Bloomberg is reporting that Cisco might walk away from its agreement to buy Tandberg. As we mentioned two weeks ago, A large group of shareholders have balked at the $3 billion offer Cisco and Tandberg’s executives and boards of directors agreed upon. Cisco’s Tandberg deal is contingent on it being able to acquire 90% of the company’s stock. Twenty-one shareholders who own 24% of the company say Cisco’s offer is too low.
Bloomberg is citing a “person familiar with the transaction” as the anonymous source for its report. Financial analyst Martin Hoff at Arctic Securities ASA told Bloomberg that Cisco probably won’t just walk away. Instead, the anonymous claim that Cisco is contemplating a pullout from the deal is probably just a scare tactic. “It’s probably smart of them to send some signals to scare the shareholders into accepting the offer,” he told Bloomberg.
If Cisco does close the Tandberg deal, it will expand its enterprise video strategy from its high-end telepresence products to a full suite of desktop and room-based video systems, multipoint control units and video management software. Combined with Cisco’s existing lines of telephony products and Cisco will be competing directly with Tandberg’s chief rival Polycom on all fronts. If that happens, enterprises can expect other major communications vendors like Avaya and Microsoft to become heavily aligned with Polycom.
Cisco’s deal to buy Tandberg could be on ice.
When Cisco and Tandberg agreed to their video marriage two weeks ago, the dowry was set at $3 billion. And the deal was contingent upon the approval of the owners of 90% of Tandberg’s stock.
According to Reuters (via GigaOm), Swedish brokerage SEB Enskilda has told Cisco that it represents 21 shareholders who own 24% of Tandberg’s stock, and those shareholders want more money. “We think the price is too low,” Amund Lunde told Reuters. Lunde is CEO of life insurance firm Oslo Pensjonsforsikring, which owns 1% of Tandberg, It’s not clear what it would take to win over these holdouts, but clearly Cisco will have to dig deeper to get a controlling interest in the company.
Apparently investors have been telling the Norwegian press that something stinks about the Tandberg deal. According to the Financial Times (via Norwegian language site Dagen IT) Rasmussen Group CEO Rune Selmar said Cisco’s promise of three-year bonus agreements to “key” Tandberg employees “probably explains part of management’s positive attitude to the acquisition.”
Ouch. That sounds awfully close to an ugly accusation.
Many, many Nortel retirees are in danger of losing their retirement benefits and severance payments as Nortel slowly slides into oblivion. Some of them would certainly face true financial hardships if this were to happen. Given the salary he has drawn over the last four years, former CEO Mike Zafirovski is probably not one of those vulnerable former employees. However, he is suing Nortel for his golden parachute.
Zafirovski was supposed to be the leader who turned around Nortel’s fortunes. Hired in 2005, he came on board with a five-year plan to help the Canadian tech giant rediscover its magic touch. He had some good tools to work with: a huge and loyal install base, good engineering talent, a strong brand name.
But fortune didn’t smile on the Zafirovski era. Nortel muddled along for three years. Then the economy took a nosedive and Nortel went bankrupt. Now rival companies are circling the Nortel carcass, biting off chunks of the business for $1 billion here and $500 million there. Zafirovski parted ways with Nortel in August. He left the company in such a state that it no longer even needs a CEO. The board of directors is letting the financial executives handle the final bloodletting and breakup of the once proud company.
Zafirovski is fighting to make sure he gets compensated for his leadership. According to the Ottawa Citizen, he is seeking more than $12 million worth of bonuses, pension payouts and severance. Just a few months ago, he was fending off such lawsuits from former Nortel employees. Now he’s in line with the rest of them.
By now, we’ve all heard about and drooled over and whined about our lack of invites into Google Wave, the latest Google application that promises to “revolutionize” communication — or at least CNN says so.
I only made it 25 minutes into the insanely long Google Wave demo video, which was long enough to see developer Lars Rasmussen do a jig but not quite long enough to see the Wave flex its muscles completely.
Beyond the ooh and ahh factor, how useful do you see this in an enterprise space? Your personal life? Do you really want people seeing you type in real time? One of our sister sites, SearchCIO.com is postulating that enterprises may be integrating the Google Wave into their own applications:
“People want a single place to collaborate on projects,” said Ted Schadler, an analyst at Forrester Research Inc. in Cambridge, Mass., who wrote a blog post (“Google Wave: Surfing The Future Of Collaboration“) with his take on where Google Wave is heading.
“Right now across corporations, they have spreadsheets, projects hosted on SharePoint, users have to jump from one application to another and partners or customers are given access to a VPN to collaborate,” he said. “That’s why one place to communicate, tying together Google Wave and Google Docs, makes sense.”
I spoke to one Masssachusetts-based analyst tonight who is among the envied few with an advance Google Wave account, so of course asked her what she thought. So, for everyone who feels bad they didn’t get the invite… apparently, Google Wave is not very fun if no one else you know is using it.
Toronto’s The Globe and Mail newspaper reported today that Siemens Enterprise Communications fell just $15 million short of beating out Avaya for Nortel’s enteprise division.
What the paper calls Siemens is probably more accurately described as a joint venture between private equity firm Gores Group and Siemens AG, who together own Siemens Enterprise Communications. Gores Group owns the controlling interest. Those two firms were reportedly working together to bid on the Nortel enterprise division.
If Gores and Siemens won, the plan was to create a new company that combined Siemens’ market presence in Europe with Nortel’s presence in North America into a company that remained headquartered in Canada and offered a strong alternative to Avaya and Cisco, so says The Globe and Mail. In backroom negotiations with Nortel and the Canadian government that kicked off a year ago, before Nortel’s bankruptcy, Siemens had said that it would relocate its own headquarters from Munich to Toronto as part of the merger. Once the bankruptcy auction got underway, Siemens remained at the table.
But ultimately Siemens fell $15 million short of Avaya’s $900 million bid this week. Also, while Avaya’s offer was all cash, Siemens’ offer included $700 million in cash cash with an IOU for the rest. Apparently Siemens was trying to work out a loan from the Canadian government to help pay for the Nortel merger. The government backed away from those loan talks when Canada’s other major tech firm, Blackberry-maker Research In Motion, started grumbling about the prospect of Nortel selling off all of its various divisions to foreign companies, The Globe and Mail reported.
This has to be disappointing news to Canadian technophiles who have always had justifiable pride in Nortel’s status as the nation’s top tech firm. Now, the Globe and Mail reports, Avaya will ship all top executive jobs of Nortel’s enterprise division south of the border, probably to… gasp… New Jersey. And the paper says Avaya will probably cut 25% of Nortel’s workforce, including layoffs of 400 of 1,000 employees at plants in Ontario.
After Nortel bankruptcy court deliberations outlasted most U.S. Open matches this weekend, the fallen Canadian communications and networking behemoth finally settled on a winning bidder for its Enterprise Solutions business — Avaya.
The New Jersey-based telecom, which had placed the first stalking horse bid of $475 million (US) this summer, has agreed to pay a cool $900 million for the assets, plus an additional $15 million reserved for an “employee retention program,” Nortel officials announced early Monday morning.
The company beat out Siemens Enterprise Communications in the nail-biter auction, which was delayed this weekend after Verizon filed court papers alleging Ayava’s acquisition of Nortel’s Government Solutions business in the deal would jeopardize national security, Reuters reported.
Officials from both companies had little to say about that hiccup this morning.
“[The auction] provides the capability to chart our future with laser-focus, enabling customers to compete in new ways with greater scale and resources. We look forward to working closely with our customers, partners and stakeholders during this pre-close phase to ensure that we continue to innovate to meet customers’ needs with high-performance, efficient and secure communications solutions,” said Joel Hackney, president of Nortel’s Enterprise Solutions, in a statement.
“As we work through integration planning, it is business as usual, and we will continue to focus on supporting our installed base,” he added. “Through deal close and beyond, we will deliver on our stated customer commitments and maintain high levels of service and support. We will ensure our customers can fully leverage their existing Nortel investment as they benefit from the complementary capabilities of the Nortel and the Avaya portfolio of products and services.”
And on and on and on.
Avaya was a bit more, well, succinct.
“Our successful bid brings us closer to adding Nortel and its complementary channel, portfolio, research and development, and global presence to Avaya,” said Kevin Kennedy, president and CEO, Avaya. “We believe the acquisition brings inherent value to both organizations’ customers, employees and partners, and we look forward to its successful conclusion.”
The fun doesn’t end yet though! Stayed tuned… the sale is pending approval from Canadian and U.S. courts in a joint hearing tomorrow.
What is unified communications? Never mind, don’t answer that.
Sometimes when I”m talking to vendors, I sense that unified communications is whatever they can convince you to buy. “Here, install our IP PBX and you’ll be on the cutting edge of unified communications?”
Oh really? How about a presence engine? How about a desktop client that combines voice, video, messaging and everything else that I need to stay in touch with the members of my team who are scattered all over the country?”
Yesterday I was talking to Shane Yu, the head of Avaya’s unified communications consulting practice and one thing he said really stuck with me. A lot of IT organizations treat a UC initiative as a science project. They just buy a piece of it and put some users on it and see what happens. If that’s your approach, how do you measure success? Gee, people like it. It works. That will make you popular among the cubicles, but executives won’t be impressed when you bring that message into their offices. They want to know why the company needs to change the way it communicates.
This conversation dovetailed nicely with my plans for a new series that I’m writing for SearchUnifiedCommunications.com. I’m calling the it simply “Success with Unified Communications.” Not particularly catchy, but it’s to the point. Each story in this series will look at a key step in a unified communications deployment and explore how to execute it. I’m going to look at everything, from vendor selection to design & build. I’ll explore how to assemble the right team to run your UC project and what management software you should have in place to deliver good quality of service and experience. I’ll also explore what you need to do in order to stay ahead of the curve and to make sure your UC deployment ages gracefully.
Part One of this series hit the wire today: The Technology Needs Assessment. I hope you find it helpful.
The department or person managing mobility within enterprise organizations varies from company to company. However, getting the right person to handle the mobile needs of your business can make a big difference in terms of what you’re getting out of your cellular plans and service.
According to Michael Finneran, president, dBrn Associates, there is a person or a small group of people who buy cell phones and services. In most cases they will be in IT, but there are cases where they are still part of a general purchasing or accounting function — kind of like telecom was in the old days.
“This is actually one of the big problems we have in advancing mobility, because the people in charge are essentially accountants not networkers,” says Finneran. “That is, they analyze usage, negotiate cellular contracts, manage the distribution of handsets, and monitor the outcome with some type of TEM system.”
Prior to the iPhone, Apple had zero cell phone market share — it hadn’t even built a cell phone before. Moreover, Apple didn’t become a carrier, and it agreed to only work with one in the US. Despite this, Apple shook up the industry pretty significantly.
Dave’s blog is a great primer for those who want to understand the differences between Google Voice and PBX application servers. Find out what makes Google Voice a completely unique offering and how it could impact your organization.
While Sony Ericsson has entered into an agreement to pay Nortel a fee to license and use the intellectual property rights (IPR) to the pre-4G LTE patents encompassed within their deal, Nortel has decided against selling the patents to Ericsson, for now. Nortel has yet to announce what the company will do with some 5,500 long-term evolution patents, but clearly the LTE patents are the company’s most valuable asset.
Just how valuable is up for debate. In April, Alcatel-Lucent, Ericsson, NEC, NextWave Wireless, Nokia, Nokia Siemens Networks and Sony Ericsson entered into a mutual commitment to a framework that will secure fair and non-discriminatory licensing for LTE technology. The companies agreed to a single-digit percentage royalty on equipment using LTE.
In a move to fortify confidence in the licensing framework, Nortel committed to a competitive royalty rate (1%) for its standards-essential patent claims for LTE handsets – a move the company hopes will boost confidence and speed up global adoption of LTE by service providers, according to Greg Galitzine.
Find out more about LTE technology and Nortel’s stake in the progress of 4G applications.