Nortel's Transformation Is Moving Forward, Company Execs Tell VoiceCon - InformationWeek
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3/6/2007
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Nortel's Transformation Is Moving Forward, Company Execs Tell VoiceCon

Nortel is in the midst of a business transformation plan, while the communications industry moves into a new era of convergence, unified communications, and mobility.

Nortel is at a critical point in its 111-year history, its president and CEO said in a keynote address at the VoiceCon show. Mike Zafirovski noted improvements in the past year, when the company achieved a positive operating cash flow for the first time since 1998 and saw double-digit revenue growth in the second quarter.

Nortel is in the midst of a business transformation plan, he said, while communications moves into a new era of convergence, unified communications, and mobility. Nortel, which once employed 95,000 people, is changing to meet those challenges, and the most recent round of layoffs is only part of the story, Zafirovski said.

Zafirovski said Nortel's transformation plan is about "having the guts to make significant investments in areas that matter." That includes increasing spending on research and development from $300 million two years ago to $400 million last year.

At the same time, customer expectations exceed current technology and services and the enterprise communications industry is poised for a breakthrough, said John Roese, Nortel's CTO. "We have the makings of a new era," he said. "We have an inflection point."

Roese and Zafirovski addressed a gathering of more than 2,000 people during a VoiceCon keynote address in Orlando. The keynote was one of three featured talks on Tuesday, day two of the four-day event sponsored by CMP Media, the company that publishes InformationWeek and InformationWeek.com.

Nortel is focusing on trends that are driving the changes in the industry. Roese said the three "mega trends" are hyperconnectivity, communications-enabled applications, and true broadband.

Voice over IP's momentum will truly take off when it can break through barriers like device- and network-centric silos of communication, e-mail, instant messaging, telephony, and multimedia conferencing.

Applications, infrastructure, and middleware must be improved and integrated -- and nodes connected -- so networks can play a greater role in application services, like location and identity management, he said.

"Most phones don't know where we are, but the network does and could share that information," Roese said.

At the same time, the true promise of broadband has yet to be achieved. That promise isn't just about bandwidth. Roese said it's about making communications as smooth as his in-person presentation. In other words, people shouldn't be aware of the technology they're using for audio and visual cues.

Tomorrow's interfaces will put mobile devices on the same plane as PCs and phones, Roese said, and connect real-time information with applications that aren't real-time while providing a multimodal experience.

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