2009 will always be remembered as the year of the Nortel bankruptcy. The century-old telecom equipment maker -- and pioneer of converged voice and data networking --announced it would disband after months of shrinking revenues, and the company swiftly began selling off units. Avaya wasted no time in snatching up Nortel's enterprise unit for $900 million -- a fire sale by all accounts. But the question looming for 2010 is: What the heck will Avaya do with Nortel's data networking business?
The Avaya-Nortel acquisition was clearly a strategy for Avaya to expand its IP voice and PBX business, and it certainly ups the ante in the Cisco-Avaya competition for leadership in those markets. But rumors have swirled that Avaya will also maintain the Nortel data networking business. So far, the company hasn't laid out solid plans for data customers, who are already getting antsy. After all, Nortel equipment sits in the networks of hundreds of government agencies, including NASA. These aren't folks who like to be kept waiting.
If Avaya decides to remain in the data networking business, it'll find itself squarely in the dirty battle among Cisco, HP-ProCurve, Juniper and Brocade, as well as a number of lesser-known but strong providers.
Here's a piece of advice for Avaya if it does go that route: Do a better job of integrating Nortel's enterprise business than Nortel did with its own 1998 acquisition of Bay Networks. That turned out to be the death of the company.
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