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Did a Chinese Hack Kill Nortel?

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Re: Did a Chinese Hack Kill Nortel?

#81

Post by throwaway423342 »

> ...have a strong suspicion it was the Chinese government...

so it MUST be China!

> ...There were close to 800 of them: PowerPoint presentations from customer meetings, an analysis of a recent sales loss, design details for an American communications network. Others were technical, including source code...

powerpoint and some technical files

> relayed the PowerPoints and other sensitive files to an IP address registered to Shanghai Faxian Corp

powerpoint and some sensitive files again.

It's hard to believe Nortel had any 'edge' in 5G, and judging from other comments of first hand experiences here Nortel's failure has more to do with itself than anything else.

pathetic medium quality opinion piece

Re: Did a Chinese Hack Kill Nortel?

#82

Post by dehrmann »

zyang wrote: post #23
Hongwei wrote: post #5

My parents lost a small fortune in 2001 riding the tech crash down (Nortel was a good chunk of that). I've been trying to explain to them (1st gen Chinese immigrants) for the past three years that Nortel was killed partly by focused Chinese spying and IP-theft by Huawei. CSIS has know about this for years. They (my parents) just wouldn't believe it until I showed them this article. Their former university classmates…

I interned at Nortel in early 2000's right before it all went down. I can tell you the engineering culture was rotten within. No-one was doing anything useful for years. Many orgs were built around milking the ancient layer 2 passport switch. The layer 3 router meant to compete with Cisco was 3 years late and only sold a few dozen units. There was accounting fraud going on at the highest level - delivery trucks circl…

Someone I worked with in 1006 who I think was at Bay Networks and jumped ship to Cisco had similar feelings about Nortel. Nothing about China, but it was already a sinking ship.

Re: Did a Chinese Hack Kill Nortel?

#85

Post by kevin_nisbet »

sradman wrote: post #19

> “This is plain and simple: Economic espionage did in Nortel,” Shields says. “And all you have to do is look at what entity in the world took over No. 1 and how quickly they did it.” The definitive book on the collapse of Nortel is 100 Days: The Rush to Judgement that Killed Nortel by James Bagnall, a journalist for the Ottawa Citizen. Occam’s razor applies here: the well documented fraud and bankruptcy at Worldcom…

I just finished reading that one (thanks for the recommendation in another post), and yea, it provides an excellent perspective.

That book lays out to me a much more compelling case that a leap to conclusions in the early 2000's that some fraud must exist killed nortel. Based on reading that book it's probably fairer to say the Americans killed nortel than the Chinese did. Although like anything else, a simplified explanation when there are lots of contributing factors at play likely doesn't mean much.

The posted article though about Huawei killing nortel by hacking them appears to be a reach (can't say it doesn't contribute of course). As I recall working in the industry around the time Telus and Bell switched to UMTS and towards LTE, Nortel wasn't even in the running. I think they had already sold off their LTE technology and were holding onto some CDMA evolution. I don't have precise memory of how this all lined up though, and didn't really work on the access network side (which is where Huawei is used, so most of my knowledge towards Huawei is second hand). I only did an eval with Huawei once.

While I don't have any insight into the china development bank offering low interest loans, and I didn't see it come up at all in that book, I've worked with a number of people who used to be contracted out by nortel to build networks in other countries. And nortel was using it's own money to fund networks in countries unlikely to repay the money for the equipment (Haiti probably stands out with the wildest stories). Those were some of the internal war stories about the financial troubles, although I'm sure there was lots.

I don't think it's safe to say that Huawei hasn't benefited from IP theft, which may include theft from Nortel, and possibly other factors, that have allowed them to skyrocket in profitability and sales. The whole thing with Huawei / Cisco routers I believe is pretty well documented. I just don't agree with the posted articles premise, that China or Huawei are to blame or fully responsible for Nortels collapse.

Re: Did a Chinese Hack Kill Nortel?

#86

Post by [deleted] »

Ghjklov wrote: post #13
11thEarlOfMar wrote: post #11

Earlier quoted context omitted.

Lol, that's me and AMZN. Bought at (split adjusted) $1.50 in 1997, rode it up to $86 in 1999, held all the way down to $6. Finally sold at about $20, still thinking I was brilliant. I have to laugh about it cuz I can't bear the alternative.

It's alright, no matter how bad that feels, it will never be as bad as all of us who missed the BTC boat when it was a little baby a few years ago. People spending it frivolously and treating it like it was worthless toy money since it was pretty easy to get. Then look at it now...

[deleted]

Re: Did a Chinese Hack Kill Nortel?

#87

Post by kevin_nisbet »

kevin_thibedeau wrote: post #78
kevin_nisbet wrote: post #75

Earlier quoted context omitted.

I agree with the overall sentiment, but I don't necessarily know if Nortel is truly unique amongst it's competitors. I worked with lots of the big vendors over the years (I worked at a telcecom operator here in Canada), and you'd get to chatting and they were all under financial pressure internally, lots of layoffs. One time I was visiting one of the big vendors in the US, and our team was joking around how it felt l…

Embedded hardware companies are skewed to an older demographic because you can't hire significant numbers of younger engineers with the necessary knowledge.

I don't know if I agree with that statement, engineers can be invested in, university programs etc. If a company is growing and expanding, they're going to need to draw on a lot of engineering and R&D talent.

And in my case it doesn't apply, the equipment we're evaluating was all software, running on a common x86 telecom platform. While I'm sure the office did have some embedded R&D, alot of what telecom vendors do just requires software developers.

Re: Did a Chinese Hack Kill Nortel?

#88

Post by jbay808 »

zyang wrote: post #23
Hongwei wrote: post #5

My parents lost a small fortune in 2001 riding the tech crash down (Nortel was a good chunk of that). I've been trying to explain to them (1st gen Chinese immigrants) for the past three years that Nortel was killed partly by focused Chinese spying and IP-theft by Huawei. CSIS has know about this for years. They (my parents) just wouldn't believe it until I showed them this article. Their former university classmates…

I interned at Nortel in early 2000's right before it all went down. I can tell you the engineering culture was rotten within. No-one was doing anything useful for years. Many orgs were built around milking the ancient layer 2 passport switch. The layer 3 router meant to compete with Cisco was 3 years late and only sold a few dozen units. There was accounting fraud going on at the highest level - delivery trucks circl…

I'm sure it looks like that inside many big companies. There's a reason that FAANG+ companies fought over Nortel's patent trove. Nortel tech is still in a lot of today's most valuable products, covering things from BGA routing techniques to wireless communications. The area still supports an ecosystem of small manufacturers of world-leading optics and photonics components. That says something, at least.

Re: Did a Chinese Hack Kill Nortel?

#89

Post by rrdharan »

KKKKkkkk1 wrote: post #80

I found this quote illustrative. Reminds you of Silicon Valley actually. Back then, Ottawa, not traditionally (or since) known for its glamour, seemed full of sports cars, corporate jets, and even society scandals featuring tech CEOs. In 1999 the co-founder of Corel Corp., who’d gotten his start at Nortel’s precursor company, threw a gala at which his wife showed up in a C$1 million leather bodysuit with an anatomica…

Article about the designer of said gown includes a fun anecdote about the Chretiens as well: https://capitalcurrent.ca/richard-robinson-keeps-high-fashio...

Re: Did a Chinese Hack Kill Nortel?

#90

Post by kevin_nisbet »

jaakl wrote: post #77

Can you kill specific competitor by stealing secretly their technical IP at all? You would not make them any weaker. You would get yourself stronger, but that would be general technical advantage, against everyone in the market. Different story if you take commecial secrets, bidding papers etc but that was not the case here?

Using a very contrived and simplified example.

If company A spent a trillion dollars coming up with the manufacturing process and formula to cure every cancer in the world. The intellectual property at it's root is the protection of that R&D investment. Company A than get's to setup manufacturing, and set pricing for the market, at the very least to recover the billion dollars investment.

If company B comes along, and spends 100 million dollars to steal that magic formula and the manufacturing process. Company B now has similar costs to setup manufacturing, but significantly less in R&D costs that need to be recovered, to sell to the same product to the same customers. In the contrived example, there is no reason to buy company A's product from their IP, when the same can be had from company B, presumably for less. Company B than earns a larger profit, which can be sunk into their own IP for the next generation, giving them a huge step up.

Of course the real world with tech products is way more messier than this, but in theory it's possible to do. As I posted elsewhere though, I don't believe it's fair to say it happened in the case with Nortel.

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