A lot has been made of the recent flirty looks passing between Cisco and Nortel. Some have predicted that a deal could happen. I am not so sure. Why? Nortel, despite its financial problems and accounting scandals is in a good spot right now. It is selling a lot of wireless equipment, has a lot of traction in the VoIP market place, and well has pretty much the entire Bell market to itself. It really does not need Cisco.

The San Jose upstart, however needs Nortel badly. Its carrier strategy has been as successful as Diamondbacks season so far. It is still primarily a enterprise company and can convincingly sell switches and routers. Even in the VoIP space it sees Nortel and Siemens walk away with all the business. Yeah, they need something like Nortel.

There will be some serious problems if these two decide to tie the knot. I think Canadians will suddenly see that they are being swept aside by the Californians who have think they are “masters of the universe” (not). Nortel-Cisco partnership is going to benefit, one company. Cisco.