VoIP by Numbers, 1, 2, 3

Nortel has a new program called IPT 1-2-3 to encourage sales of customers looking to migrate to VoIP from legacy systems. An interesting comment was made to CRN by Pat Patterson, Nortel’s director of North American IP telephony marketing, who said: “When we looked at the large installed base that Nortel has in hand, we weren’t gaining our fair share of the IP telephony market”. He went on to tell CRN that in many cases, Nortel’s channel partners found it easier to quote a “rip and replace” solution from Cisco rather than adopt a solution that would use a combination fo old and new Nortel equipment. These are certainly interesting statements, aren’t they? It suggests Nortel’s VoIP equipment isn’t competitive and/or its sales systems/progrmas aren’t working or effective. That’s a troubling admission by Patterson. Update: As a reader was quick to point out, the CRN article also talks about Nortel has also created a new tool so partners can get quotes far quicker to customers. Nortel is also providing financial incentives and financing options. Still, is it just quotes and prices that have been at the root of Nortel’s woes?

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3 Responses to “VoIP by Numbers, 1, 2, 3”

  1. long on nortel Says:

    If you read the entire article it suugest that the issue was that of a poor pricing methodolgy and not inferior product, when posting these extracts be responsible and present the facts or at least the enire article.

  2. Godzilla Says:

    the issue is that migrating from legacy system to VoIP is itself a legacy strategy.

    It was devised back when Nortel and Avaya/Lucent had the lion’s share of the PBX market, and when VoIP was far less mature than it is today. The strategy aimed at transitioning weary customers from TDM systems to VoIP progressively, thus allowing incremental steps, and progressively locking the customer into the Nortel solution. The thought was that a small incremental step would be cheaper initially than a rip and replace from Cisco or whoever, and would make the customer progressively more comfortable with the VoIP concept. Of course this was a complex strategy, with many moving parts, and compared with the simplicity of Cisco’s forklift strategy. Avaya had a similar strategy

    Fast forward 2006. VoIP is now much more stable, customers are much more familiar, and pricing continues to edge downwards. There are a lot fewer qualms now about forklift: it is simpler, quicker, gets it done, so the customer can then move on and focus on other priorities. (note: are there also SOX issues? with a migration plan, you may not be able to recognize revenues for years)

    In summary, Nortel’s comples progressive migration strategy was designed for a different age when they had market dominance, and when customers viewed VoIP with suspiscion. The equipment is fine. It’s the marketing and strategy that have become stale.

  3. All Nortel, All the Time » Blog Archive » VoIP 1, 2, 3: Analyst Reaction Says:

    […] Orion Securities analyst Duncan Stewart has picked up on the news report that Nortel has a new channel program in place to make it easier for existing and potential customers to migrate to VoIP from legacy telephony systems. Stewart is pleased Nortel has recognized a problem that encouraged channel partners to “rip and replace” Nortel gear with Cisco’s, but he said it is a “bit horrifying that this was not fixed sooner”. Here’s an excerpt from his research report: […]

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