Holding the fort

Country manager Rick Rogers seems pretty pleased with his tight team. When asked whether local culture reflects the country`s global culture, he proudly states that the local office is “far more flexible”.

“We do whatever it takes to get the work done, to get the job done, and deliver the solution to the customer,” he says, adding that the small team creates “multi-skilled and multi-talented individuals, capable of anything from project management to executive presentations.”

He adds that this results in a better understanding of the business from all the people in the local office.

“Twelve people – I think you would probably call that small, but I like to call it focused,” he laughs.

In terms of black empowerment initiatives, the small team doesn`t offer Rogers much elbow room. “Although we have a direct touch with the customer, our business is indirect, so there`s not a short-term intention to increase staff in South Africa. Instead, I would like to empower our partners. As the focus is now clearly on IT telecommunications, we need to embrace black economic empowerment (BEE) as a local organisation and empower our partners.”

The current staff complement is about a third previously disadvantaged, and short of churn in the company, is unlikely to increase at any dramatic rate. So the company is looking at other ways to fulfil its BEE obligations.

“One of the things that we do is social investment, bursaries, establishment and funding of previously disadvantaged partners, etcetera. We do have partners that we are developing and growing – they are still small, and we`re enabling them to participate and take part in the bigger opportunities in the partnerships. In our partnership with arivia.kom, which we see as being black economic empowerment, we`re helping to empower them and helping to establish them in the private sector.”

Growing a 12-man company without increasing headcount involves a different way of measuring that growth. “We grow on market share, market penetration, but I`m looking at growing my partners. There`s more benefit to the South African economy to help my partners grow than to help Nortel grow.”

Showing off

Rogers reports to EMEA through the Middle East/Africa, which lets him show off a bit, with around 20 percent of the MEA business attributed to sub-Saharan Africa – most of it in South Africa.

“The priority from the office is South Africa. Namibia is quite a good market for us. We have some business in Nigeria on the enterprise side, but not so much in telecommunications. We`ve got two CDMA networks up there, but the majority of growth is in the enterprise.”

Nortel has also seen some business coming out of Kenya and Uganda, primarily with call centres and PBX systems for enterprise customers.

On the local front, Nortel is clearly pushing for more government business, along with everyone else in a market where government is not only the biggest IT spender, but the only sector increasing its spend.

“At the start of 2002 we looked at the market – both private and public sector. We had a good footprint in the private sector, but lacked a decent footprint in the public sector. That gives us a great foundation to expand into public sector,” he says, optimistically. “That doesn`t mean that we are going to decrease our private sector focus. But we want to get involved in e-government initiatives, enabling better access to information and accountability.”

Its private sector business includes names like Sun International, Telkom, Vodacom, Absa, BHP Billiton and Deloitte & Touche. With such a small office, Nortel South Africa doesn`t focus on the international company`s breadth of offerings, preferring to provide its “intelligent Internet” family as its primary IT offering in South Africa.

Rogers adds that it will fulfil on its other three sectors – optical, wireless, and wire-line – but these are not pushed from the local office. “WAN, optical metro, call centres – we`re focused on that technology set. We took a view on reality. Ericsson and Siemens dominate mobile. With long-haul, there`s not too much growth in South Africa.”

He claims that this focused approach was a contributing factor to a 20 percent market-share growth last year – albeit in a shrinking market. “We had more focus on where we could deliver and where we couldn`t [in 2002]. We ensured that we deliver as an organisation.”

The networking world`s incumbent is Cisco Systems, which is firmly in the number one spot both locally and internationally. Other players that Nortel South Africa bumps heads against include Ericsson, Alcatel and Lucent. But Rogers adds that the local competition is quite different from the global hierarchy, with Newbridge taking number one spot in WAN technology in South Africa, back in the days before Alcatel bought it.

Nortel also went through the late nineties networking and telecom shake-up, which saw large consolidation during the IT boom years. Nortel Telecom bought Bay Networks back in 1997, but Rogers himself originally comes from Newbridge.

Partnering for feet on the ground

It`s no surprise that Nortel deals only through partners in South Africa. “Everything we do is in partnership with our channel partners. We do have a lot of direct contact with customers, but our business is all done through the channel,” says Rogers, who defines the local office`s role as a combination of public relations, sales, marketing, support and assisting the channel. “I dont think we manage the channel – it`s more just assisting our partners.”

Those partners include Comparex, Dimension Data and Grintek Telecoms on the enterprise service provision side, Comztech and Westcon for distribution, and training through IMS Africa and Grintek Telecoms. AST and arivia.kom are the most notable service partners. “I think that gives us a pretty good reach into the local market,” says Rogers.

While resellers are often attracted to large switches and routers, Rogers explains that the lack of inexpensive bandwidth in South Africa often means there`s no real fit for them.

He says that much of the assistance, and what takes up some time with partners, is training to “ensure the correct local fit for technology”.