Nortel and Avaya to tackle Cisco dominance

Nortel and Avaya to tackle Cisco dominance

Tie up to create a networking player capable of taking on the incumbent

Cisco’s dominance in the Australian market place could be challenged by an Avaya/Nortel tie up, according to analysts and partners.

Earlier this week Avaya announced plans to purchase Nortel's enterprise solutions business for $US475 million.

The vendor can still be out-bid by other companies and must get approval from the United States Bankruptcy Court for the District of Delaware and the Ontario Superior Court of Justice.

But if the moves comes off, the resulting Avaya/Nortel entity would be big enough to take on the networking giant according to Gartner research vice-president, Geoff Johnson.

“There would be very similar market share depending on which market you look at in Asia. It’s not the case at the moment as Cisco is well ahead,” he said.

In a research note, Datamonitor group analysts, Daniel Hong and Ian Jacobs, said the companies would face challenges in rationalising the respective product sets and winning over disgruntled Nortel channel partners. However, if the acquisition goes through it would significantly expand Avaya’s reach.

“Avaya will eventually have bought its way into being a channel-friendly company and that will likely be worth the purchase price for Nortel,” they concluded.

Nortel partner Westcon Group Asia-Pacific vice-president, Wendy O’Keeffe, said although it was too early to tell what would happen the deal was a significant opportunity.

“We can’t really speculate as to what is going to happen but my only comments are is when we look at Nortel, they are in 76 million ports globally, 62 million data ports globally, and from Avaya’s perspective they are pretty strong too,” she said.

Australian Avaya partner, Unity Systems, also welcomed the announcement.

“What does it mean for us? From a distribution point of view we would always assume that it would be a good thing because it will increase market size for us of distributable products,” Unity Systems, parent company, Distribution Central CEO, Scott Frew, said.

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Tags Westcon GroupAvayanorteldistribution centralunity systemsdatamonitor

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