If all goes according to plan, Avaya will take possession of insolvent Nortel’s enterprise assets, won at auction for approximately $900 million in September.
It’s at that point that Avaya will face some difficult decisions and daunting challenges. As it integrates and assimilates Nortel products and employees — not to mention its channel partners — Avaya will contend with multiple overlaps and redundancies. In most cases, those overlaps will be resolved in favor of products within Avaya’s portfolio. Nonetheless, as an article at Network World suggests, Nortel products might prevail in rare exceptions.
Avaya will have to decide whether it wishes to prolong the lives of Nortel’s switch and security portfolio. These are the products — minus Alteon load balancers, small-office/home-office gear, and blade switches, which now belong to Radware, Netgear, and Blade Network Technologies, respectively — that Nortel inherited when it acquired Bay Networks for $9.1 billion in 1998, back when the Internet seemed a limitless, gurgling fountain of obscene wealth.
There’s not much of Bay Networks left standing within Nortel. What remains really isn’t worth Avaya’s bother of keeping it alive. The cost to Avaya wouldn’t just be manifest in the bills associated with maintaining, supporting and extending the product portfolio. Additional “opportunity costs” would be incurred in the form of lost partnerships with vendors that sell networking products similar to those, but (in most cases) better than, the Nortel switches and security boxes. (Current Avaya enterprise-networking partners include HP ProCurve, Extreme Networks, and Brocade/Foundry.)
Besides, the Nortel switches would be a distraction, a once-shiny, now-irredeemably tarnished bouncy ball that Avaya executives would be remiss to chase. They’ll get some useful things from the Nortel acquisition, but the ex-Bay stuff isn’t among them.
Avaya would be wise to keep its eye on its core enterprise-communications business. Whether those communications involve VoIP alone, or unified communications, it will face tough competition from Cisco. Avaya has neither the scale nor the resources to compete with Cisco right across the enterprise board.
Accordingly, the company should strive to keep Cisco’s enterprise-networking enemies among its allies as it wades into battle.