Nortel to simplify, expand services offerings

Nortel to simplify, expand services offerings

Nortel Networks has announced it will simplify its services offerings as well as provide integration of equipment from other vendors, in an effort to spur new revenue from the services it offers to large businesses and service providers.

Even as it streamlines its services, Nortel is also adding new ones, including integration services for IPTV and for voice over IP to help service providers deliver voice, data and video services faster and cheaper.

Nortel is creating a services business unit that would focus on five commercial services areas: integration, security, optimisation, maintenance and managed services, vice-president of sales and marketing for global services, Curt Hopkins, said.

"Nortel has provided services for years, but not a separate, intentional strategy and business unit," he said. "There will be a sweeping simplification, from 700 down to 70 discreet services."

About one-third of Nortel's 30,000 employees work in services, he said.

Nortel CEO, Mike Zafirovski, recently said that services would be one of six key areas on which Nortel will focus, noting that services and applications now account for less than 20 per cent of the company's revenue.

Nortel hopes to double services revenue in the next three to five years, Hopkins said.

It has offered managed services of multivendor networks for a long time but would begin offering maintenance services for other vendors' equipment, giving customers a single point of contact for repairs, Hopkins said.

Two North American service providers recently became the first to use the new multivendor maintenance services, he said. Hopkins declined to name the companies involved.

For Nortel's existing services customers, about half the network elements were non-Nortel, Hopkins said.

An analyst at Yankee Group Research, Zeus Kerravala, said that Nortel and other vendors needed to support and maintain equipment from other vendors to compete.

"If you're not Cisco, you need to be willing to service multivendor environments," Kerravala said.

NEC had used a similar strategy successfully for nearly three years, he said.

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