Nortel's "feel-good marketing move" for Pingtel

Last week Nortel announced the acquisition of open-source VoIP provider, Pingtel. If you hadn't heard of Pingtel before the acquisition news, you're not alone. The company has actually been around for a long time, but has failed to make a strong imprint on the industry.

I'm therefore in the same camp as Garrett Smith in believing that there's not a lot of substance to the acquisition:

• This news is not big - The old guard has been getting in bed with IP PBX providers and open source projects in the space for the last two years. This is nothing new
• This is a cost cutting move - If you notice Nortel had a preexisting OEM relationship with Pingtel. Buying them will lower their costs because they are no longer paying the associated fees to Pingtel
• There is little value to be extracted out of the open source community [with which] Pingtel is associated - If anything, this is a feel good marketing move. Sure there have been 300 features improvements out of SIPfoundry, but what has been the net increase in profits - because at Nortel's level that is what it is all about.

I could not agree more. It's likely much like the Lineo sale to Motorola/Metrowerks with which I was involved: it wasn't a Zimbra-like acquisition of $300 million or more. It was the only viable outcome for a company that had not lived up to its potential.

In short, I don't believe the Pingtel acquisition points to the success of the open-source model, but rather suggests caution in the assumption that open source covers a multitude of poor business decisions. It doesn't. It exacerbates them.

On the other hand, it can amplify sound strategic business decisions.

[Tony Rybczynski Nortel]

It's not that black and white. We have launched our SCS500 UC solution with a go-to-market via IBM (on their Power Systems portfolio) and Dell..

See http://blog.tmcnet.com/the-hyperconnected-enterprise/unified-communications/nortel-opens-up-to-pingtel.asp

[tristanbob]

Another telling sign is that Pingtel was acquired by Bluesocket only one year ago. And now they are changing hands again? Why did Bluesocket sell so quickly? Did Pingtel not have as much value as they hoped? Or was Nortel's offer too good to refuse? Or was Pingtel simply not a good fit for Bluesocket's overall strategy?

Is Pingtel like the cursed corner restaurant that keeps opening and closing under a new name?

[tristanbob]

I also wanted to point out that Bill Miller from Digium just posted an excellent rebuttal to the post by Tony. You can find Bill's detailed response in a comment to this post:

http://blog.tmcnet.com/the-hyperconnected-enterprise/unified-communications/asterisk-may-be-older-but-sipxecs-is-better.asp