After a long week-end of sleepless nights, hurried hotel arrangements, and slow court proceedings, Nortel has the court’s blessing to sell their Enterprise and Government Systems Groups as well as DiamondWare assets) to Avaya for $900 million plus a $15 million fund for retention of key employees.  Nortel’s Enterprise Solutions group posted latest quarter revenue of $464 million  -but even with corporate gross margins near the 40% range, Nortel overall posted a loss for the quarter.  Avaya assumes negligible liabilities from debt and none from pensions.  The deal is expected to be accretive to earnings well within 24 months.  Business leaders (and accountants) must find a way to make the Enterprise assets profitable in the short term.   

I had an interesting briefing with L. Ravichandran, the Executive Vice President and COO of Tech Mahindra this week.  This was quite a nice briefing to have from the company, given the dramatic changes that have taken place over the last year.  In January, Forrester analyst Sudin Apte and I wrote about the drastic consequences of the accounting fraud at Satyam (“What the Events at Satyam Mean For Service Providers”). Sudin has continued to write about the subject with great research that would interest virtually anyone in the IT services industry (clients and tech professionals) on Forrester.com.

Mr. Ravichandran stressed a few key points to me: