RESEARCH TRIANGLE PARK, N.C. – Nortel’s partnership with Microsoft to develop new business communications solutions is either a smart or a dumb move.

There seems to be no middle ground about the deal, which was announced earlier this week.

In an article titled “The Microsoft Nortel Pipe Dream,” John Dvorak delivered a scathing critique at

Despite stories in what he called the “fawning press,” Dvorak questioned Nortel Chief Executive Officer Mike Zafirovski’s interest into moving into software as services.

“I knew there was a serious problem with marijuana in Canada,” Dvorak wrote. “I just knew it.”

Reminding readers that Nortel and Microsoft had partnered back in 1999 before the telecom and dot-com implosions, Dvorak ridiculed the idea that collaboration by the two companies would produce much. He dismissed Microsoft’s “unified communications platform” as “yet another one of those half-baked Microsoft sounds-good-on-paper-fix-all-problems ideas that eventually drifts off into an obscure nook, sputtering. Nobody is even sure what it is – as usual.”

Despite Zafirovski’s efforts to turn around Nortel, Dvorak lumped Nortel and Microsoft together as laggards. “Two laggards do not make a juggernaut,” he said.
He also dismissed Microsoft CEO Steve Ballmer’s contention that business communications will become web centric. “The notion that the web can reliably handle ‘all’ business communications is a laugh,” he said.

However, reaction to the Nortel-Microsoft partnership wasn’t completely negative among analysts and the trade press.

The analyst firm Robert W. Baird maintained its “outperform” rating on Nortel and kept the stock target price at $3. Nortel’s stock rebounded from a 52-week low of $1.94 to climb back above $2 on news of the deal. Nortel also announced a major deal Wednesday with Verizon Wireless for upgrades of its network.

Ray Le Maistre, international news editor at trade publication Light Reading, seemed skeptical of the Nortel-Microsoft alliance in his coverage of the story.

“Why not simply buy Nortel, asked one questioner on the conference call? That gave Microsoft’s Ballmer the chance to trot out a cliché not heard (we hope) since the late 1980s: ‘We need to find a way to make one plus one equal three.’ Ouch,” Le Maistre said.

He did quote an analyst at Infonetics Research who saw the deal as “a positive, probably more for Nortel, but you have to wait and see what it will produce.”

At, Chris Noon praised Zafirovski, the column being headlined “Zafirovski Blows Away Nortel’s Cobwebs.”

“A new broom sweeps clean,” Noon wrote to start the column as he outlined several of the “mopping up” steps Zafirovski has taken since joining the company last fall.
“One thing you may have noticed – no product has actually been announced yet,” Noon cautioned about the Microsoft-Nortel deal. But he added: “Even so, analysts have given the deal the thumbs-up, believing the Canadian firm will now have a head start over other companies considering software-based communications.”