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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: mtnlady who wrote (21316)	3/25/2000 11:22:00 AM
From: Mike Buckley	Read Replies (3) \| Respond to of 54805

mtnlady, Time for me to 'fess up. I suspected your answers would indeed be that Nortel is a royalty play with no proprietary architecture. (I'm not ignoring your comments about the company's patents that exploit the non-proprietary architecture.) My questions about that were loaded questions. You've been referencing the manual's assertion that the far-and-away leader during the tornado never loses that market share. However, that applies only to Gorillas and in fact is one of the hugely important distinguishing characteristics between a gorilla play and a royalty play; whereas the Gorilla always holds that market share until it is unseated by a discontinuous innovation, a King or lesser member of royalty is always under the threat of declining market share that is the result of better execution by an opponent. Not to speak for Frank, but I suspect his assertion that Cisco can come late to the fiber optics party and still dominate it is based on the company's strength as a gorilla in the networking space while being leveraged along with supreme execution to ultimately beat out Nortel in the fiber optics space. I don't know enough about this stuff to agree or disagree with him, but his theory (if I understand him correctly) is firmly rooted in Gorilla Gaming. I look forward to a lot more discussion about this. --Mike Buckley

To: mtnlady who wrote (21316)	3/25/2000 8:31:00 PM
From: Kenneth E. Phillipps	Respond to of 54805

Is Nortel a Gorilla or leading Gorilla candidate in any field or is Nortel limited to royalty plays?" Let me give you my opinion. I think Nortel is an emerging gorilla in fiber optic network management. They are currently building 32 out of 40 long haul fiber optic networks. All of these networks have their propreitary network management system which is interoperable with other network management systems. I think their network management will become the defacto standard. Providers will continue to choose the Nortel product because of their superior network management. If you look at their claims for OPTera and "Packet Core" which promise a certain level of integration between the optical layer and the switching/router layer which makes it easy for the carrier to deploy bandwidth to congestion points on the network and their new technology with Qtera, Xros and the tunable laser, they are continuing to deliver a better product for lower cost. In this market, the winner will be the company who can deliver the best product in terms of price/performance. All of Nortel's main competitors are behind them in the critical area of network management. Cisco became a gorilla with IOS. Nortel will become a gorilla because it will control the network with its network management system.