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Technology Stocks : Nortel Networks (NT) -- Ignore unavailable to you. Want to Upgrade?

To: Kenneth E. Phillipps who wrote (5265)	4/6/2000 9:45:00 PM
From: telecomguy	Read Replies (1) \| Respond to of 14638

A new group of aggressive, pesky startups has begun competing hard for the performance lead in network equipment. And much of the telecommunications industry -- the incumbent long-distance and regional phone companies that plan to spend tens of billions of dollars on equipment during the next several years -- doesn't buy Cisco equipment or Chambers' version of the future. The new challengers include young companies such as Juniper Networks Inc. and Foundry Networks Inc. that have jumped up to deliver high-performance networking gear that, in some eyes, beats Cisco's high-end gear in performance and reliability. When Exodus Communications Inc., the world's largest Internet data center company, wanted new equipment to run its highest-speed networks, it looked to Foundry Networks. The reason, said Exodus chief executive Ellen Hancock, is that her data centers' extremely high Internet traffic volumes were "stressing" the high-end Cisco gear it had installed. Analysts say Cisco's much smaller challengers are making similar inroads among other performance-hungry customers such as Denver's Qwest Communications. And the big players in the telecom industry are placing multibillion-dollar orders for new equipment to upgrade their networks, and many of them aren't turning to Cisco, either. They are turning to established telecom equipment suppliers such as Lucent and Nortel. Telecommunications industry analyst Tom Nolle of CIMI Corp. in Voorhees, N.J., notes that the regional Bell operating system companies such as Southwestern Bell Telephone Co. represent more than half of the communications revenue in the United States. All have announced major network upgrade programs, and Cisco, Nolle said, hasn't won any of those major contracts. That's partly because most of them are not yet ready to put their faith in Internet communications technology as the center of their business. They don't believe, as Chambers does, that it's an IP world. "Everyone acknowledges that Cisco is dominant in the Internet," Nolle said. "But most people don't realize that the Internet represents less than 1 percent of worldwide communications service provider revenue. The Internet rides on the backbone of the public switched telephone network." Nolle's conclusion? "Convergence is nonsense." Industry analyst Beth Gage with Telechoice in Denver says the communications convergence that Chambers talks about will happen -- only at a far slower pace than Cisco is counting on. "Convergence is an evolutionary process, not an overnight occurrence," Gage said. "Cisco has what it takes to be a player in (the telecommunications equipment) market. It's a little bit early to call who is going to be the kingpin. It's easier to call who is going to be the top three: Cisco, Nortel and Lucent Technologies in the U.S."

To: Kenneth E. Phillipps who wrote (5265)	4/7/2000 8:41:00 AM
From: Bosco	Read Replies (1) \| Respond to of 14638

Hi Ken & all - speaking of being aggressive, NT is also very so in continuing the radical restructuring. She is outsourcing corporate services altogether to PriceWaterhouse Coopers This is quite forward looking. Of course, outsourcing is not necessarily a no brainer, if it is not done right. However, in this focus demanding world, the less of non core functions one has to deal with, the better the chance one can get the core biz out the door ahead of competition. This is something LU and HWP etc may want to consider The following is a cut and paste from my daily IW newsletter -TOP STORIES- - Nortel Signs $625 Million Outsourcing Contract PricewaterhouseCoopers boosted its business-process outsourcing services practice Thursday by signing a five-year, $625 million deal to manage corporate services for Nortel Networks Corp. This is the first BPO contract between the two and the largest such contract ever in Canada, according to PricewaterhouseCoopers. About 1,100 Nortel Networks corporate-services employees worldwide will become PricewaterhouseCoopers employees. PricewaterhouseCoopers will assume responsibility for Nortel corporate services, including payroll, human resources, procurement, accounts payable, capital services, employee expense reimbursement, and employee training. Nortel's market, which encompasses Internet telephony, data, E-business, and wireless applications, is evolving too fast for the company to focus on back-office functions, says Jagdish Dalal, a partner in PricewaterhouseCoopers' BPO practice. Says Dalal, "PricewaterhouseCoopers will change the existing human-resources and procurement infrastructures to make them more efficient, which is a key to business-process outsourcing. We also plan to Web-enable HR and procurement functions for Nortel." The deal with Nortel is the third large BPO contract PricewaterhouseCoopers has signed in the past nine months. In January, PricewaterhouseCoopers and BP Amoco reached a $200 million, 10-year agreement to expand their global BPO relationship to include Canada, where BP Amoco is the largest producer of natural gas. In July, PricewaterhouseCoopers signed another $200 million BPO deal, this one with Equifax, to manage certain portions of that company's HR administration, finance, and accounting functions. - Larry Greenemeier