A commenter on my Unified Communications blog at Information Week (where I moonlight) made an interesting argument, drawing a parallel between Avaya now and Seagate Technologies in 2000, when it too was acquired by Silver Lake Partners. The basic argument is that if things go for Avaya the way they went for Seagate, Avaya's got a bright future ahead of it.
A commenter on my Unified Communications blog at Information Week (where I moonlight) made an interesting argument, drawing a parallel between Avaya now and Seagate Technologies in 2000, when it too was acquired by Silver Lake Partners. The basic argument is that if things go for Avaya the way they went for Seagate, Avaya's got a bright future ahead of it.One parallel this commenter leaves out is that David Roux, non-executive chairman of Avaya's board, held a similar position with Seagate.
And here's an interesting quote from a Fortune magazine article on Silver Lake from 2003. The piece quotes Seagate's then-CEO (and still chairman) Steve Luczo:
"If you're behind in technology, the answer isn't that you cut expenses or capital. It's that you add expenses in the form of R&D and add capital. This isn't intuitive to the guys buying bottling plants and whatnot," [Luczo said].
The self-described "tech weenies" at Silver Lake got it right away.
The self-described "tech weenies" at Silver Lake got it right away.
To clarify, I read that phrase "behind in technology" to mean, "behind in the technology market", not to mean that the technology itself is lagging. Clearly Avaya's technology is the cream of the crop. But they're unquestionably facing tough times. As Luczo's quote suggests, the impulse is always to cut costs, and as I noted earlier today, there may be factors at work with Avaya that increase that pressure. Even "tech weenies" who understand the importance of R&D can only hold out so long against this kind of current.
But if this commenter at Information Week is right in his/her analysis, at least Avaya's got an ownership team that may be up to the task.
Update: I notice this person posted the same Comment on my original D'Ambrosio article. I just a short time ago had a chance to look at Comments here.
