Can Nortel pull an AMD on Cisco?

Nortel is apparently trying to take a page from AMD's old playbook and sneak up on its much-larger rival-Cisco.Just a few years ago-it's hard to believe given AMD's recent execution issues-but AMD snuck up on Intel and gave it fits.

Nortel is apparently trying to take a page from AMD's old playbook and sneak up on its much-larger rival-Cisco.

Just a few years ago-it's hard to believe given AMD's recent execution issues-but AMD snuck up on Intel and gave it fits. Intel was off its game. AMD was on it. AMD created a competitive chip line, but more importantly latched on to what customers were really starting to care about-power efficiency. Today, we have a competitive chip market even though AMD is taking a lot of body blows courtesy of Intel.

Now Nortel is attempting to do the same thing: Offer competitive products, tout energy efficiency and get in the door as Cisco customers use the Canadian networking player for price leverage. And who knows? Maybe Nortel steals a few deals.

If you're an IT buyer you should run to TechRepublic's Jason Hiner's blog on Nortel's plans to upend Cisco. We've been bantering about Nortel behind the scenes here and I've been a tad dismissive. It's a little hard to take Nortel seriously if you've been following its accounting woes for the years. Nortel appears to have put its bookkeeping problems behind it for what it's worth.

But on further review maybe I should take another look at Nortel. But I'm not buying anything. It's probably more important that you-the folks with the buying power--check out Jason's report. A few takeaways:

  • Nortel was ridiculously aggressive at Interop Las Vegas a few weeks ago with its green marketing, we're better than Cisco pitch.
  • Nortel built its networking product line around a couple big priorities: energy efficiency and unified communications (UC). With cost, environmental, and (looming) political pressure building around energy efficiency, that's a no-brainer.
  • Customers are looking for a viable second alternative to Cisco.

My take: It's good that Nortel is being aggressive because customers would love a second choice and are very receptive to a little price competition. However, Cisco has also been talking the unified communications game forever so Nortel isn't exactly breaking new ground. And there's a big difference in the AMD-Intel, Nortel-Cisco analogy. Intel was off its game. There's no evidence that Cisco is misfiring.

So the tiebreaker here is really that IT buyers want a strong No. 2 player in their key markets and will give Nortel a look. Microsoft has Linux. Intel has AMD. Cisco could have a tag team of Nortel and Juniper. I'm not sure what it will take to get me on the Nortel bandwagon, but Jason has provided enough ammo for me to give the company a second look.