When Avaya was spun off from Lucent in 2000, it had approximately 34,000 employees. With reports today that another 400 jobs will be eliminated, Avaya will be down to a headcount of about 18,000.
Acquired last year by private-equity firms Silver Lake Partners and TPG for $8.2 billion, Avaya is in aggressive cost-cutting mode. According to an Avaya spokesperson, the latest cuts are additional to a cull of 600 positions that resulted from attrition, layoffs, and retirements since the beginning of 2008.
Categories: Layoffs · VoIP · network infrastructure
Am I the only one who finds it funny that Enterasys is rumored to be taking an acquisitive run at Extreme Networks?
Way back when, in the prehistoric 1990s, Cabletron Systems was an enterprise-networking competitor to Cisco Systems and 3Com. Cabletron was a combative east-coast player, led by truculent executives who liked to engage in bodybuilding, employee intimidation, and competitive hardball. They held business meetings standing up, not sitting down, and they hosted militaristic sales meetings at which tanks and swords were not out of place.
Eventually, Cabletron self-destructed, breaking apart into corporate fragments.
Why I am talking about Cabletron? Well, network-industry historians will recall that Enterasys was one of four Cabletron units spun off in 2000. Enterasys was the enterprise-networking piece, and it found sustenance, if not outright success, as a purveyor of network-security gear.
Now, if rumors are to believed, the erstwhile-Cabletron business unit is looking to Extreme Networks, a vendor of high-speed Ethernet enterprise switches. Just like 3Com, Enterasys has chosen to go back to the future. Let’s hope it has better results.
Categories: 3Com · Cisco · network infrastructure
A few market observers seem to think Facebook’s Mark Zuckerberg and his growing executive coterie have their hearts set on an IPO rather than an exit by acquisition. Maybe that’s true, but I think Zuckerberg and company would not look a gift horse in the mouth, especially if Microsoft came calling with a takeover offer of $10 billion or more.
Why? Well, look not further than this paragraph from a post today at the Silicon Alley Insider:
For the record, we think a Microsoft (MSFT) deal wouldn’t be a terrible idea. But we really don’t think that Zuck has any interest in selling out, yet. He seems gung ho on an IPO, and is beefing up his management team in advance of one. Still has to work on a business model, though.
Still has to work on a business model, eh? I’d say that’s a major omission, one that we shouldn’t be cavalierly disregarding after the bubble carnage of earlier this decade. Have some of us forgotten the inherent investment risks associated with having Internet-based enterprises that lack solid business fundamentals? It would seem so.
You can bet that Zuckerberg and his advisers would think twice before turning down Microsoft’s filthy lucre.
Categories: IPOs · M&A · Microsoft · Silicon Valley · Software as Service · Web 2.0
There’s too much blather and ferment about how a Microsoft acquisition of Yahoo’s search business combined with a subsequent Microsoft acquisition of Facebook would result in the “end of the open web.”
In actuality, such a scenario would only involve the transfer of considerable wealth from Microsoft’s shareholders to Yahoo’s shareholders, followed by a similar exchange of wealth from Microsoft’s shareholders to Facebook’s backers.
It wouldn’t result in the “end of the open web.” Instead, I suspect it would represent the beginning of the end for Facebook as a social phenomenon and the absolute end of its prospects as a commercial entity.
As for Microsoft, the company would incur an enormous opportunity cost. Resources that Microsoft could have spent on software-as-service for the enterprise, where it actually has a fighting chance of consolidating gains and making money, would be squandered on web-search and social-networking pipe dreams. It would emerge a relative loser in both markets.
It’s as if Microsoft doesn’t know itself anymore. The company can’t seem to distinguish its strengths from its weaknesses. Surely somebody as savvy as Bill Gates must know the adage about throwing good money after bad, something he has seldom done previously.
Microsoft just seems delusional these days. It’s as if the entire executive team is undergoing a collective midlife crisis. The only difference is, in Microsoft’s misguided bid to remain relevant and vital, it’s neurotically buying companies rather than sports cars.
Categories: Google · M&A · Microsoft · Software as Service · Web 2.0 · Yahoo
On the Barron’s website today, Eric Savitz writes in Tech Trader Daily that Jefferies analyst Katherine Egbert doesn’t believe the rumors regarding a potential acquisition of Tibco Software. For what it’s worth, neither do I.
Tibco has had many opportunities to be acquired, some of which would have offered greater returns than what the company would fetch in today’s market conditions. Assuming that overtures are being made, Tibco is apt to resist them.
Mind you, as Egbert notes, “management does have incentive to keep the perception of an acquisition alive, as such rumors have steadily boosted the stock price.”
Categories: M&A
