Nortel emerging with a leaner global R&D network to meet challenges ahead

Behind the high-profile trials and tribulations of its recent history, Nortel Networks Corp has revamped its vaunted R&D machine and placed its Ottawa operations at the core of a global operation with regional strengths in the US, China and India. With an eye on the convergence of all networks towards a single architecture, the Brampton ON-based firm is increasingly focused on software development, which now accounts for 80% of its R&D expenditures.

Ottawa is by far the largest centre for Nortel R&D, with about 5,000 personnel compared to approximately 2,000 each in China and India.

“We do R&D all over the world. We take advantage of resources and capabilities all over the world and we tie that together to markets,” says Brian McFadden, Nortel’s chief research officer. “All of our regional labs are complementary to our lab in Ottawa. We fundamentally do some basic things in Ottawa and we do some other market-based and regional-based things in other countries. And we tie that together in a global network and global program.”

Linkages, partnerships and alliances underpin Nortel’s product development strategy. It currently leverages expertise at more than 50 universities globally in areas such as infrastructure conversion, wireless-wireline conversion and Internet Protocol Multimedia Subsystem (IMS) architecture.

“We use them to look at what is possible with next-generation technology ... You need to look beyond your own campus and walls to understand what’s going on.,” says McFadden, adding that communications is moving into a world of multimedia, personalization and freedom of mobility. “You want the network to do what you want it to do, not what the network allows you to do.”

The movement towards a single architecture has emphasized the importance of applications software as well as software that sits on top of the optical network. And as Nortel rebounds from the telecom meltdown and accounting scandals that devastated its workforce and bottom line, speculation over where it will grow its R&D base is growing .

McFadden says Nortel is set to build a new R&D facility in China and add several hundred workers annually to its payroll. At the same time, Nortel’s massive laboratories in Ottawa are less than half full.

“Clearly we have the capability here to grow. The environment has a lot to do with it,” he says. “We’ve made lots of submissions under the telecom policy review about that environment and how the Canadian government can maintain that environment. ... We would like to grow our R&D capability in Canada (and) as business conditions dictate, we’ll try to do that.”

R$