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By Julie Bort
04/23/01
How do you define success? If ever a company epitomized this quandary, it is Nortel Networks.
On the one hand, Nortel increased its actual-dollar revenue more than any other Network World 200 company. Nortel's 42% revenue increase equals almost $9 billion, landing total 2000 revenue at $30.3 billion, up from about $21.3 billion in 1999. With that, Nortel climbed two spots on the NW200, to No. 11.
On the other hand, Nortel posted a $3.5 billion net loss in 2000. It was the only company among the top 20 NW200 firms that reported a loss in 2000.
Nortel attributes the loss to costs incurred from its three-year buying spree. Since 1998, it's been on an acquisition binge. In 2000, Nortel gobbled up Alteon WebSystems, Architel Systems, Clarify, CoreTek, EPiCON, Promatory Communications, Qtera, Sonoma Systems and Xros. These purchases, which gained Nortel optical network technologies and components, content switching and more, should begin generating revenue for the company this year.
Nortel can't grow as fast in 2001 as it did in 2000 and has gotten a black eye by saying it would come close (see related story).
And then there's Dell. Relying on the same business model it has since inception, Dell landed second on the NW200 list of companies with the most actual revenue growth. Its 30% revenue growth in 2000 translated into slightly more than $7 billion, bringing total revenue to $25.3 billion and earning Dell the No. 13 spot on the NW200.
Unlike many NW200 companies that spent the late 1990s on buying sprees, Dell completed its first-ever acquisition just last year. It picked up emerging storage-area network company ConvergeNet and, in so doing, pushed further into the enterprise storage market.
Yet storage was not Dell's biggest source of growth. Strong sales of its PowerEdge servers in the enterprise market holds that honor, says Gene Austin, a vice president of worldwide marketing.
"We maintained our aggressive price position. Our pricing strategy is a direct result of our maniacal focus on costs and our direct model," he says. "Despite the slowing economy, our model enabled us to keep inventories low and profitability up."
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