Nortel Networks is no stranger to hard times. The Canadian telecom equipment provider found itself in a downward spiral two years ago — a vortex many industry experts predicted no escape from. But, it appears there is a new Nortel on the horizon, a company ready to take on the world of telecommunications and IT services, specifically with its voice-over-IP (VoIP) technology. Late last year, Network World Canada contributor Carly Suppa sat down with Raleigh, N.C.- based Albert Hitchcock, Nortel’s CIO, to discuss the future of VoIP and where Nortel sees itself in that future.
NWC: What has Nortel been doing internally with regards to VoIP?
A.H.: Obviously we run Nortel products. Our network is entirely Nortel. We run a Meridian PBX environment. For the last two years, we have been upgrading that environment and have been putting all the voice traffic on our own internal converged network. We have upgraded our Meridians to IP to run voice trunk traffic across the wide area. During the last year, we have upgraded all our branch offices to IP. We have had budget cuts and have really had to focus on the business case. We can’t just roll out technology for technology’s sake. We have done a very focused deployment. In our research, we found the part of the population that would receive immediate savings were people who were out on the road a lot with customers, teleworkers. We realized we would make the most savings in terms of reductions in calling card bills, reductions in long distance phone conversations, reductions in cell phone roaming charges. The investment we made for that section of the population in giving them that capability and upgrading our network with voice over IP was paid back in three months. We haven’t applied this to everyone, though. We haven’t ripped out all our physical handsets across the world. A lot of that investment has been kept in place.
NWC: What are some of the big trends you are seeing in the future of VoIP and where is Nortel going to play in that future?
A.H.: It is going to be a very exciting year because we are at this inflection point and you can’t just look at it as voice over IP anymore. You’re really opening up a whole environment to converged IP applications. What that means is that voice becomes a component of a converged multimedia environment. You are going to have video, voice, instant messaging (IM), traditional messaging all coming together in a single application.
One of the key differentiators of Nortel is that we really understand how all these technologies come together. We have been talking about convergence for a while now, but it is really only now that you see the wireless environments coming together with the wireline solutions. They are all coming together as converged solutions. There are very few people out there that have the breadth of knowledge that we have. We have huge capabilities in wireless. We have a very good understanding of voice and data in the enterprise. We are the dominant player in the service provider sector. Having all that knowledge allows us to go and act as a real partner. A lot of these things are not simple to do. There is a huge amount of learning and things you need to get right to make it work. It is not just about running the application on the network. I would say to any potential customer, look at us from the point of view that we have the ability to bridge the gap and understand how you put this environment together.
NWC: How is Nortel gaining back the lost mind share in the industry?
A.H.: Clearly we have been through a very hard time as an industry in the last three years. We have turned the corner. This is going to be our first full year of profitability in six years. People shouldn’t be concerned anymore. We fell off the cliff and went through the downturn and it was a very trying time for everyone. But Nortel is here to stay and I think this ability of ours to span this environment and bring together these solutions puts us ahead of the competition. One thing we need to do a better job of is getting that message out. We are a very viable alternative to the Ciscos and others. It is a very aggressive market and we are fighting (the Ciscos and 3Coms) all the time. I think there are two aspects: sure we need to be very competitive on price and that will continue to be a bonus and goes without saying. But, I think it comes down to partnerships. Our customers want an alternative. They want to know they can work with a partner they can trust.