More Consolidation Scenarios
I've been communicating with Allan Sulkin on the ongoing topic of vendor consolidation/spinoffs (inspired by but not directly related to today's Motorola announcement). Here are his latest thoughts:
AT&T/Lucent/Avaya and Siemens started the trend. Ericsson recently followed. Look for Nortel and Alcatel-Lucent to follow suit by spinning of their enterprise operations; Nortel could then hook up with Motorola's carrier business. If--as one rumor has it--Nortel were to acquire Siemens Enterprise and they are both spun off, it would be the largest enterprise communications business based on revenues. Nortel may not need all of the Siemens products, but its global sales/service operations are sorely needed to ensure distributor loyalty. As I have been saying for several years industry consolidation is inevitable. Only the strong will survive to be the market leaders capable of battling Microsoft (and Google?) for the future of controlling business communications.Indications are that the Siemens outcome may be decided within the next month or two, because the Enterprise unit would have to be absorbed back into Siemens AG by end of its fiscal year in September if a buyer is not found very soon.
That last point relates to German tax and other laws, Allan points out. He also noted that Forbes.com reports Cerberus is the most likely private equity buyer for Siemens Enterprise.
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