Given Nortel’s on the record that it’s interested in making an acquisition, there’s no lack of speculation about who it could buy.
The most recent scenario is Nortel hooking up with 3Com and Polycom to become a stronger competitor to Cisco in the enterprise market. Sramana Mitra writes that combining three “dwarves” would “create more efficient industry dynamics, whereby, rather than also having to compete amongst each other, they can focus their combined energy on competing with Cisco.”
“It would also create a larger entity (although still only one-third the size of Cisco) that has product offerings in most of the important segments on the networking market, from Carriers, to Enterprise, to SME. The missing pieces need to be brought together from the other dwarfs, some of which we will explore this week.”
So which dwarf would Nortel be? Dopey? Sorry, couldn’t resist.
Seriously, I could envision an alliance but not acquisitions. 3Com likely thinks they’re worth more than they really are and would be too expensive. Polycom is a stronger company and I can’t imagine that they would want to shackle themselves to the current boat-anchor version of Nortel. I don’t know what Polycom would have to gain.
Danno
3com – Bad idea. Tons of product overlap in low-to-mid end enterprise and SMB. Months of confusion as business, ordering, and support processes are integrated. Only conceivable plus is that we get 4 or 5 more points of market-share in the LAN market.
Polycom – Better idea. Cool, flashy products that complement Nortel’s enterprise stuff. Many sales and support processes already integrated.
Their equipment is also relied on by a number of NT’s competitors. For example, they just bought Spectralink, who makes WiFi handsets for half the industry. I’d love to dedicate all that Spectralink R+D directly to solid Nortel integration and a tight SIP stack on a WiFi handset
James
I agree with Danno, Polycom is a better choice for Nortel, 3Com can not bring any new things to Nortel, and it is difficult to integrate its H3C which operates in China. Never make M&A for M&A in any circumstances, especially when stock price is so low, I do not think it is the right time to make M&A for Nortel, scale is not everything for a company, Nortel has good products, but needs to improve its operating efficiency to turn the company profitable.
Nortel-3Com-Polycom?
Given Nortel’s on the record that it’s interested in making an acquisition, there’s no lack of speculation about who it could buy.
The most recent scenario is Nortel hooking up with 3Com and Polycom to become a stronger competitor to Cisco in the enterprise market. Sramana Mitra writes that combining three “dwarves” would
“create more efficient industry dynamics, whereby, rather than also having to compete amongst each other, they can focus their combined energy on competing with Cisco.”
“It would also create a larger entity (although still only one-third the size of Cisco) that has product offerings in most of the important segments on the networking market, from Carriers, to Enterprise, to SME. The missing pieces need to be brought together from the other dwarfs, some of which we will explore this week.”