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Tony Li
Tony Li
12/5/2012 | 2:43:49 AM
re: Avici, Nortel Get 'Strategic'

Well, all I know is that the core bandwidth still seems to move along at 100%/yr growth. And that makes for an interesting technical challenge...

;-)

So, I guess I care.

Tony
standardsarefun
standardsarefun
12/5/2012 | 2:43:49 AM
re: Avici, Nortel Get 'Strategic'
I know they are big and sexy but really the total market cap for core routers is tiny compared to edge, access, mobile, etc.

Even that smallish market is probably not a long term one since each operator is likely to have a core of only 5-15 boxes and push all the smarts to the edge. After that its just a smooth growth story with legacy vendors holding their market shares.

what do you all think?

byteme3
byteme3
12/5/2012 | 2:43:46 AM
re: Avici, Nortel Get 'Strategic'
Seriously though, the Nortel - Avici relationship didn't work last time, why will it work this time?
Has anyone other than AT&T deployed Avici?
They were better off with Juniper.
-------------------------------

Because Nortel broke off the relationship before Avici had a deployed router - they didn't think it would work. (and at the time Nortel was in retreat mode) Avici being at AT&T this long has changed that perception. (AT&T is rather large, after all)
Juniper offers nothing to Nortel - no commision, no percentage, no incremental sales.
MrLight
MrLight
12/5/2012 | 2:43:45 AM
re: Avici, Nortel Get 'Strategic'
In response to post 4 fromG«• romeo-foxtrot:G«•

>This sort of announcement smacks of the constant re-qrite of strategy that was evident >in the Clarence/Roth days.

Response: These types of announcements are pretty standard in the telecommunications industry. Nortel is not unique in this respect. Nortel has had numerous G«£strategic relationshipsG«• announcements pre and post the unbridled G«£Clarence/RothG«• era. If this was a G«£Clarence/RothG«• days announcement it would have contained some outlandish claims about G«£bandwidthG«• and G«£capabilityG«•. Recall ClarenceG«÷s G«£Wings of LightG«• press releases.

>Why did Nortel cease their original partnership with Avici?

Response: The reason Nortel ceased their original partnership with Avici were many, but the main one was that certain people within Nortel lost faith in that Avici could deliver on their promise of building a multi-shelf core router. As well the Nortel and Avici interests were diverging during the bubble, and the Avici people felt they didnG«÷t need Nortel, which maybe why they didnG«÷t present their best face to Nortel to instill some more confidence. There was some of the G«£Not Invented HereG«• thinking by some R&D people as there always is in almost every company, but that wasnG«÷t the reason the partnership ceased.

>Why are things different now?

Response: Well for one, Nortel does not have a core router program in-house to fall back on, as was the case with the Avici and Juniper relationships.

See the Lightreading June.29.2000 article on the Juniper-Nortel alliance http://www.lightreading.com/do... . The Juniper relationship was a handicapped from Day 1 due to the fact that not all the Nortel R&D (Versalar, OPC and Passport (Accelar)) and their associated sales teams were on-board during the negotiations. To be fair these groups really couldnG«÷t be on board since the company still was trying to decide whether to build or buy a core router.

One thing people should remember about a strategic relationship is that it can be done for many reasons, one of which is to get an insight into a market that you arenG«÷t currently and learn as much about the business from your partner in before you put both feet in. This G«£toe in the waterG«• strategy has been used quite successfully by the Japanese, Koreans and now the Chinese.

This doesnG«÷t seem to be the case here with the This appears to follow the more typical reason for getting into a strategic relationship, that is to provide a G«£turn-key whole clothG«• solution to your customer while keeping your main competitor out. The main competitor being Cisco in this case.

>What's happened to the re-sale relationship with the #2 IP player Juniper?

Response: As Rick H stated in post 5 http://www.lightreading.com/bo... G«£It was mainly management issue with Nortel: NT R&D had a close relationship with Juniper's R&D and NT Sales tried and successfully sold Juniper. However Sales Rep. were not even commissioned on Juniper routers sales- How could you expect success in this case. G«£ This needs to be addressed in this new Nortel-Avici relationship in order for it to succeed.

>Why is an Avici relationship better than one with Juniper?

Response:
1.Avici is more needing of a partner than Juniper.
2.Juniper is already partnering with Lucent. See http://www.lightreading.com/do... for example.
3.Avici having a smaller installed base it will be easier to get the required software changes for interoperability with the Nortel Passport products into the Avici plan of record than it would have been with Juniper.

>Nortel has NEVER been able to develop a fruitful long-term partnership with >complementary vendors the way other companies, such as Nokia, Ericsson, or Siemens >have. NIH from R&D and stupidity from sales have always screwed things up, and >expect this to go the same way.

Response: To make a G«£complementary partnershipG«• work requires both partners to be committed to make it work. In a lot of the partnerships Nortel engaged in that was not the case since both sides had diverging interests from day one. Some that come to mind are GTE UK, Motorola, AEG, Cabletron, Westell, Antec, Matra, STM, etc.

Note: Nortel has been partly successful with some large companies like Daimler-Benz Aerospace (Dasa), Corning and Sun , in part because they donG«÷t directly compete, as well with quite a number of smaller box (VoIP, cellular etc) and software vendors. See http://www.lightreading.com/do... for a partial list. But they need some people who have been both inside and outside Nortel to make these partnerships really work, since if you worked only for one company for your whole career you just "don't get" what you need to do in these types of partnerships to make them work no matter how hard you try. You really need to see it from the other side of the relationship before you "get it" - meaning how to make the parntership work.

>And if Nortel acquires Avici, that would only be their 4th attempt to have an IP core >product (Remember Versalar and OPC?).

Response: As Heywood supposedly said in 1565 "Better late than never."

MrLightG«™If you plan to do it, better late than never.
P.S.I wonder where this leaves the other core router companies like Procket, Hyperchip, etc.
byteme3
byteme3
12/5/2012 | 2:43:45 AM
re: Avici, Nortel Get 'Strategic'
The passport does both VoATM and VoIP. VoATM is AAL2. VoIP is usually sent over the ATM interfaces, so people often get confused, but it's really AAL5 IP packets. They can send it over GigEther natively now too.
byteme3
byteme3
12/5/2012 | 2:43:44 AM
re: Avici, Nortel Get 'Strategic'
Nortel makes much of the rest, but their strength is for an end-to-end solution, which a missing piece like a core router can fix. So it doesn't have to sell a lot of core routers, if the core router helps it sell a lot of other stuff it's still valuable. (and revenue/margins from core routers ain't bad either - one box with ports is still millions of $)


byteme3
byteme3
12/5/2012 | 2:43:44 AM
re: Avici, Nortel Get 'Strategic'
Avici was selling its routers to AT&T, but AT&T has cancelled its contract with Avici. Avici all optical switches are not in demand. Similarly routers/optical routers are in demand.
-----------------------

You are clearly an idiot, or in need of counseling. Avici does not make an "all optical switch", they make a core router. They also keep getting revenue from AT&T amounting to over 10% of all of their income (and some would argue probably 100% of their revenue). Check the numbers in their next quarterly announcement and you will see their contract with AT&T is far from canceled. (do you not think Nortel would not do due diligence and talk with AT&T before signing them?)
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