Nortel's Reality RoadNortel's Reality Road

Nortel faces a gargantuan task if they think they can reorganize and rebuild their empire to compete in an already crowded market.

The pundits have made predictions and observations about Nortel, but Nortel hasn't stepped up and the reality is the auction man may be near.Nortel has yet to file a reorganization plan with the bankruptcy court. How will shareholders gain the most during the worst possible economic times? According to Barron's report, Is a Nortel Breakup Nearing, WSJ sources say, "more value could be returned to stakeholders via divestiture than by trying to climb out of bankruptcy."

Reality is, Nortel faces a gargantuan task if they think they can reorganize and rebuild their empire to compete in an already crowded market. Winners and losers, and losing, are the part that folks often forget about in business. Back when Nortel's stock hit the pennies per share is when I believe a significant decision point for Nortel led them in the wrong direction making more bad decisions.

As dismal as an outlook as Nortel may be engulfed in, no one can forget about the Nortel embedded base. It's worth something. Cisco is too arrogant to buy Nortel and besides it's not their business model or behavior. They devour, sink and then redo or drop what they buy after they're done playing with it. Aastra having had long relationships with Nortel seemed a likely buyer but this is where it doesn't matter as much as what's ahead for users of Nortel. Microsoft doesn't get it and they have too much faith in their Response Point and can't think like "Bell heads."

I've mentioned in previous posts that distributors are aligning with Avaya not Cisco, and it's not because they want to expand their horizons. I've also mentioned that Nortel's embedded base is a loyalist but it needs to be said that they are not stupid or living under a rock either. This will be an exciting year, meaning for competing dealers/VARs anything could happen. In the meantime, all the anti-Nortel selling will continue and as some customers are departing Nortel, for those that wait, the rest of us know as much as you. Customers will ultimately decide what they will do and when. While Nortel's going, going, going they are not yet gone.Nortel faces a gargantuan task if they think they can reorganize and rebuild their empire to compete in an already crowded market.