As part of a new strategy to put more focus on selling to the enterprise market, Nortel Networks last month appointed its first President of Enterprise Networks, Malcolm Collins, formerly the senior executive for the firm's U.K. and Northern European Region.
The move is Nortel's latest step in an effort to grow beyond it's traditional telco-heavy customer base. The Brampton, Ont.-based equipment maker recently created the division after splitting its Metro and Enterprise Networks division in two.
Collins replaces Frank Plastina, president of Metro and Enterprise Networks, and will report directly to Frank Dunn, president and CEO of Nortel. Collins joined Nortel in 1992 as vice-president of sales, moved to managing director and general manager of European data business and then to senior executive of the U.K. and Northern European Region.
Peter Kelly, Maidenhead, England-based president of Enterprise Networks for Europe, said Collins brings to the position a strong background in the enterprise field, a familiarity with all four of Nortel's core competencies - wireless, wireline, optical and enterprise - and a strong background in sales and marketing.
Although Cisco Systems Inc. currently holds a greater share of the enterprise market, according to Ottawa-based analyst Mark Quigley at the Yankee Group Canada, Nortel still holds the advantage in the voice part of the network; Cisco has been strong on the data side.
"One of the things that has been happening in the communications world as a whole has been a movement to IP-based services," he said. "The fact Nortel, for example, builds PBXs that are IP-based…gives them the ability to leverage some of those relationships (with carriers) to hopefully [get its foot] in the door."
However, Cisco's foothold in the enterprise network market did not seem to perturb Kelly. "We already have number-one market share in a number of places in the enterprise market," he said, citing IP VPNs, core centres and ATM multi-service switching as areas where Nortel outperforms Cisco.
While Nortel is working to build on its data capabilities, Cisco is doing the opposite by ramping up its efforts to further penetrate the carrier space. "They certainly have a challenge in front of them," Quigley said, adding that Cisco's degree of success on the voice side is going to come from having relationships with the carrier population, something Nortel has and Cisco does not.
"They're coming at it from different sides of the fence," he said. "Nortel has a great history of providing traditional voice services within that carrier population so there are certain challenges presented there for Cisco as well.
As far as data goes, even through Cisco is stronger in this area, Quigley said Nortel's data capabilities are good. He added, however, that the company hasn't fully capitalized on the abilities acquired through its 1998 purchase of Bay Networks. At the time of that buy, most of the growth for the company was coming from wireless and optical networking, he said. So Nortel concentrated on those areas while enterprise networks was pushed aside.
"So the suspicion on my part is that there was much more internal focus on those businesses and not as much focus as there perhaps should have been on the enterprise side," he said.
However, this didn't stop the City of Daytona Beach, Fla., from deploying a Nortel solution from end to end when it constructed its new enterprise network in February 2001.
"Our population is only 68,000 - however, we have an annual eight million visitors here for special events like spring break, so we needed a state-of-the-art telecommunications converged system. What we had wasn't working and was on its last legs," said Grady Meeks Jr., director of information systems and services for the city.
He said the City met with about 32 vendors but eventually selected Nortel.
"We looked at Cisco, we looked at Siemens (AG), Lucent (Technologies inc.) and Marconi (Corp.), and basically the Nortel solution was the only one that met our needs."
Meeks said the city wanted an "evergreen solution" meaning that it wanted a "25-year solution, that as long as we stayed current we would just upgrade modules as opposed to the whole thing," he said.
The City of Daytona Beach had 43 locations running on 17 disparate telephone networks and one data network that needed to be converged into one network. Right now it is running a Nortel gigabit Ethernet network at all locations, but is running voice over IP only at 23 locations.