Avaya Lands Nortel Enterprise Unit With $915 Million Auction Bid
September 17, 2009
Avaya is the winning bidder for Nortel (NYSE:NT)’s enterprise solutions unit, agreeing to pay $900 million in cash and $15 million for an employee retention program. The companies confirmed the agreement in separate releases early Monday.”Our successful bid brings us closer to adding Nortel and its complementary channel, portfolio, research and development, and global presence to Avaya,” said Kevin Kennedy, president and CEO of Avaya, in a statement. “We believe the acquisition brings inherent value to both organizations’ customers, employees and partners, and we look forward to its successful conclusion.”
Toronto-based Nortel filed for bankruptcy protection in January 2009, seeking shelter from creditors after losing $5.8 billion last year.
Avaya, which had the early lead in the bidding process with a $475 million opening, preauction bid, will gain the assets of Nortel’s global Enterprise Solutions business as well as Nortel Government Solutions Inc. and Diamondware Ltd.
“This is fantastic news for our customers, as this will empower us to continue to deliver industry-leading solutions and services focused on unlocking the enterprise business potential enabled by unified communications,” said Nortel Enterprise Solutions President Joel Hackney in a statement. “It provides the capability to chart our future with laser focus, enabling customers to compete in new ways with greater scale and resources. We look forward to working closely with our customers, partners and stakeholders during this preclose phase to ensure that we continue to innovate to meet customers’ needs with high-performance, efficient and secure communications solutions.”
Added Chuck Saffell, CEO of Nortel Government Solutions: “With our combined knowledge of the federal market, we will be focused on delivering the best-performing, most cost-effective capabilities available to support our customers’ mission. Our goal continues to be helping our customers provide security, livelihood and well-being for the citizens of the United States.”
Nortel noted in its statement that Avaya and Nortel expect the deal to close in the fourth quarter of 2009 and will seek necessary Canadian and U.S. court approvals in a hearing scheduled for Sept. 15.
The deal is subject to court approval in the U.S., Canada, France and Israel as well as regulatory approval.
Hackney told ChannelWeb in early August that Nortel’s channel need not fear the outcome of Nortel’s sale and that Nortel had “gone a long way in stabilizing the business.”
The comments came the same day former Nortel Networks CEO Mike Zafirovski stepped down and its board of directors was reduced from nine to three members.
Nortel for its second fiscal quarter reported $1.97 billion, a 25 percent drop year over year but up 14 percent sequentially from the first quarter of 2009.
In early comments Monday, Nortel sought to reassure channel partners.
“The independent members of the Nortel Distributor Alliance Council are excited about the future potential that today’s announcement brings to the tens of thousands of enterprise customers we support,” said Rick Dawybida, president of the Distributor Alliance Council Americas, in a statement. “We look forward to a commitment focused on ensuring customers can fully leverage their prior investments while also getting expanded choices. The combined portfolio capability of Avaya and Nortel will offer the marketplace industry-leading solutions as companies move aggressively to unified communications.”
Hackney and other executives from Nortel were expected to speak in a call for media and analysts at 9:30 a.m. Eastern on Monday.
By Chad Berndtson, ChannelWeb
Cisco To Expand Small-Business Reach With New Products, Financing Options
September 17, 2009
Cisco Systems (NSDQ:CSCO) Tuesday rolled out an array of products, services and financing options for solution providers serving small businesses, part of its ongoing push to become a more active presence in a market where it has not traditionally held sway — small businesses of 100 employees or fewer.”Small is a market we’ve been addressing accidentally for 10 years. It’s a 100 percent channel-driven business for us,” said Andrew Sage, Cisco’s vice president of small-business sales, in a briefing with Channelweb.com. “We realized that if we wanted to be really successful in small business we had to address the market in a consistent way. I think this is the only way we can do it.”
Cisco Tuesday launched five Small Business Partner Development Fund tracks, each catering to different types of channel partners and rebate levels, from small-business-focused Cisco VARs to DMRs. Cisco is also offering partners new partner registration and program intelligence tools to track sales and calculate payments owed by Cisco.
Cisco began offering the programs a few months ago and has signed up more than 3,500 partners, Sage said, with the goal of 20,000 partners by the end of the year.
On the product side, Cisco unveiled the SA 500 Series, a $550 network security offering and new addition to Cisco’s Small Business Pro Series featuring built-in firewall, VPN capabilities, optional VeriSign (NSDQ:VRSN) Identity Protection and optional e-mail and Web security through Trend Micro’s ProtectLink Gateway.
Cisco is also now offering SPA 500 Series IP Phones — five new IP phones, ranging in price from $135 to $430, that work with Cisco Unified Communications 500 Series or hosted IP telephony solutions. The company is also unveiling Cisco Smart Business Communications System Release 1.6, which supports the IP phones and Cisco’s SR 520-T1 router ($1,495), as well as supports third-party applications specific to vertical markets like automotive, insurance and health care.
Cisco used the product releases and program adjustments to promote Small Business Pro Service, which offers tech support, software upgrades and advanced access to Cisco small-business resources, and its Cisco Capital program, which offers interest-free financing to small business.
Cisco further said that in the U.S. and Canada, it would until the end of 2009 extend zero percent financing on voice solutions to include Smart Business Communications System, Unified Communications Manager Express and Unified Communications Manager Business Edition.
“A lot of the discussion from small businesses out there centers on how do I get my name out there, leverage Web 2.0 technologies and communicate to my existing customer base,” Sage said. “We want to give them options.”
Cisco’s full-on press toward a stronger small-business-oriented portfolio — an area Cisco that Chairman and CEO John Chambers singled out as “one of the fastest growth opportunities” during Cisco’s fourth-quarter earnings announcement Aug. 5 — will also include ongoing recruitment of SMB-focused partners and more demand generation activities, Sage added.
“Historically, Cisco has been seen as a complicated company to work with,” Sage admitted. “We knew that with small business that wasn’t going to work for much longer. We definitely know the market has yet to accept us fully as a small-business-focused vendor and we’re out to prove them wrong.”
By Chad Berndtson, ChannelWeb
