Cisco acquires Tandberg for $3 Billion

Cisco announced earlier this week that they acquired Tandberg for $3 Billion. Tandberg is a world wide leader in video conference equipment, and puts Cisco into a very dominant position in this market.

Cisco’s acquision gives them a bigger install base for their Telepresence product including a whole new line-up in the lower end of the market. This now also puts them in an excellent competitive position against Polycom, the other dominant market player in the video / voice market.

BTW – Polycom is now an excellent market play. I’m wondering who might decide to pick-up Polycom and gain a very quick foot hold in the voice / video market to better compete in the converged world. HP perhaps ? Silver Lakes, one of the private investors that owns Avaya ? Microsoft ?

On another note, I find it rather interesting that Cisco overpaid for Tandberg, although couldn’t see any value in acquiring the Enterprise division of Nortel which was acquired a few weeks ago by Avaya for $900 Million. A Cisco / Nortel marriage would have created a Telecom powerhouse. True, there’s a lot of product overlap, and as I speculated a few weeks ago, Cisco decided to let Avaya take control over Nortel and wait for Avaya to mess it up. That’s the only reason I can think of for them not being at the Nortel bargaining table.

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

The CPE Race is on ! Cisco, Avaya, Nortel, Mitel, NEC

Leading the way in the North American CPE’s race to see who the #1 Market Share company in the CPE sector is proving to be quite interesting.

At the halfway point it looks like Cisco has taken the lead, but there is a lot of year left, and some fantastic competitors.

These top 5 companies have gobbled up the lion’s share of the CPE sector, providing nearly 66% of all Customer Premise Equipment in North America. An amazing statistic, but it’s actually down from 70% in 2008. There are some strong competitors that are making up the rest of the market, but the top 5 are the companies to watch.

A bit about them and some explanations for their current success according to Allan Sulkin with nojitter blog:

- The “Marketing machine” that makes Cisco so ubiquitous has helped to establish the brand, while top-rated dealer support and training ensure that the support is there when the customer needs it. Being known as the safe choice doesn’t hurt, either.

- Consistent focus on aggressive pricing has enabled Avaya to stake it’s claim on the market behind Cisco. Bundling the UC All-in-One license fee with the Aura Communications Manager Enterprise Edition is unbeatable, and their licensing fee for the Standard Edition – only $50 – is one of the best deals around.

An aggressive pricing strategy combined with a strong product lineup allow Avaya to be a serious competitor, both at the Enterprise and especially the SMB level. As an Avaya dealer, I know that Avaya has some very aggressive (mostly Nortel targeted) discounts on right now.

A fiercely loyal customer base has allowed Nortel to hold onto the third place position. Though they may be losing some of their market share in the high end of the market, Nortel has been able to achieve stability in the lower risk/more economical market segment. The future of Nortel is certainly unpredictable at this point, but one thing is for sure – with a solid 12% of the market, there is still some value in Nortel.

Sulkin explains that NEC was able to slide into the 4^th place position over Mitel because of their recent improvements in the larger line size segment in the past quarter. Launching the UNIVERGE SV8500 system has allowed NEC to reclaim the customer base equipped with the NEAX2400 systems. In a welcomed change from the past, NEC is now using webinars to provide more company and product information to the consultants and analysts that can help spread the word about the changes in NEC.

Mitel has traditionally focused on the lower end of the enterprise market, but over the past few years they have been growing the capacity of their product lineup which has helped them gain more market share. Doubling the port capacity of their flagship 3300 and acquiring Inter-Tel has provided new direct sales/service opportunities as well as a solid team, skilled in selling managed services.

Well, in the top half of the year these five companies have shown solid and consistent performance. The competitors, many with less than 1% of the market but in total over 10%, are nibbling away at the leaders, hoping to break through the back of the pack and emerge as a real contender. With an estimated 5.5 million line stations in F2009 – this could make, or break, these companies.

Jeff www.digitcom.ca

How to lock down your border router in order to avoid security breaches

This is a guest post posted by one of Digitcom’s Cisco techs and is of a more technical nature. The discussion is on How to lock down your border router in order to avoid security breaches
Cisco Premier

Cisco Premier

These tips are very important to follow, especially on routers that are on the border between the external and internal network. Here are some tips that I’ll put in bullet form to make it easier to read. I’m doing this in parts because it’s quite a lengthy process to lock down your router….IF you’re not using SDM (which does a one step lockdown). Here is the first part:

* Shut down any unused interfaces. What’s the point of leaving them “up” if you know they are not being used? It’s just one less thing someone trying to breach your network can try. Just make sure that the interface is indeed not being used….otherwise you might start getting phone calls asking you why a branch office is down. Go to the selected interface and type shutdown.

* Turn off cdp. – Have you ever taken a look at a “show cdp neighbours detail” output? It provides quite a bit of interesting info….two of which are dangerous for unauthorized users to know….IP address and what kind of IOS version the router is using. All this person has to do is Google for vulnerabilities and the ios version they saw in the output and use that to their benefit. You can disable CDP either globally on the router or by interface. I suggest disabling it globally. Use it if you have to troubleshoot something but do not leave it running 7 days a week 365 days a year, 24 hours a day. To disable it globally, enter in config mode and type no cdp run or disable it in the interface you wish with no cdp enable.

* Turn off bootp – In config mode type no ip bootp server.

* Turn off tftp download of boot network and host files – You don’t want your router picking up unwanted configs form anyone that has set up a tftp server do you? In config mode type no service config.

* Turn off tcp small servers – There are tons of ways to get a router to stop…one of them with the chargen attack. This can get your router’s CPU running to 90 percent or more. This is just ONE of the attacks that can be done to the router if the small services are enabled. Turn off all tcp and udp small services. Most of them are not even used anymore anyways….so go ahead and do that. In config mode type in no service tcp-small-servers and do the same for UDP with no service udp-small-servers in config mode.

* Turn off ftp service if your router’s IOS has this functionality. Do the no ftp-server enable command in config mode.

* Turn off tftp services. To disable the tftp service on your router do the no tftp-server command in config mode.

* Turn off ntp on unwanted interfaces. For disabling on the interface do the ntp disable command.

If you do want to have remote connectivity to the external interface you should, first, disable telnet and enable SSH. To do this follow the steps below

* Start in global configuration mode and give your router a hostname.
* Create a DNS domain
* Generate the SSH key with the crypto key generate rsa command
enable AAA with aaa new-model. Then create a username and password with the username (name) password 0 (password) command
* Configure SSH maximum authentication retried before the connection is cut off. This is done by issuing the following command: ip ssh authentication-retries 3.
* Have the connection timeout if inactive for a certain amount of time (in this case 60 seconds) with the ip ssh time-out 60
* Go into line configuration mode and type transport input SSH
Then connect with Putty to your router`s IP address and test it out. You should get a pop up message from Putty talking about the new encryption keys for you to use. Just click on ok and a prompt should come up on the terminal asking you for your credentials.

Well, this just about covers basic security lockdown for your border routers. You might not want to do all of this on your internal routers since some of these services are needed for internal operations. One thing though……always use SSH to connect to your devices.

Next week we’ll be discussing border router security a little more in-depth with the Cisco IOS firewall feature set.

Nortel, Avaya, Siemens, RIM, Matlin Patterson. Things are heating up.

Looks like things could get interesting in the race to acquire Nortel’s assets.

Matlin Patterson has submitted a $725 Million bid for Nortel’s CDMA assets. Looks like this offer trumps Nokia Siemens offer by $75 Million. It also looks like RIM is interested in acquiring some of Nortel’s assets.

RIM is of course a Canadian company and could clearly take advantage of some of the BILLIONS in R&D tax credits, BILLIONS that Nortel has on their books in tax losses, and hundreds of telecom and IT related patents. Seems like a no brainer ? Or you would think anyway. BUT, it seems that RIM was told if they wanted to make an offer on the Nortel CDMA business that they could not submit offers for other Nortel assets for a year.

Whose interests does this serve ? Certainly not the bondholders, pensioners, employees, and even Canadian’s … Isn’t this bankruptcy process intended on maximizing the remaining value of assets to maximize pay-put to these groups ?

Is this a Nortel imposed limit, or a federal limit ? Either way, there should be an exception.

Avaya’s offer for Nortel’s assets is a first step. It’s a $475 Million offer. We’re months, many court proceedings, and multiple offers away from any of this closing. I suspect the $475 Million offer by Avaya is a first offer that will no doubt be trumped by competing bids over the next month. Cisco has been sitting on the side lines which I find rather surprising. Avaya’s acquiring some of this Nortel technology will clearly put Avaya into more of Cisco’s cross hairs. RIM’s got some big tax losses, patents, and R&D credits that they could apply. Nokia Siemens is now at the table, Matlin Patterson is obviously watching and bidding, and I’m sure other bidders will now throw their offers in. Looks like the capital markets are easing quite a bit, the recession is dissipating, and dollars are now getting spent. I’m going to check my piggy bank and see if we can come up with $476 Million :

SIP Trunking – a new line beginning

Let’s simplify this otherwise somewhat complicated concept.

SIP Trunking is the mechanism used to connect phone lines into an organization’s business telephone system, and is emerging as a viable alternative to legacy (TDM PRI and analog lines). A SIP trunk is essentially a telephone line, or series of telephone lines and DID’s brought into the office over a broadband (Internet) connection. The SIP trunk is a viable option, although the technology is relatively new and still not that well understood by the carriers. The problem with a SIP trunk, which must be addressed, is that since the telephone line is coming in via a broadband / Internet connection, the quality of the data line from the organization’s offices into the SIP providers premises is absolutely critical.

Digitcom has been researching SIP trunk providers, we have done 4 deployments so far (3 on Avaya IP Office, and 1 on Cisco Unified Communications Manager Express) including our own office, and have had excellent success. All of these deployments have been in Toronto. We’re finding it quite challenging finding reputable carriers although we’re making some progress. This is obviously a work in progress, so we’ll keep you posted.

Jeff

Cisco Adds Twinning to their latest IOS

Cisco’s latest IOS now includes twinning.  Call your desk set and your cell rings at the same time.   Go back to your desk and pick up your cell.