Avaya announced today that it will seek to buy Nortel Enterprise Solutions for $475 million. In the deal, Avaya would acquire Nortel’s voice, data and government systems businesses. Due to bankruptcy laws, other entities will be allowed to bid on the company later this year before any deal is sealed.
In its announcement of the deal, Avaya sent out signals that Nortel’s channel partners are a central focus of the transaction. Quoted in the press release, Avaya CEO Kevin Kennedy said, “The addition of Nortel Enterprise Solutions will increase Avaya’s global scale, expand our channel partner network, and strengthen our world-class portfolio of products and services.” (Emphasis is mine.)
The press release also has supporting quotes from a couple of major telecoms, who resell Nortel gear. No doubt this is an attempt to send a signal to other Nortel partners that Avaya is committed to them.
The press release first quotes Stephane Boisvert, president of Bell Business Markets, the business communications division of Bell Canada and a major reseller of Avaya and Nortel. “Bell was the first major service provider to standardize on both Avaya and Nortel IP telephony solutions, and we are confident Avaya will continue to provide partners and customers with innovative business communications technologies and responsive customer support going forward.
Hanif Lalani, CEO of BT Global Services said in the release that BT plans to expand its channel relationship with Avaya globally over the next year and that the Nortel acquisition will strength this expansion plan.
Historically, Avaya’s reputation in the channel partner community isn’t exactly sterling. Carol Giles Neslund, Avaya’s vice president for the North American channel, recently told me her company is aware that it has a reputation among resellers for being difficult to do business with. She said Avaya is working aggressively to change that. Avaya’s growth strategy is focused centrally on building out its channel and recruiting Nortel partners has been a key part of that strategy. Neslund told us that Avaya has recruited seven of Nortel’s ten largest partners since late last year.
I hope to get someone from Avaya on the phone toda to talk about the channel and also to talk about what the company’s plans are for Nortel’s data networking business, since Avaya isnt’ exactly known for being in that market.