Avaya announced its intention and agreement to purchase Radvision today. These two technological powerhouses have the combined brainpower to put together some of the most advanced unified communications solutions in the world. Radvision’s experience in building complex modular communication components plus Avaya’s strength in delivering complete, reliable communications solutions is an appealing combination. The strengths of this combination include:

• Breadth of open technologies. Radvision’s H.323 and SIP stacks will combine neatly with Avaya’s Aura architecture to enable a wide range of interoperable communications solutions from varying vendors built on multiple old and new technologies.
• Video portfolio. Radvision’s Scopia videoconferencing portfolio (from  desktop to telepresence) extends Avaya’s current partner-driven video endpoint model.
• The cloud. Radvision’s service provider relationships gives Avaya a firmer footing from which to sell cloud solutions to service providers.

Issues that management will have to deal with in the combined company:

• Cultural fit. Avaya’s consensus-driven and collaborative culture may not provide the direction Radvision’s developers got used to within Radvision’s traditional command and control structure.
• Revenue growth. Radvision has been on a slide. The Avaya/Radvision combination will have to open new markets and increase win rates to pay back the $230 million purchase price — approximately three times Radvision’s annual revenue.

I believe this acquisition will almost immediately enable Avaya to better sell into mixed environments with older video and VoIP solutions by integrating Radvision’s H.323 stack into the Avaya Aura product set. The long-term success of the combination will depend on the combined company’s ability to deliver open, interoperable, software-based unified communications that provide the flexibility to integrate — not just with communications components, but also with business applications and processes.