Avaya is giving away FREE Avaya IP Office phone systems

Well sort of ! Don’t get too excited just yet. But, read on …

This fall, Avaya will be visiting 20 small businesses—organizations with 10 to 50 employees—and giving them FREE communications makeovers. They will help design and install solutions specially tailored to each company’s specific needs. Actually, the installation, if the winner happens to be in a city serviced by Digitcom.ca, might be done by one of our own technicians.

How it works:
It’s simple: You will need to explain the “disconnects” (no pun intended of course) that are hurting your business, and if you win, Avaya will help you fix them (by donating a FREE Avaya IP Office phone system).

The disconnect could be technical—like an outdated phone system, or a patched-together “system” that’s unreliable. Or it could be a human problem—like frustrated customers or a key employee who no one can get a hold of. Or it could be a combination of both.

Whatever the problem is, you will need to explain this in a short video or written essay. You can be funny. You can be serious. You can be desperate. But however you do it, be sure to submit it by October 15, 2009.

Interested in finding out more – check this out …

Interested in speaking with Digitcom.ca about a new phone system (that’s not FREE) – then visit our web site or give us a call – 866-667-8357

P.S. I have been in the Telecom business for 20 years. I’ve seen some real horror stories out there, so if you are looking for some good ideas then give me a shout !!

Written by: Jeff Wiener. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Identi.ca, or Friendfeed

Time is not on Nortel’s side: An appeal to the US, EU, and Cdn Govt’s to expedite the process

The future of Nortel is now in the hands of the Canadian and EU governments, as well as the US Department of Justice.

The objections from Verizon have been rejected, but the fate of Nortel is still in limbo waiting for regulatory approval, and it’s important for the regulators to realize that the waiting will only hurt the sale process. If any individuals reading this blog have a say in the regulatory process, please step in now to help ensure the sale of this potentially diminishing asset.

The DoJ needs to determine how to measure the marketing power that this integration creates. If they look at the whole North American market, including small and mid-sized products, the impact isn’t as severe. But if you “slice and dice” (a term used by Gruia) up the market into the various segments, and examine it on a product-by-product basis, Avaya, Nortel, and Cisco are clearly the dominant players in the large enterprise arena. And with the Avaya/Nortel combination resulting in over 42% of the contact centre product’s market, dangerously close to the key threshold level of 43%, some analysts feel that the antitrust regulators will require Avaya to sell off assets to gain approval.

“The key issue is the DoJ rubber stamp,” according to Ronald Gruia (analyst for Frost & Sullivan). And the longer it takes to get the approval, the bigger the chance there is that the existing Nortel customers will seek other vendors through RFP’s. Gruia explains that Avaya can walk away from the entire deal if they don’t meet the regulatory requirements.

“The more pain for the customers the more likely it is they will take it to an RFP” said Gruia.

This issue could prove problematic moving forward. The channel, customers, employees need some certainty with regards to direction, and the “dark cloud” hanging over the deal’s head and uncertainty it brings will make it difficult for Nortel to continue the sales momentum moving forward. It looks like Nortel’s asset will rapidly decline in the next 6 months as their current customer base erodes and the dealer channel awaits a final seal of approval.

Avaya has set aside US$15 million for employee retention, which should provide some comfort to the 3100+ employees that are waiting for the sale to go through, but neither Avaya nor Nortel have released how many of the jobs will be kept after the sale. But if the sale doesn’t go through soon, or if the regulations are too prohibitive, Avaya will win, and Canada loses.

Some good news, the Canadian government has declared that they will not be blocking the sale of Nortel’s wireless division to LM Ericsson of Sweden, claiming that the agreement will be beneficial to Canada. Since the Liberal government has announced that they have the same position on the Avaya deal as they did on the Ericsson acquisition, another roadblock might be soon removed.

The US and Canadian governments have approved the bankruptcy sale, but there are still a lot of “If’s” in this development: If Avaya is forced to sell off the Nortel Symposium products, and If the DoJ looks at the market in individual segments, and If the Canadian government decides to block the sale – but It’s hard to say what will happen because no one really knows. And the waiting game will only make it more difficult.

The combination of an indecisive Canadian government and an unrealistic, overly protective American government might delay this process unnecessarily. So, hurry up the process and get this approved !

More:

Written by: Jason Finnerty. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Identi.ca, or Friendfeed

Avaya wins Nortel’s Enterprise business for $900 Million

I did this post as a guest post for AllAboutNortel.com and am cross posting this on TheTelecomBlog.com.

It’s been a long downhill battle for the last many years. Nortel has been languishing in the business sector, their prized business hampered by years of poor management and financial crisis. It’s a rather unfortunate end for Nortel, the staff, customers, dealers, and the Telecom market in general.

But, every cloud has a silver lining.

The Silver Lining: Every industry needs healthy competition, and Nortel brought that in spades for many years. Healthy competition spurs innovation, lower prices, and a spirit to win. At this point Avaya’s purchasing Nortel is a reflection of the consolidation happening in the marketplace, making way for Telecom 2.0 and the changes to come. On one side, competition is healthy, and one the other, so is consolidation; It will make way for stronger players in the CPE space. That’s the silver lining.

Nortel was a Canadian Telecom institution. Actually, Nortel was a Telecom powerhouse. And there isn’t much more Nortel left to go around, especially with today’s announcement that Nortel’s Enterprise business unit has been sold to Avaya for US$900 million in cash, with an additional pool of US$15 million reserved for an employee retention program.

The Nortel business units left are Metro Ethernet Networks (MEN), the carrier business (including VoIP), the stake in the Nortel-LG joint venture, and the LTE patents, which weren’t part of the Ericsson deal.

Some of the main highlights of this deal include:
– Nortel will sell the assets of the Enterprise Solutions Business, and shares of Nortel Government Solutions and DiamondWare to Avaya
– Avaya to Pay US$900 Million in Cash to Nortel, with an Additional Pool of US$15 Million Reserved for an Employee Retention Program
– Canadian and U.S. Court Approvals of Sale will be Sought at a Joint Hearing on September 15

It’s hard not to be somewhat nostalgic about the sale of the Enterprise division, especially given it’s business history. Nortel’s origins date back to 1882 as a manufacturing arm for the Bell Telephone Company of Canada, and they were incorporated as a separate company in 1895 known at the time as Northern Electric.

Unfortunately, both Nortel, and their technology has been lagging in the market for some time – quite a difference from only a decade ago when Nortel was the largest company by market CAP in Canada, their shares making up over 25% of the Toronto Stock Exchange’s main composite index.

The last few years Nortel began losing market share, and now Avaya needs to stem that tide, consolidate business operations, and hopefully for Avaya, remain profitable. In the best of times this is a huge task. Under these circumstances, GARGANTUAN.

Avaya is a large Telecom player and certainly has the resources and brains to make this a success – it won’t be an easy task though.

Something about this auction process that has me somewhat surprised is Cisco’s lack of presence or mention at the bargaining table. Cisco is the undisputed worldwide leader in voice and data technology. At one time Nortel was their biggest competitor. And it seems that Cisco has almost ceded their fate into someone else’s hands. With the addition of Nortel, Avaya is now the number #1 voice player, by far, and now has control over Nortel’s switches and routers, clearly stepping into Cisco’s sandbox. Clearly the folks at Cisco were aware of this. I suspect they decided to let Avaya take control over this asset, mess it up, and then clean up the mess. I can’t think of any other reason why they weren’t at the table.

Either way, today marks the end of a Telecom dynasty, and the beginning of a new one.

What are your thoughts ? Is this a good move for Avaya ?

Written by: Jeff Wiener. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Identi.ca, or Friendfeed

Will it be Avaya ? Siemens ? Either way, it’s good bye to Nortel, Canada’s Telecom giant.

It’s almost like watching a really long sports game, but in this case, the game is played behind closed doors, the fans awaiting news of the outcome.

The news of the fate of Nortel’s Enterprise business unit should have been determined on Friday, and, for some as yet unreported reason, there have been delays. The speculation is that the bidding is still on going, however, there could of course be other related complications, the Verizon issue being one.

There certainly is an energy that has surrounded the news, the unfortunate end result is the dismantling of Canada’s Telecom giant.

For continued updates on the news as it progresses, Twitter seems to be the best spot.

P.S. For those looking to pass some Sunday morning time, I wrote a post on Twitter and how I, just recently, realized it’s importance.

P.P.S. It seems the best spot to follow updates is through Bo Gowan’s Twitter account.

Will it be Avaya ? Siemens ? What do you think ?

Written by: Jeff Wiener. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Identi.ca, or Friendfeed

And the reason for the delay in the Nortel auction is …

AllAboutNortel.com is reporting that there will be a court hearing on Monday at 1PM in New York to deal with Verizon’s opposing Avaya’s acquisition of Nortel’s Enterprise business unless provisions are provided for continued support of Nortel’s equipment. Looks like we will have to wait until Monday.

P.S. I am wondering if this is the final step in the process. Perhaps Avaya won the bid with a caveat of dealing with the Verizon claim. If Siemens had won the bid then this wouldn’t be an issue – right ?

Jeff

Winning bidder for Nortel’s Enterprise business to be announced today. Avaya ? Siemens ?

At some point today, barring some major complication, the winner of the Nortel Enterprise (Corporate Networking) business will be announced. It appears that there are 2 companies bidding. Avaya has made a $475 Million stalking horse bid, and Siemens Gore will be submitting a counter bid. Early rumors were that there were 3 bidding firms, Mattlin Patterson or Ciena rumored to be the third.

It also looks like there were some complications during the day Thursday with Verizon going to court to oppose Avaya’s bid on U.S. national security grounds. “Verizon says it has purchased equipment from Nortel that is now in use by virtually every arm of the U.S. federal government, including the military, anti-terror units and 911 call centres.”

I’m wondering what Verizon is hoping to get out of such a claim ? Fair enough – The US federal government is using Nortel hardware in many of their operations. Nortel’s bankruptcy, and Avaya (or Siemens) acquiring these assets will pose a threat to US national security, but, what exactly is Verizon hoping to accomplish with such a claim ? Nortel is bankrupt. The assets are being sold to the highest bidder. Someone is going to acquire these assets, and hopefully, provide continued support to the current customer base.

This decision … to acquire and take on the number 1 phone system manufacturer and morph the staff, channel, products, engineering into one cohesive unit … That takes a savvy business team with a very deep understanding of the business, business model, and opportunities for success. And to parlay that into a new, successful business model – well, the acquiring firm certainly has their work cut out for them.

Hopefully history will prove that this team made the right decision. Stay tuned – I will be posting my thoughts and end result at the end of the day.

More: My prediction is that this thing will sell for $825 Million. Just a wild guess really. What do you think ?

Written by: Jeff Wiener. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Identi.ca, or Friendfeed

Come on Canada. Wake up. Nortel gold is almost dust

All bids are now due for the Enterprise division, and – wait – this just in …

Sometimes you wonder if the Canadian Federal and Provincial governments are asleep.

The Canadian government only expressed interest and concern about the Nortel CDMA business only once the CDMA process was complete, and victor announced. The day after the sale was done the Canadian Government decides that maybe they should keep the business in Canada, and block the sale. Where were they in January 2009 when Nortel announced bankruptcy ?

Next business unit up for auction is the Enterprise division. Again, no federal or provincial government looking to salvage this piece of Canadian Telecom gold. Protect Canada’s R&D investment. The Canadian taxpayer has invested BILLIONS into Nortel through Canada’s SR&ED (research and development tax credit) program. It’s the US government standing by waiting to stake a $2.97 billion claim on the asset, but, no Canadian government.

All bids are now due for the Enterprise division, and – wait – this just in … The Provincial Government is hoping that the victor will keep the jobs in Canada. Maybe an announcement, a plan, some dollars on the table PRIOR to the auction process commencement ? No. Not the way things are done around here. That would be too proactive. Craft your own destiny perhaps. No. That’s not the Canadian way.

Let’s let fate determine it’s course, issue a Provincial Press release letting the world know that:

“In my view, it goes without saying that there’s an expectation that the footprint be maintained here and that’s certainly what I would look for in a successful bidder,” Pupatello told Dow Jones.

Unfortunately, I suspect that none of the bidders are Canadian. It looks like there are 3 bidders, chances are, none Canadian (Avaya of course, Siemens and Matlin Patterson probably). These firms will certainly act in their own self interest, offer and bid, and then run the NEW NORTEL the way they see best fit.

How about the Canadian Government putting some money on the table. Provide some incentive for the winning firm to take advantage of some of those SR&ED tax losses that are sitting on the books, with the condition that a certain number of jobs are maintained in the country. That might be a WIN WIN. We can then keep the gold in the country.

Written by: Jeff Wiener. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Identi.ca, or Friendfeed

Telecom 2.0 – Where are we headed ? Nortel, Mitel, Avaya, Cisco, ShoreTel …

I did a guest post on AllAboutNortel.com yesterday. You could read the entire post here: , or, I have re-posted my guest post on TheTelecomBlog.com I know, seems strange that I am re-posting my own blog posting, but, I actually did this as a guest post for another site. Mark Evan’s has been a great help and a big supporter of this blog.

No, I don’t have a crystal ball but I wish that I did. I am looking at the next generation of telecom, and wondering where this rapidly evolving market is headed. I’ve been in the telecom business for 19 years – it’s almost like a 6th sense (although my sense is sometimes off).

With that in mind, let me offer my take of where the enterprise telecom market is going in the short and long term. Keep I mind I’m writing this post at a time when the customer premise-based equipment (CPE) market is at a crossroads.

Nortel’s bankruptcy and uncertain future has left many current and prospective customers wondering where to take their new telecom equipment business. Does it make sense for an existing Nortel customer to spend money on upgrading Nortel equipment, or, as my father explained in my early years in business, “never throw good money after bad”.

In other words, many of my clients are now throwing out their older Nortel gear in favor of new hardware, rather then spend dollars on upgrading their older Nortel systems.

Either way, Nortel is still a large player in the market but their absence at the table has left a void filled by their competitors. Of course, over the near term this issue will be resolved.

And what will follow in the enterprise telecom market?

In the short term, many customers looking for CPE will gravitate toward some of the larger players such as Cisco, Avaya, Mitel, and NEC. I believe these players will continue to shuffle market share around ever so slightly. There are also some smaller players in the CPE market – notably ShorTel, Asterisk / Digium, and Microsoft.

Some thoughts on some of these players:

- Microsoft hasn’t become the competitive threat I suspected they might – the enterprise market hasn’t adopted Microsoft’s OCS or Response Point telecom equipment – yet.

- Cisco is obviously making headway into the larger space but their SMB products haven’t been that widely adopted – yet.

- Asterisk, although a threat, isn’t taken that seriously within the enterprise market – yet. It seems that customers need a “manufacturer” to scream at!

The other spectrum of the enterprise equipment space is the looming threat of Hosted VoIP, Google, and Skype, which is hanging over the CPE vendors like a very dark cloud.

The world is gravitating toward an IP-centric model, and the “cloud” at a rapid pace. Over the next few years, there will a gradual adoption of cloud telephony. In time, the technology will be widely adopted as the technology evolves and becomes more reliable.

As a CPE vendor, I view the threat that companies such as Google and Skype hold over the CPE market with some fear. Not today, but certainly in the future. Cloud telephony represents a paradigm shift – something to be watched, and shortly, feared. I am going to label this next generation of telephony as “Telcom 2.0”.

What does Telecom 2.0 look like ?

Speaking along the lines of paradigm shift, the next generation of phone systems will be a highly intelligent server, much as they are now. The talk/communicate medium will not necessarily be the bulky phone on your desk, but rather a variety of end point devices.

Skype, Google, Facebook, iPhone, Blackberry – these all-in-one appliances will be the talk/communicate path, and the server at the back end will bridge these technologies together. And with the recent news of Silver Lakes (Avaya’s parent company) being part of an investment group buying a 65% stake in Skype, it will now bring together the old and newer emerging technologies.

In the meantime, I’m now watching the race for Nortel’s enterprise asset – the winner will change the landscape considerably.

What do you think? Where is Telecom 2.0 heading?

More: AllAboutNortel.com received some amazing, very insightful comments which can be read here.

Written by: Jeff Wiener. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Identi.ca, or Friendfeed

Skype sold. Silver Lakes is one of the investors. Silver Lakes also owns Avaya (along with TPG)

A small group of venture capital funds have agreed with eBay to acquire a majority stake in Skype. The group is led by Silver Lake Partners, joined by Index and Andreessen Horowitz Ventures.

I wrote a blog this morning speculating that this deal might happen, and also speculated that Silver Lakes might be one of the investors. It is now confirmed.

Quite a powerful combination – Skype and Avaya.

The next generation of phone systems will be a highly intelligent server, much as they are now, but, the talk / communicate medium will not necessarily be the bulky phone on your desk, but rather a variety of end point devices. Skype, Google, Facebook, iPhone, Blackberry – these all in one appliances will be the talk / communicate path, and the server at the back end will bridge these technologies together. I’m calling this TELCOM 2.0, and it looks like Skype / Avaya will be well positioned to take advantage of this technology.

Jeff www.digitcom.ca

Is there an association between Skype and Avaya ?

I was about to post a write up this morning on a “Skype for business competition” and decided beforehand to check out what was going on in the tech world when I came across this interesting posting on Techcrunch.com titled: “Skype Sale to Investor Group Led By Andreesen Horowitz Confirmed”.

The title itself seems fairly innocuous. The article explains that Skype will be sold to an investor group led by Andreesen Horowitz, and will have as capital investors Index Ventures, and Silver Lake Partners. The piece I find interesting is the Silver Lake Partners piece.

Silver Lakes, along with TPG, is one of the 2 private investors that also owns Avaya.

For those that read my blog, you will know that I view Skype and Google as one of the long term threats to the CPE / Enterprise telecom business. I have no idea what the association between Silver Lakes and Skype might be, or for that matter whether this rumor is even true, but, if this does pan out it will certainly pivot Avaya / Skype to the front of the VoIP, CPE , Telecom 2.0 market. Let’s wait and see what happens !

Jeff www.digitcom.ca