Nortel rumoured to sell CRM acquisition

Rumours are flourishing that Nortel Networks plans to sell Clarify, the customer relationship management acquisition it acquired in a stock-swap worth $2.1bn in late 1999.

One analyst, Josh Greenbaum of Enterprise Applications Consulting, said the company has disappeared off the CRM radar screen.

"Nortel burned itself out of the market in an 18-month period when companies like PeopleSoft were building up their CRM presence."

A mass exodus of executives has also beset the CRM unit. Tony Zingale, the former Clarify chief executive, left the division last year.

A few months later, William Conner, who took over from Zingale, left for a position with Entrust Technologies.

Joseph Davis, former president of Nortel's commercial markets for ebusiness solution, is currently heading up the ebusiness division.

The combination of Nortel's telephony hardware, along with Clarify's call centre software, was intended to position Nortel as a single source for full-service enterprise call centres.

Nortel said recently that the company added Windows 2000 and Hewlett Packard's Unix platform support for Clarify applications.

Yet in spite of such actions, a reseller agreement with SAP, in which SAP was to resell Clarify call centre software, did not amount to any sales during its ten-month tenure.

Greenbaum noted that SAP might be a buyer for Clarify because the company has already invested time integrating its own software with the Nortel applications.

He said the only thing holding up a sale is price. "Nortel is still pretending they can get their money back from the $2.1bn sale."

The CRM market will exceed $24bn by 2003 and will remain a high-growth IT market, according to market research firm, the Aberdeen Group.

"CRM remains a high priority for IT executives because innovative technologies have raised the bar and customers expect quick, efficient service and support," the analysts said.

In June, Nortel disclosed it would lose $19.2bn in the second quarter and would lay off up to 30,000 of its workforce.

The company also said it would exit the broadband and narrowband access business as well as the DSL business.

Chief executive John Roth said: "We're experiencing a very significant reduction in sales in the industry and we are focusing on getting our cost structure in place and going forward."

A Nortel spokeswoman said the company does not comment on rumour or speculation.