Switchfast Blog: The Future of IT
Nortel sells wireless business, further signals change in telecom landscape
Monday, June 22, 2009 by Michael Holley
Nortel announced the sale of its most profitable wireless
divisions to Nokia, for a sum of $650 million, signaling the start
of what may be a long-awaited large scale sell off of the telecom
giant's assets.
The developing demise of Nortel, once the most substantial
corporation in all of Canada, was been quite public since its announcement of Chapter 11 bankruptcy in
January of this year. Amidst all of the shocking news, questions as
to "what went wrong" have continued to arise. Surely, the telecom
bust of the early 2000's set this all off, but how have so many
other telecom companies managed to stay afloat while Nortel, a
century old company worth upwards of $250 billion in the 1990s, has
completely fallen apart?
An enlightening article by James Bagnall of the Ottawa Citizen
points to numerous major mistakes made by management beginning over
a decade ago. Bagnall paints a picture of a company who felt too
safe and failed to make the changes necessary to survive in a
rapidly changing industrial landscape. When trouble befell the
entire telecom industry, Nortel stuck to its guns, refusing to be
acquired during a period when the rest of the industry was
consolidating to survive. Eventually, Nortel's more innovative
competitors came out on top.
As Nortel "restructures," we have to ask ourselves what can be
learned from this massive failure that will leave thousands without
jobs. The simple lesson for businesses is simply to stay ahead of
the game. Don't let operational inefficiencies turn into money pits
(or worse, competitive disadvantages) like Nortel's outdated
accounting system did. Continue to innovate, developing or
improving products and services. The market is always changing, and
those who adapt the quickest will be the ones left after the dust
settles.
Best,
Michael Holley
Switchfast Technologies
Chicago IT Support
& Consulting
Rochester
IT Support & Consulting
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