It looks like the Nortel saga is finally drawing to a close and current Nortel customers can now move to new direction with greater clarity.

For those of you not aware, Nortel filed for bankruptcy in January 2009. All of Nortel’s business units went up for sale, almost all having now been sold.

The enterprise unit was sold to Avaya in Sept 2009 with the transaction closing on December 18th, 2009. At that time Avaya promised a new road map to be delivered on January 19th, 2010. The focus of this post is the Avaya small / mid market product line specifically.

I will address the enterprise Avaya Aura strategy in a separate post. Although many of the specifics are somewhat vague, the overall product direction is not.

The Nortel BCM 50, BCM 200, BCM 400, BCM 50 and Norstar will converge / morph into the Avaya IP Office product line some time in 2011. The Norstar and BCM are brands I have personally grown quite comfortable with having sold many Norstar’s and BCM’s over the last 20 years while at Digitcom.ca (although we switched to Avaya in 2005 as our primary product line).

It’s kind of sad to see them go. It’s not all bad news though. Nortel sold millions of handsets over the last many decades. Avaya’s intention is to take a best of breed approach with respect to product development moving forward incorporating the best of Nortel’s BCM and adding that level of functionality into the Avaya IP Office product line.

There will, eventually, be support for some of the Nortel handsets on the Avaya product line although that isn’t expected for some time, and the models of phones to be supported not clear either. Some tentative dates appear to be early 2011 although the specifics of what handsets, how, when, how much remain unclear.

The other bright spot with regards to Avaya’s SMB strategy is the continuation of the former Nortel SCS product line. Nortel launched SCS in February 2009 after they filed for bankruptcy protection, and Avaya intends to continue development and sales of SCS. SCS was formerly known as Pingtel which Nortel acquired in August 2008.

You can read the old Nortel press release here. In search of greater clarity on the Norstar and BCM product direction I went in search of answers to a series of questions.

These questions included: When will the M and T series sets be supported ? Will all M and T series sets be supported ? Will the i2000 series work ? How will they be supported on IP Office ? Will the module be the same price ? Will Nortel’s wireless solutions be supported on IP Office ? If so, how ? Will hot desking work on IP Office if using an M and T series set ? What version of IP Office will support the sets ? What does it mean that you can use Nortel element manager to program an IP Office ? Is all functionality maintained ?

The response I received to the above list of questions was as follows: It is going to take some time for engineering to investigate all the bits and pieces to see what can and cannot be supported. In all fairness, this is a major acquisition that just closed 4 weeks ago and the nature of these questions are quite granular.

It will take some time to provide a clearer response of what, when, how, how much … I’ve sat through hours of Avaya presentations in the last 7 days and am “copy and pasting” verbatim some questions / answers from those presentations: Question: What was the rationale to make the IP Office the platform of the future and the model to support BCM and Norstar features as opposed to the opposite Answer: We have multiple generations of SMB products and have made multiple acquisitions in the past.

The way to give the partner a competitive edge, every time we made an acquisition or changed to a next generation platform we had to make sure that the channel partner was able to retain the relationship with the customer. As a result the IP Office has been the platform we converged and we have a very good process of doing so.

That includes Legend, Partner, Merlin, Ingeral 5, where every time the phones, features, type of management and more, has been converged to IP Office. It protects the investment of the install base. It would be easier to converge to BCM and Norstar on IP Office then the reverse.

There was a question with regards to the Nortel sets that will eventually be supported on the IP Office. The response was as follows: With regards to the sets, we’re currently investigating the T series sets. Some of the other ones with regards to the mobility are being considered, and some of the IP sets are being considered.

The specific models are under investigation. I would look to see how things are being supported when we migrate Partner into IP Office, there will be almost an analagous activity. That’s where we are. With regards to the mobility, the interface is very similar to the T series interface so that is the consideration we have right now.

So I can’t guarantee that we will be there but clearly the mobility offering is very profitable for everyone so that’s something we will have to get our head around really quickly.

Overall, there appear to be many unanswered questions. The product direction is clearer though. Norstar and BCM are gone. Avaya has committed to hardware and software support until 2017, however, the platforms themselves are dead.

There will / might eventually be some investment protection for the handsets although which ones, how, how much still remain unclear.

Did you like this post ? TheTelecomBlog.com publishes daily news, editorial, thoughts, and controversial opinion – you can subscribe by: RSS (click here), or email (click here).

He writes that early indications suggest Avaya has a good handle on folding Nortel’s enterprise unit into the fold, as well as the market forces at play. “Now customers and dealers have to buy into the strategy.”

Nortel – Official Site
Reliable Info – 100% Transparent
Visit the Official Site Now!

Being a curious type, I clicked on the ad, and discovered it’s a Web site (next.nortel.com) for Nortel’s enterprise solutions business, which has been acquired by Avaya.

Some of the headlines are eye-catching:

“Your Nortel Investment is Safe”
“There’s Never Been a Better Time to Buy”

There’s also links to Nortel’s Buzzboard blog, Twitter and its Facebook Page. Clearly, some people have been doing a lot of work preparing for life post-Nortel.

David Downing, Nortel’s General Manager for Communications Solutions, and IDC Research Director Abner Germanow will host a virtual roundtable to discuss the Avaya deal as well as talk about Nortel’s IT networking strategies and technologies.

To register for the Webinar, click here.

The restructuring should not be a surprise given the overlap between what Avaya and Nortel do in the enterprise market. As well, Avaya and Nortel also have their own reseller networks, which will be consolidated.

Nortel’s enterprise business had 7,800 employees, according to court documents filed in July. But the business was already being restructured with 1,000 jobs being cut.

According to the Ottawa Citizen, Avaya will not be cutting any Nortel positions in Europe or Washington

So, what’s taking so long? Are Avaya and Siemens continuing to bid even as the price keeps going higher? Are legal issues – Verizon’s protest about Avaya winning the deal – coming into play?

It looks like it’s going to be a long weekend for everyone involved, and we may not discover the eventual winner until the buyer decides to disclose the news.

For more, check out the Ottawa Citizen.

This post is entirely speculative as I have no better knowledge then any other reader about the enterprise sale, but here are my thoughts as to the sequence of events leading up to yesterday’s delay in the Nortel asset sale.

I’m really just having fun with this. It’s 9 a.m. on Saturday morning and I’m now off for the week-end.

No, I don’t have a crystal ball but I wish that I did. I am looking at the next generation of telecom, and wondering where this rapidly evolving market is headed.  I’ve been in the telecom business for 19 years – it’s almost like a 6th sense (although my sense is sometimes off).

With that in mind, let me offer my take of where the enterprise telecom market is going in the short and long term. Keep I mind I’m writing this post at a time when the customer premise-based equipment (CPE) market is at a crossroads.

Nortel’s bankruptcy and uncertain future has left many current and prospective customers wondering where to take their new telecom equipment business. Does it make sense for an existing Nortel customer to spend money on upgrading Nortel equipment, or, as my father explained in my early years in business, “never throw good money after bad”.

In other words, many of my clients are now throwing out their older Nortel gear in favor of new hardware, rather then spend dollars on upgrading their older Nortel systems.

Either way, Nortel is still a large player in the market but their absence at the table has left a void filled by their competitors.  Of course, over the near term this issue will be resolved.

And what will follow in the enterprise telecom market?

In the short term, many customers looking for CPE will gravitate toward some of the larger players such as Cisco, Avaya, Mitel, and NEC. I believe these players will continue to shuffle market share around ever so slightly. There are also some smaller players in the CPE market – notably ShorTel,  Asterisk / Digium, and Microsoft.

Some thoughts on some of these players:

- Microsoft hasn’t become the competitive threat I suspected they might – the enterprise market hasn’t adopted Microsoft’s OCS or Response Point telecom equipment – yet.

- Cisco is obviously making headway into the larger space but their SMB products haven’t been that widely adopted – yet.

- Asterisk, although a threat, isn’t taken that seriously within the enterprise market – yet.  It seems that customers need a “manufacturer” to scream at!

The other spectrum of the enterprise equipment space is the looming threat of Hosted VoIP, Google, and Skype, which is hanging over the CPE vendors like a very dark cloud.

The world is gravitating toward an IP-centric model, and the “cloud” at a rapid pace. Over the next few years, there will a gradual adoption of cloud telephony. In time, the technology will be widely adopted as the technology evolves and becomes more reliable.

As a CPE vendor, I view the threat that companies such as Google and Skype hold over the CPE market with some fear. Not today, but certainly in the future.  Cloud telephony represents a paradigm shift – something to be watched, and shortly, feared.  I am going to label this next generation of telephony as “Telcom 2.0”.

What does Telecom 2.0 look like ?

Speaking along the lines of paradigm shift, the next generation of phone systems will be a highly intelligent server, much as they are now. The talk/communicate medium will not necessarily be the bulky phone on your desk, but rather a variety of end point devices.

Skype, Google, Facebook, iPhone, Blackberry – these all-in-one appliances will be the talk/communicate path, and the server at the back end will bridge these technologies together.  And with the recent news of Silver Lakes (Avaya’s parent company) being part of an investment group buying a 65% stake in Skype, it will now bring together the old and newer emerging technologies.

In the meantime, I’m now watching the race for Nortel’s enterprise asset – the winner will change the landscape considerably.

What do you think? Where is Telecom 2.0 heading?

Wiener, the president of Toronto-based Digitcom and an Avaya reseller, asked me how he could get the word out, so I suggested he contact a number of bloggers and telecom reporters.

When he asked about issuing a press release, I told him it probably wasn’t worth the money given no one reads press releases any more.

Fortunately, Jeff didn’t take my advice, and he issued a press release through the CNW Group that generated a flurry of media and blog coverage.

My hat’s off to Jeff, who has taught me an important lesson about how old school communications tool can be effective as long as you’ve got an interesting story to tell.

Joel Hackney, who heads up the enterprise business (at least for now given Mike Z. has left the house) said in a Webcast today that 1,000 enterprise jobs will be slashed by the end of Q3 so the business can “meet our target of becoming profitable by Q4″.

None of the 1,500 employees within Nortel Government Services will be affect, which means the 1,000 cuts will come from the 6,400 employees within the rest of the enterprise business.