Nortel AGM: Post-Mortem
So what went down at Nortel's marathon of an annual meeting earlier this week? To start, you have to give the company credit for letting shareholders vent as much as they wanted. If you've been frustrated, mystified, mortified and maddened for the past two years without a forum to get things off your chest, then the seven-hour AGM was the way to get some resolution. The patience shown by CEO Bill Owens, CFO Peter Currie and chairman Red Wilson in answering dozens of questions - some of them inane and off topic - was admirable. Owens, in particular, probably put on his most impressive public performance - at least from the ones I have witnessed. I may not be the biggest Owens fan - something he dryly commented on when I introduced myself during a break in the AGM - but he's definitely coming around. That said, he still has to surround himself with top-notch people so the appointment of a new COO is crucial. The one thing that I wanted to see but didn't happen was insight into Nortel's technology strategy. This is a company with a strong wireless portfolio but some serious shortcomings in the broadband access, router and metro optical markets. Owens talked about India, China, services, security, government and enterprise but Nortel needs to start talking about the technology its going to sell into these markets. It's one thing to target them, it's another to have leading-edge technology customers want to purchase. I was somewhat troubled by Owens' take that Nortel's portfolio is broad enough that it only needs to make small acquisition's to fill “vacuums”, while playing down Cisco's aggressive M&A tactics. I think there are serious technology holes Nortel needs to address with some aggressive M&A moves. If they can spend US$448 million on a systems integrator (PEC Solutions Inc.), surely Nortel can spend some serious cash/shares on much-needed technology.
The bottom line on the AGM: long, not terribly informative but a necessary exercise Nortel and its senior management team handled very well. With the AGM out of the way, it's time to execute. Let's just say, I'm willing to give Owens the benefit of the doubt and watch closely to see how well he and his team can execute over the next 18 months.
