TheInfoPro

03 December 2009 – Bill Trussell, Managing Director of Security and Networking Research and Advisory – It would appear that the Nortel Enterprise business unit acquisition by Avaya is headed for closing this month, though questions remain as to the impact that this will have on the the enterprise customer. Most industry observers are recommending that enterprise customers wait out the acquisition and subsequent integration period before making any rash decisions on product adoption or abandonment. Data suggests, however, that this recommendation is not being observed by many enterprises as both Cisco and Microsoft are gaining consideration to supply IP voice infrastructure to both large and small enterprises.

The biggest question for the industry to consider is whether this acquisition was being made as one to spur growth or merely as an exit strategy for the private equity investors of Avaya. While a successful exit can seldom be accomplished without some indication of profitability ,the acquisition of Nortel by Avaya offers the opportunity to cut costs dramatically – and with a short focal length – in order to secure a pathway out for the equity owners. Such a strategy may very well lead current and newly acquired customers of the Nortel products down a dark path of not knowing whether the product just acquired will continue to be supported in good faith. If the acquisition is truly intended to spawn growth for Avaya, then they can ill afford to lose any customers for any reason. But our data indicates that this does not appear to be the case thus far as Nortel customers tell us they are looking to leave in favor of competing products from other providers. For that matter, Avaya does not have a good track record recently other than for their largest legacy systems which are not easily replaced.

As a result of this uncertainty, caution is likely the best enterprise strategy at this point.

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