Is Nortel's Future In The Clouds?

| Contact Center/CRM Views and Analysis

Is Nortel's Future In The Clouds?

Rich Tehrani's superb piece on the solid shape of Nortel's carrier business, coupled with recent stories on the troubled communications/enterprise products firm got me to thinking: does Nortel's future lie in the convergence of carrier networks and hosted solutions from Fortune 500-scaled CRM to workforce management i.e. the cloud?

Companies are very interested in the hosting model because they want to get away from buying licenses and bolting in hardware just as they no longer, with few exceptions, own their buildings: to save capital costs and give them greater flexibility.

Enterprise solutions, like buildings, are infrastructure. They don't define the firms' value propositions. Instead their products, pricing, service, and their people do. Slowly, in contact centers and in other fields such as media and PR, organizations realize that they don't need buildings either, or if so, they need much less space than in the past.

The challenge for hosting i.e. the cloud, a.k.a. SaaS is reliably and seamlessly handling the huge volumes of data and interactions through it. That is why heavy-duty enterprise-scaled contact center-based or using applications such as CRM, performance management speech analytics, speech rec, and workforce management/optimization have been licensed for clients' premises, and why hosted/SaaS has been confined to SMEs.

If any firm can make enterprise-scaled hosting possible, and to make licensed premise software and bolted hardware practices of the past it is Nortel. Only Nortel has both the carrier-and-enterprise-grade engineering and expertise to make this happen. Nortel's strength in carrier landline and wireless products is not matched by any of its enterprise solutions competitors e.g. Avaya, Cisco.

The markets are there: carriers, ASPs, and CRM/ERM/database solutions firms. Nortel can easily support a mashup say between Verizon Business and an Oracle or for the Canadian market, Telus and CDC, makers of Pivotal. Hosted top-drawer solutions may provide cost-reduction/customer retention-seeking enterprises the tools they need to survive the economic climate and prepare for recovery: and likewise for the carriers offering them.

By going to the cloud, both Nortel, the carriers, solutions developers, and their customers can take flight, and grow...if nervous investors allow them.

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