Is This Nortel's Year?

If you can count a revamped channel program, a powerful partnership with the world's largest software company and an inspiring new CEO as celestial bodies, then it seems the stars are finally aligned for Nortel Networks.

It's a cosmic occurrence that the company's channel partners have been hoping for: signs that the beleaguered telecommunications company has the wherewithal to recover from the accounting scandal, financial woes and executive turnover that have plagued it since the burst of the dot-com bubble. And signs, more specifically, that the company's languishing enterprise strategy and the channel partnerships that drive it are getting some much- needed attention.

The biggest star on the Nortel horizon these days is undoubtedly President and CEO Mike Zafirovski—or Mike Z., as he's commonly called—who is set this week to unveil a beefed-up unified communications product line at VoiceCon Spring 2007. Zafirovski joined the company 16 months ago, bringing with him a reputation for business acumen and vision honed at his previous gig as president and COO of Motorola—where the crazy-popular RAZR mobile phone debuted under his watch and revitalized the company's handset business—and throughout a 25-year career at General Electric, where he worked closely with Chairman and CEO Jack Welch.

Slide Show: VoiceCon Sneak Peek

Solution providers say they are seeing evidence of a channel revival at Nortel, and they credit Zafirovski for the resurgence.

"It's clearly happened since Zafirovski hit town," said Tony Parella, president and CEO of Shared Technologies, a Nortel partner in Dallas that's on track to hit approximately $300 million in Nortel-related revenue this year, up from approximately $220 million in 2006. "I think before that, they had no direction. They were lost for a few years trying to dig out of their accounting problems."

Zafirovski is the first to admit that the company's enterprise strategy needs work, and he is reaching out to the channel to help put it back on track, noting that 90 percent of Nortel's enterprise business comes through partners.

"I articulated on our first earnings call that we have very good products but haven't done a good job selling and marketing those products, as well as working closely with our partners," Zafirovski said.

With that in mind, Zafirovski has anointed Nortel's enterprise business as one of his top three focus areas for improvement and growth in 2007, along with a push toward next-generation mobility and convergence and plans to grow services revenue.

"We'll be working pretty much all of this year to significantly enhance our capabilities in the enterprise space," Zafirovski said. "One of the things we're looking at specifically is increasing the velocity of new products—that's No. 1. No. 2 would be working to go from playing defense to playing offense, which includes a very bold relationship with Microsoft, and working closely with our channel partners on programs like IPT 1-2-3, where we are accelerating and simplifying the process of going from PBXes to VoIP." Partners will benefit from all of those steps, he said.

"In totality, the overall experience for our channel partners will be significantly better than it ever has been before," he said.

As part of that commitment, Zafirovski plans this week to unveil new enterprise products at VoiceCon, run by CRN parent CMP Technology, where he is scheduled to deliver a keynote. Set to debut at the Orlando, Fla., show is version 5.0 of Nortel's Communication Server (CS) 1000 IP-PBX platform. With the release, scheduled for availability in the second quarter, Nortel is opening the software to run on industry-standard servers and rolling out simplified pricing. It is also adding integration between its Multimedia Communication Server 5100 and IBM Lotus Notes. New networking gear, the Ethernet Routing Switch 2500 and 4500, will also launch. The family includes Fast Ethernet and Gigabit Ethernet switches, advanced quality of service features and support for Power over Ethernet.

NEXT: Nortel's updated partner program