Avaya has advised its resellers to continue treating Nortel as a competitor until its deal to buy the insolvent Canadian company’s enterprise business is formally approved, according to a report in ChannelWeb.co.uk.
Combining the two companies’ channels will not be easy, and many of Nortel’s current channel partners might choose to leave the fold if it is acquired by Avaya. The product portfolios of Avaya and Nortel also conflict and overlap in key areas, and Nortel products will be on the losing end of most decisions involving which to keep and which to jettison.
All of this is occurring against the backdrop of a review by the Canadian government into Avaya’s $900-million acquisition of Nortel’s enterprise assets in a bankruptcy auction. The Canadian federal government is considering whether the acquisition is of net benefit to the country.
Siemens Enterprise Communications was the runner-up in the auction. If it had won, it would have agreed to keep the business’ headquarters in Toronto. Siemens also would have been more likely than Avaya to retain Canadian jobs and research and development.
As for Avaya’s channel decree that Nortel is to be treated as a competitor until further notice, it’s a prudent move. The acquisition won’t be a done deal until it fully navigates the approvals process, and it still has a major obstacle to clear.