A month after closing a $915 million deal to buy bankrupt Nortel's enterprise business unit, Avaya is preparing to unveil its integrated road map. The industry will see in which direction Avaya is moving, and Nortel customers will find out the future of their products.
Avaya was one of the biggest winners in the 2009 fire sale that was Nortel
The communications technology vendor bought Nortel's enterprise business,
which includes Nortel's UC (unified communications) products. Avaya on Dec. 18
completed the acquisition, which analysts at the time of the deal's
announcement in September said put Avaya
up at the top
of the enterprise telephony field with rival Cisco Systems.
Since announcing the $915 million deal, Avaya officials have been relatively
quiet about what they will do with the Nortel products they bought. The company
has brought on about 6,000 Nortel employees, with Avaya CEO
Kevin Kennedy telling Bloomberg in December that the Nortel business had
"held up better than we comprehended" after Avaya announced the deal.
The ex-Nortel salespeople will help Avaya gain business in sectors such as
government, and also in emerging markets such as Asia,
Kennedy told the news organization.
Avaya officials are now ready to take the wraps off their integrated road map.
The company is scheduled to unveil its plans Jan. 19.
This will be an important day for Nortel's former customers, according to
David Passmore, an analyst with Gartner's Burton Group.
"What Avaya does will tell customers a lot about the future of their
Nortel equipment," Passmore said. "It's not entirely clear just
Avaya officials have indicated the company will support the Nortel products
for 12 to 18 months, but haven't said much beyond that. The company's road map
will answer a key question about Avaya's strategic intent for the acquisition,
The deal obviously strengthens Avaya's UC and VOIP (voice over IP)
offerings, he said, but by buying Nortel's Enterprise Solutions business, Avaya
also got Nortel's enterprise switches and routers.
What will be interesting to see is whether Avaya wants to keep its focus on
its strong UC and VOIP businesses, or expand its reach in switches and routers,
Passmore said. Switches and routers is a strong market, but it's highly commoditized
with low margins, and it's one that Avaya has been in before. It's unclear
whether Avaya officials will want to get back into it.
"Except for Cisco, which is the 800-pound gorilla in the room, there's
not much to distinguish one [switch and router] vendor from another,"
Avaya's purchase of Nortel's enterprise business may come down to Avaya's
desire to expand its customer base, rather than grow into other markets.
Avaya officials also will talk about the integrated Avaya-Nortel road map at
the Internet Telephony Conference & Expo East show held Jan. 20 to 22 at
the Miami Beach Convention
Center in Florida.
The road map will be part of a panel discussion at the show, according to
Nortel officials announced in January 2009 that the company was filing for
bankruptcy protection, saying the global recession had derailed plans to make
the company healthy again. Initially the plan was to use the bankruptcy
protection to restructure, although the tack quickly changed to selling off the
company piecemeal. Officials said it was the best way to protect the company's
technologies and employees.
"Maximizing the value of our businesses in the face of a consolidating
global market has been our most critical priority," then-Nortel President
and CEO Mike Zafirovski said in 2009.
"We have determined the best way to do this is to find buyers for our
businesses who can carry Nortel innovation forward, while preserving employment
to the greatest extent possible."
Nortel over 2009 also sold off a number of other businesses, including its
CDMA (Code Division Multiple Access) wireless group, LTE (Long Term Evolution)
technology and wireless technology business.