Nortel users need to keep tabs on Avaya integration plans

Avaya buyout of Nortel enterprise business raises overlap, consolidation and support issues, analysts say

The biggest issue facing Nortel enterprise customers on the heels of Avaya's $US900 million purchase of that business is product overlap, consolidation and subsequent support, analysts say.

Avaya emerged as the winning bidder for Nortel's enterprise business Monday, beating out Siemens Enterprise Communications.

Now comes the uneasy task of sifting through the product portfolio and eliminating redundancies -- an ordeal that could leave Nortel and even Avaya users with a shortened life span on their investments.

"There may be some surprises there," says Bob Hafner, an analyst with Gartner. "These are going to be two large companies coming together. It's not the easiest thing to do. These things never go without issues, problems or concerns."

Significant overlap is expected in the IP telephony/unified communications portfolios of both companies -- IP PBXs, handsets and call management software. Avaya is the leading revenue market share vendor in enterprise telephony, according to Dell'Oro Group, while Nortel is No. 4. (See our test of Avaya's unified communications platform.)

Less overlap will be found in routers, switches and other infrastructure products, where Nortel has a larger market share and installed base than Avaya.

"The biggest issue for users is, 'Show me the [product] road map,'" says Henry Dewing of Forrester Research. "They want to see hardcore product plans [and] how they are going to actually consolidate product lines."

Avaya has pledged near term support for the Nortel enterprise products, including those serviced by Verizon, a Nortel reseller. Verizon filed motions last week seeking assurances that Avaya would continue to support the Verizon accounts, which the carrier says include many federal law enforcement agencies.

"I'd be surprised if that issue doesn't work itself out," says IDC analyst Abner Germanow of the Verizon/Avaya impasse. "I'd have a hard time believing they'd leave the US government out to dry."

Nonetheless, Germanow is advising Nortel customers to accelerate any assessment or planning activities in light of the Avaya takeover.

"They should figure out where their own needs lie and how to most effectively migrate," he says. "They should hold companies to their multi-vendor visions -- that open means open."

Gartner's Hafner agrees.

"Customers need to pay attention to what's going on in the [merged] organization" to detect any potential distractions or turf battles that may adversely affect them, he says.

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