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.

Tags: Unified Communications by Blair Pleasant
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What’s left to say that hasn’t already been said about Nortel filing for bankruptcy? It’s a big disappointment and I hope that something good comes out of it – perhaps a leaner, meaner Enterprise group?

The writing has been on the wall for years, ever since the financial wrong-doing that had Nortel restating its earnings over and over again. Customers no longer had the full trust in Nortel, and its reputation was badly injured. Now it’s filing for Chapter 11 after missing a $107 million interest payment. Ouch!

What’s really sad is that the company has some great technology (not all of it, but much of it) and many loyal, happy customers. I’ve been speaking with some Nortel customers recently, and they are very happy campers who love their Nortel products and relationships.

Nortel tried its best when it entered into the Innovative Communication Alliance (ICA) with Microsoft, hoping that this relationship would help provide a competitive differentiation. While some people saw this as a last ditch effort to stay relevant, others saw it as Nortel selling its soul to Microsoft. While Nortel did attain some net new unified communications customers, it wasn’t enough to make a dent in its lagging business.

Most industry pundits are debating about what will happen to Nortel – most people expect the company to be split up in parts, and sold piecemeal to competitors. The question will become, which parts will they sell, who will they sell them to, and what parts will they keep. One report had them looking to focus on WiMax, while other people believe it will sell off its Enterprise division to Microsoft (I highly doubt this will happen and would be really surprised if Microsoft gave this option much thought). Personally, I’d like to see Nortel focus on its enterprise business. To me, this is their best bet. But maybe that’s because that’s the part of Nortel that I focus on and would like most to see succeed.

The company notes that it will continue daily operations as usual and will continue to support its products while investing in research and development. As of now not much is supposed to change for existing customers. According to Mike Zafirovski, CEO, “These actions are imperative so that Nortel can build on its core strengths and become the highly focused and financially sound leader in the communications industry that its people, technology and customer relationships show it ought to be.” He went on to say “I want to reaffirm Nortel’s dedication to delivering world-class solutions and services to customers.” What he didn’t say is how they will achieve this.

While I have no insights into what Nortel will do, my personal hope is that the company sells off its Metro Ethernet and Carrier Business, and focuses on its Enterprise Business – mainly unified communications and contact center. The company has done a good job of moving forward to a software-based architecture, although not too many of its customers have moved in that direction yet. The company recognized the shift away from hardware toward software and has introduced ACE and other offerings, but has primarily been living off of its installed base of customers and products rather than selling much of the latest and greatest stuff.

This is a sad day, but there are lessons to be learned.

Tags: Unified Communications Information by Blair Pleasant
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Tags: Mobile UC, Unified Communications, Unified Communications Information by Blair Pleasant
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Building on a relationship that began over a year ago, Nortel and IBM announced a new UC solution for SMBs that leverages IBM’s new “Power System” and Nortel’s UC software to create the new Nortel Software Communication Server (SCS). IBM has brought together its I-series and P-series servers into one family, called Power System, and introduced three servers as part of the family: the IBM Power 520 Express, the IBM Power 550 Express and the IBM BladeCenter JS12. IBM’s Business Systems Group is breaking the mold in how it goes to market, and no longer goes to market by product line but instead by customer set. The group can talk to customers about solutions and determine what the customers’ needs are and match them with platform that best meets these needs. And of course one of the leading solutions today is unified communications.

Nortel’s Software Communication Server is an open, SIP-based UC solution for SMBs that provides VoIP and UC capabilities on a single platform. Designed jointly by Nortel and IBM, SCS runs on IBM’s new Power Systems products and was purpose built for SMBs with under 1000 users. The two companies can provide an all-in-one solution providing embedded instant messaging, presence capabilities, basic telephony capabilities, basic contact center functionality, Ad hoc/ Meet Me audio conferencing, basic videoconferencing, and more.

Lori McClean of Nortel describes the Software Communication Server as being “dead simple,” meaning it meets the needs of SMBs for simplicity, including ease of installation, maintenance, and use. The system can be up and running in 10-20 minutes for 120 users.

In terms of features, SCS provides traditional PBX feature set, integrated ACD, auto attendant, click to talk, click to conference, call management, and PC desktop integration with Microsoft or IBM. Basic IM and presence capabilities are included as part of the Nortel software, and customers who want more extensive UC capabilities can purchase and integrate IBM Sametime (most SMB customers would likely opt for the Sametime Entry or Standard editions).

Following the simplicity theme, pricing is based on a per user license basis. MSRP is $200 per seat, including the Nortel telephony UC software and feature set, and softphone all preloaded and preconfigured. Customers that do not already have the IBM server would also need to purchase the System i server, which generally costs around $8,000-$9,000.

The product is currently in controlled release with some initial trials. SCS on System i will go GA April 17, followed by the rest of the IBM Power Systems shortly after.

The two companies will work together to market the solution, which will be sold by certified resellers. While there are only 20 certified resellers today, these are very large, national organizations. IBM partners will be primary and initial route to market, and partners need to be certified on both IBM and Nortel solutions, with expertise on both Nortel SCS and IBM Power Systems required.

Both companies agree that customers demand choice, and stated that this is not an exclusive agreement - Nortel is offering similar software to other partners and IBM will work with other partners as well. However, Nortel was quick to point out that the IBM solution is unique and that the IBM platform is the first platform to leverage the Nortel software, and it is the only multi-application platform. The companies noted that what is unique about this relationship is the breadth of the relationship - Nortel is currently the only vendor to support all of the platforms that IBM brings to market.

SMBs have different needs than their larger counterparts, and to date there have been just a handful of UC solutions aimed at this segment. While SMBs haven’t been banging down the doors yet for a full-featured UC solution (then again, neither have large enterprises), it is just a matter of time, and having more options is always a good thing. SCS helps Nortel to fill out its UC product portfolio, providing a compelling offering for SMBs. IBM will need to get additional resellers certified and capable of selling this solution which will take time, but IBM resellers that also resell Nortel solutions and also serve the SMB market should be more than willing to add SCS to their portfolio.

Tags: Unified Communications Information by Blair Pleasant
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