Nemertes Impact Analysis:

Nortel To Sell Remaining Assets, What's Next For Customers?

Nortel Networks (TSX: NT | OTC: NRTLQ) announced it will sell off its remaining business units and de-list itself from stock exchanges. Rumors continue to swirl around potential business unit buyers. Nortel's decision to cease operations underscores the weakened global economy's impact on telecom systems vendors. More than half of Nemertes' research participants have decreased IT spending in the last year, with corresponding reductions in capital spending.

Impacts:

Enterprise: Those considering Nortel purchases should look elsewhere. Numerous competitors offer migration incentive programs for existing Nortel customers (and channels). Talk to your resellers about their plans and investigate incentives to migrate to other vendors, otherwise sit tight until the fate of Nortel's enterprise division is known.

Vendors: Exploit the opportunity to acquire new channels and customers with programs to encourage Nortel's customers and partners to switch. Expect fierce competition, but don't expect a sudden spending boom until economic recovery is certain.

Investors: Nortel's potential business unit suitors include Alcatel-Lucent (NYSE:ALU), privately held Avaya, Cisco (NASDAQ:CSCO), HP (NYSE:HP), privately held Siemens Enterprise Networks, and Tellabs (NYSE:TLAB).

Irwin Lazar, Vice President, Communications Research

http://www.nemertes.com/impact_analyses/nemertes_impact_analysis_nortels_chapter_11_filing_indicates_bumpy_road_ahead_telecom_system_vendors
http://www.nemertes.com/ongoing_research/nemertes_ongoing_research_spring_2009_research_benchmark_computing_and_communications
http://www2.nortel.com/go/news_detail.jsp?cat_id=-8055&oid=100257883&locale=en-US

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