Nortel Rejuvenates Enterprise Business

After several years of slumping financial results and massive layoffs that caused many to question whether the company could even survive, Nortel is now approaching profitability and refocusing on solution providers, said Collins, president of the Enterprise Networks division of Nortel, based here.

Nortel appointed Collins to head its enterprise business in December, two months after a reorganization that split Nortel's enterprise and wireline carrier businesses into two separate units.

The separation was a first step toward distinguishing Nortel's efforts in enterprise networking and IP telephony from products that served the floundering service provider sector. Now Enterprise Networks is profitable, contributing 25 percent to Nortel's overall revenue, Collins said, adding that the vendor expects to break even in the second quarter at the latest.

Solution providers said Nortel has been preoccupied with financial struggles but is now working to prove itself a worthy partner.

"Now they have to get their products back into the market, and clearly they can't do it without the channel," said Bill Corbin, president of Network Catalyst, a solution provider in Irvine, Calif. "Our channel manager, who was nonexistent over the last 12 months, now is in here two to three times a week."

Collins said he faces the task of rebuilding solution providers' faith in the company and its enterprise plans. "Our biggest obstacle out there today is [building] channel loyalty and confidence," he said.

To that end, Nortel is rejuvenating its lead-generation efforts and building interest in its offerings with a new branch model that puts its reps in front of customers while ensuring fulfillment through partners, Collins said.

Also, Nortel has bolstered the capacity of its high-end Succession IP-PBXes, revamped its networking lines and placed more emphasis on the midmarket, especially when it comes to applications for its IP telephony products, he said.

John Wassenbergh, vice president and general manager of Shared Technologies, a solution provider in Hackensack, N.J., said Nortel has provided viable migration paths to IP telephony for its legacy PBX customers.

After all, Collins really has a second mission too: to take on networking behemoth Cisco Systems by convincing partners and customers to shop around before purchasing Cisco gear. "We want to give choice back to partners and users," he said.