Micro Economics Shut Down Decision
The October, 2000 announcement that Nortel Networks would enter the customer relationship management (CRM) application market by acquiring Clarify for more than $2 billion in stock stunned the majority of people. The question on everyone’s mind was, “How can a hardware giant succeed with a software business?” The answer, coming only 18 months after the acquisition closed, was that it couldn’t.
Nortel purchased Clarify in its bid to become an eBusiness provider by extending its hardware Internet foundation product lines which include optical, local area and wireless Internet products by adding applications to manage eBusiness relationships that the Internet facilitates. Three quarters of Nortel’s customers were large communications carriers such as MCI and AT&T, newer carriers like Qwest, or wireless carriers such as Sprint PCS. The rest were corporations. Nortel made the bet that company’s spending a billion dollars on its hardware infrastructure would also be interested in its software applications.
Nortel expected Clarify to bring it further penetration into the customer interaction center (CIC) market, an area in which the company had a poor reputation spurred by a poor product release of its NT-based Symposium Call Center server that suffered from scalability and reliability issues. Nortel also wanted to bring its prospects and customers with a prepackaged, lower-cost solution with an integrated CRM/CIC product. Clarify provided Nortel with a professional services organization for CICs that it did not have, but needed to be successful in the CIC area.
The acquisition for Clarify was also in response to competitor initiatives. Lucent had recently purchased CRM supplier Mosaix and had formed a partnership with Clarify’s CRM rival, Siebel Systems. Cisco had entered the voice-networking market with the purchase of GeoTel for call center management and a partnership with WebLine for customer support capabilities.
Nortel left Clarify as a wholly owned subsidiary that was led by Clarify’s CEO, Tony Zingale. It also established a new organization that covered customer interaction via any touch point ranging from the call center through electronic commerce. The organization included Nortel’s Symposium call center solution and voice processing and speech technology and Clarify’s CRM.
At the time of acquisition, Clarify had emerged as number two vendor of CRM Software, bested only by Siebel Systems. Revenues for Clarify’s fiscal year ended in December 1998 were $130.5 million. The company had almost 800 employees in the Americas, Europe, and Asia. Broadvision was the number three supplier closely followed by Remedy. However, a new category of CRM competitors was emerging, companies that offer back-office software such as enterprise resource planning and supply chain management. These included PeopleSoft, SAP, and Oracle. Siebel Systems did not have back-office capabilities, but focused on providing tight integration with these software systems.
Although Clarify product-specific revenue after the acquisition is not available, it’s clear that Nortel’s purchase of Clarify was a dismal failure. Clarify lost its number two market position and quickly fell to number seven. Nortel sold Clarify to Amdocs, a provider of information systems to the communications industry, for $200 million in cash in November 2001, a far cry from the $2 billion in stock that it paid for the company and a figure not much more than Clarify’s 1998 revenues. Nortel also shut down its customer interaction organization.
There are several factors that contributed to Nortel’s failure to make the purchase of Clarify successful for the company. The most notable is customer demand for CRM software that is integrated with back-office software rather than a CIC. To date, Siebel Systems is the only CRM player that is not a back-office supplier that has been a success in selling CRM software to large companies.
This company succeeds by providing unmatched depth and breadth of CRM functionality with over 300 products and 20 vertical solutions to compensate for integration woes. Integration with back-office applications can cost more than fifty percent of a CRM project.
Overall, the CRM market was exceptional in 2000 with an eighty nine percent growth rate over 1999. Siebel Systems remained the number one supplier and grew its revenues from $813.5 million in 1999 to $1.79 billion in 2000. However, Siebel was the only non-back-office supplier to hold on to market leadership. Back-office vendors quickly replaced the remaining top three CRM slots as shown below.
Nortel confronted other issues with Clarify as well. Nortel prefers a distribution model for its products, while complex enterprise applications such as CRM typically involve direct sales.
And, it’s not clear that Clarify’s CRM was a good fit to complement Nortel’s Symposium. The average Symposium implementation is thirty to forty seats while Clarify’s complex software is typically used by large-scale implementations with three hundred to two thousand seats.
The decision to sell Clarify and to shut down the customer interaction division came at a time when Nortel was under enormous financial pressure caused by a downturn in the telecommunications industry and an overall economic recession.. The company’s revenues plummeted from $27.9 billion in 2000 to $17.5 billion in 2001. The company’s 2001 losses reached an astonishing $27.3 billion. The $200 million in cash that Nortel was financially immaterial to organization of this size, but it was important for Nortel to streamline its business and to focus on areas that it had better room for success. Also, Nortel listened to the voice of the customer. The customer wanted back-office and CRM integration from a single vendor or a compelling value proposition such as Siebel’s exceptional depth and breadth to justify selection of a non-back office supplier for CRM. Nortel made the right decision in putting Clarify back on the market. It couldn’t do well in a market that was on fire with eight nine percent growth, and it’s hard to imagine that would have done any better in 2001 when the CRM industry’s growth fell to six percent.
Bibliography
CRM Software Growth Remains Stalled,” July 24, 2002, Gartner Group
Menconi, Peggy, “Clarify is Alive and Well at Nortel Networks,” August 31, 2000, AMR
Research
Nortel Networks Announces Expected Closing Date for Sale of Clarify Assets to Amdocs,”
Retrieved January 14, 2003 at http://www.nortelnetworks.com/corporate/new/newsreleases
Nortel Networks Reports Fesults for Fourth Quarter and Year 2001,” January 17, 2002,
Retrieved on January 14, 2003 at http://www.nortelnetworks.com/corporate/new/newsreleases
Nortel Networks to Acquire Clarify for U.S.$2.1 Billion, Establishes First Mover Advantage in Creating Second Wave of eBusiness,” October 18, 1999, Retrieved January 14, 2003 from http://www.nortelnetworks.com/corporate/new/newsreleases
Ussher, Elizabeth, “Nortel Networks Clarifies the Customer Interaction Center,” October 21, 1999, Meta Group
Menconi, Peggy, “Clarify is Alive and Well at Nortel Networks,” August 31, 2000, AMR Research
Ussher, Elizabeth, “Nortel Networks Clarifies the Customer Interaction Center,” October 21, 1999, Meta Group
Nortel Networks to Acquire Clarify for U.S.$2.1 Billion, Establishes First Mover Advantage in Creating Second Wave of eBusiness,” October 18, 1999, Retrieved January 14, 2003 at http://www.nortelnetworks.com/corporate/new/newsreleases
Nortel Networks Announces Expected Closing Date for Sale of Clarify Assets to Amdocs,” Retrieved January 14, 2003 at http://www.nortelnetworks.com/corporate/new/newsreleases
CRM Software Growth Remains Stalled,” July 24, 2002, Gartner Group
Ussher, Elizabeth, “Nortel Networks Clarifies the Customer Interaction Center,” October 21, 1999, Meta Group
Nortel Networks Reports Fesults for Fourth Quarter and Year 2001,” January 17, 2002, Retrieved on January 14, 2003 at http://www.nortelnetworks.com/corporate/new/newsreleases
Siebel eeel
SAP
Oracle
PeopleSoft
Get Professional Assignment Help Cheaply
Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?
Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.
Why Choose Our Academic Writing Service?
- Plagiarism free papers
- Timely delivery
- Any deadline
- Skilled, Experienced Native English Writers
- Subject-relevant academic writer
- Adherence to paper instructions
- Ability to tackle bulk assignments
- Reasonable prices
- 24/7 Customer Support
- Get superb grades consistently
Online Academic Help With Different Subjects
Literature
Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.
Finance
Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.
Computer science
Computer science is a tough subject. Fortunately, our computer science experts are up to the match. No need to stress and have sleepless nights. Our academic writers will tackle all your computer science assignments and deliver them on time. Let us handle all your python, java, ruby, JavaScript, php , C+ assignments!
Psychology
While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.
Engineering
Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.
Nursing
In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.
Sociology
Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.
Business
We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!
Statistics
We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.
Law
Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.
What discipline/subjects do you deal in?
We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.
Are your writers competent enough to handle my paper?
Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.
What if I don’t like the paper?
There is a very low likelihood that you won’t like the paper.
Reasons being:
- When assigning your order, we match the paper’s discipline with the writer’s field/specialization. Since all our writers are graduates, we match the paper’s subject with the field the writer studied. For instance, if it’s a nursing paper, only a nursing graduate and writer will handle it. Furthermore, all our writers have academic writing experience and top-notch research skills.
- We have a quality assurance that reviews the paper before it gets to you. As such, we ensure that you get a paper that meets the required standard and will most definitely make the grade.
In the event that you don’t like your paper:
- The writer will revise the paper up to your pleasing. You have unlimited revisions. You simply need to highlight what specifically you don’t like about the paper, and the writer will make the amendments. The paper will be revised until you are satisfied. Revisions are free of charge
- We will have a different writer write the paper from scratch.
- Last resort, if the above does not work, we will refund your money.
Will the professor find out I didn’t write the paper myself?
Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.
What if the paper is plagiarized?
We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.
When will I get my paper?
You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.
Will anyone find out that I used your services?
We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.
How our Assignment Help Service Works
1. Place an order
You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.
2. Pay for the order
Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.
3. Track the progress
You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.
4. Download the paper
The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.
PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A PERFECT SCORE!!!
