Nortel Networks Ltd. is reorganizing, forming two new product groups and four regional teams to strengthen its enterprise focus, drive product efficiencies and deliver global services.
Nortel said the new alignment includes two product groups each led by its own president-Enterprise Solutions & Packet Networks led by Steve Slattery and Mobility and Converged Core Networks led by Richard Lowe. The company said creation of the two groups greatly simplifies its business model and creates new cost efficiencies by leveraging common hardware and software platforms.
Motorola Inc., Nokia Corp. and Lucent Technologies Inc. each have reorganized their structures in the last year to better serve their customers.
“Convergence is here and now, and our enterprise and carrier customers are demanding partners who can deliver enterprise innovation on carrier-grade platforms,” said Bill Owens, vice chairman and chief executive at Nortel. “With our carrier and enterprise capabilities, Nortel is uniquely positioned to deliver on this. We’re playing to win, and that means having the determination and flexibility to transform our teams, simplify our portfolio, and focus our resources close to our customers, as well as harness both the power and opportunities of network convergence.”
In addition, Nortel said that forming four region-based teams to address the most promising business opportunities, as well as to create market solutions and business arrangements tailored to individual customer requirements, will heighten its responsiveness to customers and increase rapid deployment of industry-leading products and technologies.
Nortel has been working through financial difficulties. The vendor earlier this year restated financials for the past few years after firing several high-level executives. Industry watchers said the implications of the reorganization immediately won’t be known.
“Nortel is restructuring, which could have positive and negative implications,” said Jeff Kagan, a telecom and wireless industry analyst. “On the plus side, it redesigns the company to attack the new opportunities head on, but on the other hand, it admits that something in the old model was broken and needed fixing.”
Kagan said creating two product groups and four regional sales teams makes sense. “Nortel has been through quite a financial and leadership storm in the last few years. Now that it is behind them, they can focus on the market opportunities and redesigning the company may help them do that. But we have to remember that redesigning the company is like changing the set at a play, while the play is still on. It can be filled with quite a bit of confusion, so the company has to pull it off smoothly or it will be set even further behind.
“The bottom line is, this redesign makes sense, but we will not know if it works for a while. During that time, Nortel will be working like crazy to make sure it was the right move. But the rest of us will have to wait and watch closely for a while.”
