Many Questions Remain on Avaya-Nortel Announcement

While the waiting game is over regarding the winner of the auction for Nortel Enterprise, there are still many unanswered questions – mainly the who’s and the what’s.

Who – we heard from Avaya and Nortel in a press/analyst call that Avaya has agreed with a minimum employee transfer of 75% of Nortel employee work force at the time of close of deal. Note – at the time of close of deal, not today, not last week. Who knows how many Nortel employees will still be around by December when the deal is expected to close.

Also, in a letter to the Nortel troops, Nortel Enterprise President Joel Hackney stated that Avaya will employ about three-quarters of Enterprise Solutions employees globally. This includes the full Nortel Government Solutions workforce and most employees who work wholly or mainly for the Enterprise Solutions business in countries with an Acquired Rights Directive (ARD) or similar law. ARD or similar laws apply in many of the countries in EMEA and require that employment automatically transfers to the purchaser upon an acquisition of the business. Outside of Nortel Government Solutions employees and those employees in countries where ARD or similar laws apply, we expect that a minimum of about 60% of the remaining Enterprise Solutions workforce will be offered employment with Avaya.”

If you’re a non-Government Solutions or non-ARD employee, you now have only a 60% rather than a 75% chance of being retained. And the Avaya employees aren’t all safe either – if someone from Nortel is retained but their job duplicates that of an Avaya employee, then the Avaya worker may be out of a job. I’ve known many of the Avaya and Nortel folks for a long, long time, and I certainly wish them the best and I’m keeping my fingers crossed for them.

Now for the most important part – the what. What products will remain, which will move forward with the company, and which will be set out to pasture? Will it be CallPilot or Modular Messaging? BCM or IP Office? ACE or Aura? And where do the Nortel products fit in Avaya’s Aura vision? Avaya is still working on its Aura story and now has to figure out how to leverage the products and platforms that Nortel brings to the table.

There are very few areas where there is no overlap (data solutions excluded). The one product that is sure to go forward in the Avaya line up is Nortel’s Diamondware (Nortel acquired Diamondware last year). I hope that Avaya recognizes its value and continues with development in this exciting area, particularly with Diamondware’s special audio capabilities. Similarly, I expect to see Avaya leverage web.alive and be more aggressive in this area.

I hope to soon get some of my questions answered regarding the future of the combined company, but I’m not holding my breath. It will take the company a long time to figure out its new product portfolio, and customers on both sides will have to guess as to the life expectancy of the products they have installed.

Of course, all this assumes that the DOJ doesn’t decide that this acquisition is anti-competitive and prevents it from happening. This is pretty unlikely to happen, as there are still lots of vendors in the telephony and contact center markets.

I was really hoping for a more creative outcome, such as Oracle, SAP, or an application vendor acquiring Nortel in order to communication-enable its applications. But alas, our industry has never been known for its creativity.

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