Avaya’s acquisition of Nortel’s enterprise assets doesn’t come as a huge surprise, as Shamus McGillicuddy noted weeks ago when acquisition rumors swirled. Even the price was pretty spot on: Rumored $500 million, actual sale price $475 million. But now that the sale is official, Avaya’s the proud owner of a huge enterprise unified communications customer base that will be looking for answers on if and when a migration strategy will appear.
They also inherited a large networking business outside of Avaya’s core focus, as Shamus notes on the Network Hub blog, but I’m sure they’ll find something to do with that.
The full text of Avaya’s press release after the jump.
- Nortel auction: Avaya or Siemens-Enterasys will bid for UC business
- Nortel enterprise business set to go to Avaya for $500 million?
- Nortel voice customers are the vendor’s only enterprise asset
Top unified communication vendors like Agito have been working hard to give RIM’s BlackBerry devices integrated deskphone features, but now Google Voice is getting in the game.
Today, the search-and-everything-else-Internet giant unveiled its Google Voice application for both BlackBerry and Android, which integrates Google Voice’s 1-number calling and call-forwarding service into those devices.
As a long-time Google Voice user (since early on in its Grand Central days), I had to give the new service a whirl. For the BlackBerry, users just browse to m.google.com/voice, download the app, sign in and ta-da: Your Google Voice address book, and all Google Voice voicemails, are just an app click away.
This means that when I’m using my cell phone for work, I can have my Google Voice number show on the receiver’s caller ID instead of my personal cell number. It also means I can quickly flip through Google Voice’s automatic transcriptions of my voicemail or, if the transcription is garbled (One recent message: “hi michael act kathryn capture with the cisca”) I can click a button and download the original audio.
Google Voice lacks some of the features the enterprise-focused vendors have. Unlike Agito, for example, I can’t route my calls over Wi-Fi and save cellular minutes. Enterprises also can’t currently “push” the service to users.
Nor is the integration quite as slick as many alternatives: If I’m calling from the Address Book, the popup menu lets me route the call through Google Voice, but other areas of the phone (such as missed calls) don’t give me that option.
Overall, however, it’s a great early effort with an unbeatable price: Free, if you can get a coveted Google Voice invite, and Google’s made clear they want to boost the rate those invitations go out.
According to the Canadian newspaper The Globe and Mail, Nortel is close to selling its enterprise unit for $500 million. The paper says Avaya is the leading bidder, but Siemens-Enterasys could emerge as the buyer if Avaya backs out. Both bidders are interested in Nortel’s enterprise customers more than its technology.
If Avaya seals the deal, it will suddenly find itself in the data networking market with Nortel’s line of enterprise routers and switches. It’s unclear whether it would hold onto those assets or try to spin them off to a third party. Depending on who you talk to, Nortel owns about 3% to 4% of the network switching market. If Siemens-Enterasys emerges as the winner, it will have find itself with some redundant product lines which will require some rationalization.
It looks like Nortel will purge some of its lower level executives before handing over the division to a buyer. www.ITbusiness.ca is reporting that Nortel laid off the senior UK staff who were leading Nortel’s unified communications partnership with Microsoft, known as the Innovative Communications Alliance. The partnership was formed in 2006 and expires next year. It’s been on shaky ground since Nortel entered bankruptcy.
Nortel is breaking apart.
The former crown jewel of Canada’s high-tech industry revealed today that it will sell off its CDMA and LTE wireless telecom infrastructure division to Nokia Siemens Networks (NSN) for $650 million. Nortel also revealed that it will sell of the rest of its assets. According to reports, the CDMA division generates $700 million in annual revenue, which means means that NSN will make back its money inside of a year. NSN has also established a low bar for the sale of all of Nortel’s other business units.
A sale of Nortel’s enterprise telephony and unified communications businesses is will probably follow soon. A couple months ago at VoiceCon Orlando, there was plenty of buzz circulating that Avaya and Siemens-Enterasys were both looking to acquire Nortel’s UC business. Neither of them, according to rumors, are interested in technology. Instead, they want the customer base.
A company that’s only looking for access to installed customers might not be willing to pay much for Nortel’s UC division. However, NSN’s $650 million deal with Nortel is so shockingly low that it has certainly driven down Nortel’s asking price for its UC business. The only question now is whether the price has been pushed low enough for Avaya or Siemens to pull the trigger. If that happens, Nortel customers will find themselves with two choices: They can accept whatever incentives the winning bidder offers Nortel customers to buy into their own products, or they can start looking elsewhere.
Since I wrote about Google Wave’s UC potential, I’ve been curious as to Cisco’s response. After all, as Frost & Sullivan analyst Vanessa Alvarez pointed out, Google and Cisco could be the best of frenemies.
After chatting with Cisco directly however, it looks like that friendship will have to wait at least a bit to blossom (they contacted me as a direct response to the article). Grace Kim, a senior manager of marketing for Cisco’s WebEx collaboration suite, told me first and foremost the announcement of Google Wave was a sign Cisco was leading the way.
“I think, number one, they’re validating the growth and potential of our SaaS-based applications,” she said. “We’ve been in this space and they’re coming aboard the web-based application model.”
Google’s “coming aboard” the SaaS model? Google IS the SaaS-based business model: Its strikes against Microsoft have come in search, sure, but it was only when the search giant unveiled Google Docs that it truly encroached on Redmond’s territory. Cisco acquired WebEx in 2007, while GMail was launched (in Beta, naturally!) in 2004, with more and more UC features added regularly since then, including chat, video, text … Is conferencing that far behind?
Grace said the WebEx team hadn’t been paying particularly close attention to the Wave news, however, beyond reading some of the news as it came up, and re-iterated that Cisco was committed to interoperability (without signaling Wave or any other product in particular) as a cornerstone to success.
“We’re always looking at all the vendors and where the market’s going and to interoperate with what our customers want,” she said. “We’ll continue to evaluate it as opportunities arrive.”
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Sipera Systems, a unified communications security specialist, says it has seen a rise in toll fraud among enterprsies and service providers that it uncovers during the security architecture reviews and product deployments it has done in recent months.
Sipera said these cases of toll fraud of cost organization losses ranging from a few thousand dollars to hundreds of thousands of dollars.
The company identified the three most common vulnerabilities that lead to VoIP toll fraud.
- Telecom Connectivity Vulnerabilities: Enterprises that use Session Border Controllers (SBC) to secure VoIP and unified communications traffic risk a breach caused by configuration errors, SBC vulnerabilities or functional limitations.
- Application-level vulnerabilities: Many communications systems are vulnerable to fraud because they have weak passwords and authentication systems.
- End-point vulnerabilites: Enterprises haven’t instituted much security on users’ devices, especially as unified communications applications are extended to mobile devices, which are much easier to lose than a laptop.
Social networking has come a long way from the days of Friendster and Ok! Cupid. I am no social networking expert — I barely use Twitter, I rarely check MySpace. But I have had the pleasure (and dismay) of watching Facebook grow from the very first days, when I joined as a college freshman, and I’ve learned a few things along the way.
In March of 2004, I was finishing up my freshman year at Boston University (yes, this will help you figure out how old — or not old — I am). Around this time, I began to hear buzz in my dorm about this new fun way to socialize, “The Facebook” (it went from thefacebook.com to facebook.com in 2005). At this time, if I recall correctly, Facebook was only available to Harvard, Yale, Stanford, Columbia, BU, NYU and BC. And it was a completely different monster back then. There was a field along the top of your profile so you knew when you joined, which is how I still remember that I joined on March 30, 2004.
Just got off the phone with Vanessa Alvarez, an analyst with Frost & Sullivan, who suggested that rather than Google Wave threatening Cisco WebEx and other collaboration vendors, this could be a perfect opportunity for unlikely partnerships.
“The Ciscos and Siemens and other UC vendors should be looking at this concept to see what they can do to [learn from] or even to interoperate with this platform,” she said. “There’s been talk about Cisco WebEx, and it’s really prime to interconnect with Google Wave.”
But wait, isn’t Google Wave infringing on Cisco and Siemens hard fought turf?
Alvarez said it can be a win-win, because Google’s had trouble penetrating the enterprise market while the UC traditional vendors have stumbled drumming up developer support.
“We’ve told the UC community to start nurturing their own developers, and Avaya has DevConnect, but Cisco has had trouble with that,” she said.
Whatever partnerships follow from the Wave announcement, Alvarez said she’s excited about its potential.
“It’s definitely ground breaking in the sense of what it does, it definitely revolutionizes the current state of the market today,” she said. “But it has a long way to go. It still is in a very infant state.”
There’s even Google Wave discussion on Cisco‘s own forums, where Dan Miller, founder and analyst with Opus Research, writes in a posting:
In the near term a feature called “playback” is destined to be the difference maker. It is a feature that enables Wave users to tap into conversations at any point in time – past or present. While it is tempting to think of such a conversation as a “thread” in a email trail or discussion group, tapping into (and reviewing the entries to) a Wave is tangibly different. Most dramatically, entries are displayed on the screens of all participants in real time (or close to it). So there are times when participants, literally, work on the same documents at the same time. To paraphrase Gene Kelly: “That’s Collaboration.”
Playback is also the doctor’s prescription for social media-driven attention deficit disorder. It is the mechanism that enables people to search and tap into an ongoing “thread”, review it from the beginning and work up to real time. But, as the infomercial goes “that’s not all”. Wave enables picture sharing and the addition of any media feed for that matter.
Read more at SearchUnifiedCommunications about Google Wave’s UC potential.
Reports out of Canada say that a team of former Nortel executives hope to raise money in order to buy the company out of bankruptcy and keep it more or less intact and under Canadian ownership. Former Nortel president Robert Ferchat, 74, leads a group that also includes former chief marketing officer Ian Craig and retired Nortel vice-president David Mann. It might be more accurate to call Ferchat the former president of Northern Telephone, since that was what Nortel was called back in 1991 when Ferchat last worked there.
Ferchat told the Ottawa Citizen that his group hopes to raise at least $1 billion US from investment banks in order to buy Nortel through the bankruptcy courts.
Meanwhile, Nortel’s current executives are still trying to sell off the company’s top business units. But Nortel CEO Mike Zafirovski’s efforts have been undermined because no one is willing to pay very much for them. For instance, Nortel sold its application delivery buisness to Radware in February for just pennies on the dollar. Nortel originally acquired that business when it bought Alteon for about $6 billion in 2000. Radware paid just $17.5 million to take the Alteon business off Nortel’s hands.
I’ve heard rumors that Avaya and especially Enterasys-Siemens are interested in buying Nortel’s enterprise communications business, but they are more interested in gaining access to Nortel’s customers than actually owning Nortel’s technology. How much are they willing to pay when they can simply try poaching nervous customers (and partners)?