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.
During this week’s Cisco Systems quarterly earnings call, CEO John Chambers revealed that his company recently shipped its first $1-million order of Flip video camerasto an enterprise customer. (The cameras sell for about $250 in retail). Cisco got into the handheld HD video camera business when it bought Flip manufacturer Pure Digital for $590 million in March.
Initially it appeared that Cisco targeted Pure Digital as part of a strategy to build out its consumer technology business. That remains part of the plan; however, Cisco soon started positioning the Flip as an enterprise product as well. At June’s Cisco Partner Summit in Boston, Cisco gave out 1,500 Flip cameras to partnersat the conference and Cisco executives emphasized the importance of video to the future of collaboration.
So who is this enterprise customer? And what plans does it have for more than 4,000 Flip cameras?
As if there weren’t enough choices already for IP PBX vendors, Barracuda Networks has started up a subsidiary company called CudaTel. The new company’s website describes it as a collaboration between Barracuda and FreeSwitch. FreeSwitch is an open source telephony platform that can be “used as a simple switching engine, a PBX, a media gateway or a media server to host IVR applications using simple scripts or XML to control the callflow.”
A quick perusal of the CudaTel site tells me that these PBX boxes start at $1999 with no per-user license costs. I assume that is for the baseline model, which can support an unlimited number of extensions, but with a limit of 10 concurrent calls and up to two conference calls. The 1U box has 50 GB of voicemail capacity. I highest-end box, whose price I don’t see listed, can support up to 250 concurrent calls, 50 conference calls and 200 GB of voicemail storage. Clearly this is aimed at small businesses and midsized companies that are on the smaller side.
It looks like CudaTel will be reselling Snom and Polycom phones with this PBX as well as Polycom and LifeSize conference phones.
It’s an intersting entry into the market for Barracuda, which is known for its network security appliances. As IDC Research Director Abner Germanow posed in Tweet today, how will Barracuda’s channel sell this? Do you want to buy your PBX from a a security VAR or reseller?
Last week, I attended the Wainhouse Research Collaboration Futures Summit ’09 in Boston. Topics of discussion ranged from collaboration to videoconferencing to synchronous distance learning. Some highlights include:
- A presentation from Sascha Hach of Google, demonstrating the latest collaboration applications in the cloud, including working on a spreadsheet with three people at the same time. Another interesting note: Google’s collaboration applications will be available to businesses for a flat fee of $50 per user per year — an amazing deal for an SMB. Hach invited all users to test out the new applications and pushing them to their limits. “It’s always good to break things so that we can make them better,” he said.
- An amazingly cool presentation on the future of technology, including a video of MIT’s Sixth Sense technology. The technology can also be replicated with an iPhone and a mirror. If you haven’t seen the video, watch it — you will be blown away.
- A panel discussion with six experts discussing collaboration deployment strategies, and whether hosted vs. managed services vs. do it yourself was a better option.
I also had the chance to sit down with one of these experts, Steve Bleiberg of Johnson & Johnson, to discuss some of the UC choices being made at J&J. He provided me with a few really interesting insights:
- When it comes to Microsoft vs. Cisco for UC, Microsoft OCS has a huge advantage for companies that deploy other Microsoft applications. For companies with huge Microsoft contracts, Microsoft will throw in OCS for free. And it’s hard to compete with free.
- No matter what kind of service provider you employ, there will always be a DIY aspect. There’s also the matter of knowing how to use a service provider, and for what tasks based on your own IT staff. Steve likened it to owning a house and paying the city for water — you still need to hire a plumber, maybe a gas company, and then you also need to know how to turn on your own faucets.
- Cisco is king when it comes to networking gear. But when it comes to UC and desktop videoconferencing, engineers and IT departments tend to see that as not network, but desktop. And most engineers trust their desktops to Microsoft, so Microsoft has that inherent edge over Cisco and Cisco has to overcome that hurdle and be seen as “desktop” if they want to win contracts. This is not to say that Microsoft is better than Cisco, but just that Cisco has that much more work cut out for them to sell their UC solutions.
Be sure to check out my blog entry with video highlights from the exhibit floor at the Wainhouse Research Collaboration Futures Summit ’09.
The days of Google and Apple having a cuddly relationship appear to be ending, and unified communications has played a small part in the break-up.
Google CEO Eric Schmidt resigned from Apple’s board of directors today, just a few days after the FCC opened an inquiry into why Apple rejected the Google Voice application from its iPhone App Store. Google Voice, based on the technology Google acquired with GrandCentral, is sort of a UC-on-the-cheap technology, as pointed out by our Click to Talk blogger, Tony Bradley. At it’s core, Google Voice allows users to establish a single phone number which can be set to ring any number of devices – desk phones, mobile phones, home phones. It also has some unified messaging features, such as visual voice mail and online voice mail access, and it offers some other useful features, such as call recording, conference calling and directory assistance.
When Apple rejected the Google Voice application, many bloggers were upset. Some suspected that Apple was trying to protect AT&T from losing revenue, since Google Voice users can easily use the technology to move a phone call from their mobile device to a land-line. However, the picture is much more complicated than that.
As Dave Michaels pointed out on his blog, Pin Drop Soup, Apple and Google are now competitors. Although Google remains largely a Web-based software company and Apple remains mostly a hardware company, that distinction isn’t enough to keep this bromance alive. Michaels writes: “Well, maybe not a ‘primary’ competitor since Google doesn’t make hardware. But Google does make a browser, a cell phone platform, and an OS – direct alternatives to those made by Apple.”
Historically, Google and Apple have been relatively friendly toward, based on a mutual distrust of Microsoft. Schmidt’s presence on Apple’s board formalized that friendship. But now the companies’ interests are diverging. Google, which makes the bulk of its revenue in online advertising, wants a wireless Internet that is as open as its wired cousin is. Apple, like Microsoft and the majority of wireless service providers, want maintain a market where devices, operating systems, and carriers have a high degree of control over how wireless users access the Internet.
Apple and Google should have seen this split coming. After all, Microsoft is mostly a software company, too, and it has been Apple’s fiercest rival for decades.