Unified Communications

Nortel Auction: Siemens was edged out by a $15 million nose

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.

All the right moves with unified communications

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.

Mutual dislike of Microsoft won’t salvage Google and Apple’s broken BFF bromance

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.

Nortel enterprise business set to go to Avaya for $500 million?

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 auction: Avaya or Siemens-Enterasys will bid for UC business

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.

VoIP toll fraud on the rise

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.

VoiceCon 2009: Building success through innovation

The impact of today’s global economic crisis has wrenched companies into shaping new business models merely to survive, much less thrive. But top-tier UC vendors at the recent spring VoiceCon 2009 show in Orlando are interpreting the recession (or depression) as a unique opportunity to change the old ways of doing things. The dawn of a new day. A time to rely on and trust in innovation to carry us through these dark days.

Tough times coupled with perpetual, driving need is the catalyst that has historically sparked prodigious ideas. And, as in the past, the tumultuous times we’re now experiencing paired with our insatiable thirst for new technology will be the impetus to finding more efficient ways to do what, in otherwise good times, would keep us trekking down the same path, doing things the same way. The way to survive, more over, come out ahead of the competition, is to innovate now.

In every VoiceCon keynote presentation, a single theme threaded its way through — innovation. Kevin Kennedy, president and CEO of Avaya, kicked off the keynote sessions stressing the critical importance of innovation. According to Kennedy, innovation will help us navigate these uncertain times and emerge from these times of turmoil.

Gurdeep Singh Pall, corporate VP of unified communications with Microsoft, said in his keynote address that it’s the choices companies make now that will determine their viability when we’ve moved beyond the current recession.

General manager of IBM, Bob Picciano, stated simply, “We can’t afford to do things the way we did before.”

Cisco’s CTO, Padmasree Warrior, went further to say that ideas get stronger when we share them with others and social networks and collaboration are powerful in making connections stronger.

All of the keynote speakers offered sensible, reasonable reasons why companies should invest now in collaborative innovation in some capacity (irrespective of their financial status). Each presented their thoughts on the best ways in which to do so – respective to their agendas, of course.

Whether you innovate through social networking software, collaboration tools, UC technologies, CEBP, otherwise, or all of the above and more, a thoughtful strategy is imperative. Gurdeep Singh Pall rightly said that hope is not a strategy. If you want to keep your company afloat now and gain a healthy degree of competitive dominance in the future, in a sunnier financial climate, heed Pall’s simple, but wise, advice:

• Focus on innovation
• Shift away from old models
• Lay down the foundation for the future

VoiceCon Microsoft keynote: Gurdeep Singh Pall throws desk phone in the trash

Microsoft corporate vice president for unified communications Gurdeep Singh Pall essentially threw the contemporary desk phone in the proverbial trashcan today during his VoiceCon keynote, arguing that software-based communications is the way of the future.

Pall compared the desk phone to the Brother word processor that started filling landfills across the country in the 1980s and 1990s. Pall was merciless, saying that too many telecom vendors are stuck in the past, still insisting that their customers need to buy a desk phone for every user. His disdain for the desk phone probably stings the ears of many of these same vendors who have partnered with Microsoft on OCS, but apparently Pall thinks everyone needs to hear his message, whether friend or foe.

“Folks, we cannot afford to do the things you did before,” he said.

Pall admitted that some users still need a desk phone, but he said the softphone capabilities available from Microsoft’s Office Communications Server and the Office Communicator client promise to make employees more flexible and productive. He said OCS is a single platform and a single infrastructure, not “five infrastructures with copious amount of duct tape around it.”

Pall ended his address with a memorable image. He asked attendees to imagine that they’ve been given a $300-per-user budget to buy a device for the desktop. He held up two options: A typical desk phone, which he said would cost $300. And then a small notebook computer, which he said you could buy at Walmart for $300. Which one would you buy, he asked. Then he said, “It’s time to get rid of the Brother word processor,” and he tossed the desk phone aside.

VoiceCon keynote: Kraft Foods UC vision includes Avaya and the iPhone

Kraft Foods sounds like a fun place to work. During his keynote, Tom Behnke, manager of network services, global architecture and strategy for Kraft, gave VoiceCon attendees a glimpse of the future for information workers at his company. He offered details of a unified communications pilot program at Kraft’s Chicago facility.

Behnke’s pilot involves a rethinking of not only communications and collaboration technologies, but also the workspace. Kraft wants to change the collaboration culture among its employees. To do that, it did away with traditional cubicles and office, putting information workers at large work table, where they can sit side by side and face each other.

As far as technology, Behnke brought in Avaya to deliver its voice infrastructure. He also decided to go with a wireless office, so employees could move freely throughout their workspace, building a Cisco wireless LAN infrastructure that was designed by HP/EDS. And he engaged AT&T to come in and build an in-building cellular system so that he could deploy iPhones to every employee.

Behke said his goal was to change the user perception that he was providing them with technology widgets that they had to use. He was trying to create something that would focus on the individual user experience, that would help them the way they do there jobs.

One thing that really jumped out at me. He designed this new environment to be free of MAC addresses. If a user needs to move his work station, he can just get up and walk somewhere else. IT doesn’t need to reassign the employee’s phone and network profile to a new set of ports.

I’ve asked Avaya to give me a one-on-one conversation with Behnke is doing at Kraft. If they come through, I’ll write more extensively about this project for www.SearchUnifiedCommunications.com.

Who should drive unified communications investment in contact centers?

Aspect, a vendor of contact center software, published a survey of 300 European organizations about their attitudes toward unified communications. It has some of the usual banal findings (85% of respondents believe UC improves customer satisfaction and 67% believe it will deliver cost advantages within three to five years).

The interesting nugget of research is sort of tucked away in the published findings: People are sharply divided over who should be driving investment in unified communications technology for contact centers. Fifty percent say it should be handled by IT organizations while 50% said it should be driven by customer service organizations.  What if the survey offered respondents a third possible answer, such as, “Investment should be driven equally by the IT organization and the customer service organization?” I imagine we’d see a lot of agreement on that option.