DALLAS – Nortel Networks Corp. is working hard to shift its hardware-based applications to software that can run on commodity servers, the company told industry analysts and reporters at its annual user group conference here earlier this month, another sign of how fast it is becoming a software company.
However, at least one analyst who heard the presentations on Nortel’s product roadmap here isn’t impressed.
“Nowhere in that discussion did you hear anything about ISVs (independent software vendors), that they are nurturing a developer community,” Vanessa Alvarez, an IP communications infrastructure analyst at the Yankee Group, said in an interview.
More Nortel news in Network World Canada ISVs develop applications on top of a software company’s platform, helping to spread the popularity and desirability of the product. Microsoft is cited as the best example of a company that leverages its developer community into hefty revenue, but Alvarez noted that one of Nortel’s competitors, Avaya, has a strong developer community.
One of the challenges all equipment vendors face is that falling hardware prices mean they have to move into software. Nortel recognizes that, Alvarez said, but she believes it isn’t moving fast enough.
An example of the way Nortel is moving is the upcoming release of Interactive Communications Portal (ICP) 1.0, a software version of Nortel’s self-service portal pieces of which come from other hardware-based company products.
“ICP brings the IVR (interactive voice response) to the next level,” Thomas Neary, director of global product management for multimedia products, said in an interview. “What we’ve really done is marry two products together. We’ve taken the application execution environment from the MPS (Nortel Media Processing Sever) and integrated that with the soft DSP (digital signal processor) packet technology in our MCS (Media Communications Server) product, specifically the media server.”
The media server integrates with Microsoft Office Communications Server, is SIP-enabled and integrates into any third party call server. “It becomes base platform for all Nortel communications applications to run on," Neary said. "It provides voice, video, presence capabilities to be integrated into off-the-shelf applications, and notification applications, network services and conference capabilites. It really provides you with a uniform platform for all types of communications applications that can then be integrated into a Web services environment.”
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To be released in November, ICP 1.0 will initially run on Windows Server 2003 Standard Edition on x86 hardware with a minimum of 4GB of memory. Version 2.0, available next year, will add support for Windows Server 2008 and Linux. Pricing has not yet been set, but Neary said Nortel is looking a pricing per port versions of the software as well as one for providers who want to host the application.
Among hardware-based products, David Downing, general manager for enterprise and SMB communications solutions, said the latest model in Nortel’s Business Communications Manager family, an all-in-one box which lets small and mid-sized businesses add IP telephony to their systems, will be released in October. The BCM 450 will scale up to 300 users, 100 more than the BCM 400.
The company also said that it will decide “in the next couple of months” if it will add SIP lines to the BCM family, which would make it a survivable gateway for branch offices if the corporate WAN fails.
Pricing for the BCM 450 wasn’t immediately available.
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He also confirmed that Dell will become the third server maker to bundle the Communications Server CS 1000 on its hardware next year when version 6.0 of that application is released. IBM and Hewlett-Packard already sell the CS 1000 with select servers, although it will only be later this year that those manufacturers will sell hardware with the Nortel software installed.
In his keynote, CEO Mike Zafirovski spent a half hour reassuring some of his biggest customers and employees that despite several years of restructuring, cost-cutting and layoffs, the company is moving in the right direction.
“I do believe we’re making the right bets,” he said, including emphasizing unified communications products.
Two years ago, Nortel was losing market share in almost every area, he acknowledged, the company had an uncompetitive operational and cost structure and had run operating margin loses in four of the past five years. However, he said, the company’s trajectory is improving, and promised improvements in product quality, building customer momentum and solidifying the health of the company.
In addition, new partnerships with companies such as Microsoft, IBM and LG are driving revenue, he said. To the question “can Nortel regain the lustre it had?”, he admitted that “we have a ways to go.” But he emphasized that the company is increasingly paying attention to customers.
However, Alvarez noted that Nortel’s stock continues to drop, and wondered how long shareholders will wait for the company’s financials to turn around.
Other analysts at the conference said the off the record briefings helped shed more light on where Nortel is going. Shiela McGee-Smith of McGee-Smith Analytics in Putnam Valley, N.Y. was impressed with some new software products and features, although she added she would have liked to have heard a more coherent strategy for marketing Nortel’s enterprise products. Industry analysts have complained that while Nortel has good hardware and software, its failure to deliver aggressive and targeted marketing is hurting the company.
“I think there has been progress,” she said, “but I’m not sure I heard a cohesive top-down story about how it all fits together. I think if I were a customer I would have trouble understanding the elements of the portfolio and how they work together.”
“I think they have good solutions, I think they have good technology,” Brent Kelly, senior analyst and partner at Wainhouse Research in Hyde Park, Utah, said after the briefings. “Now we’ll see how they execute.”
Kelly credits Zafirovski’s candidness with custo
