September 2009 Archives

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I hope so. None of the current devices really cut it for serious to use the rock band Tubes song title: "keyboard kids." Take it from this longtime (yeah 20+ years) heavy duty portable computing device user: Apple should borrow/swipe/steal as much as it could from Kyocera i.e. Radio Shack, the makers of the TRS-80 T100s and T200s. In fact Apple should lift the entire line for its own tablets and netbooks. Shrink them down, build out the screens, update the guts, but still keep intact two amazing machines.

My first computer was a T200, the clamshell model with 24 KB RAM and that now-so-quaint DTMF tone dialing for the internal modem for the Manchester Union-Leader. If it could take my fat-fingered pounding for cranking out deadline daily news--from boring planning board meetings to multiple pile-ups on I-93--it could withstand anything...

Here's more and why. Says Wikipedia: "The computer is silent when it operates. The keyboard is superior to most others currently on the market.[citation needed] It runs for 20 hours on 4 readily available and easily replaceable AA batteries. Data is protected by a built-in rechargeable battery. There is no boot up routine; the Model 100 operates as soon as the switch is flipped and an application selected. There are several simple programs available on the Internet for transferring Model 100 files to a modern personal computer.

"The Model 100 was also used in industrial applications as a programming terminal for configuration of control systems and instruments.Third-party peripherals for the Model 100 extended its battery life and file storage capacity. Software was designed, and is still available, to extend the display capabilities and to provide more advanced word-processing or calculation software than the supplied programs. To this day, hobbyists continue to design games, applications, and hardware for this device.

"With few exceptions, no modern portable computer has the appearance, or some would argue utility, of the Model 100 line. Modern portable computers (laptops) are larger, heavier, and have much shorter battery life than the Model 100. The closest modern successors include the Alphasmart Dana and the Quickpad Pro. These similar modern "slabtop" units typically are targeted at the education market, although they are often used by writers and mobile professionals.

"Although much larger, the Model 100 actually bears a close resemblance to modern PDAs. Its TEXT program is similar to the Memo program found on PalmOne products, and ADDRSS and SCHEDL are essentially simplified versions of Contacts, Tasks and Calendar. The Model 100 has the additional advantage of a full size keyboard, a built-in modem and BASIC programming language. By including BASIC, the Model 100's designers made it possible for users to design additional applications."

Sticking your head into the mouth of a lion is usually not recommended unless you've conjured a way to make it appear that your life is really in danger...like putting easily-removed false teeth into the feline or other such tricks.

Why else would Avaya--a very smart company--ask Canada's minority Conservative government to have its $915 million purchase of Nortel reviewed, as reported by TMCnet, unless it is very confident of the outcome?

Here is the wording from yesterday's announcement:

OTTAWA, Ontario, September 24, 2009 -- Today, the Honourable Tony Clement, Minister of Industry, issued the following statement regarding the acquisition of Nortel Networks Corporation's Enterprise Solutions Division by Avaya Inc.:

"Avaya filed an application for review under the Investment Canada Act (ICA) of its proposed acquisition of Nortel's Enterprise Solutions Division...."

--

Here's another strange dimension to this deal: no release of the enterprise division's book value compared with the $149 million for the wireless units. Why hasn't this figure made the light of day? Unless someone can enlighten me--given the sales declines experienced by this sector--does it make sense for the enterprise division to be worth more bookwise than wireless?

What is being counted: excess inventory that no one wants to buy, especially now? The value of the precious metals in the unwanted boxes that would have to be recycled? When the Province of Ontario launched its aggressive e-waste program did it realize that some of that junk would be originating from its back yard?

At least Ericsson is taking advantage of Nortel's technology in a leading edge field and is hiring the best and brightest to work for a company that has long had an R&D presence in Canada. In contrast Avaya is buying a division in a 'mature' i.e. slow growth area that is undergoing a technology shift i.e. TDM to IP that favors its pure-play IP rivals i.e. Cisco, ShoreTel, a unit whose value appears to mainly lie in the customer base and distribution channels. That spells for the Nortel enterprise unit's Canadian workers just two words: Employment Insurance.

Unless there has been backroom assurances and promises that haven't yet seen the light of day, seeking the review is a gutsy move by Avaya to quell the negative press over rumored layoffs--and the reports of Nortel customers going to competitors--aimed at stanching what the cynical would regard the rapidly bleeding value of its costly purchase.

If the Canadian government can close its jaws quickly and Avaya emerges unscathed, the enterprise sale (and Avaya) would have been spared a political haranguing on the job losses and the pensions issue that would make the hassle over the Ericsson purchase of Nortel's wireless assets like a friendly disagreement. Parliament is back in session and the Opposition Liberals under its leader Michael Ignatieff is beginning to think it has an issue with Nortel that it can beat the Conservatives with.

If there is one thing that the Conservatives are good at--which is the secret of their nearly four years of minority governance--and that is behind the scenes as well as up front managing the political show.

When you're on your way out, in more ways than one, and you want to wreak revenge on those you truly despise you leave them a poisoned chalice, one fortified with nutrients but laced with a cocktail of deadly agents, one that they have little choice to drink.

For a disgruntled employee that can be the computer virus from Hades. For a head of household that can include a business or property that the heirs can ill-afford to manage. For a political kingpin that can be scandals that will be unearthed, forever embroiling and tainting the new chiefs and their rivals when the old boss is put to earth.

This may well be the case, intentional or more likely unintentional but with the same effect with the sale of Nortel's enterprise division to Avaya

If the Ottawa (Ontario Canada) Citizen newspaper story and competitors' reaction to the sale as reported by TMC are to be believed, Nortel's archrival and half-cousin Avaya--both firms are derived from the same Bell heritage--and which Nortel had tried to buy, should soon feel the toxins coursing its system.

The seemingly rosy $2.4 billion Nortel's enterprise division earned in 2008 has quickly been eroded to only $860 million in business in the first six months of 2009, down 34 per cent from a year earlier. It lost $209 million compared to an operating profit of $168 million a year earlier.

The arsenics and strychnines are not just the severe downturn but a lack of faith by many resellers and customers in the enterprise division's offerings caused by Nortel's lousy finances and poor top management. As soon as this comm/tech giant announced that it was in financial trouble last year it was doomed like the whiff of almonds that are the telltales of cyanide--from a firm that had reportedly been detoxified from past mismanagement and scandal. 'Here we go again?' came the fear. Understandably channel, prospects, and existing customers seeking replacements or upgrades started going elsewhere. Who can trust Nortel again? Who wants to risk being stuck with end of life goods?

Here's the nub. If resellers and customers picked Nortel over Avaya why should they buy/stay with Nortel now that it will become Avaya? Will Avaya really continue to support Nortel's product lines? The one scenario there is Avaya may act like a spider; after paralyzing and cocooning its prey it sucks out the juices created by special enzymes that liquify the organs--until there is nothing left.

Nortel has been the walking dead, its heroic and dedicated engineers like the still-vital organs struggling with weakening condition to produce and support IP-oriented quality products as they were drained with layoffs. Little wonder that in the contact center field at least, reported Interactive Intelligence's Joe Staples--whose firm has seen competitors like the 'old' Aspect, Davox, Rockwell et al disappear and many others fade into insignificance--Nortel's product line was aging with little new to get these buyers excited.

Then again IP-from-the-ground-up companies like Aastra, Cisco, Fonality, Interactive Intelligence, and ShoreTel, to name but a few, didn't have the legacy TDM/PSTN baggage to lug with them. For these companies there is no need to 'migrate' customers to IP; they are already there.

The substance that stops the heart may be the technology shift from PSTN/TDM to IP. What is happening is another lesson that firms that were based in the new technologies are typically but not always more successful than those that been formed from and made their mark in the old ones. When the core technologies change the old outfits are left behind.

A great example to illustrate this is railroads. Which is why if you've seen or ridden on a commuter or Amtrak or in Canada VIA Rail train they are pulled or pushed by diesel or electric locomotives built by outfits that had started out making them, not by firms that had made their mark constructing steam engines.

Those companies: Alco, Baldwin, Lima and their Canadian licensees CLC and MLW, failed to make the transition when the railroads switched from steam to diesel in the 1940s and 1950s. They had tried build diesels, in an attempt to capitalize on the loyalty of the customers that had relied on them for their 'legacy' steam engines, but their diesel products failed to match the quality and features of the steam builders' 'non-legacy' competition. The steam firms had allied with electrical gear makers GE (Alco-GE) and Westinghouse with Baldwin--most railroad locomotives are diesel-electric with motors driving the axles--but they fell apart. In GE's case it emerged as a competitor to Alco and supplanted it.

In a lesson for technology as well sometimes new entrants don't fare as well if their solutions are not suited for particular markets though these tools may be proven elsewhere. Fairbanks Morse, which made marine diesel engines, entered the steam-to-diesel fray in the late '40s but exited 10 years later. While its technology, opposed-piston engines, offered an appealing much higher horsepower in the same space than its competitors, could not hack the very different environment of railroads. It is one thing to have the engine blocks being battered and rattled by depth charges and hurricanes. It is another for them to be violently jerked front and back and side to side in a moving train.

Nortel has also left for its enemies a set of legal and political nightmares, like its powerful customer Verizon who wants its pound of flesh. Then there are the workers who may in likelihood will need to find new jobs sooner than later despite the $15 million employee-retention plan and promises to retain 60 percent of Nortel's North American staff by Avaya.

Job-keeping programs are merely ways to enable staff to find other careers or pare down their expenses so they can live on much less when they are ultimately let go. Canada is teetering on an election which may take place this fall but the latest will be next spring. The Official Opposition Liberals have made it known that its attack will include on how the Conservative government has handled the Nortel debacle, including the treatment of its pensioners and long-term disabled former employees.

Besides who is kidding whom here? Does anyone truly believe that Avaya will actually retain Nortel's North American staff, in particular those in now 'foreign' Canada, whose offices are but a 90 minute flight or 9 hour scenic in the spring/summer/fall but dangerous-in-the-winter drive from its New Jersey HQ? American firms have more often than not when they buy Canadian outfits shift their operations to home base to save money and gain greater control. Why should Avaya, which isn't exactly flush with cash, behave any differently? Especially with the high Canadian dollar?

The question is can Avaya or more accurately its owner Silver Lake Partners can afford to sustain the Nortel 'legacy' in what appears to be a slow recovery amidst a marketplace that is fast-moving to pure IP, where voice is another set of data to be managed? And where the savvy outfits are having the routing hosted rather than using scarce capital resources to buy hardware and licenses for boxes and servers stuck in some closet, money that will be spent more effectively not on infrastructure but on R&D, production, and marketing? Is it willing to be a political punching bag in Canada and the target of legal attacks and having its government customer base eroded in the U.S?

Then again did Avaya have any choice but to drink from the cup? If it had declined to sip it may have met a crueler and more likely fate at the hands of Cisco et al. Avaya may well have a strong constitution and corporate antidotes to cope with the poisons laced with the strength from the beverage but could it continue to take the battering from such powerful, flexible, and younger opponents?

Nortel's toxic chalice has with Avaya drinking from it also wounded its other rivals, e.g. Iwatsu, Mitel, Siemens Enterprise, and Toshiba. The deal has made Avaya number one at Siemens' expense that gives it a powerful position, but is Avaya strong enough to capitalize on this new position?

The only cure for this poison is for Avaya backer Silver Lake Partners to suck it up and lay out the cash now to devise and launch a strategy to weaken and destroy, and buy at dimes to dollars the other legacy TDM-based vendors to create one outfit that has one foot in the TDM past that will swing then those customers into IP with an integrated mix of flexible open and hosted as well as premises solutions. If Silver Lake does not do this or hesitates it may be too late for Avaya, Silver Lake, its investors, and Avaya (and Nortel) employees.

Last week at IT EXPO West I had the privilege of moderating an excellent session on open source, Leveraging Open Source for Contact Center ROI, with Steve Kaiser from OrecX, Corey McFadden of Infradapt, and Vijesh Mehta of CallFire.

In the discussion of why open source came one excellent benefit: security against the product being phased out and/or the supplier going out of business. With open source you have access to the software kernel--it isn't proprietary--so you can continue to support, adapt, and grow the application to meet your needs regardless of vendor.

The impending demise of Nortel's enterprise division--which it will be unless it is won at the ironically dated/located September 11 auction in New York City by a bidder that is willing to keep it as an independent corporate entity, and that appears unlikely---is a stark reminder of that open source virtue. Anyone who owns Nortel proprietary software, and hardware, will have to plan for end of life, and buying replacement products.

Does anyone really think that the purchaser, which in all likelihood will be a competitor, is going to commit to supporting Nortel's product lines any longer than it takes to migrate at full speed Nortel's customer base to its lines? Especially since they will have to not only eat the winning bid costs--which will be much higher than Avaya's stalking horse auction paddle of $475 million--and the huge costs involved with integrating the unit with theirs including supporting legacy namely TDM products?

While the enterprise piece did pull in $2 billion in revenues, the net profits are obviously less. And while the economy is beginning to recover and order books are starting to open, will that mean magically good times? Not when there are many other similarly good and native IP-based solutions out there from eager competitors.

Nortel's collapse serves also a reason why business communications and contact center applications should go software, not hardware, and ideally hosted. Who can afford to get stuck with infrastructure? The products are sufficiently the same across the suppliers so as far the organizations' customers are concerned--the people who truly matter-- it doesn't matter which outfit makes the routing as long as the contacts are routed promptly, with no drop outs, to the right people.

If Nortel had made their enterprise products software, fully open source, and hosted with CPE as the alternative then we could be seeing one of its competitors being dismembered instead of this once-proud company.