[bgc_fan]

Not really sure where to put this, but here is an interesting article about the two companies. Coincidently or not so coincidently, when one was falling, the other was rising.

Did a Chinese hack kill Canada's greatest tech company? - BNN Bloomberg

Nortel was once a world leader in wireless technology. Then came a hack and the rise of Huawei.

www.bnnbloomberg.ca

Not that the Nortel wasn't responsible for its failings, but it is interesting that if Canada had provided some more support to Nortel and if Nortel didn't slash R&D funding to cut expenses, Nortel could possibly be a major player in the 5G space.

 

[calm]

China graduates close to 300 thousand engineers per year.
America graduates 60 thousand engineers per year.
What can compete with that?

 

[ian]

Not unusual in the tech space over the years. We have had Burroughs, GE, Datapoint, Control Data, Data General, MAI, Mohawk, Wang, Sperry, ICL, NCR, Digital Equipment Corp, Compaq, Nixdorf, Prime,Tandem, Amdahl, Honeywell to name just a few. They are gone, some mergers, and some have transitioned to discreet product lines or spun off subsidiaries as NCR has done over the years. And there are no doubt many others that I forgot or never knew about. And apparently one of them, I think Honeywell, is about to announce a new computing product line.

IBM , NCR, and Hp came through it but are far different companies than they were twenty-thirty years ago. Same for relative newcomer Sun.

It has been exactly the same in the networking space. Why did Cisco survive and grow and Nortel crash and burn? Same for the Bay Networks ,Gandalf, and a handful of others in the space.

 

[bgc_fan]

It has been exactly the same in the networking space. Why did Cisco survive and grow and Nortel crash and burn? Same for the Bay Networks ,Gandalf, and a handful of others in the space.

Well, Nortel bought out Bay Networks and it was pretty much the beginning of the end. The simple fact is that they cut funding to R&D as a cost cutting measure which would contribute to a downward spiral. Nortel was the top spender in R&D in Canada at one point which is why its patent portfolio was worth so much money. Where Nortel went wrong
Cisco and Nortel were the big names, but I'm going to say a bit of mismanagement on Nortel's side of the house probably as Nortel had arguably the better technology.

At any case, it's hard to compete against a company with government backing (Huawei) when you have a company that the government doesn't understand to back (Canada).

 

[ian]

I really do not know who had the best technology. In my experience senior management at all levels is imperative, along with R&D. Finance, manufacturing, r&d, sales, marketing, operations. All of them. Plus some good timing, foresight, and good fortune.

IBM certainly has not had the best technology over the years. But they more than made up for it. There are many pieces to the puzzle and they are all interdependent.

I can remember when NCR and IBM were competing head to head for the lucrative ATM market. NCR had color terminals and their ATM's could communicate to multiple IBM back office systems better than IBM ATM's could (amazing as it may sound). At the time IBM was actually trying to tell customers on executive visits that monochrome terminals we better than color terminals, etc. In the end, IBM exited the ATM/self serve financial market. Their product was not selling, loosing market share, and the product line unprofitable.

The tech marketplace can change on a dime. The new quantum systems development may be an upcoming example of that.

 

[kcowan]

<snip>
The tech marketplace can change on a dime. The new quantum systems development may be an upcoming example of that.

Honeywell is a major player in the quantum space.

 

[ian]

I read that recently and was surprised. Had no idea. I just remembered competing a few times against DPS systems! Showing my age.

Remember those huge orange binders that had competitive information on all the the IT players, their product lines, strengths etc. that used to be updated on a regular basis? It listed scores of vendors, scores or products.

 

[james4beach]

Kind of feels like "beat up on the Chinese" hour lately. Something the US government is stoking as part of their economic & foreign policy. I am pretty suspicious of all these anti-Chinese telecom articles coming out, especially when the articles are echoing American foreign policy.

The US is currently using muscle to bully other nations into adopting their anti-Huawei position, so any article like this should come with an asterisk that these opinions are currently part of US government policy and the US is directly influencing nations to fall into line with their foreign policy. In other words, this article could be American propaganda.

A great example of that is the Five Eyes intelligence partnership. You'll see, in fact, that this article quotes members of Canadian intelligence. In recent years, the US has threatened to stop assisting Five Eyes partner countries or deny them access (like Canada, Australia, New Zealand) unless they also turn hostile towards Huawei. Through this pressure, partner countries have basically been forced to become hostile towards Huawei.

So when I read an article like this, which is weak on evidence and heavy on conjecture, and citing government intelligence people, and coming AFTER the US has forced our government (our intelligence service) to align with their foreign policy ... yeah, you have to be very suspicious that this article is propaganda.

 

[bgc_fan]

Kind of feels like "beat up on the Chinese" hour lately.

I guess it is a matter of perspective. My take away from the article is that Nortel was in a good position to become a leader in wireless networking, but due to corporate espionage, apathetic government and corporate mismanagement, Huawei ended up becoming a major player instead.

If the government was more forward thinking at the time, instead of spending energy and resources stuck in the 20th century economy of resource extraction and manufacturing, Canada could have been near the front of the pack in the IT industry. In which case this whole thing about Huawei wouldn't have been an issue as Nortel would have been a contender. But, that is the past.

And if you wonder why I mention the government, Harper's cluelessness in the article is obvious when he says he didn't know how this happened.

 

[james4beach]

If the government was more forward thinking at the time, instead of spending energy and resources stuck in the 20th century economy of resource extraction and manufacturing, Canada could have been near the front of the pack in the IT industry. In which case this whole thing about Huawei wouldn't have been an issue as Nortel would have been a contender. But, that is the past.

I agree that Canada could have done more with high-tech and telecom.

After a high tech job in Toronto, I ended up going to the US due to better opportunities (mainly because the work was interesting). And I learned, a bit later, that much of that work had been supported by the US govt, and in fact the small company I worked at in the US was bootstrapped entirely by US government R&D programs.

What I learned in the US was that government funded R&D works. The Americans have done a great job with this. Canada needs to learn to do the same but unfortunately there is no willingness.

So I do agree with what you're saying, but it's not just a matter of "the past". We are actively in a situation now where Canada's economy could benefit from serious R&D investment in ourselves.

 

[ian]

You can search and search for a scapegoat. Ultimately Nortel went down because they had poor senior management. They collapsed under the weight of poor management, too many middle managers, too many employees, and a lack of marketplace vision. No different than some other names in the tech sector that went down hard IMHO.

 

[bgc_fan]

What I learned in the US was that government funded R&D works. The Americans have done a great job with this. Canada needs to learn to do the same but unfortunately there is no willingness.

So I do agree with what you're saying, but it's not just a matter of "the past". We are actively in a situation now where Canada's economy could benefit from serious R&D investment in ourselves.

The thing is government R&D is best spent in the universities for basic science research with collaboration with key industry partners. When I look back at the Waterloo ecosystem, that would be the ideal setup.

But, when government looks for cost cutting, the first thing that goes are the "non-essentials" and basic research is an easy chopping block. Again, this is about looking at short term economic goals instead of long term strategic goals.

 

[james4beach]

The thing is government R&D is best spent in the universities for basic science research with collaboration with key industry partners. When I look back at the Waterloo ecosystem, that would be the ideal setup.

I agree the R&D should be focused on universities, but I think Canada should start stepping up additional forms of R&D that go beyond this.

The US provides numerous facilities that help small and medium sized businesses. I have first hand experience with this, and the beauty of the system is that it provides opportunities for everyone from a single innovator in their garage, to a decent sized company.

For example, a small company of 5 people can easily win US govt funding, to help them bootstrap a tech concept. The US govt also encourages (and rewards them) for partnering with universities and other small businesses. The net result of this is really quite amazing, and I saw it work VERY well. In fact it creates an entire ecosystem of innovative small companies, some of which grow into large businesses. Along the way it employs a ton of people and helps finance innovations and discoveries which help the US, long term.

One example that comes to mind is a small company (that I am part owner of) which was originally supported by these kinds of US government R&D programs. Initially it had 2 employees and all its revenue was government R&D. At first, it operated out of the founder's garage. Over time this expanded and the company branched out, and today has nearly 200 employees and tremendous revenue.

Another example is Arbor Networks. It was nearly entirely government supported in its initial stages, a very small company. Over time it grew and is a major IT player now.

 

[bgc_fan]

The US provides numerous facilities that help small and medium sized businesses

So Canada does have the Build in Canada Innovation Program, which has changed somewhat. Build in Canada Innovation Program - Canada.ca

This was supposed to help with working on that stage where a start up needs some help with commercialization. It has changed, but I remember before there was a list of technologies and interested government departments that would act as sponsors.

Not sure how successful it has been.

 

[JohnTobbs]

I am not a huge expert in "tech" communications companies. But, I try to learn more. This was an interesting news article to read. "Nortel was attracting brilliant coders from all over the world" - interesting.
"No one knows who managed to hack Nortel or where that data went in China. But Shields, and many others who’ve looked into the case, have a strong suspicion it was... "
I guess it is "suspicions." Good luck figuring out what really happened.

 

[bgc_fan]

I am not a huge expert in "tech" communications companies. But, I try to learn more. This was an interesting news article to read. "Nortel was attracting brilliant coders from all over the world" - interesting.
"No one knows who managed to hack Nortel or where that data went in China. But Shields, and many others who’ve looked into the case, have a strong suspicion it was... "
I guess it is "suspicions." Good luck figuring out what really happened.

FWIW at the time, Ottawa was trying to position itself as Silicon North, with other companies like Mitel, Corel, Newbridge, and JDS Uniphase. https://www.cbc.ca/news/technology/is-ottawa-still-silicon-valley-north-1.801035

It was an interesting time, too bad things pretty much fell apart, although there are probably some smaller startup sized companies still around with their roots from some of the bigger companies.

IIRC Ottawa floated the city motto: "Technically beautiful".