In my discussions with Kevin Kennedy (President & CEO), Joel Hackney (Senior Vice President & President, Government and Data Solutions) and other Avaya executives over the past 12 months, the need to keep customers informed about their options, and to equip partners with the capabilities to serve those customers has been a paramount concern.  When Avaya won the bidding to acquire Nortel’s Enterprise business, the company promised that they would make their product road map public 30 days after closing and today they are making good on that promise under the banner of &ldq

At Cisco’s Collaboration Conference wrapping up in San Francisco today, Cisco doubled down on their bet on collaboration.  Since acquiring WebEX in 2007, Cisco has not been shy in acquiring companies to rapidly fill out their Unified Communications and Collaboration Portfolio – 3 of the 4 acquisitions announced in the last month are directly beneficial to their collaboration portfolio – Starent enhances mobility, ScanSafe enhances security, and Tandberg enhances open video capabilities. Cisco has also tasked their development teams with improving and delivering new products enabling them to deliver a dizzying 61 distinct new products and product upgrades.    A year after publicly proclaiming their intent to compete aggressively in the collaboration market, Cisco is leveraging their agility and speed to deliver a cacophony of capabilities to the market.

Cisco’s Collaboration Portfolio is keeping up with the Jones... and the Smiths and the Johnsons

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.   

What has happened?

Avaya has announced today, July 20, 2009, their desire to acquire Nortel’s Enterprise Business Unit  and the shares of Nortel Government Solutions and DiamondWare, Ltd, bidding $475M for the businesses.  Avaya has offered to assume $28M in debt associated with Nortel Government Solutions as part of the transaction.   This kicks off a set of processes that will lead to a new owner for Nortel – and it may be Avaya or some other bidder.

Why are Nortel and Avaya interested in joining forces?