Nortel's Morin on optical networking

In health care, we've had a lot of announcements of business with hospitals through carriers, sometimes direct to the hospitals. All are doing storage, where they link MRI machines in clinics with other locations. Some university clinics are linked and want to have access to huge digital files and want security and reliability. It's been an interesting new segment, especially the private hospitals, where the new HIPAA regulations are forcing a lot of backup, and their distance backup requirement is good for us.

With schools districts, including the Philadelphia district, it's about service connectivity and allowing applications to run and getting more information to different schools. What schools need is a network capable of voice and video conferencing and distance learning. A lot want to be able to link student information in a metro area network or campus. They want low jitter, and sometimes you can't run videoconferencing over Multiple Protocol Label Switching and need optical.

So with optical, we hit bottom last year. ... But since then it's seen a good pickup. It's important that we have the right focus on investment. It was a mistake to have invested in long-haul DWDM, so we revectored our R&D in 2002 towards enterprise. The long-haul buying was by the carriers.

Will Nortel ever again see the growth in optical as it did back in the 1990s? We're not ever getting back to 50 percent of revenue. We may see single-digit growth on an annual basis, and I'd say we're going to grow faster than the market because we are well positioned in metro and enterprise segments,

You've been at Nortel 18 years, so what was it like to go from that high in optical to the bottom? It's a hell of a learning experience. You learn to grow rapidly and make decisions that are about sizing the business right. It's absolutely tough to go through head count reductions. ... Now, seeing the growth, it feels much better.