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Nortel Faces Its Customers at VoiceCon

In one of the more remarkable sessions I can remember at a VoiceCon, Nortel Enterprise Solutions' top execs took questions from customers worried about their future with the vendor as it moves through Chapter 11.Give them credit: Enterprise Solutions president Joel Hackney, Marketing VP Wes Durow and Enterprise CTO and Chief Strategist Phil Edholm stood up in front of the group of 90 Nortel customers and took on all comers. Most of the questions were polite; there weren't any fireworks, though many of the questions were pointed.

There weren't many definitive answers, largely because such answers either don't exist or can't be discussed or speculated on by the corporate leadership. Still, the customers in this room expressed their concerns frankly, and the Nortel execs seemed to be doing their best to say what they could.

Hackney began by asserting that Nortel is "announcing continuous innovations" like recent or pending upgrades to the CS1000 core telephony platform and the Contact Center 7.0 system. He also said service and support have remained strong, and that the company is "absolutely on track" to meet a May deadline to announce its reorganization plans.

But Gary Bernstein of McGill University offered this response: He said he is poised to replace 10,000 stations and "My heart is with Nortel; we've been with them 20 years." But, he said, "What I've heard is a marketing message." What he wanted to hear was, "How does a customer react to the uncertainty?" And he added, ominously, that given the uncertainty, he has to bear in mind that, "Today, you can't get fired for buying Cisco."

Hackney did his best to assure Bernstein that Nortel is continuing to invest in product development and customer support, and that its channel continues to support its products as well, and reminded him that Nortel's path forward will be publicly known this May.

When several customers asked about distributors' adding other vendors' products to their offerings, Hackney conceded that there are "some channel partners that are trying to hedge their business models." One customer in the audience told Hackney bluntly: "Not all of your channel partners have been serving you well" since the filing.

Asked about an earlier reference to customer wins since Nortel's January 14 Chapter 11 filing, Wes Durow cited the "largest hospitality deployment on the planet," and Hackney pointed out that the U.S. Social Security Administration was only 10% into its massive 125,000-seat deployment at the time of the filing, but has chosen to move forward. Hackney also cited a "major financial institution." Bottom line, according to Hackney, was that order rates have been rising every week since their initial dropoff after the filing.

One particularly pointed question came from a customer located in the Research Triangle Park area, who noted that local media had covered Nortel's decision not to pay severance to its laid-off employees. This customer asked why he and his peers should trust a company that would take such a step.

"As a professional that's been in business for 20 years, there's nothing that's pained me more than that," Hackney replied, though he said that Nortel, in consultation with its creditor committee, had concluded it had no other choice.

I'll close with a personal thought. I started out by saying that this was a remarkable session, and as a co-chairman of the VoiceCon program, I appreciate the Nortel execs' willingness to stand up and take the heat. No company wants to air these kinds of issues in public, but Nortel understood that their customers were going to be at VoiceCon, and were going to be having this conversation either with or without them, and they agreed to be part of the conversation and offer as much as they could. The uncertainty that hangs over Nortel--and its customers--was not going to be dispelled in one hour in that room, but customers were at least able to speak their minds and be heard. Keeping that dialogue open is Nortel's best hope for keeping those customers in their camp while the situation is being resolved.