I had a chance to talk this afternoon with Tony Shen, co-CEO of Aastra, about the company's acquisition of Ericsson's PBX business, and I also chatted with Allan Sulkin about the deal, and I came away from the two conversations believing that this acquisition was about Aastra picking up a good product line with a strong international play--at a bargain price.
I had a chance to talk this afternoon with Tony Shen, co-CEO of Aastra, about the company's acquisition of Ericsson's PBX business, and I also chatted with Allan Sulkin about the deal, and I came away from the two conversations believing that this acquisition was about Aastra picking up a good product line with a strong international play--at a bargain price.Tony Shen emphasized Ericsson's "big footprint" in Europe, but also its ability to "bootstrap us [Aastra] out" into Central and Eastern Europe, the Middle East and parts of Asia-Pacific--developing markets that are much more up for grabs than the rapidly maturing and consolidating North American market.
Shen conceded that Ericsson's presence in North America is "really small," but he stressed that the company would continue to support Ericsson's installed base here. Shen also insisted that Aastra is "in it for the long haul" with Clearspan, the large-enterprise IP softswitch it's selling as a result of its partnership with Broadsoft.
Tony Shen also stressed that Ericsson's enterprise-scale MX-ONE platform is "very complementary" with Aastra's strength in the small-to-medium-sized market.
Allan Sulkin also focused on the installed Ericsson base when I talked with him. He noted the "big installed base" in Europe and the Middle East, and pointed out that Ericsson's MX-ONE architecture preserves the distributed architecture based on Line Interface Modules (LIMs) that have been used for literally decades, making Ericsson one of the most cost-effective systems to migrate gradually to IP.
"Theoretically, anything that went in since the '80s is migratable," Sulkin said. "If they keep that base, for what they paid for the company, it's a good value."
Tony Shen confirmed that Aastra paid $103 million for Ericsson's PBX business. Sulkin said that even if Ericsson didn't have the strong international play, and if Aastra had only "bought the company to milk it by selling parts to the base," that might still have been a reasonable deal for Aastra.
When I asked Allan if he thought Aastra would adopt the MX-ONE as its flagship IP-PBX, he said, "If they're smart they will"--a decided contrast to Tony Shen's position on the product lines.
"The Intecom base has nowhere to migrate, so they might as well migrate to Ericsson," Sulkin said.
The biggest challenge for the merged companies--which Sulkin says account for just a combined 1.5% of the North American market share--is distribution. Here in North America, Ericsson sold off its direct channel a few years back, and Aastra has also been selling Intecom products through indirect channels. Tony Shen said Ericsson's go-to-market model in the targeted developing markets has been successful with an indirect channel.
