Daily Archives: September 25, 2009

Nortel’s LTE Patents Could be Auctioned by End of Year; Nothing Set

As most keen observers of the situation know, Nortel has yet to sell its LTE patents.

During the next 15 years, Nortel’s LTE patents could be worth from $915 million to $2.9 billion, according to calculations from JP MorganChase analyst Ehud Gelblum. (The estimate varies depending on the royalty rate ascribed to the patents.)

Even at the lower end of that range, the patents would have considerable strategic and financial value, which is why they are eagerly sought by RIM, Ericsson, and perhaps a few other players that have yet to declare their intentions. It’s also why so many interested and disinterested observers want to know how and when Nortel will dispose of them.

Earlier today, I asked Jay Barta, a Nortel spokesman, whether he could specify a date by which Nortel will auction off its LTE patent portfolio.

His first reply to me was surprising, because he didn’t explicit state that an auction would occur. Instead, he wrote the following:

“I can’t speculate. We’ve said that we are looking for buyers, but I can’t speculate beyond that. When/if we have a buyer we will announce via press release.”

That’s odd, I thought. Given the interest that’s been expressed in the patents from more than one quarter, not to mention the value attributed to them, one would assume Nortel would auction them off. After all, that’s the course it has followed in selling its other major business assets.

I asked Barta to confirm that the patents would be sold at auction. I also asked when we might expect the sale to take place. He replied that the patents would likely be sold at auction, though there’s no guarantee “it will play out that way.”

He also said Nortel doesn’t have an announced sales date, auction process, or staking-horse bid for the LTE patents. He said an announcement will be made when more is known and the plans are set.

The Ottawa Citizen’s James Bagnall, who has provided exemplary coverage throughout the Nortel saga, informed me via email that Lazard, Nortel’s investment banker, has told prospective bidders the patents could be sold by yearend. Bagnall cautioned that the timetable could slip.

For those of you interested in new developments related to the LTE patents, that’s all I can offer for now.

Considering Chrapaty’s Move from Microsoft to Cisco

A senior Microsoft executive left for Cisco Systems earlier this week, setting off speculation about what the move signified.

Debra Chrapaty was Microsoft’s VP for Global Foundation Services, responsible for the company’s physical infrastructure, security, and global delivery operations. She would have been involved with data-center rollouts of Microsoft’s Azure, a cloud platform designed for intra-enterprise or Internet-delivered application services. She also would have been involved with the delivery of the online version of Microsoft Office.

It’s the connection to Office Web Apps that is particularly interesting about her move to Cisco, where she will become the senior vice president of Cisco’s collaboration software group (CSG). The group was previously run by Doug Dennerline, who left Cisco to become SalesForce.com’s executive vice president of sales for the Americas.

A few months back, Dennerline said Cisco might compete with Microsoft and Google in offering office applications, such as documents, spreadsheets, and presentation packages. He said Cisco was “thinking about it, but (is) not there today.”

What Cisco already has, of course, is WebEx, the web-based conferencing and collaboration service it bought for $3.2 billion in 2007. Cisco also competes against Microsoft and others in premise-based unified communications. It also is adding its telepresence to its collaborative portfolio.

Earlier this year, Cisco CEO John Chambers talked about “Cisco’s collaboration imperative,” terming it one of Cisco’s “market adjacencies.” Said Chambers:

“We believe that we are very well positioned in the industry from a vision, differentiated strategy, and execution perspective. We believe we are entering the next phase of the Internet as growth and productivity will center on collaboration enabled by networked Web 2.0 technologies. We are going to attempt to execute a strategy over the next decade that is similar to what we did in the early 90s and as we’ve said before, it powered our growth for the next decade.”

One could argue Cisco is on the brink of imperial overstretch, taking itself in too many ambitious directions at once. One could also argue that while Cisco has a sound collaboration strategy, and strong underlying products that show well against competitive offerings, it might be folly for Cisco to add online document, spreadsheet, and presentation packages to its roster. Are they something Cisco really needs? Is that it a battle it wants to fight?

Maybe the answers are yes, maybe they’re no. Nonetheless, Cisco plans to play a leading role in hosted collaboration, and it has a solid foundation on which to work.

Irrespective of why and how Chrapaty made her way to her new corporate home, Cisco attaches considerable strategic importance to the group that she’ll run.

Ballmer Throws Windows Mobile Team Under Bus, Backs Over Them for Good Measure

When Microsoft first accosted the world with Windows Mobile, the plan was to extend the company’s desktop hegemony to mobile devices, including smartphones.

Now, as that desktop hegemony looks less assured than ever before, Microsoft concedes that Windows Mobile hasn’t lived up to expectations.

That’s an understatement. Many would say Windows Mobile has been a chronic underachiever, continually lagging well behind its main competitors in features and functionality. Not surprisingly, its market share has declined steadily.

As the release date for Windows Mobile 7 slips further into the future (perhaps as late as the fourth quarter of 2010), Microsoft CEO Steve Ballmer wants the world to know it won’t happen again — which probably means it will.

Speaking at a venture-capital summit, Ballmer admitted that WIndows Mobile 7 is late, something we already knew. He said it won’t happen again, noting that the company “has pumped in some new talent,” implying that he’s done away with the “old talent” or relegated them to Microsoft’s version of purgatory . . . or hell.

There’s nothing like delegating blame, if not authority. Lately, some Microsoft executives have taken to falling on their swords, admitting mistakes with the “less-good” Windows Vista. But Ballmer favors pointing the sword somewhere else, making shish-kebabs of Microsoft minions.

It’s good to be king, even if the kingdom isn’t quite as impregnable as it was in years past.

As for Windows Mobile 7, it will be the last chance for Microsoft to redeem itself as a platform purveyor for smartphones and mobile devices. Then again, it’s probably already too late.