We have all been reading about Avaya, Ericsson and RIM and the Canadian government in the news related to potential Nortel spin offs and divestitures. When my Fox Group colleague Bill Elliot and I were talking about the recent moves, Bill had an epiphany, and thought we would share it with our readers, and provide you our thoughts about what we think this all means to us as Canadians.
As I reflect on the offer by Avaya to purchase the Nortel Enterprise Solutions, The circle of life analogy became apparent.
From 1880 until 1975, AT&T and Bell Canada with their various subsidiary companies such as Northern Electric had very close working relationships and with their U.S. counterparts. These unique relationships included a financial interest by AT&T in Bell and Canadian patent rights to equipment and practices developed by AT&T and Western Electric. In fact Western Electric provided startup capital for Northern Electric when it was created in 1914.
When I first joined the industry “back in the day”, Bell Canada and Northern Electric were vertically integrated companies with Northern Electric manufacturing the telecom equipment that Bell Canada used to provide service to the public. Similarly, in the United States, AT&T and Western Electric had a very similar corporate arrangement.
Clearly, the historical roots are well documented, and for people who have been around the industry for a while, clearly understood.
So… What about Avaya and Nortel?
As the telecom world evolved over the past 20 years, Western Electric evolved into AT&T Telecom, then evolved into Lucent Technologies (1996) providing carrier, wireless and enterprise telecom gear.
Lucent Technologies has now morphed into Alcatel Lucent with focus on carrier telecom gear.
Avaya was spun out of Lucent in 2000 as their business communications subsidiary, producing end user equipment and as a publicly traded company. In 2007, private equity companies Silver Lake Partners and TPG Capital purchased Avaya, and the company became privatized.
The original roots of Nortel phones go back to 1882 when a mechanical department within Bell Telephone Company of Canada manufactured telephones and supporting equipment for Canada.
This was primarily due to import restrictions from the U.S.
This group grew and added additional products until 1895 when they were required to spin off into what became Northern Electric and Manufacturing Company Limited.
The net of the evolution is that Northern Electric evolved into Northern Telecom and finally Nortel Networks, shortened to Nortel.
During the tech boom of the late 1990s into 2000, Nortel went through a series of acquisitions and created a number of internal business units that included the industry infrastructure components, business communications systems, wireless and data equipment with varying success until the start of their meltdown in 2001.
Breakup and Potential Acquisitions
We all know the rest of the Nortel saga to its current state of being broken apart with various parts being sold off or shelved.
Now it seems that Avaya will purchase the Nortel Enterprise solutions, the circle of life would be complete…..the linkages of Avaya back to Western Electric, who helped create Northern Electric, which were the origins of Nortel…..a complete and full circle.
My views on the Nortel saga(As a former AT&T and Nortel PBX customer, and now as an end user telecom analyst) is this. In 1990, I was thrown into a converged world of voice and data. I was then a datacom systems engineer who was told that I had to install and configure these things called “AT&T PBXs” into our corporate network.
I had no idea about how telephones, telephone systems or voice circuits actually worked from a technical perspective, I only used them.
I just knew that I had to get them installed within our Canadian corporate offices, link them together, and connect them to the U.S. corporate headquarters using telephone company circuits of various types.
It was an interesting project that forced me to learn and understand the voice side of the world, as well as how telephone companies actually delivered dial tone, networked voice mail, etc.
I then had the opportunity to work with enterprise level Nortel PBX equipment and even integrating Cisco data gear through our corporate Nortel PBXs. We actually ran the Cisco data through the Nortel PBXs and Canada wide voice carriers. This involved working with Nortel, BNR labs, CNCP and Bell to make it all happen across Canada. This was a very novel concept, particularly given that we did it back in 1993.
As we at FOX GROUP developed and managed our SMB lab facilities, I have had the fortunate opportunity to install, configure and play with Avaya, Cisco, Mitel, Nortel, 3Com and even open source telecom equipment of various types. Our goals have always been to better understand the benefits that these emerging technologies bring to customers, and how the industry could and should support us as customers.
Telecom manufacturers have developed products from different parts of the world.
They have also sold their products to different countries and tried to adapt to the technology and business requirements.
All of the companies above have developed good products over the years. What I did observe though is that there was always a slight difference between companies based on their roots, focus and culture.
Each one of them were different from one another in how they went to market, what products they focused on, how they sold products and solutions, educated and serviced their various types of customers, and how they worked within the communities within their countries.
As a customer, I found them each very different to work with, and we, as customers had to adapt to their ways and styles (right or wrong).
Nortel has always had its own unique culture that was uniquely Canadian. It affected how they engineered, sold, trained and supported us as customers. I have heard they also had their own style in working with their channels who sold to us as customers too.
So what does this mean for the future of Canadian telecom?
As proud Canadians, we at Fox Group hope that the Nortel spirit, traits, people and focus on quality, are able to remain within the companies that acquire the various Nortel business units.
We also hope that the purchasers recognize that we, as Canadians, bring a long history of developing world class telecommunications solutions, combined with a unique Canadian way of doing things that would benefit them.
Lastly, we encourage our government to remember our history, and support us in the various ways necessary to again become leaders in telecommunications and upcoming unified communications solutions.
As always, we welcome your thoughts and feedback on this article. Feel free to contact at Editor@foxgroup.ca