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Editor's Blog: Nortel's comeback?
No love lost over Avaya and private equity

By Tony Hallett

Published: Thursday 20 September 2007

I quite often get asked to meet visiting tech CEOs. I mention that not because it might seem obvious but because they're sometimes from companies I never really covered much as a reporter.

But yesterday I caught up with Mike Zafirovski, the still relatively new CEO at Nortel, a company I have followed for more than a decade.

I liked the guy and agreed with much of what he said about the way ahead for the way we all connect, whatever the device or network. But there is much I could write about that wasn't appropriate for the news article I filed.

For one thing, I wonder about the place Nortel will occupy over the next five to 10 years. I do see it has a future and - despite some turbulent times, mainly before Zafirovski's arrival - it remains one of the premier brands in IT and communications.

But will it be in the top tier occupied by Cisco and - I predict with hardly any great originality - China's Huawei? We reported recently from Huawei's HQ with a news article and photos.

I don't think Nortel will make it, though it will be a cut above third tier players, many of whom will be swallowed or merge over this admittedly long time-span.

There was a lot of talk about Nortel buying Avaya, one of the other equipment big boys - albeit with an enterprise, rather than enterprise-plus-service-provider, profile which many of its rivals, including Nortel, have.

But Avaya ended up going the private equity route. Would Zafirovski be drawn on the subject of PE? Officially, no - though he did mention that "any change [at a rival] presents an opportunity".

In fact, he was compelling on the whole PE-in-tech question. His years immediately before Nortel were spent at Motorola, which segued nicely into his current role, but he may well still be best known for a long career at GE, part of which was at GE Capital and "down the corridor" from guys riding the leveraged buyout boom of the 1980s.

You could start a now long list of all the major tech and comms players that have been taken private - and we'll see mixed results from that over coming months and years - but Zafirovski thinks the trend is now mature, a story mainly told.

"It was reshaping [tech]," he told me.