Blessay: Lessons to Be Learned From Nortel’s Death Throes

A couple of days ago I explained how cyn­icism and regret are valu­able think­ing pro­cesses for a Network Designer. The long fore­seen fail­ure and sub­sequent breakup of Nortel presents a oppor­tun­ity to look back with regret and learn cyn­ical les­sons for the future.

Even Big Companies Fail

The biggest les­son to be re-​​learned is that even the biggest com­pan­ies fail. Nortel and Cisco were the top two play­ers in the Voice/​Data mar­ket­place at the end of the century.

Lesson:You might think Cisco, or IBM, or EMC, or VMware may be too big to fail but that isn’t true, Nortel proved it.

They didn’t integrate

I have been work­ing with Nortel since 1996 or so, when they were called Bay Networks¹. When Bay Networks and Nortel merged in 1998/​1999, Nortel was widely hailed as the mes­siah of the pre­dicted voice/​data net­works, and rein­forced the pop­u­lar man­age­ment concept (of the time) that a com­pany with a large port­fo­lio of products would be bet­ter than smal­ler, focussed companies.

But the integ­ra­tion didn’t work. To this day, most every engin­eer still thinks of the Nortel data products as Bay Networks rather than Nortel. This lack of integ­ra­tion (real or ima­gined) meant that my per­cep­tion of Nortel was never very strong. This under­mined their over­all place in the marketplace.

Lesson: If a com­pany merges or acquires com­pan­ies, and the mer­ger doesn’t look good, look closely to see if there is some deeper problem.

Proprietary Features means no Exit — Choose Open Standards

If you have based a net­work design on any Nortel spe­cific fea­tures or hard­ware, you will exper­i­ence some dif­fi­culty. Generally, Nortel’s Enterprise Data divi­sion has been one of the best com­pan­ies and set­ting and fol­low­ing stand­ards. They were, and are, reg­u­lar con­trib­ut­ors to IETF, 802.1 and so on. Nortel’s voice products are com­pletely closed and pro­pri­et­ary and you must be a little con­cerned at the moment.

As a designer, it’s time to remem­ber that open means integ­ra­tion with other vendors and that a migra­tion with mixed vendors is pos­sible. Right now, we are see­ing quasi-​​proprietary or marginally-​​closed solu­tions com­ing from the Storage mar­ket­place and rein­forced with ‘val­id­a­tion’ and ‘cer­ti­fic­a­tion’ pro­grams. Is this a sign of poor tech­no­logy stand­ards, poor imple­ment­a­tions or some­thing else ? If vendors can’t inter­op­er­ate with tech­no­logy based on stand­ards what does this mean ?

Lesson: Avoid pro­pri­et­ary fea­tures even if the vendor offer such features.

Service Levels Going to be Bad

When your vendor fails, the sup­port doesn’t always get bad imme­di­ately but it does get poorer and poorer over time. No mat­ter who buys them, the exist­ing products are never as import­ant as the new products.

If you remem­ber when DEC/​Digital Equipment was acquired by Compaq, the Networks Products Business Unit was not part of the pur­chase. No one ever pur­chased it and the main­ten­ance con­tracts were sold to a com­pany who ware­housed spares and provided no fur­ther soft­ware updates.

Lesson: Maintenance and sup­port mat­ters. but if your vendor fails, you don’t have many choices.

Strategy Overhaul

If you had a strategy based around a vendor that is fail­ing in the mar­ket­place, are you able to change to meet this require­ment. In my exper­i­ence, once you have made a sig­ni­fic­ant invest­ment in train­ing and main­ten­ance of a given vendor, large com­pan­ies are very reluct­ant to change that strategy.

Are you able to over­haul your strategy and change vendor ? Do you have a mech­an­ism that can get agree­ment to walk away from your sup­plier to a new one ?

The Value of Open Standards

And take this oppor­tun­ity to be thank­ful that net­work­ing is an industry of open stand­ards. Unlike stor­age net­work­ing which emphas­ises ‘val­id­a­tion’ and ‘cer­ti­fic­a­tion’ for products that are sup­posed to work together, Data Networking demands that vendors inter­op­er­ate and is one of the greatest strengths of our industry.

Wrap Up

The fail­ure of Nortel is a sad story, and I have always wondered why Nortel didn’t do a good job, but we should always learn from what hap­pens around us. Hopefully, I have covered a few of the top­ics that we could learn. I will try to remem­ber them in the future when I’m select­ing products and vendors in my designs and architectures.

Footnotes

1. actu­ally, Wellfleet but no-​​one wants to remem­ber back that far surely [back]

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