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Nortel Avaya bid win could hurt enterprise users
Will deal lead to product line rationalisation?
By Jim Duffy and Tim Greene | Network World US
Published: 12:35 GMT, 18 September 09
Users should chart the progress of Avaya's purchase of Nortel's enterprise assets carefully, so that they are spared any unpleasant product integration or rationalization surprises.
Product overlap, consolidation and subsequent support are the biggest issues facing Nortel enterprise customers on the heels of Avaya's $900 million purchase of that business. Avaya last week emerged as the winning bidder for Nortel's enterprise business, beating out Siemens Enterprise Communications for the asset. Avaya last week also won court approval for the purchase.
Now comes the uneasy task of sifting through the product portfolio and eliminating redundancies -- an ordeal that could leave Nortel -- and even Avaya users -- with a shortened lifespan on their investments.
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"Like an onion, there are lots of layers," says Nortel customer Bruce Meyer, director of network services at ProMedica Health Systems in Toledo, Ohio. "Let's see where they go from here."
"There may be some surprises there," says Bob Hafner, an analyst with Gartner. "These are going to be two large companies coming together. It's not the easiest thing to do. These things never go without issues, problems or concerns."
Significant overlap is expected in the IP telephony/unified communications portfolios of both companies -- such as IP PBXs, handsets and call management software. Avaya is the leading revenue market-share vendor in enterprise telephony, according to Dell'Oro Group, while Nortel is No. 4.
Little to no overlap will be found in routers, switches and other infrastructure products, where Nortel has a significant market share and installed base. Indeed, Meyer believes Nortel routers and switches will be less susceptible to discontinuation than the VoIP products, because Avaya has virtually no data products.
"With Avaya, there's not a lot of strength in enterprise data," Meyer says. "[Avaya] will want to know that the infrastructure is good. We need a reliable infrastructure."
"The biggest issue for users is, 'Show me the [product] road map,'" says Henry Dewing of Forrester Research. "They want to see hardcore product plans and how they are going to actually consolidate product lines."
Avaya has pledged near term support for the Nortel enterprise products, including those serviced by Verizon, a Nortel reseller. Verizon filed motions last week seeking assurances that Avaya would continue to support the Verizon accounts, which the carrier says include many federal law enforcement agencies.
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