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Nortel a Distant #3 in Enterprise
By Mark Evans | June 27, 2007
According to research by IntelliComm Analytics, Cisco and Avaya are virtually neck-and-neck when it comes to the leading enterprise telecom suppliers in North America during Q1. Avaya had 20.9% of product revenue was Cisco was a smidge behind with 20.9%. Nortel, meanwhile, had 12.1%.
Tech Confidential Blog suggests the study illustrates why Avaya was such an attractive takeover target for private equity investors who recently snapped up Avaya for just over $6-billion. “It also illustrates how Nortel Networks Inc. has its work cut out for it in attempting to catch up with industry leaders Cisco Systems Inc. and Avaya,” wrote Andrea Orr. Tech Confidential Blog also had a post earlier this week about a CIBC World Markets reports suggesting Nortel needs to become an “aggressive acquisitor” to remain competitive.
Topics: Enterprise, Rivals |
June 27th, 2007 at 1:18 pm
Mark
Unless I’m missing something,this blog source that you retrieved information from is inaccurate.
Nortel’s most recent qtrly filing shows “Enterprise Solutions” q1/07 revenue at,
“Enterprise Solutions (ES) revenues in the first quarter of 2007 were $597 million, an increase of 31 percent compared with the year-ago quarter and a decrease of 24 percent sequentially. The year over year growth was driven by strong growth in both voice and data businesses. We believe that we gained market share again this quarter.”
granted the latest filing covers global revenues,but with NA accounting for 56 percent of Nortel’s revenues,Enterprise comes in at approximately $334 million for q1.
Give or take a few percentage points due to the fact that Nortel does not break down their Enterprise revenues geographically.
The graph from this blog source shows Nortel’s Enterprise revenue for q1/07 at just under $200 million.
$334 million and just under $200 m as shown on the chart amounts to a whopping 72 percent difference using the charts’ figures.
I highly doubt that although Nortel’s Enterprise revenue is not broken down geographically, and with NA accounting for 56 percent of revenues,when taking that number and multiplying that with the Enterprise revenues, something doesn’t add up.
At least not a 72 percent disparity!
June 28th, 2007 at 3:34 am
just thought I would add this piece from an article back in May,which tells a different story than the one from Itellicom Analytics,
“Customers with traditional Nortel telephony in place are asking more now about sticking with Nortel and upgrading with Nortel rather than just ripping it all out and going with Cisco,” Kobuszewski said. Cause for more optimism is the fact that 75 percent of CXtec’s Nortel customers are still running legacy gear, leaving a huge opportunity for VoIP migration, he said.
Nortel’s fourth-quarter U.S. IP telephony sales rose 34 percent year over year. The company maintained its No. 3 spot but outpaced No. 2 Avaya, which grew 22 percent, according to Synergy Research Group. “If Nortel can continue to build on its success, you will see them eat at the market share of the others and we’ll see a fight at the top between three players instead of just Cisco and Avaya,” said Ryan Olsen, Synergy senior analyst. “
June 28th, 2007 at 1:38 pm
This chart appears to be based on revenue, not lines. Since Cisco is more expensive then Nortel, how accurate is this in terms of new lines deployed?
June 29th, 2007 at 7:15 pm
Psychiatrist,
Maybe when they refer to Enterprise Communication they are not including NT’s data networking and security line. If you take 56% of the $375mm reported for circuit and packet voice, you get $210 which is alot closer to the report…
here is IntelliCom’s definition:
IntelliCom measures the manufacturers based on volumes and associated revenues that are segmented by major solution component categories including platform hardware, end user devices, and Business Communication Software (BCS) applications. BCS applications include Messaging, Contact Center, Call Control, and emerging Unified Communications (News - Alert) solutions. Unlike the hardware and device categories that are measured by number of units shipped, the volume measurements for BCS applications are based on the number of activated end user software licenses or “seats.â€
June 30th, 2007 at 4:44 pm
Mike Z failed to grow enterprise business by acquiring_ merging Avaya.
The above research shows 12% market share.
So if Mike is committed to his 20% market share in any business Nortel does, the Enterprise business will be sold.
That’s what happened with UMTS with 10% market share, sold to Alcatel.
July 1st, 2007 at 1:06 am
Apple
A few incorrect assumptions on your part
1)Mike Z did not fail to grow Nortel’s Enterprise business in the event that it did not acquire Avaya,as the asking price may have been higher than he would have agreed upon.
2)Nortel’s market share is 12 percent within North America,on a global scale Nortel’s Enterprise business represents more than 25 percent of their annual revenues,so it will not be sold.
3) Nortel’s former UMTS business had just 6 percent market share not 10 percent as you suggested.
reread the paragraph below more carefully before making irresponsible comments regarding Nortel’s Enterprise business.