On the Job – With Mumford & Pals

"Holy Mackerel! We’re going to get killed!!"

December 13, 2002

18 Min Read
On the Job – With Mumford & Pals

Next Tuesday, the 17th of December, marks the first anniversary of Greg Mumford’s ascension to the position of CTO at Nortel Networks Corp. (NYSE/Toronto: NT).

Not a lot of people know that (as Michael Caine may or may not have said). Fortunately, however, this is exactly the kind of obscure factoid that Light Reading editors manage to retain – while at the same time totally forgetting the important stuff (pay mortgage, wife’s birthday, collect kids from day care, etc.).

Anyhoo, we thought the date would be a good excuse to venture to the frozen North of Canada for a status check on “things” with Greg, and Nortel in general.

As CTO, Mumford is playing a key role in Nortel’s attempts to rally from its current financial crisis. Of course, he’s had a significant influence on his company’s technology strategy for some time. Light Reading likes to think of him as Nortel’s “Optical Oppenheimer” – particularly when it comes to 10 gig. After all, Mumford was the man who helped give Nortel a huge headstart in developing the 10-gig technology that minted it a fortune at the height of the high-speed networking arms race.

As CTO he now has even more power (bwa-ha-haaaa!) but must wield it in a very different, environment – a depressing, post-bubble apocalypse characterized by cutbacks, layoffs, and lost fortunes.

How goes his battle? Pretty well – at least on a relative basis.

Relative to what? Well, archrival Lucent Technologies Inc. (NYSE: LU), for one. Whereas Lucent committed a huge faux pas recently by issuing big bonuses to executives in its time of crisis, a Nortel exec last week told Light Reading that equivalent bonuses are out of the question at Nortel until the company meets its goal of a return to profitability. Makes sense to us.

Meantime, the market (that fickle mistress) seems to think Nortel is a lot farther along the road to seeing off the threat of bankruptcy than Lucent (see Nortel’s Quarter Perking Up?): Nortel’s bond price has risen to 95 cents on the dollar (up from a low of 50 cents); its wireless division is gaining traction in new markets; it has $4.5 billion in cash; its stock price has been leaping (in the right direction; doubling in the last three months); and rumors are circulating that its next earnings announcement on January 23rd will exceed expectations – showing growth (remember that?).

Our trip to visit Greg turned into a series of surprises, starting with the fact that Nortel actually agreed to admit us to its giant Carling R&D Campus (a.k.a. “Canada's largest industrial park, eh?”). Relations between Light Reading and Nortel have not always been exactly – how shall we put this? – cordial. In fact, a couple of years back the dialog was as frosty as a moose’s antlers in February.

But with Mumford’s backing we were allowed in. And yes, we got our interview with Greg, in which we learned some new networking slang (apparently a “snow back” is a Canadian engineer hired by U.S. startups to impress customers, VCs etc.), as well as the story behind the iron ring worn by Canadian engineers, including Mumford.

But we got more – much more. In fact, we were given an all-access pass that got us a picture not just of Mumford’s progress in his new job, but of the situation inside Nortel as a whole.

To Ottawa, then, 'mid snow and ice! Read on for:

  • A tour of the facility

  • No strings!

  • Busted! (a fair cop)

  • Return to normal

Next page: The Grand Tour

[Light Reading arrives in the morning at Nortel’s Carling Campus. After checking in with security we are led to Mumford’s office. It’s situated at the tippy-top of the tower that dominates Building 5 of the Nortel campus, and, indeed, the Ottawa skyline for miles around. It’s here that we find Mumford, like Saruman in Isengard – except that Greg’s having a meeting with his secretary (he's working? How very outré!) We loiter outside for a bit with Nortel’s PR person until Mumford emerges.]

LR: How much of your time do I have today?

Mumford: I’ll be with you all day, then we’re having dinner this evening.

LR: What did I do to deserve this?

Mumford: I’m not sure. Not just anyone gets this tour, you know.

LR: Well, Greg, not just anyone gets one of these t-shirts.

[Formal presentation of Light Reading t-shirt ensues. Greg appears mildly pleased with our gift, in a mildly pleased sort of way. Mumford next leads us through long passageways to the sanctum of Marco Pagani, president of optical Ethernet at Nortel.]

LR: Marco [resisting temptation to shout Polo!], why is Nortel focused on optical Ethernet? Why not just offer IP over optical?

Marco Pagani: It depends on what you are trying to achieve. 90 percent of traffic over local area networks is Ethernet, and the old 80:20 rule on enterprise networks has been reversed. [Ed.note: According to the 80:20 rule, 80 percent of an enterprise’s traffic will stay onsite – on its internal corporate network. Only 20 percent crosses a WAN connection.] So there’s an opportunity to use Ethernet to create a utility, carrying all traffic.

LR: Will the “grid” [grid computing] play a role in your “utility”? [Chuckles at own pun. No one else does.]

Pagani: When you have a broadband-enabled network, all sorts of interesting things will happen on the computing and applications side. That’s one of them.

LR: OK, Ethernet is great – but don’t people really just want to use IP for everything?

Mumford: We’re not saying, "Don’t use IP." It’s already been decided that IP is the application protocol. We’re saying, "Use Ethernet for the underlying infrastructure."

LR: Got it.

Pagani: Ethernet addresses the last-mile bottleneck, and it’s an evolutionary technology – not revolutionary. I believe that today’s TDM private-line infrastructure will evolve into an Ethernet private-line network. You’ll see large volume deployments of Ethernet in late 2003 and at the start of 2004, and Ethernet will overtake TDM in 2007.

LR: Bold words. What are the potential barriers to that sort of deployment?

Pagani: There are two main ones: inertia caused by incumbent carriers not wanting to cannibalize existing revenues, and service providers not understanding the P&L [profit and loss] for Ethernet services.

LR: Do the Ethernet startups in this market have anything to offer?

Pagani: In the area of innovation, certainly. But in order to sell products they will need to associate themselves with a mothership [incumbent equipment vendor].

[Pagani takes us for a quick tour of one of Nortel’s customer labs.]

LR [while walking]: You look like Jeff Goldblum. [It’s true; Pagani is the spitting image of Jeff Goldblum.]

Pagani: So they tell me.

[We arrive at the lab. The highlight is the Optera 3500, which contains 32 protected Sonet rings in a form factor about the size of a toaster oven. We meet Denis Niles, an optical Ethernet verification engineer.]Denis Niles: So you work for Light Reading, eh?

LR: Yes.

Niles: I’m not sure I should talk to you. [Cue: general hilarity.] LR: Well, we’re not all bad, you know [ed.note: this is not entirely true; most Light Reading editors are actually complete bastards]. Do you want a t-shirt?

Niles: Yes. [The natives are always won over by our t-shirts.]

[Denis is clearly a “character.” A quick demo of voice- and video-over-Ethernet with RPR rapidly devolves into an enthusiastic lecture on why Niles works at Nortel, and how he heard about his job from a neighbor. Pagani beams his approval. Mumford checks his email on a Blackberry.]

Niles: I could work anywhere I want, you know.

LR: Oh yes?

Niles: Oh yes. I choose to work here. I don’t have to put up with a bunch of rules, red tape. I used to run IT at the RCMP [Note: Royal Canadian Mounted Police, a representative of which we'll get to meet in person later in this article]. We had one of the largest router networks in the world, over 1,200 routers. The costs involved in monitoring it and running it were astronomical, humungous! Anyway, I’ve always been of the opinion that the best way to attack a problem is through simplicity, and I was talking to my neighbor and he told me about this new Sonet metro box…

LR: Hold on, you mean your neighbor just happened to know about Nortel’s optical networking equipment?

Niles: Sure.

Pagani: That’s Canada for you. We have hockey and optical networking...
That’s us!

Niles: And this box was made by Nortel. That’s how I ended up here.

[Niles’s enthusiasm is mirrored by the other Nortelians that we meet over the course of the day. Nortel the company may have been beaten up – but its remaining employees do not appear to be dispirited or, for that matter, particularly bruised.]

Next page: Wireless Wonders

[Our next stop on the Nortel tour is its wireless facility. This is at a different location in Ottawa, necessitating a short ride in the Nortel PR person’s car – tragically, a Toyota Rav4. Despite the fact that Mumford is about six inches taller than the LR editor, he insists on sitting in the back. In fact, Mumford is impeccably civilized throughout the day – putting the interviewer and everyone else we come across during the day at their ease. This consideration even extends to the car he drives to work – a modest North American saloon, rather than the luxury vehicle that someone in his position obviously could afford, but which might cause resentment at a company in the middle of a brutal downsizing operation.]

LR [in car]: How long have you worked at Nortel?

Mumford: Thirty-one years. I started August 30th, 1971.

LR: What made you stay here that long?

Mumford: Well, I had to make the decision to stay a number of times… Holy Mackerel! We’re going to get killed!!

[PR person puts the pedal to the metal with absolutely no apparent increase in the Rav4’s velocity, as we run a light that had been red for quite some time before we arrived at it.]

PR person: Huh – you can talk with your driving, Greg.

Mumford: Everyone criticizes my driving... As I was saying: It’s always been the diversity of opportunity that kept me here in the past. And now the company needs to be rebuilt, so I can’t leave now.

LR [ungluing hands from dash board]: So do you think Canadians are more loyal than Americans, then? Mumford: I hesitate to generalize, and blind loyalty serves no one. But Denis [Niles] hit on part of it. You should be where you are because of the people, because you respect and have confidence in your teammates, and because you believe you can win. None of that has anything to do with blind loyalty.

LR: Do you still enjoy it?

Mumford: Some days more than others. It would be fun to get into a more fun phase.

[A short discussion ensues on local wildlife. Visiting Ottawa is rather like starring in your own episode of Wild Kingdom.]

LR: I saw a big brown animal when I was driving up to your building this morning.

Mumford: Groundhog.

LR: Hey, I’m just asking.

Mumford: No, it was a groundhog.

LR: Wow, and they just wander around like that? Amazing!

[Mumford and PR person look at LR editor like he’s an idiot (no surprise there).]

PR person: Hit a deer once. Deer won.

Mumford [philosophically]: Deer always win.

[The Light Reading editor is still musing over that laconic utterance, when we arrive at Nortel’s wireless facility. I’m ushered into the office of Al Javed, VP, Wireless Networks Technology. Another room, another impressive view of Ottawa greenery.]

Al Javed: We’re the only company that offers infrastructure that complies with all the wireless standards. LR: What, all of them? Javed: Yes. [He rattles off eight or nine acronyms… GSM, CDMA, GPRS, 1XRT, UMTS, CDMA2000, and so on.]

LR: What do you think of Tahoe Networks?

Javed: Their founder is the same guy who founded Shasta – which we bought. Their technology is incremental, it’s not the huge leap forward that they are portraying it as. Micro-billing, for example: We’ve added that to Shasta. I was in a conference with them, and they seem to have forgotten that we are constantly adding to and upgrading the Shasta product.

[Javed takes us for a tour of the facility, during which we meet David Starks, manager of advanced wireless design at Nortel. Starks gives us a demonstration of how a laptop loaded with a combined 1x/CDMA wireless modem and 802.11 wireless modem can move between networks, seamlessly. This involves putting a laptop equipped with said device on a table on little squeaky casters and getting a Nortel technician to roll it from one side of the room to the other. It works. The Light Reading editor then has a go with the trolley, and it still works. There is a bit of a Godot-like silence while everyone stands around grinning at each other and the Light Reading editor tries, and fails, to think of any questions. We move on.]

David Starks: I work on technology beyond 3G.

LR [taken aback]: Beyond 3G? Aren’t you getting a bit ahead of yourself? Does this mean we can expect “legacy 3G” technology any day now?

Starks: No, no... well, not really…

Mumford: If you are going to be an industry leader you had better always be looking at the next technology, the next step beyond where we are now. That’s what David does.

Starks: We’re talking about really high speeds.

LR: How high?

Starks: High. Like, 20 megabits.

LR: Blimey.

[Starks gives us a demonstration of a technology that Nortel is working on called OFDM, or orthogonal frequency division multiplexing. It is really impressive (much better than the table on casters). He explains how Nortel is planning to develop prototypes that will combine OFDM with another technology called MIMO (multiple input, multiple output), which uses multiple antennas on a PDA or laptop to boost throughput to some seriously high speeds. The only hurdle seems to be that right now the OFDM part of the equipment weighs a few hundred pounds and occupies an entire laboratory table. Still, the Nortel team doesn’t seem phased by the challenges ahead.]

Starks [completing long complicated technical explanation]: ...so using OFDM you increase the capacity and spectral efficiency by a factor of 10 over 3G.

LR: So this is 4G?

Starks: I didn’t say that.

LR: How long until this stuff is small enough and affordable enough for me to buy it?

Starks: Seven to ten years.

Mumford: It won’t take ten. These things either happen or they don’t. If it’s the right solution it will materialize faster than we expect.

[It’s obvious even to our rudimentary editor-brain why Mumford has included this part of the Nortel campus in the tour: He wants to demonstrate that Nortel is still investing in the future of telecommunications. This prompts us to ask...]

LR: How much does Nortel spend on R&D these days, Greg?

Mumford: 20 percent [of revenues]. That’s less than last year, but more as a percentage because this year’s revenues were lower.

[We leave the wireless building to head back to the main Nortel campus. After our experience on the way over, both Greg and the Light Reading editor try to politely insist on sitting in the back seat of the "car"... Greg wins.]

Next page: Highway to Heck

LR: Nortel has announced some pretty huge wins for its softswitching and voice-over-IP solutions. I think that’s interesting, because people have been talking about the inevitable migration of voice from circuit-switched networks over data networks for years and it just never seemed to happen. Is it happening now?

Mumford: Is packetization happening? In some circumstances. But there are two different types of deployments. One is when a carrier builds a new network. And that’s not happening as much as anyone would like these days. The other is if an incumbent is upgrading its network, and they decide that it’s a good idea to invest in the technology – which is what Sprint did. But it’s very important when someone is making that decision – packetize or not – that you don’t present them with an either/or choice. You need to allow them the ability to upgrade at their own pace, without a complete overhaul, and not all at once. And that’s what we do, with both our service provider and our enterprise products, which let companies upgrade to packet voice workgroup by workgroup, if they feel like it. Everything we offer is compatible with TDM.

LR: How do you keep people motivated to make good products during a downturn?

Mumford: At a product company you have to make sure that you have an innovation engine. That’s part of my role. And Nortel let’s me do that. We did this by putting the product development into the business units, because having it centralized, like at Bell Labs or BNR, keeps it too far from the customer. We also have an investment board.

LR: Who’s on it?

Mumford: I am, and the three leadership category presidents.

LR: What if you can’t agree on a technology direction?

Mumford: It’s not a democracy, but usually reasonable people can agree.

[At this point we get stuck in a traffic jam. After a few minutes, the PR person driving decides to take a short – albeit somewhat illegal – detour, via a bus lane.]

PR person [seeing unidentified person standing by side of freeway up ahead]: Oh, is that a cop? [Attempts to nudge back into jam. Mumford and the Light Reading editor don’t like this move one bit.]

Mumford [to PR person]: No, no, you’ve committed yourself now.

LR: Yeah, go for it!

[The PR person obliges, and a police officer, who is, disappointingly, not dressed in traditional Mountie garb, promptly steps into the road and calls a halt to this nonsense.]

PR person: Sugar!

Police officer: I need your driver’s license. You’re in a bus lane.

PR person: Sorry.

[A passable imitation of “Let’s Make a Deal” follows, the result of which is the PR person gets a ticket, but no points on her license. The Light Reading editor resists the temptation to ask the police officer the whereabouts of her horse. We drive on and Mumford complains about how the police officer was nicer to the PR person than she would have been to him.]

PR person: Well, she was a woman, Greg.

Mumford [laughing]: We won’t get into any stereotypes here, and before you ask, no, you can’t put your ticket on expenses.

[We return to the main Nortel campus.]

Next page: Safe at Last

[The tour continues. Mumford takes one short break to deal with weighty matters, but otherwise keeps his word to spend the entire day chaperoning our editor around the campus. We are duly impressed. The formal itinerary finishes with a chat in Greg’s office.]

LR: When you talk about optical networking you are obviously very enthusiastic about it. I would think it would be difficult to be enthusiastic about the state of the optical transport market.

Mumford: People aren’t buying long haul optical transport. That’s true. The market size had dramatically reduced. Metro optical sales are still actually clipping along, though. Metro optical is much more vital.

LR: So transport is becoming less important for Nortel as a company?

Mumford: For now.

LR: When does it become important again?

Mumford: When sales pick up.

LR: When is that?

Mumford: Don’t know. In the mean time we still have to make decisions on what we want to be in and what we want to move out of. And we’ve clearly made the decision that we will be “in” optical. We are still investing in the capability set that goes on top of HDX, for example, and if we didn’t believe that optical business was going to be important we wouldn’t do that. At the same time we are evaluating our business, and working on a business model that sizes our cost structure for the business that is available today, so that when it comes back we are in a position to be able to capitalize on that – but if it doesn’t come back for a while we won’t die.

The End

(Or... is it?)

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