nortel

Sep 17 2009   7:38PM GMT

Avaya as a networking vendor

Posted by: Shamus McGillicuddy
Avaya-Nortel acquisition, Avaya, nortel, Networking

Avaya has tried to be a networking vendor in the past (Anyone remember Cajun switches? I think you can still buy one in Thailand). The market has not been friendly to it.

And yet, with this week’s news that Avaya won the bidding war for Nortel’s enterprise division, the company is now on its way to being the owner of a significant data networking market share.

According to Gartner’s quick-take on the Avaya-Nortel deal, Avaya has committed to continue Nortel’s data portfolio as its own. I haven’t seen that corroborated anywhere else. In July I asked Todd Abbot, Avaya’s senior vice president of global field ops, about Avaya’s plans for Nortel’s switches and routers. He said the company wasn’t ready to discuss it.

Chances are that Avaya won’t be ready to discuss the future of the data portfolio for awhile, at least until the deal is closed. Then perhaps Avaya will make a go of it as a networking vendor. It’s not out of the question, given how many former Cisco executives the company has on board. But it’s also entirely possible that Avaya will eventually flip the data business to another vendor.

As Garter’s Bob Hafner et al noted in the firm’s quick-take, Avaya has a poor history with data products and Nortel’s product line needs some updating and rationalization (Although Nortel would disagree with that assessment). Gartner worries that Avaya “may not be able to spare resources for this task while it focuses on integrating and supporting the combined [Nortel-Avaya] voice portfolios.”

So Avaya’s Nortel agenda looks like this:

• Retain an extremely rattled voice customer base.
• Make amends with a very unhappy channel community.
• Integrate two huge voice and unified communications product portfolios.
• Figure out what to do with the data networking business.

Gartner is right. The first three bullets in this list look like tall tasks. The last one might sit in the to-do file on CEO Kevin Kennedy’s desk for awhile.

Jul 20 2009   6:25PM GMT

IBM exec leaves to head Avaya’s Nortel integration?

Posted by: Rivka Gewirtz Little
nortel, Avaya, IBM, Avaya-Nortel acquisition, mohamad ali

IBM veteran exec Mohamad Ali will leave IBM after more than 13 years and join Avaya as a senior vice president of corporate development, focusing on M&As, he told his contacts in a personal email over the weekend.

Ali’s transition to Avaya is especially noteworthy now that Avaya intends to acquire Nortel’s enterprise business.

Ali said he will lead Avaya’s M&A activity as the company angles to gain market share on Cisco in the enterprise communications market, according to Xconomy, a Massachusetts business and technology journal that interviewed him over the weekend. Avaya, Nortel and Cisco have long battled for the top three spots in the Voice over IP market, with Nortel holding ground even amid its bankruptcy proceedings.

There appears to be a clear alignment between Ali’s new role at Avaya and Nortel’s current customer base. Ali said in his email that Avaya offers “an opportunity to participate in and shape a whole new era of intelligent communications for healthcare, financial services, government and other services.” Nortel counts numerous government and healthcare agencies among its largest customers.

Ali led IBM’s worldwide M&A activities and was behind IBM’s 2007 acquisition of Cognos. He also said in his email that he has joined the board of Ember Corp. a Boston-based ZigBee wireless technology company that enables smart meters and building systems for energy efficiency.

Ali did not respond to emails regarding his new role at Avaya.

Jul 20 2009   3:19PM GMT

Avaya buys Nortel’s enterprise business

Posted by: Shamus McGillicuddy
Avaya, nortel, Nortel bankruptcy

After months of rumors, Avaya has finally struck a deal to buy Nortel Enterprise Solutions, the bankrupt Canadian company’s enterprise division whose assets include its voice and unified communications portfolio and its Ethernet enterprise networking business. Avaya has agreed to pay $475 million for the division. It had been rumored to be offering $500 million. Siemens/Enterasys was another rumored bidder for the business.

Nortel, despite the bad press surrounding its financial collapse, remains one of the leading global vendors of enterprise networking equipment. It has a significant install base and access to those customers is appealing to other network equipment vendors. Avaya, however, is a leading vendor of enterprise voice and unified communications with no history of being in the enterprise networking business. It remains to be seen what Avaya will do with Nortel’s networking business. I hope to get someone from the Avaya on the phone today.

Jul 13 2009   4:10PM GMT

Nortel out, Cisco in, as 2012 London Olympics sponsor

Posted by: Shamus McGillicuddy
Nortel bankruptcy, nortel, Cisco, Olympics

As E.T. would say, “Ouch.”

Nortel received another black eye this week when the organizers of the 2012 London Summer Olympics announced that it has replaced the bankrupt Canadian company with Cisco as technology sponsor and official supplier of network infrastructure for the games.  The move will cost Olympic organizers $20 million in revenue because Cisco is signing on as a lower-tier sponsor. Nortel was replaced because of the uncertainty surrounding the company.

Nortel has a similar deal in place with the 2010 winter games in Vancouver, but that deal appears to be safe because buildout of the network is 85% completed.

May 6 2009   1:31AM GMT

Shocker! Cisco leads the pack in Gartner’s Magic Quadrant for enterprise LAN

Posted by: Shamus McGillicuddy
Cisco, HP ProCurve, 3Com, Extreme Networks, Force10, Enterasys, nortel, Alcatel-Lucent, Brocade, Foundry, Gartner, Juniper Networks, Juniper, LAN, Ethernet, Local Area Network, switches

When I saw that Gartner had published a new Magic Quadrant for enterprise local area network (LAN) infrastructure, I knew one thing was for certain. Cisco Systems would be THE leader in the market. The only question was for me was - how would the rest of the market shake out?

In this blog post I’ll review this year’s Magic Quadrant for the LAN market, and I’ll compare it to last year’s Magic Quadrant for Campus LAN infrastructure, which is essentially a measure of the same market.

As I wrote above, Cisco is THE leader in the LAN market, scoring high in both of Gartner’s criteria for the quadrant: completeness of vision and ability to execute.  In their assessment of Cisco’’s position, analysts Mark Fabbi and Tim Zimmerrman noted that Cisco maintains the broadest portfolio of LAN switching and WLAN technology on the market. The introduction of its Nexus switches have shown that Cisco is providing some leadership in addressing emerging connectivity demands in data centers.

However, Gartner cautioned that Cisco remains the high-priced vendor, with some workgroup switching products being twice as much as alternative products on the market. Gartner also said Cisco might be taking its customers for granted, especially those customers who believe in buying networking gear from more than one vendor. The analysts wrote:

We are hearing increasing concerns about Cisco’s presales organization taking customers for granted, and not providing expected levels of service, especially for customers that have not endorsed an end-to-end Cisco solution.

The only other leader in this Magic Quadrant is HP ProCurve, which was a leader last year as well.  Gartner described ProCurve as the fasted growing LAN switch vendor during the past two years and when clients speak with Gartner about their shortlists for vendors, ProCurve is the the second-most-asked-about vendor after Cisco. Gartner praised ProCurve’s integration into HP’s Technology Services group, which gives it access to HP’s broader sales force. It also praised ProCurve’s low cost of ownership and the successful integration of the WLAN technology it acquired with Colubris Networks.

But Gartner cautioned that ProCurve still lacks high-end core switches (An acquisition of a high end core switching vendor like Arista Networks or Blade Network Technologies would do the trick!). The company also needs to expand its channel for larger sales opportunities. ProCurve has in the past been known as a good vendor for SMBs.

A third leader from last year’s campus LAN Magic Quadrant fell down a notch in this year’s quadrant. Foundry Networks, now known as Brocade, the storage networking company that bought Foundry last year, was classified as a visionary in this year’s Quadrant, scoring high on its completeness of vision but scoring a little lower than last year in its ability to execute.

Gartner praised Brocade’s integration of Foundry but said Foundry lost momentum last year due to its U.S.-centric and data-center-centric sales focus. Gartner said it wants to see market evidence that Brocade’s integration of Foundry is successful and that Brocade can regain market momentum.  I have no doubt that last week’s announcement of a new Ethernet switching OEM agreement between IBM and Brocade will go a long way toward helping Brocade regain some of that lost momentum that Gartner is looking for.

Gartner identified three other visionaries in this year’s Quadrant: 3Com, Enterasys/Siemens and Extreme Networks.

Last year Gartner classified 3Com as a niche player, but it elevated the vendor to a visionary in this year’s Quadrant, giving it higher marks for its completeness of vision. Gartner praised 3Com’s revamped product lines and its growing market share in China and other emerging markets. H3C, 3Com’s Chinese subsidiary, has a 35% market share in China, for instance. And 3Com has a very large, low-cost R&D workforce in China. 3Com recently told me H3C has 2,300 engineers in China.  But Gartner cautioned that 3Com and H3C have been, until recently, run as two separate companies. It will be important for the two to integrate. Also, 3Com has very little market penetration outside of Asia. Gartner warned that taking products developed for China and selling them globally will be a challenge.

Enterasys, which merged with Siemens Enterprise Communications last year as part of a Gores Group acquisition, maintained last year’s position as a visionary. It drew praise from Gartner for it full complement of products from the data center to the access layer, its tightly integrated security technology, and good customer buzz around support and services. But Gartner said Enterasys’s market footprint remains small and its distribution channel is limited. Marketing has also been weak, Gartner said, as the market waits for the new combined company Enterasys/Siemens to change its name.

Extreme Networks, the third visionary in the Quadrant, drew praise for broadening its XOS-based switch line and its policy-based configuration and open architecture. But Gartner noted that Extreme is struggling to maintain revenue and it remains one of the smallest vendors in the market. Gartner also cited some support issues affecting the company’s install base.

Gartner identified two niche players in this year’s Magic Quadrant. First there is Nortel, which was downgraded from its visionary status in last year’s Quadrant. Gartner cited Nortel’s bankruptcy as an impediment to the company competing for new business. Gartner is predicting significant loss of market share and revenue for the company as it remains in bankruptcy. Gartner also said Nortel needs a new core switching platform.

The second visionary, Alcatel-Lucent, drew praise for a solid product strategy and its growing market share and revenue; however, Gartner said the company needs to invest more in R&D to keep pace with the latest innovations in data center switching and wireless LAN technology.

Force10 Networks, which was identified as a niche player last year, was dropped altogether from this year’s Magic Quadrant because it no longer meets Gartner’s revenue requirements for inclusion, whch is 1% of ports sold overall or 5% of ports sold in a specific market segment.

Gartner also noted that Juniper Networks has entered the Ethernet switch market, but it hasn’t earned enough of a revenue share to be included in this year’s Magic Quadrant. Juniper’s switches earned the company $56 million in 2008.

So there you have it, for what it’s worth. Cisco remains on top, but the other players in the market continue to make moves. ProCurve and 3Com are on the rise. Nortel and Force10 are in decline. Everyone else is looking to take a step forward.

Feb 23 2009   7:48PM GMT

Nortel’s Alteon deal with Radware worth pennies on the dollar

Posted by: Shamus McGillicuddy
nortel, radware, alteon, bankruptcy

And you thought you were underwater with your mortgage?

Back in 2000 Nortel bought application delivery switching vendor Alteon for about $6 billion in an effort to keep pace with rival Cisco. Nine years later, Nortel is bankrupt and it is trying to sell off assets as it restructures itself. Nortel announced last week that Radware was buying the asseets of the Alteon business, but neither company announced the value of the deal. Today the Ottawa Citizen published the numbers, based on a filing in U.S. bankruptcy court.  Radware will pay Nortel around $17.5 million. That’s less than 3% of what Nortel originally paid for the company.

Feb 23 2009   7:38PM GMT

Radware makes deal for Nortel’s application delivery business

Posted by: Shamus McGillicuddy
nortel, Cisco, F5, Citrix, bankruptcy

One of the circling vultures has finally picked some of the juiciest meat of the bones of Nortel.  Israeli company Radware, an application delivery networking vendor, announced that it has agreed to buy Nortel’s Layer 4-7 appplication delivery switching business for an undisclosed sum. In the transaction Nortel is basically selling off the assets of Alteon WebSystems, a company it purchased nine years ago.

Nortel bought Alteon in 2000 for $6 billion in an effort to keep pace with Cisco, which had bought a competing company,  ArrowPoint Communications, just months prior for $5.7 billion.

Nortel is currently restructuring itself under Chapter 11 bankruptcy protection. According to U.S. bankruptcy law, the sale must be conducted at auction, so other companies have an opportunity to best Radware’s offer before the sale is finalized.

In its announcement of the deal, Radware said the Alteon products would be sold under the brand Radware Alteon. The company announced that it would offer a five-year support plan on Alteon products to ease the worries of existing Alteon customers. Radware plans to hire some of Nortel’s employees, it said.

Other vendors in the application delivery space have been trying to capitalize on the uncertainty surrounding Nortel and its Alteon line. For instance, F5 Networks announced plans to offer up to $9,000 worth of credit to companies that agree to trade in their Alteon switches for F5’s competing Big-IP switches.

If consummated, Radware’s acquisition of Nortel’s Alteon business will solidify its position as a strong competitor to F5, Cisco and Citrix in the application delivery networking market.

Jan 28 2009   5:10PM GMT

Aruba courts Nortel customers with multivendor WLAN management suite

Posted by: Shamus McGillicuddy
Aruba, nortel, Wireless networking, wireless LAN, bankruptcy, Network management

Aruba Networks has joined the growing ring of vultures circling above Nortel Networks’ Toronto headquarters, where executives are busily trying to restructure Nortel while under the cover of Chapter 11 bankruptcy protection.

Aruba announced an “investment protection” program for customers of Nortel wireless LAN (WLAN) technology. The vendor is offering Nortel customers a discount on Aruba’s AirWave Wireless Management Suite, a WLAN management technology that can work in multi-vendor environments.

Nervous Nortel customers, who are worried that Nortel might not be around a year or two from now to support their wireless infrastructure, might find this offer from Aruba appealing. It gives them a a way of managing legacy Nortel infrastructure.

And Aruba no doubt sees this as a potential foot in the door with Nortel customers who will likely give new WLAN vendors a good luck when it comes time to refresh or expand their infrastructure. Today, Aruba can sell them AirWave. Next year, Aruba will have a better chance of selling them access points. Now if only Aruba had a wired networking division as well, they could attack Nortel on multiple fronts.

Jan 14 2009   4:37PM GMT

Nortel comes crashing down

Posted by: Shamus McGillicuddy
nortel, Networking, Telecom, Unified communications, bankruptcy, star trek

Nortel Networks has filed for Chapter 11 bankruptcy protection. It seems last quarter’s $3.4 billion loss was the last straw. The company still has about $2.4 billion in cash on hand, which it will use to maintain operations while it restructures itself.

When news broke this morning that Nortel was filing for bankruptcy protection, an old and familiar image popped into my head: that of the starship Enterprise near the end of Star Trek III. Badly crippled in a battle with a Klingon vessel, the faithful old ship started her fatal descent toward the planet below. Captain Kirk and his crew safely beamed down to the planet and watched their beloved ship streak through the sky towards its demise.

But as fans know, the Enterprise was rebuilt and rechristened time and again for countless adventures in subsequent films and television shows. So, too, may Nortel.

Right now, the telecom industry has slowed its investment in new hardware. When will that trend reverse? No one knows. No doubt Nortel’s efforts to sell into enterprise networks are also suffering in this climate. And unified communications is still such an emerging market, the company obviously couldn’t hope to stay afloat with the quality products it’s been producing in that field.

Indeed, this is just the first of what promises to be several collapses in the networking industry. When Nortel emerges from bankruptcy, what kind of world will it find? And will it survive? Lots of companies disappear forever in an economy like this, even a company as old and revered as this Canadian giant.