September 14, 2009
Nortel Exec: Avaya Sale to Benefit Customers, Remove Market 'Uncertainty'
By Marisa Torrieri, TMCnet Editor
A Nortel (News - Alert) Networks business executive said Monday that company expects its $990 million transfer of its enterprise/government assets to unified communications service provider Avaya (News - Alert) will allow both companies to better serve their customers with “industry-leading solutions.”
“This announcement removes another layer of uncertainty,” said Joel Hackney, Nortel’s president of Enterprise Solutions, during a 25-minute conference call with media and analysts. “All of you know the challenges we’ve been faced with in this environment. But we’ve never wavered in our strategy and our commitment to customers.”
Under terms of the agreement, Avaya, which Hackney told teleconference attendees beat out two other bidders, will retain at least 75 percent of the Nortel’s current workforce in its government, enterprise solutions and DiamondWare (News - Alert), Ltd., divisions.
Avaya provides unified communications, contact centers, and related services directly and through its channel partners to enterprises worldwide.
Pending court approvals in Canada, the United States and any other applicable courts, including those in France and Israel, the sale transaction expected to be certified by the courts on September 15 and officially close by late December. At that time Avaya will unveil its unified product roadmap and services strategy.
Hackney assured one caller that it will continue to support platforms based on its most popular equipment, like the Communications Server 2100, although any “integration activities” are on hold until the end of the year, when the deal closes.
Hackney also answered a handful of questions about controversial media reports following news of the merger, which broke Sept. 11.
The Ottawa Citizen reported Sept.10 that Verizon (News - Alert) Communications plans to object on U.S. national security grounds to the potential sale of Nortel’s enterprise division should Avaya win the auction, as the carrier sells Nortel’s communications gear to U.S. defense, national security and spy agencies.
“We do not expect the Verizon interaction and the news surrounding that to impact court approval of this deal and the close of this deal,” Hackney said, adding that because Nortel did its “homework,” the company has a high level of confidence that it will get the necessary court approval this week.
Meanwhile, others – including TMCnet’s CEO Rich Tehrani – have hailed the Nortel-Avaya partnership as a good thing, and said it will make the company a more viable competitor against networking giant Cisco (News - Alert), among other players.
“I say that if any company other than Cisco gets the enterprise assets of Nortel,” Tehrani blogged during the week of ITEXPO West, “the market will be safe and there won't be too much anticompetitive power in the hands of any specific company.”
Hackey made it clear during the conference call that Nortel and Avaya channel partners will have opportunities to grow their business as the move to unified communications accelerates.
“Even through these toughest times we’ve demonstrated that innovation is alive and well,” Hackney said. “And our specific actions will continue to demonstrate that our commitment to our customers is strong.”
Marisa Torrieri is a TMCnet Editor. To read more of her articles, please visit her columnist page.
Edited by Michael Dinan