So after much speculation and jostling for position Avaya has signed agreements to purchase Nortel’s enterprise solutions business for $475 million USD a bargain even considering the current economic climate.
It will be interesting to see what happens as the two manufacturers share some common distribution for the dealer channel in Europe, in some cases this makes the acquisition easier but Avaya will need to be careful to ensure that one plus one does not end up equalling one. With care this should see Avaya being able to widen their sales reach right across Europe and beyond.
There should be some manufacturers who will be sitting up and taking notice such as Cisco, Siemens and Alcatel-Lucent as this new combined entity may push some of them off top spot in some European countries.
We wait to see if the Nortel name survives and what will be the consolidated product range in a few years time.
We are seeing lots of rumours about who is going to buy the Enterprise division of Nortel – it seems Avaya is the favourite with Nokia Siemens Networks and GENBAND also interested and for sure there will be several other parties looking closely as the price will be very good on account of Nortel’s financial problems.
We are interested to see what happens should Avaya acquire Nortel, they have in the past bought SDX Business Systems in the UK and what was originally the Network Alchemy system became the IP Office which is the mainstay of the SME business sector for Avaya. They have also in the past purchased Tenovis in Germany but that was more a market share acquisition and that product range seemed to disappear.
If Avaya completes the acquisition then it will need to be smooth and they will have to ensure that customers have a migration path from existing Nortel products to Avaya product or else the competition will be all over them.
This story has been widely covered so we will not go over it again but as this is one of the biggest news stories in our industry we could not let it go without adding our comments.
In recent times we have heard various stories about Nortel and their highs and lows, for sure this is an all time low and we can only wonder what will happen now, will the company break up, will it lose it’s management team, will major partners such as Microsoft will be scared off, how long it can hold on to it’s skilled talent – lots of unanswered questions and we can only watch from the sidelines to see how the saga plays out.
We hope a new Nortel will come out of the other side as it is not good for our industry to see one of our giants disappear, how ever many competitors will be happy to see Nortel suffering hoping to pick up a lot of their business and staff.
Nortel has bought Pingtel from mobility firm Bluesocket. Nortel hopes the open source IP PBX division will have better luck moving forward.
Financial terms of the deal remain confidential but Nortel will acquire the key assets of Pingtel from Bluesocket, Pingtel’s existing OEM relationship with Nortel will be brought in house and Pingtel employees will be integrated into Nortel’s Massachusetts facility. Pingtel and Nortel have already been working together for a while on OEM SIP based enterprise solutions.
Pingtel’s sipX open source IP PBX software is highly regarded for its ability to scale to support up to 10,000 users and Pingtel landed Amazon.com as its largest publicly announced customer. The Amazon.com installation reportedly supports over 5,000 users in a high availability configuration.
We think this is an interesting move and we remember when Pingtel produced one of the earliest SIP phones called Xpressa which had a knob on the side to scroll through the phone book and later they moved away from hardware to focus on software and sipX development. In 2007, the company was purchased by Bluesocket. We like the way Nortel has made a move to an OpenSource system but has avoided the Asterisk race, it will be interesting to see how the Asterisk community reacts to such a big player in the Telecoms marketplace making a move into their area.
See the Nortel Press release here.