Cisco to acquire Nortel?

Yesterday in Houston, a Nortel representative said to a customer that a Cisco acquisition of Nortel is in the works. He added that Nortel has been restructuring itself in anticipation to the acquisition.

Since I am at the Asterisk conference, I presented the above as a question to one of the conference speakers, who happens to be very knowledgeable about the two companies. His answer? "I have heard that claim before but I'll believe it when I see it... Nortel's hardware is excellent but its software sucks".

Any comments?

-Ramon F Herrera

Reply to
Ramon F Herrera
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Don't forget the call-center applications. I work for a company that uses Nortel Symposium. Recently there has been some interest in Cisco solutions as well, but there is nothing at the moment that Cisco can offer that even compares to Nortel's offerings in terms of configurability (scripting of phone menu's), reporting etc.

I'd say that (apart from the customer base) the callcenter market is a big one and Nortel's offerings would give Cisco a proven solution in this area.

Reply to
gekkeprutser

Hi Ramon,

John Chambers and Cisco have the most successful "acquisition strategy" on earth.

Nortel does not fit that strategy.

Sincerely,

Brad Reese BradReese.Com Cisco Repair Service Experts

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Hendersonville Road, Suite 17 Asheville, North Carolina USA 28803 USA & Canada: 877-549-2680 International: 828-277-7272

Reply to
www.BradReese.Com

Well, I guess the question is: "What does nortel have that cisco would want?" The only answers I can come up with are: customers, and an aging TDM platform that nortel's been trying to move all their customers off of. There really isn't all that much left that cisco doesn't already have.

J
Reply to
Jeff Pratt

In article , Jeff Pratt wrote: :Well, I guess the question is: "What does nortel have that cisco would :want?" The only answers I can come up with are: customers, and an aging :TDM platform that nortel's been trying to move all their customers off of. :There really isn't all that much left that cisco doesn't already have.

The Baystack 5510 / 5520 switch series is faster than Cisco's corresponding offerings, and sells for about 40% of Cisco's street price.

Why aren't we hearing a lot more about the 5510/5520? I'm not sure, but I'd guess that in part it's because the current layer 3 capabilities and QoS services are pretty limited. Cisco's 3550/3750 and related devices are swiss army knives compared to the 5510/5520.... but still, there's plenty of times where one just needs fast layer 2 plus a small bit of static layer 3, and Cisco cannot currently compete in that market.

Reply to
Walter Roberson

Jeff Pratt schrieb:

I know Nortel customers that would cut both their legs off instead of buying Cisco. Regardless of the products.

Reply to
Uli Link

Ramon F Herrera a écrit :

That sales rep wants you to buy Nortel products. His February trip to Cancun relies on it. Since you probably said to him that you had doubts about buying Nortel because you thought it was headed towards extinction, he just piped up that "don't worry, It'll be picked up by Cisco" to make you think that it would still be supported in the long run.

Reply to
Francois Labreque

Sounds like another urban legend to me. Some years ago there was a rumor of Cisco looking to acquire Mitel. Most recently there was a rumor going around Houston that Houston-based HP might be wanting to put together a deal with Mitel. We've also heard stories of Foundry Networks looking at a Mitel acquisition. Houston is the rumor capitol of the free world. If you heard it in Houston it's got to be so. :-)

Personally I cannot imagine what Nortel might have that would interest Cisco. Maybe they'd want Nortel's old TDM technology so they could put together a hybrid (like the Mitel 3300) and thereby offer Nortel's legacy TDM customer base a less painful migration strategy to get to IP.

Reply to
wdg

If there really were an acquisition in the works, I think that everyone in the know would be required by the SEC to keep silent about it. So anyone talking about it would either be passing on a rumor or violating insider information laws.

Reply to
Barry Margolin

Hi Ramon,

Huawei Technologies is privately-held with sales of $5.5 billion in

2004 that are expected to top $8 billion in 2005 --- this will leapfrog Nortel and be on the heels of Cisco in less than 3 years.

Huawei international sales double every 12 months exceeding $2 billion in 2004.

With 30,000 staff members worldwide, Huawei sales in Europe will triple in 2005:

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Unfortunately, Nortel's future prospects are not to "robust" compared to this newcomer.

Sincerely,

Brad Reese Cisco Authorized Distributors Worldwide

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Reply to
www.BradReese.Com

Frankly, Cisco's software blows pretty bad too in light of the premium we have to pay for their gear. I don't think anyone would argue that Cisco is best of breed in too much of anything - their hardware is slow compared to just about any vendor they go up against (perhaps the SUP

1440 will help in that area). The big boys (ISP's and carriers) use Juniper. Their add-on products are even worse. CiscoWorks (or doesn't!) 2000 is an example. CallManager is full of memory leaks and is almost impossible to keep at Microsoft's recommended patch level. One has to have a friggin' PhD to understand and follow their IOS trains. The quality of IOS, in particular, is downright maddening anymore. I have uncovered at least three bugs in the last two months, and only while cleaning up some EIGRP routing issues. We run VoIP and the quality and fragility (is that a word? hehe) of the IOS and it's relation to the hardware DSP's is nothing short of frustrating. Anyone every try to beat DSP's, IOS, and VoIP faxing into submission? Can I get a witness here? :-)

Despite my growing frustrating with Cisco, I still purchase their products and maintain my certification. Why? Well, I guess it's for two reasons. I get great support from our Cisco partner (SBC), and, Cisco has one thing that no other vendor has - a "soup to nuts" solution. I run a little of everything in my network - I've got an ONS15454 optical platform, 7200's, 1760's, 3700's, BGP, VoIP, PIX, MPLS, and all kinds of PSTN interfaces/H.323 gateway functionality. There is at least one other positive about their code - the featureset is indeed rich and support for diverse and demanding applications via QoS and other traffic control mechanisms is pretty darned good.

To be fair, I can only imagine what it would be like to try to support the chassis and module/line card combos in Cisco's portfolio. However, I still think they REALLY need to work on the quality of their software if they aren't going to make up for their other performance deficits, especially when compared to other vendors.

Reply to
Cisco Guy

Yes but that product only works on Nortel, so why would Cisco want something that would have to work with their IP system.

Reply to
DPGumby

I know both HP and Foundry have partnership deals with Mitel, but other then that why would they want to buy the company?

Reply to
DPGumby

My question would be why? What does Nortel have that Cisco would want so desperately? Sure with the drop in Nortel's stock price it would be a relatively a cheap buy but again why? Cisco has usually been pretty smart in its buys but I don't know if buying Nortel would be considered smart. Do they want the base, their manufacturing capacity, engineering resources or their huge debt? Would they want Bay Networks portfolio? What hole in Cisco's offerings would the purchase fill? There has to be some kind of reason for a take over, Nortel is not exactly a small entity, they would still take a lot of money to purchase. You also have to remember the two cultures are completely different. Nortel is still from the old telco religion, everytime a data company has taken over a telco player it hasn't exactly been peachy. The data and telco worlds are still very differect mentalities.

Me, I don't see it. Also I doubt that a "Nortel rep" would yak somethng like that even if true. " Yeah Cisco is buying us so why don't you run out and buy our stock before it jumps in price due to this merger" I don't think so. Maybe I see it in the Wall Street Journal, I take it seriously.

Reply to
DPGumby

What about acquisitions? I mean there's been a lot of talk about acquiring Nortel Networks or something big like that. Chambers: I don't know how to do large acquisitions--which is a very nice way of saying I haven't seen any that would be successful.

Our strategy is more to use acquisitions to enter new markets. Our ideal target is about 100 people, primarily in an engineering product area, with good engineers that are just about to bring a new product out (or has just come out.)

What about this chatter about Nortel? Chambers: Nortel is a very good company...I've been wanting to partner with Nortel for five to six years. I still believe that--much like we did with IBM and with Ericsson--strategic partnership is the right way to go. Acquisitions have a much higher risk. I would argue in the industry, the hit rate on acquisitions is probably 10 percent...To do large ones across geographies, across cultures--we don't think they have a very high probability of being successful.

A clip from a C-Net interview with the president of Cisco. Maybe this is the ultimate answer, at least if its a smoke screen you don't see him blabbing it in the press like the "Nortel rep" in the orignal post on this subject.

Reply to
DPGumby

When that blue line (NT) starts heading up and the red one starts heading down (CSCO) - then people are hearing rumors. It is interesting that it opened higher - but if it was related to CSCO, they would have dropped real hard

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Reply to
GHTROUT

You think if they were to buy them they would have when Nortel was down around $.67 not when they are up where they are now.

Reply to
DPGumby

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