Nortel CEO Serious About Services
Nortel's new management team has been talking up the vendor's position and prospects in the services sector this year. At a recent briefing in London, CEO Mike Zafirovski said the vendor "is changing focus more towards services and applications and not just hardware," and identified services as one of the firm's key growth areas, alongside WiMax and IMS (IP Multimedia Subsystem).
The company estimates the global services market to be worth about $65 billion a year, with Nortel's addressable market "more than half of that," reckons the CEO, who says Nortel's current annual revenues from services (outsourcing, managed services, integration, network optimization, security, and more) is about $2 billion from more than 100 carrier and enterprise customers.
The latest carrier to sign up is Swisscom AG (NYSE: SCM), which announced last month it has launched business VOIP services using Nortel's Communication Server 2000-Compact softswitch, and has outsourced the operations, OSS and billing integration and service development support to Nortel Global Services. (See Swisscom Picks Nortel VOIP.)
Now, said Zafirovski, Nortel is "hiring the right people" to boost that line of business, and name-checked Dietmar Wendt, who joined from IBM Corp. (NYSE: IBM) as the head of Global Services on May 1.
Now Nortel has hired two Avaya executives to head up Wendt's European team. Urban Hofstrom will be Leader of EMEA Services, while Dave Millett will be director of Business Development and Marketing for EMEA Services.
Nortel also announced it is spending $38 million over the next five years, and hiring 300 new staff, for a regional Customer Service Center of Excellence in Mexico City.
This isn't as closely linked to the Global Services team as it sounds, though. Instead, the Mexico center, and another that's being planned in Turkey, will be focused more on supporting existing business, servicing equipment, and providing training for customers, says a Nortel spokesman.
The creation of these regional support centers, which will be staffed predominantly by local graduates, is part of the Nortel's ongoing cost reduction program, as they are replacing a larger number of smaller support centers and have been located where labor and other costs are relatively low.
— Ray Le Maistre, International News Editor, Light Reading