Why the Nortel-Avaya Deal is a Bad Idea

I worked for Nortel Government Solutions Defense Sector and was very successful with a raise and a bonus given to me just before the merger in December 2009. Avaya came in and despite a profitable showing of the Nortel SI contracts, Avaya got greedy and to lower their rates, layed off 45% of the work force, including BD, Capture, VPs of Operations, Pricing and Contracts. Well, guess what, now that virtually nobody is there, that area of the business is in question. Luckily I landed a new job at a much better company than Avaya with a nice raise and better benefits all the while with Avaya paying me severance. Thanks Avaya for getting me to the next level in my career by laying me off! LOL! Good luck on getting that sector of the business to work!

Destroy value? Then Nortel has much expertise to offer...

In other news, Oracle is buying Sun long before it goes bellyup - with shareholder approval, mind you - and:

"IBM may walk away from this week's Hot Chips conference with bragging rights to having the most muscular microprocessor with its Power7. The eight-core, 45nm chip is expected to set new watermarks in parallelism and cache that could translate into leading-edge performance for servers using it."

It looks like evolution is still happening elsewhere in technology, in contrast to Nortel's contention that CDMA will still be around for a while and them patents will generate some serious cash well into 2012, so no worries.

Based on previous history.. it's probably not a bad idea to believe that the opposite of Nortel's contentions will come to pass.. bet against their paradigm, and you'll probably come out a winner.

Avaya and Siemens/Gores must do something or become increasingly marginalized as Cisco and Microsoft take over the market. Bulking up by taking on the Nortel Enterprise product base and selected elements of the product portfolio and distribution structure make good sense. Throwing good money after bad? I don't think so. The world is a large place and there is plenty of room for a strong #3 to Cisco and Microsoft. Whether the #3 turns out to be A or S... that remains to be seen.

Don't worry. Siemens will win. Hackney has already negotiated his new job with them and he will assure they get the favored bid...

What's your source?

Really? Do tell....

I guess we are not going to get an answer. Too bad. Maybe it's just conjecture.

good luck again... good luck all... don't let them steal your shares, buy all you can

now you knock McGuinty like a trailer house polititian who knocks anyone in power

McGuinty was first to stand up in shock criticizing Nortel for cutting employee severances under bankruptcy protection to appease big business creditors

do you always bite the hand that fees you? He was on the employees side!

If you want to laugh at political evil, look at mean spirited Harris or Rae the socialist who robbed the public with legalized gambling, we have awesome leaders in place today with him and our PM as well as in the US. These are great times for ethical leadership we should be thankful for.

McGuinea is a cowardly cow towing Anyone But Canadian Politician who has destroyed ontario inside and out bringing in far too many immigrants who go on social aassistance and then vote for him.
He and Flaherty flatly denied any assistance for current nortel pensioners.
Pulled the rug right from out under them with that stupid half smirk he has.
The americans are taking of their ex nortel pensioners.
If you don't work as an assembler at GM or Chrysler don't expect McGuinea to be interested. And yes I submit rae is even worse than mcguinea. Ray has direct sympathy
and aspirations to help known terrorists. But we might as well give the NDP a shot. At least their social assistance is good. Might as well put everyone in ontario on the welfare roll. While we are at it let's try for some refugee cash.
Get educated before you comment.

Just want to say Good Luck to all the current Nortel Employees awaiting their fate in both wireless and enterprise. Just remember at election time Neither McGuinea or Harpo were there for you when it mattered. I guess your only choice is to vote NDP.
Don't forget who wasn't there when it mattered.

I may be bending the question a bit...forgive me. But I do believe one should look at the possible "assimilation" well beyond the suitor and target. I pose this question.

How about from the enterprise customer point of view?
For 25 years you were either Nortel or Avaya(Lucent/ATT given your vintage). You placed your career in one hand or the other. And now....if you were a NT shop...you are being asked to change colors to the other vendor you have pitted your rfps, mindshare against for maybe...your whole voice career. That's a tough one. Who do you beleive benefits? Especially in this new "logical", network based, distributed telephony world? Maybe the LAN/WAN incumbent? Not being a commercial either way.
I think Cisco would benefit the most if it does happen. The POE ports lights are green and ready to be plugged in to. Some people that haven't seen the tenacity of the decade + old Nortel/Avaya dance may not understand that. Again....end customers with PO's have a great deal to do with the outcome of M&A.
Just my humble opinion.
I hope everyone is well

Joe ODonnell

M&A success depends upon management ability - the acquirer and the acquiree to integrate, increase value and retain customers.

Avaya is bleeding. Nortel management sandbagging is well known. This will go south. For that matter anybody buying Nortel and keeping the laggard dinosaur managers is a losing proposition.

Small acquisitions are usually successful. Swallowing Nortel is going to cause hiccups since its large, complex and inefficient which are hard to chew on.

Nortel management could never integrate anything they acquired to make it a success. It is a guarantee that would never be able to integrate into someone else to make it a success either.

Here's a poll for you:

How many people are irritated when people post comments that have Zero to do with Mark's stated topic ???? And, how about if on top of that, they are reiterations of posts from other threads??

Awe Shucks GP,
Sorry to irritate you.

Have a mojito it's quittin' time

http://www.learnmyself.com/personality.asp?p=ta...

THE ME Blog Articles question:

Question: What is the quality of the reporting and articles provided on the Mark Evans AAN website?

The articles are great
4 8%
The one stop shop for Nortel progress in this time in her history is a great service tot he readership
9 17%
Take it or leave it.
7 13%
Do not like the articles
2 4%
articles are fine but the commentary of the posters in the comment section takes away from the experience
15 28%
The articles are great and the commentary is a great addition to the service.
7 13%
I just like using it to check out the articles on Nortel
5 9%
Other
4 8%

53 responses in 3 days

still active...
Vote at the link....

Here is your question: "What is the quality of the reporting and articles provided on the Mark Evans AAN website?"
Curious choice of answers you have provided. Some are normal others are not.

Specifically these :
"articles are fine but the commentary of the posters in the comment section takes away from the experience"
"The articles are great and the commentary is a great addition to the service."

Nice trick to add some lame precursor like the articles are fine (but), or the articles are great (and) ..
Tacking on anything to do with commentary has Zero to do with your question. Read your question again. Articles and reporting. Nice try to bait and switch but no one is fooled.

Take your reiterated cooked and crooked poll and shove it. No one believes you.

Readers are not as stupid as you to believe this BS poll and its BS votes by the majority of multi ID multi vote happy talk pumpers who have always been dead wrong.

AAN remains the most authoritative and proven voice on Nortel, and everyone knows it.

The pumpers have endlessly proven to mislead with intent, lie, fabricate, with a die hard fraud trait that is perfectly reflected in this lame poll you created to reiterate here. Like anyone cares or believes it. What horsefeathers, seek help, you're sick.

Poll Results
Question: In Your humble opinion, who holds the most blame for the downfall of the Canadian Giant, Nortel?


The Board(s) of Directors 47 28%
The last 4 CEOs 32 19%
The Employees below VP 1 1%
The VP's and above 15 9%
Mike Z 37 22%
Frank D 11 7%
Bill O 5 3%
John R 16 10%
The Economy 2 1%

166 Responses in 9 days.

http://www.learnmyself.com/personality.asp?p=po...

There was no offered button to press 'other' and offer your opinion outisde of the choices, sorry about that, but I thought that is what is this blog was for...

Makes sense to me.
The board of directors did everything but direct.
They sat with their thumbs up their asses nodding like yes men to whomever
was the CEO at any given time.
Sweet Job.

frauds like you

Question: Who Will win the auction for the Nortel Enterprise Unit?


Avaya 130 28%
Alcatel 9 2%
IBM 26 6%
HP 19 4%
DELL 3 1%
Microsoft 23 5%
MITEL 38 8%
Seimens Enterprise Networks 171 36%
APPLE 6 1%
aastra 1 0%
CISCO 13 3%
Shared Technologies 3 1%
MatlinPatterson 5 0%
Ridculous 16
472 Responses in 28 days.

Vote yourself
http://www.learnmyself.com/personality.asp?p=ta...
It's not over until September, just around the corner.

It appears the readship is opinionated about the opinionators.... >160 votes

Total positive view of top commenters 45 26%
Total negative view of top commenters 80 47%
Entertaining to read the comments 47 27%

Positive They are correct in their judgement and objective hold the company accountable in the forum provided. 24 14%

Negative They are harsh, over the top and write unfairly about management 13 8%
Negative They are too harsh and over the top when it comes to employees who stayed or still remain. 31 18%

Postive They have been spot in analysis and use the blog precisely as it is intended. They should be commended for their energy. 17 10%

Middle Not that simple, it's easy to throw stones in either direction, but it is entertaining nonetheless to read their opinions 47 28%

Positive They are great, I'd love to work with them. I'd let them run my buisiness. 4 2%
Negative If they were former or present Nortel employees it is good the company saved money by laying them off. 18 11%

Negative Other 14 8%

"There was no offered button to press 'other' and offer your opinion outside of the choices, sorry about that, but I thought that is what is this blog was for..." - Your comment from one poll

Results from a different poll:
Negative- Other 14 8% ????????????????????

You are so obvious its actually funny, but still pathetic. Spin, Spin, Spin the facts, just like Z & Company and their oblivious BoD.

exactly, the company has thankfully died yet the undying fraud relentlessly perseveres for some strange reason... at least not for much longer

Any company "carrying" Nortel management on the payroll would fail, merger or no merger.......

yes, LOL, there are these proverbial "costs" to contend with

telecom is in the outhouse as other companies in decline (Avaya / Ericsson) utilize the same desperate risks Nortel tried... the business disciplines must lack emergency measures among other things

Given the debt/equity ratio of private equity companies, all deals are now for hoarding cash irrespective of value creation. My guess is new R&D will be cut off for the most part by private equity and Nortel Enterprise will be squeezed like a turnip. In another year or so additional cash can be used to buy up a company with more advanced R&D. Private equity companies have already figured out that spending is not coming back anytime soon so the strategy will be one of low investment and a run for cash in the short term. Although the cost of capital is still low, a lot of private equity companies used debt to leverage their purchases. The banks are now starting to call in those loans as a result of the commercial real estate blowup on their portfolios. The biggest margin call on the economy has yet to come.

Absolutely Dead On.
Cash is King ... and we are talking private equity strategy here, as you have detailed.
That's why the arguments put forth in the article , while they may have merit regarding general M & A's , also may be way off base in this particular situation

Oddly, enough...another forgotten M&A was Northern Telecom and Bay Networks. That obviously didn't work and the Avaya deal would be another attempt of a voice company trying to run/be a data company. Hmmmmm.

NT + Bay Networks didn't work for many of the generic reasons in the No Jitter post. Roth buying Bay Networks was to stroke his ego, once acquired Roth and the rest of NT management had no idea what to do with it. If your acquired one expects the buying company to have some sort of master plan for their new asset. There was no plan for Bay Networks. Nortel just took a right hand turn into a brick wall.

There is also no guarantee that the management at Avaya is any better than what Nortel has.

Nortel had no clue what to do with Bay #2 to Cisco. Can only imagine if this had not happened, where would Bay be today? Would Cisco have had such a good run since Nortel took out #2 for them.

Bay Networks wouldn't have made it on it's own. They couldn't afford to invest at the level needed to compete with Cisco. There was a lot of "promise" in the Wellfleet Synoptics merger, just like there was a lot of promise in the Bay Networks Nortel merger. In both cases there was a lack of strategic vision and to much focus on process and internal politics.

At one point Wellfleet had 50% market share in routing, then Bay Networks happened and they lost all their momentum.

Eric sites many reasons why he believes, as the title suggests, that the take over between Avaya - Nortel will fail. Although well written, and arguments well presented, I believe Eric is way off base. 3 weeks ago I also questioned the take over, further research has now proven otherwise.

I was so bothered by Eric's post that I actually bothered to write a rebuttal, point by point, on my own blog. You can read my blog posting here:

http://www.thetelecomblog.com/2009/08/20/avaya-...

Eric sites many reasons why he believes...
-------------------------------------------------
re
BTW- it wasn't Eric's reasons or Eric's post. He was passing on an opinion made by an anonymous consultant if I remember correctly.

@GoProto - Yes. You are right. I should have picked up on that. I added an addendum to the bottom of the post. Thanks for the clarification.

Jeff Wiener
TheTelecomBlog.com

You are quite welcome.

So, everythings changed for the better, and much of it in the last three weeks alone.

Avaya has been promising channel changes for the last 8 years
Avaya 2009 is not the same as Avaya 2007
Avaya WILL become a dealer centric organization within 3 years
the last 6 months have been outstanding

...resulting in the increased use of capital letters and exclamation points. How many back slaps/high fives do they average per day over there?

Since 2001 Nortel promised several major turnarounds within "12-18 months"; such abstract timelines have proven to complex for me to understand. I'll stick to numbers I can see, put my hands around and, heck, maybe give a biggole bear hug, even!

Krapf suggests poor strategic and tactical planning – conjecture really. Nothing backing this claim up !

I.e. "Doubters, give me mumbers, please", am I right?

Many of us here at AAN had nothing to support our claim that NTs filing Ch 11 must surely be imminent due to Z, either. Still don't. Before he left Z said NT revenues were up.

I have heard the commenters refer to themselves as "prophets"....

So it made me ask the question....
if this band of truly (self proclaimed) 'wise men' commenting on this blog are so smart, they're telling us they prophesied the end...

Then they must have moved thier jobs form NT and did not work there after 2000
They made no investments after July 2000 in Nortel and sold immediately.

then I'd have to ask, if you invested and were so smart, you must faboulously wealthy as NT was worth over 300B at one point....

What are you doing wasting your time on this blog for?

I suppose I could go over to youtube, critique some guitar hero's video, and await fans' (i.e. Believers) 100% predictable retorts...

"Can YOU play guitar. NO! So SHUT UP (expletive). Your (sic) a $#@$. X is God. Y has had more groupies/sold more records then (sic) you ever will. $#% looser (sic) "

...but I feel its vital to keep the infamous legacy of Nortel alive here, so that the blind, the Believers and yesterday's expert-rock-fans-turned-working-Joes who find themselves in similar debacles can perhaps predict and form their futures by selling out accordingly - without compassion or remorse. Looking out for number one, like them rock stars and CEOs do.

EDIT: I don't kow that serious prophets go around calling themselves "wise men" as often and as easily as their idolators do.

The accuracy and frequency of experts' and scholars' predictions may be referred to as "common sense".

The accuracy and frequency of experts' and scholars' predictions may be referred to as "common sense".

yes, and visionaries might write it down to see where the dots connect, call it research, and reveal the obvious which may be just a longer way of saying what you did =)

the obvious with Nortel has become overwhelming

Avaya shouldn't care about the technology overlaps and the ressources (human and products) it will need to throw away.

The math should be really simple: provided a cost effective migration is possible, does the enterprise voice customer base of Nortel worth the money of the acquisition ?

The rest is noise and the wellfare of Nortel employees is of no concern to Avaya.

It seems Avaya and Nortel each have 75 million or more voice customers in their installed base and Nortel is over that number in data ports.... for the enterprise...

That's a pretty big base to sell into for many years.

"big"? oh peachy! wonderful news, is this true! and "many years"! hooray! ogh joy to the happy talk and revalations be known, Long live Nortel and Cisco eat your heart out! How can we doubt you! LOL...

heh... amazing isn't it.... once then I couldn't fathom anyone being like Ted Bundy either...

I'm shocked monkeys can type, once then monkeys aren't frauds, and I consider frauds more dangerous than monkeys with a keyboard, if anyone listened to them that is...

I must admit that I didn't follow the argument in the article. As far as I could see it said:

1. 66% of mergers fail
2. This would be a merger
Therefore
3. This would fail

That doesn't seem to me to be very sound. I'm not saying that this particular merger would succeed or fail, just that the argument sounds pretty poor.

Agreed, poor rationale. Besides
It's Not a merger, it's an acquisition

"It's Not a merger, it's an acquisition"

how can they merge if Nortel is certifiably dead?

merging product lines has nothing to do with this, who said merger, shame on them! merger ... how dare they!

So many new ideas today arguing this articles merits too =)

consider what he said
1.) 2/3rds of mergers tank (let alone involving Nortel)
2.) therefore the odds are it will fail


If you feel that part of the argument is poor, consider the rest:

Why It's Likely to Fail, The Avaya-Nortel deal is a bad idea. A really bad idea

the failure rate for these deals is roughly 66%. That is, two-thirds of M&A fail to create any value, or actually destroy value. Accounting Professor at Wharton's School of Business, who estimates the M&A failure rate is somewhere between 50%-80%.

Companies overpaid and have too much leverage--crushed by debt & then the bloodletting begins (Note Ercssons 61% decline too as they seeks 300M EDC welfare as they axe outside their backyard, and we have witnessed Nortel's desperation before folding)

Poor strategic and tactical planning--once the deal is done, the executives can't decide what to do next

Lack of objective and realistic thinking--the acquiring CEO loves the idea and must have the deal no matter what the facts say

Strategically ill-conceived--even when the entire industry doesn't see the value, somehow the buyer knows something everyone else doesn't


I don't believe there is any way Avaya will get the people or speed questions right. Absolutely no way.

I also believe they just don't have the resources, expertise, experience, or stamina to pull off the Nortel merger. We're talking about Avaya, a company so burdened by debt that they apparently are furloughing their sales people this year for two weeks. Their sales people, for heaven's sake.

" Lack of objective and realistic thinking--the acquiring CEO loves the idea and must have the deal no matter what the facts say"
-----------------------------------------------------------------
As Avaya is a privately held company, I am sure their CEO did not make the decision to make the deal because he just had to have it. Actually the statement above reminds me of Z's mentality- he and GEuniuses were always correct in their vision, because they just are, and damn the facts screaming around them. Ironically, one of Z's biggest mistakes I think was in not acquiring Avaya when he could have. Now, things have turned a 180.
In any case, it is an interesting article. It is definitely cautionary and seemingly with good cause although we don't know the specifics are correct. Only Avaya could explain why they think it's worth a shot.

I have been through Cisco CCNA training and have some hands on experience with configuring their routers. Their data fill is wayyyy too cumbersome and not intuitive. I can see Nortel offering a better router and greatly simplifying the MMI into a more user friendly and intuitive experience. with the right development, PLM (my background), marketing and sales I see a decent chance competing with Cisco in the enterprise market.
If HP bought Nortel Enterprise, I feel we could give Cisco a run for their money.
I get the impression Cisco deliberately makes router configuration complex as a job security measure.

Bahr, and I know who you are.. and btw Mark Hurd and the good people at HP will buy a tire company before they touch NT.

I enjoyed reading your blog piece on the NT site complaining about CSCO product placement on 24. What was your comment? Cringe was the word you used when you see the product placement. Actually pulling it up to refresh your memory... quote and link are below.

http://community.nortel.com/go/blogs/buzzboard/...

"No doubt, Cisco dominates the enterprise routing/switching space. But, do they risk loosing focus on their bread & butter business by pushing into the polar opposite - consumer networking? Ok, ok, maybe that's just sour grapes on my part. But I just can't stand Cisco commercials during my beloved Dallas Cowboy games... Lord please"

This commentary is flat out pathetic, and no CSCO is not losing focus.

Let's talk about your beloved Cowboys for a second. Did you enjoy seeing John Chambers and Jerry Jones on CNBC discussing how CSCO is "enabling" business process through the streamlined use of IP networking and digital media to enhance the fan experience in the new Cowboys stadium? Check out the link below...and do me a favor. Run over to Best Buy and purchase a Flip Video camera (Cisco product) www.flipvideo.com and shoot me some HD videos of your new Cowboys stadium running end to end CSCO.

http://www.cnbc.com/id/15840232?video=115568019...

More product placement here-

http://www.cnbc.com/id/32375230/site/14081545?_...

You comments in the NT blog, and your comments here are exactly the reasons why NT doesn't get it..and quite frankly you never did. Remember Neptune in SP? What are you guys doing with the Tasman acquisition? Bay was a disaster.

As for your router comments, network engineers all over the world are configuring, racking, running, and quite pleased with the reliability and functionality of CSCO products and services. Any decent CSCO trained engineer can cut and paste most of the pertinent commands to have core functionality in minutes. All of you over there in Richardson need to meet with your customers and listen to THEIR problems, and build something innovative. Design it. Build it. Have thought leadership in your customer base to sell it. Ship it. Deliver. Service it. Day and Night.

My friend you don't need to worry about your CCNA. Work on your resume.

Do you think the consumer seriously falls for these Cisco campaigns rand go out and buy Flip Video products thinking "Oh this is Cisco !" - NOT. Cisco has no Cisco consumer brand to this day. For Cisco, its more like buy it and let them run as is when it comes to consumer brands. Its more like Bank of Cisco.

I agree that Cisco isn't losing focus but then a company with little legacy costs to worry about has it a lot easier as well. Give it a few years..Huawei will be further along then as will Apple on the consumer side. A lot these markets are converging and the pressure to produce profits will only go up as many technology products will become commodities. In the long tail, we are now falling and eventually it'll be a race to the bottom.

to the contrary Cisco is a brand. when a customer starts to refer to routers as cisco its a brand. when it comes to new technology, people look at what cisco is doing.

cisco is all about marketing. they have some good technology but the way its branded, positioned and sold is one of the best in its peer group.

they are moving into the consumer space because that is the next story. Huawei makes s hit everybody knows that. they are only undercutting. so new markets are needed instead of competing in a consolidating market. aka Nortel.

I am not cisco just giving them the high marks they deserve. Which is the problem at Nortel. if you gave any competition high marks or showed how they are doing better, the response was not how shuld we counter it but more of arrogance and disbelief.

thats why onecompany makes 10 billion a quarter and the other stayed at 10 billion a year.

I am not who you think I am. In fact, I am not a cowboys fan at all.Nor am I a Texan.
I will agree to disagree with your position and leave it at that.

Fine.. if you are still at NT and your email still works, cut and paste my comments and send them to Jay Barta. Enjoy the day.

again HP...

if HP bout it they can give it a run for their money
how long have you pumped this under how many IDs

"I can see Nortel offering a better router "
hahaha this is hysterical, aside from Nortel being officially dead, you live in denial here too

Look at the demand for Cisco certified technicians even though you find their technology challenging, the market certainly doesn't. When is the last time you heard of Nortel certified demand... get the drift,,, Nortel is dead and what they garbage sale is too burdensome , it is over, shirley you can see this

How can we doubt your PLM marketing and sales backround with such claims like malicious complexity from Cisco painting the stage there is complexity to begin with... such horesefeathers

From an Enterprise management perspective, wouldn't you want want to control your costs by hiring the lowest cost network engineer? The more complex the datafill the higher the cost of the engineer because of the higher certifications.
Things like IP sub-addressing and other abstracts need not be so complicated. The complexity can be masked with the right MMI. All it takes is a little programming effort to mask those complexities.
Yes, I can do sub-network addressing but I am looking at the bigger picture. Make the product user friendly and technically superior and you will get market share.
All this is moot though. I do not see anyone interested in building on the talent Nortel has. All I see are opportunity vultures circling the dead carcass.

Nortel had the opportunity since Bay acquisition and never fulfill it..And the companies are not worried about lowest cost network engineers because Cisco is providing bunch of them, in fact they educate people in Cisco solutions from high school...

you know... I have no clue what you are talking aboout...

Nortel has been around this so many times that I'd be a millionaire if I got a $ every time this suggestion was made.

Cisco configuration is cumbersome and need to know what you are doing. Agreed. Thats why they created the entire CCNA program making it a success. Cisco config is standard so operations staff do not want to change to different ways of config. The industry has moved to copying Cisco so tough to move away. No other certification program even comes close to Cisco - Nortel, Juniper, Alcatel. Cisco is ubiquitous.

Some Nortel products are easy to configure but it depends upon how you look at it. From a customer angle its cumbersome 'coz they are used to Cisco. If you are PLM you should know this. Maybe have a chat with operations staff in your customers.

Righto. Searches incl. keywords "Microsoft" and "Cisco" return countless more career opportunities than "Nortel" and "Atari BASIC".

No company is more painfully aware than Nortel of what a disaster acquisitions usually turn out to be. in 2000, they were buying all sorts of junk. In some cases, no-one could remember why the company was bought by the time the deal closed... just some executive put together some nice ppts and then retired or left.

Picking at the carcass of Nortel is a bit different though. Prices expectations seem to modest, and there is some market share, products, people that have enough value to get a quick payoff .

Best move for Avaya now?

Pay the $100M penalty and run, don't walk... =)

I disagree that a Private Equity play is the best option for Nortel Enterprise at this time. Sure, they could resurrect the Bay Networks brand, but I think there needs to be some consolidation in this market for effective competition against Cisco and Microsoft, especially in the markets of Unified Communications and Collaboration.

HP would be an interesting play. HP used to be a very large Cisco reseller which brought HP substantial Services revenue. HP has Procurve, which will do around $750 Million in revenues this fiscal year. Nortel Enterprise will do around $1.5 Billion in revenues this year. There is overlap in the Data Networking segment, especially at the Edge Switch market, but Nortel is superior in the Data Center Core Switching market.

An HP acquisition gives them a number of different go-to-market strategies that can effectively compete, especially against Cisco who recently called out HP as a competitor.

HP could create differentiation and market advantage by packaging solutions across their various business units. For instance, Core Switching + Enterprise Servers + Enterprise Storage could be an attractive offer with a strong competitive position against Cisco. They could leverage their EDS group for outsourcing, systems integration and hosted/managed solutions for large accounts. Procurve + Nortel Voice + Microsoft Collaboration can address the changes that are happening with how we communicate and the role of young staff entering the job market.

HP has $13.5 Billion in cash, so this type of transaction would not deplete their cash much and they've had very good cash flow the past few quarters. Who knows if they will enter the auction, but there is some competitive advantages for them to consider.

I agree with your thoughts and know that HP has looked at nortel way back in the winter/spring timeframe. i don't think they liked what they saw and may wait until avaya swollows nortel and buy that entire entity in 18-36 months. Or, at least that's what avaya folks are thinking right now.

"HP would be an interesting play."

Look how many times have you reiterated HP
Have you seen any interest in HP to keep reiterating this? Let alone by the leader by a loing shot Cisco?
What HP for heavens sakes?

Enough HP already. It appears no one wants this increasingly tanking dog lacking credibility but total fools and for all the wrong reasons . This seems to be the message in the article whether you know better to disagree or not but I think the article is dead on.

No one has beat Cisco with this kind of a lead as Chambers said, and all the more power to this statement no matter who buys it now. Nice try with HP but forget it, where do you even hear mention of this but from your wet dreams.
.
As for "resurrecting the Bay brand"? My goodness you do have wild hopes and a vivid imagination to speculate so hopefully. HP? ... sorry to burst your bubble again but they are not even in the equation to make mention of... why not the Roman Catholic Church for that matter

Everything they garbage sale is increasingly losing money as a greater eye opener. Never mind the anemic vultures betting on the poison to revive their appetite.

Nortel is not the only one making really bad business decisions, there was NSN and now Ericsson, as Avaya also eyes Nortel's silk hat on a pig corpse. I also fear RIM is interested in the Canadian patents solely because they are Canadian. Hardly a prized treasure anyone could live without like development time stops right there.

Good or bad, Avaya is are on the mules back hook for $475M and a huge penalty if they get cold feet.

Again, what are business divisions losing money really worth.

Like NSN or selling WiMax, others primary objectives seem to focusing on expanding their footprint during consolidating with greater competition, slimmer margins, and fewer customers that make it all the greater of a high risk, and in Nortel's case, betting on a losing horse.

At least they did something right, sell assets at a premium. There must have been bonuses for this =)

yep just as I said before even reading this article:

"Strategically ill-conceived--even when the entire industry doesn't see the value, somehow the buyer knows something everyone else doesn't"

"it's more than expanding market share or global footprint with Nortel's embedded base. "

"I don't believe there is any way Avaya will get the people or speed questions right. Absolutely no way. "

__________________________


...and Avaya giving their business development people a 2 week break for costs sake, lest we forget Nortel's reiterated costs woes before folding

It also isn't only Avaya who suffers as this article states but also Ericsson with a 61% recent decline recently, accompanied by layoffs outside their own backyard first as they guarantee employment in the acquisition for 12 months.

Are these desperate gambles as we witnessed how desperate gambles fared for Nortanic. Who would want to contract Nortel's contagious woes? Avaya? Ericsson?

Why did the more successful Cisco's refrain like the plague, like other high profile players, if the deal was so hot. This is like being persuaded that a thousand flies just can't possibly be wrong as Nortel lacking so much credibility, striving to preserve value to liquidating their rapidly declining units ASAP. Buyer beware, haste makes waste =)

NT CDMA is a highly sucessful and profitable business - the major revenue and profit engine for NT. Not everything NT is bad. You are just attacking everything NT. This doesn't make sense. You must have an axe to grind.