Nortel Networks Corporation, the Toronto-based network equipment provider, filed for U.S. Chapter 11 bankruptcy protection last week. What does this mean for current Nortel customers, and what should you do now to assure continuing viability of your Nortel-based networks? No one is sure just yet, but here are a few tips.

Don’t Panic – Don’t junk your Nortel stuff in a panic. Chapter 11 means reorganization, not liquidation (though, as with any company in Chapter 11 proceedings, Nortel could convert to Chapter 7 liquidation down the road–Circuit City filed Chapter 11 in December 2008, and in January 2009 converted to liquidation). In all events, it appears Nortel will need to shed some of its operations in order provide a meaningful plan to emerge from Chapter 11. If Nortel survives its Chapter 11 experience, expect a leaner, more-focused company for the future.

Dont’ Buy – Don’t buy any more Nortel stuff until a better picture emerges. Postpone noncritical upgrades, etc. Now is not a good time to make a further investment in Nortel’s products and services, some or all of which may not be supported down the road.

Service Deterioration – Expect poorer service (response times, etc.) from Nortel in the coming months. Nortel has been struggling financially for the last four years, and service performance has no doubt taken a hit during this period. So, we’re talking now about perhaps going from bad to worse.

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Tags: Chapter 11 Bankruptcy, Chapter 11 Bankruptcy Protection, Chapter 7, Circuit City, Deterioration, Good Time, Liquidation, Network Equipment Provider, Networks Corporation, No Doubt, Nortel Networks, One Don, Proceedings, Reorganization, Response Times, Service Performance, Service Response, Viability

This entry was posted on Tuesday, January 20th, 2009 at 1:11 PM and is filed under IT Industry News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.