The Hyperconnected Enterprise

This is my last blog posting, two years to the day and 160+ postings after entering the blogsphere, and six months after retiring from Nortel, where I worked for 37 years. I left out the front door, but was saddened to leave a company that had entered bankruptcy and was being sold off.

Having my own blog been fun and quite a learning experience!

Throughout I tried to educate, entertain and promote Nortel's cause in this exciting new medium.

The theme of the blog was Hyperconnectivity, a megatrend whereby everyone and everything that could benefit from being connected will be connected; or more succinctly the "exploding network of people, computing and things".

Education came in many forms. For example, most recently I talked to new applications enabled through the Internet of things. But I have talked a lot about UC and social networking, and exciting new solutions such as Web.alive.

Entertainment took many forms. Take a look at the posts on virtual sailing around the world, http://blog.tmcnet.com/the-hyperconnected-enterprise/green-it/think-green-on-st-pattys-day.asp and missing links.

Promoting Nortel's cause on the blogsphere was somewhat of an experiment. While being in the CTO office, I got closely linked with a new marketing push we had in leveraging social networking. While there were numerous Nortel blogs such as Buzzboard, mine was the only one not on a Nortel site (providing some unique opportunities).

Worked pretty well, even though we were all learning. For example, at one point, 3 of the top 4 stories on an Brad Reese's Cisco blog (including one on Cisco's Nexus launch) were about Nortel- a strong demonstration of the value of social networking when tightly linked to marketing strategies. Another example was promoting Nortel's leadership in energy efficient networking, a very important differentiator against Cisco.

My thanks Rich Tehtrani (a very prolific blogger himself) and his TMCnet team for giving me the opportunity to blog on their site and to write a column for over ten years..

Thanks to you my readers and godspeed to all, particularly to my co-workers at Nortel many of whom are losing or have lost their jobs, or continue to work in a stressful environment.

And here's to the Hyperconnected Enterprise, a concept that is increasingly being realized across an ever-broader range of of business applications, encompassing mobile people, computing AND connected things.

Tony

PS Check out the archives button above or the categories on the far right to take a look at past postings.

Great set of articles crossed my desk on connecting a broad range of sensors in various forms.

We've all heard about and probably used toll-collection tags, security access key cards and retail tags, but many new apps are coming our way.

For example,
How about the first WiFi pacemaker that allows the doctor to monitor its performance? Could be life saving.

How about RFI-embedded poker chips that allow the casino to track winnings? The table always wins in the long run.

How about an app that tracks thousands of GPS-enabled cell phones, analyzes the data and returns traffic reports? Anything that helps me waste less time the better.

How about RFID tagged tools that warn you if you don't return all tools to your truck before you leave a work site? Not having the tool you need when you need it costs time and money.

By 2014, ABI Research estimates that the business of new apps willalmost be as big as the business of traditional apps.

Very exciting prospects for Hyperconnectivity!

Certainly not.

But Larry Roberts, one of the founding fathers of the Internet, says that the Internet, the underlying fabric of Hyperconnectivity, is.

He suggests that traditional routers, such as those from Cisco and Juniper, just don't have the price/performance required to support Hyperconnectivity, the "exploding network of people, computing and things" (my term).

Larry suggests that you need flow-based routing to solve the problem, basically bringing back virtual circuits (introduced back in the mid-70s) to the packet world (and also visible in label switching or MPLS). The difference lies in leveraging the inherent flow-based nature of Internet traffic.

Larry's gone off and started another company, called Anagran, to deliver what he thinks is needed.

What has always amazed me about Larry is the ability to converge technology and business ideas in his head? Maybe he's on to something.

In the meantime, we can only hope that the Internet, faced with explosive growth in video and addressing, is not at the edge of its demise (a prediction that has come up every decade or so, fortunately to no avail).

Hyperconnectivity depends on it!

Infoweek 500 's annual survey provides an industry-by-industry view of investment strategies.

Across most industries, the response to "What has been the most effective productivity push?", the answer is "new forms of collaboration software." This can take various forms, such as Unified Communications, social networking, and web conferencing.

There were a few noted exceptions. For example, in retail, Business Intelligence solutions are king, not surprising given that understanding customers is so important to the top and bottom lines.

This bodes well for UC suppliers, who need to sell the values of their solutions, with an eye on non-traditional suppliers of other forms of collaboration software, including those that deliver cloud computing solutions.

The US DoJ is apparently investigating whether there are any anti-trust aspects in the Avaya purchase of Nortel Enterprise.

When I visited the DoJ web site, I couldn't find anything on this, suggesting it's in very early stages, though my Nortel friends tell me that the DoJ is in an intensive data-gathering mode.

Here's my take.

This is a highly competitive market that is being transformed from a PBX-centric environment to one that is "UC as an application"-centric. The same is generally true for the contact center space. Looking at historical market shares is not useful.

New entrants are coming in many forms: Microsoft, open source, cloud computing, Skype-like offers. Enterprises have many ways of evolving their telephony and contact center environments.

The DoJ has not, to my knowledge, questioned Cisco's market dominance of 70% in the router space,. Why would the DoJ care about a much smaller share for Avaya-with-Nortel in the voice space.

The DoJ process needs to be wound up very quickly; otherwise it is actually discouraging competition, weakening Avaya's prospects and giving Cisco an advantage.

The courts approved the acquisition of Nortel Enterprise by Avaya and dismissed any Verizon objectives.

My Nortel friends tell me that the acquisition is moving ahead, anticipating the the DoJ investigation will not impact these plans (my take on the DoJ in an upcoming blog).

Now execution begins towards long-awaited industry consolidation.

Sorell Slaymaker does a good job describing what needs to be done. But what needs to be done is very hard in a normal merger (e.g., had Nortel merged with Avaya or Siemens before bankruptcy, as had been rumored) and even harder in this situation.

In a normal 'merger' situation, best-in-class capabilities from each company would be chosen to enhance the offer to customers and to be most competitive in the marketplace.

But this is not a merger but an acquisition under Chapter 11. Business reality says you can layoff an Avaya employee and pay severance or layoff a Nortel employee for no cost. Financial pressures definitely get in the way of doing the right strategic thing.

In fact, Joel Hackney, the president of Nortel Enterprise, has already admitted that only 60% of Nortel employees (excluding Nortel Government Systems and employees in certain countries) will be layed off. I haven't heard of any Avaya layoffs.

My heart goes out to all those Nortel employees that will be dumped in this most inhuman way.

At the same time, Avaya executives have a huge job to do since they have to demonstrate short and long term value to their owners (Silver Lake Partners) from their $900M investment.

The last thing we need is failed industry consolidation leaving customers with less choice than before.

While one can question the tactics of Research In Motion's co-CEO< Mike Lazaridis in challenging the sale of Nortel's Wireless business, there is a net benefit.

Nortel was a technology-driven company with many brilliant engineers. Over the decades, their collective work has moved the technology forward, created business opportunities, and established Nortel leadership.

It is now clearly understood that Nortel's key patents should not be sold outright with the business units and should be monetized in some other way: either sold on their own and or even established as an on-going revenue stream.

After a marathon auction, Avaya has agreed to buy Nortel's Enterprise business for $900M, much better than the original $475M. Great selling job, Nortel!

A while back I blogged:
"It's good for Avaya-Nortel's VoIP market position globally." It's still so. Cisco watch out.
"It's good for Avaya-Nortel's Contact Center market position with two leading portfolios and opportunities for cross opportunities." It's still so, but antitrust concerns in this area may delay the purchase, which is bad all around.
"It's good for Avaya-Nortel's application and service business, which has been a strong emphasis of both entities." This is a huge opportunity, as it 's central to the new world of telecom.
It's good for Avaya-Nortel's UC position, if they can rationalize their positioning with MSFT and IBM." I see this as a major challenge, as Avaya has not been a leader in this space.

"It's bad for R&D and support effectiveness since there's a lot of product overlap (five call servers just from Nortel)." This is a huge challenge going forward.
"It's bad for Nortel's Data business unless Silver Lake Partners (private equity owner of Avaya) brings together their Cabletron assets with Nortel's to bring back Bay Networks (or something along those lines)." There has been no indication that this will happen.

Finally, is it good for customers? Too early to tell. Certainly, Avaya needs to rapidly clarify their support plans for Nortel products given Verizon's concerns about national security concerns of the deal.

So it's over when it's over, and it's not over yet!

The sale has to be approved by various bodies (particularly addressing Verizon's concerns and antitrust issues).

Hopefully this will be done at lightening speed.

Any further delays (it's taken 9 months to get to this stage) will be painful all around.

Let's not talk serious photography.

But consider that there are more cameras sold as as a feature on a cell phone than as stand-alone devices.

In fact, Telus, the second largest carrier in Canada, just bought over 100 Black's Camera stores, to get retail space.

The industry never ceases to amaze me.

Andrew raises some good points about iPhone apps and makes you wonder how lock-in can be avoided by enterprise IT.

Alan Sulkin, an experienced market watcher, has published his 2Q09 North American view on IP Telephony market shares, putting Cisco at #1 and Avaya and Nortel as #2 and #3 respectively.

According to Alan, Nortel + Avaya, if no other bidders submit bids by the end of the week, would be #1 with a combined 27% vs 21% share for Cisco.

A couple of other interesting points:

The market 'rebounded' by some 10%, a positive indicator of CIO mindsets on economic recovery.

This may be Alan's last IP Telephony share analysis as he argues that all PBXs support IP in some form and so the IP PBX designation is no longer relevant. He will be talking just PBX market share going forward. Alan could have argued this almost 5 years ago.

But not here.

The 'vergatario' was launched by Hugo Chavez, the President of Venezuela.

And it's not just a phone but also a cell phone, a WAP internet device, and MP3 player and an FM radio.

It is the result of a collaboration between a Chinese company, ZTE, the designer of the phone, and a Venezuelan manufacturer... o yes and some creative branding by the latter.

600,000 will be manufactured this year.

It demonstrates that extermely price sensitive mass markets (not just Venezuela, but India, China and many others) will be served by the likes of Vergatario and its cousins, rather than pricey iPhones and Blackberries of our part of the world.

Brent Kelly from Wainhouse Research is a straight shooter and does a great job laying out the UC landscape.

In the first part of his article, he points out that Microsoft is winning the UC seat and perception war (Nortel was right in their alliance with Microsoft), and that UC costs are increasingly untrackable and very difficult to compare.

In the second part, he talks extensively of the prospects of UC as a Service, a scenario that is becoming really interesting.

I would add that CIOs are still very confused by what UC is and how they should justify the investments, and questioning particularly how UC relates to social networking and the consumer effect in enterprise.

How about an on-line database of 2500, correction 250,000, medieval soldiers from the 14 and 15 century Britain.

There you can find that "Robert Fishlake served on three successive expeditions in 1378, 1379 and 1380, presumably in each case as an archer, before going on to give further service in Scotland and elsewhere, showing that archers might be just as professional in attitude and outlook as knights and esquires."

Fascinating stuff.

With only 5% of music downloads resulting in any cash exchange, copyright owners (artists, musicians, record studios and so on) are rightfully concerned.

But what to do? The French Government is taking a rather unique approach.

In France, there has been a raging debate over what is called the proposed 'three strikes law', whereby any Internet user observed as undertaking what are deemed illegal file transfers would be disconnected (on the third incident), UNILATERALLY. Interesting that a baseball analogy is being applied in a country obsessed with European football, sailing and everything but!

But a recent constitutional ruling states that, "under the 1789 (French) Declaration of the Rights of Man, only a judge should have the power to disconnect individuals from the Internet".

So French plans are being debated further.

Whether this flies or not, this is a serious challenge for lawmakers, with many cultural institutions at risk.

One good outcome to-date- Hyperconnectivity has been accepted a a constitutional right, at least in France.