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Nortel: It's Enterprise VOIP!

Light Reading
News Analysis
Light Reading
10/29/2002

With the service provider market all but dried up, Nortel Networks Corp. (NYSE/Toronto: NT) made a serious push back into the enterprise space today, announcing a new enterprise strategy and enhanced IP telephony equipment that might just give rival Cisco Systems Inc. (Nasdaq: CSCO) a run for its money (see Nortel Rolls Out New Strategy).

Nortel announced a second version of its Succession Communication Server for Enterprise (CSE) 1000 IP; a new version of its CallPilot unified messaging system; and the BayStack 460-24T-PRW Power over Ethernet switch.

Nortel has hiked the IP phone support on its CSE 1000 2.0 from 650 users per server to 1,000. On a cluster of 10 servers, it can support up to 10,000 IP phones. The CSE 1000 2.0, which allows the convergence of voice and data, will be available by the end of this week.

The new version of Nortel’s CallPilot unified messaging server software will also be available by the end of the week; it offers more than 40 new features, including improved system management, better security, and full Web access. The new CallPilot, which raises the number of users from 1,500 to 7,000, integrates email and voicemail messages into a single inbox.

Nortel says its BayStack 460-24T-PWR Power over Ethernet switch, to be released in January, will help eliminate latency in voice-over-IP traffic; it is IEEE P802.3af compliant (see Nortel Unveils Switches).

This barrage of VOIP announcements accompanies a larger marketing strategy. The company's new enterprise focus, with the catch-phrase, "One Network. A world of choice," aims to demonstrate that Nortel is serious about gaining market share in the enterprise VOIP market.

Some analysts point out that Nortel let its influence in the enterprise market wane as it aggressively moved into the service provider space. When the carriers started pulling their purse-strings tight, Nortel started feeling the sting. After piling up huge losses and having to lay off more than half of its employees, Nortel, like most of its competitors, has restructured and refocused its business back to the enterprise space.

"This is an important announcement for Nortel,” says Zeus Karravala, the VP of enterprise infrastructure at Yankee Group. "They’re saying: ‘We’re an enterprise player and we’re here to stay.’ I think they’re on the right track."

Earlier this month, Nortel was reorganized into four groups: wireless networks, wire-line networks, optical networks, and enterprise networks (see Nortel Reorganizes). Today, Oscar Rodriguez, the president and general manager of the new Enterprise Networks group, spoke on a company Webinar about Nortel’s reinvigorated enterprise strategy. "We’re committed to the enterprise space,” he said. "Our vision is really all about allowing you to engage with your customers… It allows you to deliver what your customers want when they want it."

Credibility is key if the company wants to sign up long-term enterprise customers for its VOIP products now. “They couldn’t have made this announcement two to three months ago [because] their stock was so weak,” says Frost & Sullivan VOIP analyst Jon Arnold. “This is an example of them getting back on their feet and proving that they still have what it takes.”

However, he says, if Nortel wants to establish itself in this space -- which means winning with the "big guys" -- it’s going to need to keep the heat on, with constant announcements of products and partnerships.

Nortel’s new products and enterprise strategy are aimed at companies that are interested in moving to IP telephony but not yet prepared to give up the comfortable reliability of a traditional PBX system.

“We believe that it’s all about evolution -- not about revolution,” Rodriguez said. “We’re unifying the past and the present to allow you to drive into the future.”

Enabling a slow migration from PBX to IP is the only way VOIP products will make it, according to many observers. “These guys know that within five years there will be a major migration [to VOIP],” says Arnold. “Until then, they have to offer different flavors… They need to engage customers now because they need to keep them.”

— Eugénie Larson, Reporter, Light Reading
www.lightreading.com

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BobbyMax
BobbyMax
12/4/2012 | 9:27:08 PM
re: Nortel: It's Enterprise VOIP!
Private businesses can deploy anything they want to. But VOIP as it stands todat would not be acceptable to the members of the public.

With declining cost of phone services, it does not make sense to use VoIP. It is just a hype on the part of the equipment vendors.
AAL5
AAL5
12/4/2012 | 9:27:07 PM
re: Nortel: It's Enterprise VOIP!
Booby,

why don't you phone Telecom Italia and tell them this I am sure they will be glad to take advice from someone experienced in these things like yourself.

Oh by the way, when you phone them your voice will most likely be going over VOIP on their public network for part of the journey.

AAL5
Packet Man
Packet Man
12/4/2012 | 9:27:04 PM
re: Nortel: It's Enterprise VOIP!
Bobby,

VoIP is not only cheaper than circuit-switched voice, it is also better providing the network is well designed and the hardware is of the right caliber. If the circuit-switched network was built with poor specs and poor gear it would suck too. Ex, most calls in a circuit-switched network (for a given area) are switched through a Class 5 DMS/5ESS. If that building were to have a major fire and the switch and the cables were burned that would cause a major outage for that area. In a VoIP Telephony system, and providing the engineers have set it up in a truly distributed system, the same fire would not affect that same given area. Some calls would momentarily be silenced and then would come live again. Some calls in set-up/tear-down progress would be messed up but a few seconds and a hook-flash would be the end of it.

The only hype that exists today are telecom professionals who are (a) technically ignorant, or (b) have some other self-serving interest/agenda in trying to keep VoIP from reaching critical mass.

I am a VoIP Telephony engineer for a telco in Canada and I can tell you it works.

Me
mesolithic
mesolithic
12/4/2012 | 9:27:02 PM
re: Nortel: It's Enterprise VOIP!



Booby,

good stuff - keep thinking this way, this is exactly the reason you old Dinosaurs are keeping us new guys in business. 5ESS/DMS/AXE10 rules still, the telcos will never take them out, TDM is here to stay for ever. And the power companies love you all for drawing so much power to keep these monoliths alive. I also love the "with declining cost of phone services, it does not make sense to use VoIP " statement ....great strategic & business thinking. Of course, they should still stick to their antique, TDM voice systems to generate additional revenue streams such as, err,.......i'll get back to you on that one.

BTW - check out the web site for Fastweb, B2 in Europe: residential VoIP for 100,000 subs in Milan/Nordics all on this new-fangled, unreliable VoIP rubbish. They wanted DMS/5ESS, of course, but unfortunately there was nobody left in NT/LU to actually sell them the equipment. Funny, that....

BTW - for any of you guys who like to see the Next-Generation of services on TDM exchanges, I urge you to get out the "Robocop" DVD tomorrow. The best part is when Robocop plugs into the police computer database to view the pictures of the police officers & finds himself - for you techhies out there, this is none other than a DMS-100 voice switch. Now there's true multimedia applications ahead of its time .........
-------------------------------------------------
Private businesses can deploy anything they want to. But VOIP as it stands todat would not be acceptable to the members of the public.

With declining cost of phone services, it does not make sense to use VoIP. It is just a hype on the part of the equipment vendors.
EdmundFitzgerald
EdmundFitzgerald
12/4/2012 | 9:27:00 PM
re: Nortel: It's Enterprise VOIP!
PacketMan:
If VoIP works (and I trust you) why do you think deployment has been so slow?

An enterprise VoIP supplier told me that the collapsed price of LD has eroded the business case for VoIP in enteprise.

I know Telus and a few telcos are offering some VoIP services, but carriers havent been broadly rolling out VoIP. C&W cancelled a project, US carrier told me VoIP "not ready for prime time" etc, many suppliers have backed away from the opportunity also.

Your thoughts welcome on telcos and enterprise rollout of VoIP.

Uncle Ed
Packet Man
Packet Man
12/4/2012 | 9:27:00 PM
re: Nortel: It's Enterprise VOIP!
Hi EdmundFitgerald,

Hmmm good question. I think the reason deployment has been slow in North America (its not slow in EU, and parts of Asia) is because our telcos make decisions to return maximum value to the shareholder. The beancounters have the "if it ain't broke it don't need to be fixed" mentality. The problem with this mentality is that North America will/could become a "3rd world technology" continent. I suspect what will really happen is the major telcos will suffer large financial problem (this is starting to happen) as new whiz bang CLECs start up again. The first set of CLECs failed simply because they did circuit-switching like the ILECs. (I worked for a CLEC that went into bankruptcy).

Look at fiber-optics for example. It can do far more at far further distances than copper. So do we not use fiber everywhere? The bean counters are in slavery to the shareholders for maximum profit. Had they executed a 10 year plan to replace all fiber by now, we would be much futher ahead. No doubt costs are hard to swallow but such a project managed over a 10-15 year time frame is very feasible. Hey, if the rest of the world can do new stuff why can't we? Thats because alot of these telcos overseas are not owned by stock market shareholder but are privatly or govermently owned.

As for the US carrier that said VoIP is not ready. I suspect that was the result of higher shareholder policy. Fact 4 to 8 Billion minutes of overseas voice-Toll traffic was carried over IP networks in the year 2001.

Initially Toll Bypass was the sole reason for VoIP. However the "feature set" of VoIP Telephony has passed the circuit-switched capabilities there are new reasons. For example I can (providing it has been set up) I can land in Norway, pick up the IP set, type in my User/Pass ID and prestoooo, I have Ontario Dialtone and my North America number. You dial 416-xxx-xxxx and my phone rings in Norway. Try that with DMS/5E.

Just my opinion.

Me
Belzebutt
Belzebutt
12/4/2012 | 9:26:56 PM
re: Nortel: It's Enterprise VOIP!
You dial 416-xxx-xxxx and my phone rings in Norway. Try that with DMS/5E.

There's a feature on the DMS that lets you remotely forward calls from your line to any other number. Everyone here uses it all the time.

Not sure about having Ontario dialtone in Norway though...
dljvjbsl
dljvjbsl
12/4/2012 | 9:26:55 PM
re: Nortel: It's Enterprise VOIP!
One should remember that Nortel is announcing a new strategy for enterprise systems. The requiremnts of these systems are entirely different from the carrier systems that have been mentioned in the recent contributions to the commetary of the report.

VoIP offers many new types of applicaions that were difficult or impossible for TDM systems to produce. By entering this market, Nortel is going to take advantage of the significant cutomer benefit that will be offered by these applciations. This will rejuvenate the PBX market and provide substantioal profits for Nortel.
EdmundFitzgerald
EdmundFitzgerald
12/4/2012 | 9:26:52 PM
re: Nortel: It's Enterprise VOIP!
PacketMan:

Thanks for the very interesting thoughts on VoIP. Keep up the good work and analysis.

Ed
dljvjbsl
dljvjbsl
12/4/2012 | 9:26:48 PM
re: Nortel: It's Enterprise VOIP!

You dial 416-xxx-xxxx and my phone rings in Norway. Try that with DMS/5E.

There's a feature on the DMS that lets you remotely forward calls from your line to any other number. Everyone here uses it all the time.

Not sure about having Ontario dialtone in Norway though...


This is not Call Forward Always but regisration at a distant telephone. The user retains access to all of the features that he has set up on his home proxy (switch). This is an essential feature of 3GPP.

The feature set for VoIP systems since they can share information end-to-end is very very much larger that can be accomplished in a traditional system like DMS.

The AIN tried to accomplish this but only succeeded in the size of its failure. The new type of distributed feauture model provided by VoIP enables entirlely new classes of features

--- dljvjbsl -- For all you old Nortel types, what does this name have to do with DMS -- hint 1972-1979
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