Cisco Layoffs Revisited

I was a bit ahead of the curve with my initial report regarding layoffs at Cisco. The axe did indeed appear to fall in at least one location after I made my post.

Now, though, Om Malik is reporting that potentially significant layoffs might be imminent at the world’s largest networking vendor. Stay turned, both here and there, for future details as they are made available.

Getting bad news from vendors is like getting the Bush Administration to admit the economy is in the crapper, so if you have any information you can share, anonymously or otherwise, please feel free to do so.

Nortel’s Destiny as Microsoft’s Unified-Communications Sidekick

If you read this article by Network World’s Jim Duffy closely, you cannot help but come to the conclusion that the unified-communications partnership between Microsoft and Nortel will result in one vendor benefiting enormously and the other left as nothing but a reseller sidekick.

If you guessed that Microsoft will emerge the winner and Nortel the impoverished second banana, congratulations! Your perspicacious powers of perception have not failed you.

I admit, Nortel was backed into a dark corner when it cut this Faustian pact with Microsoft. Really, Nortel didn’t have many options. It needed to expand sales channels for its IP PBX product line, as a means of keeping revenue flowing and of keeping itself relevant in enterprise voice communications. Microsoft was there, offering a shrewd deal that promised Nortel near-term sales opportunities and long-term irrelevance. It was an offer the beleaguered suits at Nortel couldn’t refuse.

For their part, the opportunistic business-development executives at Microsoft know a desperate mark when they see one. They realized that Nortel could be exploited, that Nortel needed a lifeline tossed its way, and that Nortel had the missing piece of SIP-based voice technology that would invest future versions of Microsoft’s Exchange Server with compelling unified-communications features and functionality.

It was a relationship of convenience, but one in which only one vendor had thought several steps ahead to the ultimate end game. Sure, Nortel has opportunities today to sell IP PBXes and related software that interoperate with Microsoft’s Exchange Server and Office Communications Server. When this relationship is consummated, though, when it all comes to fruition, the need for the Nortel products will evaporate and Microsoft exclusively will provide a fully integrated, software-based solution to enterprise customers.

Maybe Nortel was hoping Microsoft would buy it rather than just bleed it of its enterprise lifeblood. But there’s a lot of baggage at Nortel — like, say, its entire line of telecommunications-equipment gear — that Microsoft had no interest in owning. There also were corporate integration issues that weren’t worth the headache. Why buy the cow when you can get the milk at cut-rate prices?

Microsoft had time and strategy on its side. Nortel had neither.

The Wry Comedy of Wireless Operators

After the European Commission threatened regulation as a means of enforcing data-roaming price reductions in the Old World, the ironic humorists at the GSM Association (GSMA), the organization that represents the voracious appetites of wireless operators, retorted that such an interventionist government measure would stifle innovation and stunt the development of new data offerings for roaming.

The GSMA apparently issued the statement with a straight face, too.

Here’s a droll quote from the organization:

"This market is evolving rapidly, as operators develop new and innovative services and tariff packages, including flat-rate pricing packages and bundles," Tom Phillips, chief government and regulatory affairs officer of the GSMA, said in a statement. "In such a period of rapid growth and innovation, the GSMA believes that talk of regulation is premature."

I bet you had no idea the telecommunications industry was known for blinding innovation and consumer-friendly new offerings.

It must be a joke. After all, I tend to equate the telecommunications sector’s embrace of new technologies with a unforgiving death grip. Look what they’ve done to SIP, for example. Look what they’re doing to WiMAX. Before that it was ATM, ISDN, and a host of others.

Give them full marks for understated comedy, though. Where were these guys during the Hollywood writers strike?

Does RIM Truly Understand Its Customers?

Research in Motion (RIM) must develop a greater sense of urgency with regard to finding a solution to the periodic service outages that afflict its BlackberryBerry network infrastructure.

BlackBerry customers buy the handheld devices and subscribe to inordinately expensive service plans with wireless operators because they don’t want to be disconnected from their work-related communications . . . ever. These people pay a premium for the dubious privilege of being continuously online, and being available for business correspondence and information exchange, all the time.

The BlackBerry network infrastructure, and the service it provides, is not like a standard consumer-oriented website, such as AOL.com or Yahoo!. People might be annoyed if one of those services were unavailable, but they wouldn’t go berserk, as many CrackBerry addicts did yesterday and have done during previous network outages.

I don’t think RIM truly understands that its customers are not like other Internet subscribers. Since RIM derives high-margin, premium revenues from its patrons, it owes them a premium service, one that doesn’t periodically leave them staring inconsolably at a broken stream of messages for hours on end. This is how franchises are frittered away and lost.