Nortel Update: Nortel Goes Green, Closes Calgary Facility

| About: Nortel Networks (NT)

Maybe Nortel is On to Something

Nortel (NT) has been making waves recently by positioning itself as the “green” telecom equipment supplier. Or, at least, more green than Cisco (NASDAQ:CSCO).

At first blush, it seems like a weird marketing campaign given you don’t think of telecom equipment suppliers as being green or environmentally friendly.

But when I mentioned what Nortel was doing to someone running a cloud computing start-up, he said it was the smartest thing Nortel had done in a decade.

How’s that?

Well, he said companies are becoming increasingly concerned about the high cost of having to operate computing equipment such as servers - not only the power required to run them but the power needed to cool them.

With Nortel aggressively pursuing the idea of lower power consumption, it plays right into the hands of customers worried about rising energy prices.

Now, the question is whether this is enough for customers to give Nortel an edge at a time when price and performance still reign supreme. Still, it’s a creative and, perhaps, innovative attempt to build competitive differentiation.

More: According to an article in The Economist, there are more than 7,000 data centres in the U.S., while the number of servers is expected to hit 15.8 million by 2010 - three times more than 2000.

Ciao, Calgary

Nortel’s Canadian heritage is taking another small step backward amid news that it will close its Westwinds Innovation Centre operations by next year.

The facility, which most conducts R&D on a 59-acre site, employs 400 people. According to Nortel’s Web site, the Calgary camus has “been recognized for quality and employee relations by the Canada Awards for Business Excellence”

The facility is closing as Nortel consolidates operations at fewer locations. It is somewhat ironic that Nortel expanded the Calgary campus in 2000 after having people spread among various locations in the northeast part of the city.

For more information, check out the Calgary Herald.

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