Avaya Friday said it had completed its acquisition of Nortel's enterprise solutions business, following the deal's approval under the Investment Canada Act last week.
As Avaya finishes integrating its channel organization with Nortel's, attention is focused on how Avaya will tailor its overall product road map. Avaya confirmed to Channelweb.com that the full product road map will be made public on Jan. 19, 2010.
"The integrated road map will be a complement of both companies' technologies. Those who have seen it are receiving it quite well," Todd Abbott, Avaya's senior vice president of sales and president of field operations, said in an interview. "The key design point is that we're not going to leave any customers stranded. We're not going to abruptly end-of-sale or end-of-support any Nortel customers. The goal will be to evolve these customers on a much smoother basis. Asking them to do rip-and-replace in this economic environment isn't practical."
The acquisition's closing ends several months of financial and legal wrangling that began with a stalking horse bid for Nortel in July and continued with the announcement that Avaya had won the bidding for Nortel's enterprise unit in September for $915 million. Since then, Avaya has offered little information on how it would integrate Nortel into its own organization as it awaited the deal's approval.
Some aspects are known. Nortel's data products, for example, will become a fourth business unit for Avaya beyond its unified communications, contact center, and small-medium enterprise units. Avaya also confirmed that several Nortel executives had accepted new roles in the organization, including former Nortel Enteprise Solutions President Joel Hackney, who will head up Avaya's government and data businesses.
"The number one filter is the same filter we'd apply to any of the changes we drove here at Avaya since our privatization: culture," Abbott said. "As we went through the organization process, we looked to who has the right leadership style and can clearly drive passion."
There has been chatter among solution providers in recent weeks that Avaya would be adding additional distributors that already carry Nortel. Abbott said that existing distribution relationships for Nortel VARs acquiring Nortel product wouldn't change immediately, and that Avaya would be meeting with distributors over the next few weeks to determine their future roles.
"I'm not at a point where I know what the strategy's going to be," he said. "All of them will be initially welcomed in. You can only do so much planning preclosure. We will map strategy over the next 60 to 90 days, and we will have no preconceived notions on changes we might make. Our goal is minimal disruption to partners. Your distribution options will be the same on Monday."
Avaya made a big deal of its channel makeover at the 2010 Avaya Americas Partner Conference in October in Nashville, Tenn. The company also touted changes in its leadership going back to early 2008, from which time it added Abbott, President and CEO Kevin Kennedy, Vice President of Worldwide Channels Jeremy Butt and other key executives.
During the conference, Kennedy said that the Nortel acquisition would help Avaya get to 85 percent indirect sales by 2012. Avaya also officially launched Avaya Connect, with new partner tiers to reward the most loyal Avaya partners, and a consolidation of regional programs around the world into one global program with one price list for products.
"We're convinced the channel is the most effective and most profitable route to growth," Abbott said this week. "There's nothing magical about the number 85. If it's 90 percent, we're not going to hold back."
Abbott reiterated that Avaya Aura, Avaya's virtualized unified communications, platform, would be the de facto method for deploying IP applications and UC products going forward.
He said Avaya was sharing the early drafts of its product road map with some partners under nondisclosure agreements, and he was "100 percent confident" that the road map would go live on Jan. 19 without delay.
Based on conversations he said he'd had with Avaya partners, Abbott said the biggest concerns from existing Avaya VARs were about channel competition with a new flood of Nortel partners. But Abbott said that only about 15 percent to 20 percent of the joint Avaya-Nortel channel contains overlap where the two companies' products are mutually installed.
"That should be reassuring to the channel. My assurance to them is that we're not about overcovering a market," he said. "These systems are in long sales cycles. This is much different than a router, or switch or a PC. They're going to have to compete, no doubt about it. But the Avaya Connect program is about enabling and simplifying training and certification. What partners need to hear is that we will give them the confidence that they will be able to compete fairly based on level and certification. It's a transparent program."
Abbott said that internally, Avaya would continue to fill out the channel team under Butt and had added both Nortel executives and outside hires to that team. All Nortel employees migrating to Avaya, he said, "now have their badges and business cards."
For some Avaya solution providers, there's a sense of optimism, even as they wait for the Nortel road map.
"I've been around a long time, and yes, we truly see them going down the path of a channel-centric approach," said Jamie Wood, executive vice president at Avatel Technologies, a Brandon, Fla.-based solution provider. "I really felt a difference this year and I can see that the leadership team I work with [Avaya's channel leadership] used to be just day-to-day stuff, and we'd see a promotion every so often. The way it is now you feel like you're a close partner and you're working for the same goals."
Wood is a member of Avaya's Business Partner Council, and Avatel was this year named Avaya's SME Channel Partner of the Year. New leadership, including North America channel chief Carol Giles Neslund, had brought new focus to Avaya's management, Wood said.
"The openness in the leadership team is just different. Some of the team is different people, of course. But the Partner Council, they really do listen to suggestions and ask for your input. You see it," she said.
Avatel is itself coming off a strong year, having increased its Avaya IP Office sales by 25 percent. The solution provider is planning to open a new office in Atlanta where, Wood says, the small and medium enterprise (SME) opportunity is huge.
Wood said that she understood concerns about Avaya's Nortel portfolio integration, but suggested that steady hands in Avaya's transition team would make it work out in solution providers' favor.
"I don't have the specifics, but they're not just going to rip all the Nortel stuff out and put new products in," she said. "I have an extreme amount of faith in the team taking care of it that they're very qualified to do it."
The Avaya acquistion of Nortel's enterprise unit brings to a close one chapter for Nortel, which entered bankruptcy in January 2009. The sell-off of Nortel's various business units has continued throughout 2009, with various business units sold or in the process of being sold to Ericsson, Kapsch, Ciena and Hitachi, as well as Avaya.