Speculation About Avaya's Plans Are Just That

I should have expected this. The buzz about what Avaya is going to do with Nortel's switching and routing business is fodder for discussion. Frankly, it's all wild speculation. Avaya winning the stalking horse bid is very, very far from a done deal. Many people thought Nokia Siemens Networks (NSN) would win the auction for Nortel's CDMA and LTE business, but private equity firm MatlinPatterson  came in with a $725 million dollar bid. Nobody knows what is going to happen with the auction, not even Avaya.

Voice (VoIP, collaboration, Unified Communications) and carrier wireless were Nortel's strengths. Not networking. Not security. Nortel hasn't been a credible networking player in years. I am not opining about their products, just that they are pretty far down the market share ladder below Cisco, natch, HP Procurve, and 3Com(!).  Considering upstart Juniper has been making lots of press announcements and getting ink but are still well below 10% market share while Nortel hasn't generated any enterprise buzz since the acquisition of Bay Networks in 1998. Nortel's switching and routing portfolio isn't exactly shaking up the infrastructure world.

Nortel's switch and routing business needs to be put to bed. It's done. Whoever wins the bid for the enterprise space can really shake up a the product development team to bring something unique to the market and kick the marketing team into high gear to start collecting mind share and ink.

When Juniper launched thier EX swtich product line, all they had were edge swtiches, it took over a year before thier core 8200 started shipping. The EX series are just basic swtiches—nothing special to see—24-48 port GB swtiches. Juniper can't even claim the highest port density or fastest products. Then they starting making noise about a single OS across their product lines—something Extreme could lay claim too much earlier. But what Juniper did was get people talking. They got the buzz happening. They are growing mind share.

Anyone who wants to make a go of Nortel's enterprise business needs to generate that buzz. The groundwork is already laid. How many columns and blogs is Nortel refferred to the "once great Nortel" or "one-time power house"? Just build off of that.Voice and collaboration is where Nortel has a much better chance of remaining vialble. Nortel is already in the top four vendors, along with Avaya, Cisco, and Siemens and the market share difference is less than 10 points, that is where the Nortel Enterprise business has some legs. If that division could get some funding and some wins, they could remain a player in what is still a growth market. If an equipment vendor with an existing VoIP and UC product line gets ahold of Nortel's enterprise business, they are going to have to contend with supporting Nortel's gear while weaning them off what they have. Nortel customers are nothing if not loyal, so that could be a difficult move.

No matter who acquires the enterprise business unit, whether it is Avaya, MatlinPatterson, or some other bidder, Nortel  jobs will be cut,  product lines will be cut, and what remains will be leaner. I don't think Avaya will want to retain the switching and routing product lines. Avaya is pretty focused on voice and UC. Everything else is just a distraction. There is something to be said about doing a few things well rather than doing many things so-so.

If I were a Nortel enterprise customer, I'd be looking at options right about now. No matter what happens, you won't be dealing with the same company a year from now.