Nortel Under Assault

Rich Tehrani : Communications and Technology Blog - Tehrani.com
Rich Tehrani
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Nortel Under Assault

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In a number of my meetings with companies in the tech and telecom space over the last few years, they have told me they are aggressively targeting Nortel customers. This was before the talk of bankruptcy which will likely make it easier for customers to be poached.

Ittai Kidron at Oppenheimer believes Juniper will benefit most from marketshare loss Nortel will see. Cisco and F5 will benefit as well according to this analyst but the revenue increase to Cisco as a result of marketshare gains will be minor when compared against Cisco's total revenue.

"We calculate that just a 6% slice of the addressable enterprise business from Nortel --  $754 million in annual revenue -- would represent 16% of our 2009 revenue growth forecast for Juniper," Kidron states in his report.

Virtually all of Nortel's enterprise businesses -- switching, routing, security and VoIP -- are "up for grabs," according to Oppenheimer. Nortel has seen its marketshare deteriorate over the past two to three years in these areas, although it still retains a "solid, credible position" in VoIP, the firm asserts.

What Nortel needs to do ASAP is to come out with a strong branding campaign to assure potential and existing customers that they will be around for the long term.

In business, perception is reality and by not being more proactive, the company risks a tremendous amount. All the engineering prowess in the world may not be enough to convince a CIO to put his faith in a company who is linked with the term bankruptcy in the general media.

Nortel needs to act immediately or competitors will have an easy time of scaring customers away from the Canadian communications vendor.

The competition is certainly not waiting, why is Nortel?



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