Are these the real reasons for the fall of Nortel?

I am personally fascinated by the following comments that were made to a previous blog story of mine. The authors appear to be former Nortel and Bay Networks employees (keep in mind that none have been verified) offering comments as to the real reasons for the fall of Nortel. According to the comments listed below, the seeds that would lead to Nortel's future fall from grace were actually planted when Nortel was enjoying its greatest success (before the dotcom bubble burst). I encourage readers to add their own comments too, but please keep the focus on when and how the seeds for Nortel's fall were planted. My objective is to offer a "centralized repository" to read the real reasons that led to the fall of Nortel.

By ex-Nortel acct mgr (not verified)

"I started at Nortel in the 80's and was layed off in 2006. I can tell you that the problems began with the Bay Networks merger. Bay was checkmated by Cisco, and for some strange and sad reason Nortel decided to follow Bay's losing managers and strategy, turning a once strong and proud company into an also-ran in the enterprise market. They destroyed a vibrant reseller marketing strategy and replaced it with a non-functional direct touch plan that did nothing but compromise decades long reseller relationships and allow valueless ex-Bay reps. to receive compensation for work they didnt do (i.e.- Hey Mr. Reseller what business are you about to close? I need to know so that I can get comp'ed on it)." Add your comment

By Ken (not verified)

"The comments in the aforementioned blog about Nortel and their demise is right on point. I provided 22 years of service to Nortel and left last year. Since the Bay Networks aquisition and then the subsequent Alteon aquisition, the focus and strategy of the company changed away from the culture that made the company strong. It was built around relationships with customers. With the influx of Enterprise talent that were focused on short-term relationships, eventually everything went toward that strategy and away from strong, long-term relationships. As part of short term focused strategy, they outsourced their manufacturing, development and systematically "outsourced" of all of their valuable assets. This trend included the people/personnel and direct control of development and manufacturing that made it a strong company. Without people, manufacturing and development assets, what is left? This is exactly what potential buyers and clients are asking now." Add your comment

By Ex Bay Networker and NT Employee (not verified)

"WRONG! The Bay Networks aquisition was one of the best buys out of Roth's outrageous spending spree. The people were dynamic and products leading edge, providing a real alternative to Cisco in the enterprise space...which many customers loved. Most of the very good Bay people (techy's, senior managers, sales guys etc) left when they saw what Nortel were doing to the company. The Nortel ethos of politics, bureaucracy, non-reward and the 'NT boys club' was the reason for the demise of Bay Networks...and Nortel. Also not taking advantage of emerging technologies such as IPT when voice is there "heritage"..prior to the likes of Cisco is a major factor." Add your comment

By Vyatta vice president Dave Roberts (verified)

"In the telecom growth spurt of the late 1990s, Nortel was one of the fastest growing companies and stocks in the world. Unfortunately, the company got very off-balance as it grew. It was very clear when I was there that anybody who wanted a long term career in Nortel had to be associated with the carrier group, preferably an optical product line. That was where all the momentum was within the company. If you were an employee working on other things (enterprise products in my case), it was clear that you weren't going to get any of the investment, attention, or promotions. In contrast, the optical management teams were masters of the universe. When the bubble burst in late 2000/early 2001, the company's 'core businesses' were smack in the middle of the action (or sudden lack of action, really). With the chair suddenly pulled out from under it, Nortel could not retrench quickly enough. They had allowed many of their other businesses to decay as the company got tunnel vision with all-things-optical, and there was nothing to fall back on. This was not the beginning of the end, but rather the end of the beginning, however." Read Dave's blog story: Nortel: Perspective Drives Feelings Dave's new blog continued regarding the Wellfleet/Synoptics merger (the surviving entity was called Bay Networks) before Bay's acquisition by Nortel, "At a macro level, almost all new product development ground to a halt because nobody could get enough critical mass to move the ball forward. Projects would start and then get repeatedly canceled. This problem particularly devastated the Wellfleet product lines. Synoptics was very much bought into the idea that Asynchronous Transfer Mode (ATM) was THE NEXT BIG THING. ATM, it was said, would obsolete Ethernet and obsolete routing. While Synoptics wasn't the only company to believe this, they made big bets in this direction. Anybody advancing a project plan that focused on advancing the company's Ethernet switching (in which, again, Synoptics was leading) or routing product lines was often doomed to failure as budget was redirected to work on ATM-related projects. I talked with multiple Wellfleet engineers who had worked on five or six projects since being part of Bay, all of which had fallen victim to the budget redirection axe and been canceled in favor of 'ATM will make that obsolete' thinking. But it wasn't just Wellfleet people. I met many Synoptics engineers trying to push forward Ethernet switching projects that suffered the same thing. So, when I got to Bay, you had a bunch of fairly talented, but bitter people, all mad at each other, and almost no new product development coming to fruition. The sales force was desperate for something, anything new that it could sell." Add your comment

By Jake (not verified)

"I started with the company in 1974 and left in 2002 and all but the last 3-4 years I considered it a privilege to work at Nortel. I spent most of my career in the manufacturing, operations, quality and service side of the business. Ten of those years were dedicated to developing service programs and relationships with Nortel's channel partners. John Roth, Bill Conners, Frank Dunn, and other so called visionaries at Nortel were at the root of the demise of this once great company. They were so consumed by acquisitions (Bay Networks) and competing against John Chambers at Cisco. By focusing all energies in trying to be like Cisco they began to ignore their core businesses. Roth, Conners, Dunn and other yes men/women dismantled a world class manufacturing and egineering team after they already spent millions of dollars in upgrading facilities. These so called bright of the brightest began to shuttle Nortel’s highly respected distribution strategy and started competing against their channel partners." Add your comment

By Anon (not verified)

"I started in 1999 and left in 2005 (voluntarily), and worked in the Enterprise division. I can categorically say the issue was NOT the Bay Networks acquisition. It was inept management from the top, and a failed understanding of how to properly integrate multiple acquisitions. That combined with putting to much emphasis on one product (the optical line) led to there downfall. Lets look at this.. Bay Networks. Arguably the #2 or #3 R&S/Switching vendor at the time of the acquisition. When 3Com went out, they were the only credible alternative to Cisco. There was competent leadership, engineering, and sales in this division. The problem came down to support from Mother Nortel. There was a complete drop in R&D, and very few new products made it to the field during the first few years after the acquisition. This combined with Nortel sucking engineering talent out of the BayNetworks business into the Optical business caused a huge loss of sales inside that division. Clarify. I'm not sure what Nortel was thinking when they did this. They purchased a CRM company for many billions of dollars, with no idea on how to market, sell, or support the product. This left us ALL scratching our heads, and wondering what master plan Nortel had. Well, as it turns out, they had none." Add your comment

Don't be shy, what is your take on the real reasons for the fall of Nortel? BradReese.Com Cisco Refurbished

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