Can we learn from the Nortel fire sale?(BLOGS)

In his Communications and Technology Blog, Rich Tehrani writes:

Nortel, a once-great company with a market cap of $250 billion is effectively being sold off at bargain-basement prices. In fact Nokia Siemens Network (NSN) picked up the ailing Canadian company's CDMA and LTE business for about one times revenue or $650 million.

For NSN the deal means a stronger North American presence and also they go from not having a CDMA business to becoming number two. They will have to work hard to maintain this business as Asian rivals are coming on strong. An additional benefit of the deal is a number of LTE patents, technology and expertise which will come in very handy as the world transitions to faster wireless broadband networks.

I have seen some surmise Nortel went down because of open source and the Internet and to some degree this is part of the problem. But perhaps the biggest problem at Nortel was failure to adjust to a market that moves faster than ever coupled with the inability to effectively integrate acquired companies. Some Nortel employees told me the company was too flexible with the companies they acquired and should have set tougher rules regarding integration.

The major take away from this ordeal is how a company with superior technology got beaten by other companies with inferior technology but better M&A, management, and marketing skills. At the end of the day the products are important but as Nortel continues to show us, having great technology alone does not a long-term successful strategy make.

Visit Rich's blog at http://blog.tmcnet.com/blog/rich-tehrani

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