Network Computing is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Nortel's Latest Game Plan: Fast And Simple

As Nortel's fourth CEO in just five years, Mike Zafirovski must prove why he'll be the one to make a difference. Nortel, one of the few viable alternatives to Cisco Systems for big business network routing, switching, and voice-over-IP equipment, has been plagued by years of accounting scandals and lags its top competitors in overall customer satisfaction.

Zafirovski, named to the post in November, is focused on simplification. Nortel's new global services unit debuts this week, with just 70 discrete services, compared with the previous 700. Services make up just under 20% of Nortel's revenue; Zafirovski says that with sharper focus, he can double services revenue.

The company also hopes to shed its image as a second-tier provider of enterprise data networking behind market leader Cisco. Last week, it rolled out routers for branch offices, the Secure Router series 1000 and 3120, based on technology from Tasman Networks, which Nortel bought for $99.5 million in December. Nortel says its routers can direct traffic at four times the speed of comparable Cisco routers, and at a lower cost. A high-end enterprise router based on Tasman technology is due later this year.

Zafirovski was credited with turning around Motorola's cell phone business while a top executive there from 2000 to 2005. His reorg at Nortel began with an overhaul of the executive management team, which included appointing former Juniper Networks exec George Riedel as chief strategy officer. Preliminary results for its fourth quarter ended Dec. 31 have Nortel with a net loss of $2.21 billion on revenue of $2.95 billion, compared with net income of $107 million on revenue of $2.59 billion for the 2004 fourth quarter.

Also last week, Zafirovski consolidated Nortel's Wireline Data and Enterprise Data groups into one division, with a plan to identify commonalities between the enterprise and carrier markets. That gets back to the quest for simplification, from combining and clarifying internal processes to bundling product offerings. "Everything must contribute to reduced complexity on the customer's part," says Peter Cellarius, business leader for Nortel's security, routing, and wireless businesses.

  • 1