Nortel Networks is brimming with confidence as the integration of Bay Networks progresses apparently without incident, but the company's president still has something on his mind: Cisco.
David House, Nortel Networks president, said companies such as Nortel Networks, Lucent, Siemens, Alcatel and Cisco all stand to win the converged voice and data networking race over the next five years.
But while Cisco is looming as Nortel Networks' strongest competitor, the company is missing vital telecommunications experience in its portfolio and may be on the hunt for a suitor, House said.
"If you ask me for my nightmare, [Cisco] would buy Siemens' telephony business," he said.
House commented that Siemens, while not performing brilliantly overall, has the attraction of offering strong sales support and has solid telecommunications experience.
In the networking tradition of observing competitors' problems, House said the challenge for Cisco is that widespread use of IP-based networking technologies will dissolve the company's point of difference.
"Cisco has got to get more competitive," he said.
House refused to disclose Nortel's own acquisition plans for the future, but said customers are happy with the integration of Bay Networks to date.
He admitted the integration of two large businesses is challenging, as there are "no signposts" as to how it can be done successfully.
"The training load is particularly challenging," he said.
House explained the merged company is now focused on strengthening its enterprise networking business and working to achieve its vision of building "unified" voice and data networks for end users.
"My wish list is I get a call from Cisco or Lucent and they surrender -- give up to us," he mused.
Meanwhile, House offered his own view of other industry players such as 3Com, Newbridge and Sienna: "I think they will get acquired or get niched."
But the problem with developing a strong niche focus is it resembles a "kind of slow death scenario", he quipped.
* Mark Jones travelled to the US as a guest of Nortel Networks