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What accounting woes? Nortel exec keys on convergence

In a surprisingly positive keynote at N+I, a top Nortel executive says the troubled networking company is focused on developing convergence technology, and not on the accounting fiasco that took down its CEO.

LAS VEGAS -- Malcolm Collins, president of enterprise networks at Nortel Networks Ltd., brushed aside concerns about recent accounting problems and management turnover at the troubled networking vendor, and instead touted the company's vision for network convergence.

In a keynote speech Tuesday at Networld + Interop 2004, Collins said that the Brampton, Ontario, Canada-based networking company has remained focused on developing technology, despite the accounting troubles that have cast a shadow over the firm.

Nortel fired CEO Frank Dunn and two other executives late last month, once it was discovered that its long-standing accounting problems ran deeper than many believed. Nortel is expected to restate its 2003 earnings for a second time, which will likely reduce profits by 50%, and it is under investigation by the U.S. Securities and Exchange Commission, as well as the Ontario Securities Commission.

However, Collins touted new CEO Williams Owens' efforts to integrate information technology into the military, and said that Nortel was on the verge of a great opportunity.

"The mood at the company has changed from surprise to excitement," Collins said.

According to Collins, that excitement revolves around the potential growth market for network convergence. Collins said that convergence doesn't mean simply VoIP technology to an existing network, because that only creates a voice service no different from what most companies are trying to replace. Convergence, he argued, involves getting something greater from the combination of disparate elements.

In a long list of comparisons that he drew between networks and other technologies, he said that a spork -- a less-than-popular pairing of a spoon and a fork found in some fast food restaurants -- would not qualify as convergence. But the escalator, the popular and useful marriage of the drive train and the staircase, more accurately illustrates convergence because it combines two useful inventions to create something even better.

Businesses are now looking to combine voice, video and presence-awareness applications on data networks. Carriers are moving to IP-based technologies. Other advances, such as standardized power over Ethernet, are helping drive convergence as well.

For more information

Learn what one expert believes led to Nortel's turmoil.

Read how rival Avaya says it must win the VoIP battle.

Additionally, Collins said the concept of work is moving from something defined by a place to an activity that one can engage in anywhere, anytime using any number of devices. That means employees must have ready access to data and to each other, via phone, e-mail, instant messaging and video conferencing. He said that's why convergence must be based on business needs, and network changes have to cater to applications.

That was a sentiment that resonated with attendee Joe Kiss, a network architect with Calabasas, Calif.-based mortgage firm Countrywide Financial Corp. Kiss is currently working on moving the company to Multiprotocol Label Switching service from its WAN provider, and integrating power over Ethernet. Hearing Collins' speech made him realize how much he is actually moving toward convergence.

While there are not specific applications driving these changes, Kiss said that he needed to ensure that his network was up to whatever use it may be put to in the future.

Collins said Nortel is well positioned to take advantage of the growing interest in convergence because of its history with networking and carriers, as well as its large voice business.

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