More Talk from CTO John Roese

Nortel chief technology officer John Roese sure ain’t shy these days. He seems to popping up in the news on a regular basis, weighing in on Wi-Max one day and how YouTube could break the Internet the next. He recently sat down for an interview with CNet in which he talked about Wi-Max, 4G, Nortel’s prospects in the enterprise market, and consolidation in the telecom equipment market. A particularly interesting quote is Roese’s assertion “Nortel is a great company with great potential, but it was misdirected for the past five years.” Let’s break down this comment. First, Nortel is not a great company right now. It has some great technology and many smart people but it’s not a runaway leader in any sector so describing it as “great” isn’t accurate – although it is definitely a glass half-full view of the world. Second, Nortel has “great potential”. Well, every telecom equipment player has potential but the proof is in the pudding, and 2007 will be a crucial year for Nortel to prove it can execute on its strategic initiatives. Third, Nortel was “misdirected for the past five years”. That’s interesting because CEO Mike Zafirovski has been at helm for the past year. So, let’s give Roese the benefit of the doubt and assume he meant Nortel was misdirected from 2000 to 2005. This covers the John Roth, Frank Dunn and Bill Owens CEO eras. On this point, Roese makes a good point. Roth got caught up in the euphoria the telecom boom and was caught with his pants down when the market suddenly melted down – shortly after he boasted about Nortel driving towards $40-billion in annual sales amid strong market share gains. Frank Dunn was unsuited for the job and was fired with cause amid allegations he was part of an accounting scandal that triggered lucrative bonuses for senior executives. Bill Owens was unfortunatley unqualified to lead Nortel, although he did provide the company with some much-needed stability after Dunn was fired. Owens may have been a terrific U.S. Admiral but he wasn’t a world-class telecom CEO, and he made some costly strategic mistakes (e.g. driving the company to enter into a money-losing contract in India with BSNL, refusing to step aside and let COO Gary Daichendt run the show, etc.) Getting back to Roese, it’s probably time for Nortel to stop looking back at what happened. The company’s it what it is these days for better or worse. A better approach would be to look ahead and focus on a challenging competitive landscape.

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4 Responses to “More Talk from CTO John Roese”

  1. Not Observer Says:

    Looks like John Roese is doing a pretty good job at being the evangelist for Nortel. They’re getting decent air cover through various media outlets without spending a ton of money in advertising.

    It’s not very often that John Roese references history. That is something you and your buddy Observer do a lot. I haven’t seen specific comments about Roth, Dunn, Owens or Daichendt from Nortel people in quite awhile. The BSNL deal was done and finished about a year ago. Yet, these topics seem to creep into many of your comments and the hatred and revenge whines from Observer.

    Maybe you can do a story with John Roese. It would be interesting to hear his thoughts on the Canadian landscape and our adoption rates and impacts of emerging technologies such as WiMAX, IPTV, IMS and even VoIP. It would be interesting to see the forward view and what potential impact it will have for Canadian business as we compete in the global economy. It would be interesting to know where we stand versus other countries. That would be far more valuable than to have to read even more history stuff about Daichendt that is now meaningless for Nortel’s current and future direction.

  2. nortel Says:

    while it’s good to look forward, the truth is you can never ignore your past. to be accurate, it wasn’t me who raised nortel’s history but roese when he talked about the last five years being marked by misdirection. if you’re going to open the door with a comment like that, you have to expect some people are going to examine it.

  3. hak Says:

    Its really easy to critique Nortel’s past moves. You don’t need to be a highly paid new CTO to do this. The Yahoo message board is full of all the criticisim of the past the company will ever need. The real question is: what is nortel planning to do in the future?…When are we going to hear what is the strategy for the future since they missed the consolidation wave?? Yakking about all the great technology and WIMAX is nice..heard this before from other CTOs..what is the company going to do?? Mr Z and team have been running the place for one year…what’s the plan????

  4. Not Observer Says:

    Try this link: http://www2.nortel.com/go/news_detail.jsp?cat_id=-9742&oid=100205643&locale=en-US

    It’s a good high level description of Nortel’s strategic direction. We can’t expect Nortel to publically disclose significant detail as that would create competitive risk.

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