The rumors of a shakeup at data and telecom equipment manufacturer Nortel Networks (11 on the NW 200 list) turned out to have some basis in reality. Shortly after speculation arose that Frank Plastina, head of carrier switching and wireless for Nortel, was headed for a promotion, the company announced that CEO John Roth will retire as expected next year and COO Clarence Chandran, currently on sick leave, will leave the firm for medical reasons.
Since no successor for Roth was introduced, analysts believe Nortel will bring in a new CEO from outside the company.
Nortel has had a rough ride in recent months. Like most other telecom equipment makers, the company warned earlier this year that declining demand will have a significant effect on its 2001 first-half revenue. The firm has also announced about 20,000 job cuts this year, and it recently revealed that it will abandon the DSL equipment market to focus on its other core business areas.
Nortel acquired its DSL technology when it bought DSL Access Multiplexer maker Promatory Communications for about $778 million in early 2000. Nortel never achieved a large share of the DSL market and analysts don't expect the move to have much of an impact on Nortel's bottom line.
Nortel's stock, which stood at $15.22 on May 10, the day of the DSL announcement, fell steadily to stand at $13.75 at the end of trading on May 14. That's not far off the stock's 52-week low of $12.50.
In other news, a few heavy hitters on the NW200 list made strategic moves recently.
On May 8, IT giant Hewlett-Packard (5 on the NW 200) and IT consultancy Accenture (formerly Andersen Consulting) formed a 3-year alliance that will see the two work together to offer enterprise clients technology consulting services.
HP officials believe the IT outsourcing business will grow rapidly in the near future. Last year the company tried to acquire consultancy PricewaterhouseCoopers, but the deal fell through.
Accenture has alliances with many other firms, including HP rivals, but Accenture officials say they are committed to making the HP alliance their primary concern.
Since the announcement, HP's stock has fallen from $27.33 to $25.90.
Another company making a strategic move is AT&T (2 on the NW200), which filed a proposal on May 11, seeking approval from the company's shareholders for AT&T's previously announced split into four operating units.
AT&T says the split will make each unit more flexible and should create value for shareholders.
One important aspect of the proposal is that AT&T revealed how the company's $65 billion debt will be split among the business units. The broadband unit will take on $28.4 billion; the wireless unit $5.5 billion; the business unit $27.1 billion; and the consumer unit $4 billion.
AT&T shares slid from $21.90 on May 11, the day of the proposal, to $21.63 on May 14.
Perennial software powerhouse Microsoft (14 on the NW200) made a number of moves in recent days.
On May 9, the company revealed it will launch the newest version of Windows, to be known as Windows XP, on Oct. 25. XP will come in both a Home Edition and a Professional Edition for business users.
On May 10, Microsoft said it will change its licensing program in October. Microsoft says the changes will simplify the upgrade and sales processes for enterprise customers. The most significant change though is the addition of a subscription option, which will allow enterprise customers to pay annual fees, rather than making a one-time license payment at the start of a contract.
Microsoft slipped from $70.40 on May 9 to $68.72 on May 14.
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