Who is going to pick up Siemens Enterprise Communications? It's a question that's been asked for nearly two years, but the recent workforce reduction announcement has brought it back to the forefront of my mind. Eric Krapf ran through a list of some of the usual (and not so usual) suspects: Microsoft, Juniper, HP, Oracle, SAP. Possible buyers (or partners if things go the route of joint venture a la Siemens Nokia Networks) are a regularly changing cast of characters. Alcatel-Lucent and Cerberus Capital are the rumored suitors du jour. Two weeks ago it was IBM and HP. Two months ago, Avaya owner Silver Lake. And two years ago, Avaya itself. Nortel is a name that occasionally crops up as well, though they seem to have recently fallen out of the offing.
Who is going to pick up Siemens Enterprise Communications? It's a question that's been asked for nearly two years, but the recent workforce reduction announcement has brought it back to the forefront of my mind. Eric Krapf ran through a list of some of the usual (and not so usual) suspects: Microsoft, Juniper, HP, Oracle, SAP. Possible buyers (or partners if things go the route of joint venture a la Siemens Nokia Networks) are a regularly changing cast of characters. Alcatel-Lucent and Cerberus Capital are the rumored suitors du jour. Two weeks ago it was IBM and HP. Two months ago, Avaya owner Silver Lake. And two years ago, Avaya itself. Nortel is a name that occasionally crops up as well, though they seem to have recently fallen out of the offing.The Siemens-IBM pairing fascinates me. It would be deja vu all over again. IBM bought PBX developer ROLM for $1.3 billion way back in 1984. For about six years Big Blue competed head-to-head with Nortel and Avaya (then part of AT&T) until IBM sold the ROLM business to Siemens. So an acquisition by IBM would bring at least a portion of Siemens Enterprise back full circle. With IBM's thrust into unified communications these days, a re-entry into the voice systems market could be just the ticket. And Siemens' current focus on software-based communications platforms delivered on IBM servers would be highly complementary to both IBM's server and applications businesses. The problem, of course, is that IBM would have to reverse its course on UC marketing. The company has long told its PBX partners that, unlike those mean old folks up in Redmond, it has no dastardly plans of turning its UC software platform into a call server in its own right. IBM would have to renege on these promises were it to reacquire its old PBX business.
Alcatel-Lucent-Siemens would be another interesting combination. It would create a European communications powerhouse. Plus Siemens' OpenScape (in its new incarnation), MobileConnect, and the Chantry wireless gear would fill clear gaps in the ALU portfolio. Product line integration would be a nightmare, but no more so than Aastra, Mitel, and Vertical need to contend with following their various acquisitions of EADS, Ericsson, Inter-Tel, Artisoft, Comdial, and Vodavi. But with Alcatel-Lucent clearly struggling to form a stable, profitable company following its mega-merger, the idea of giving the green light to yet another complicated merger probably has little appeal for the time being. And there would likely be regulatory issues with a combined ALU-Siemens owning such a large share of the market in Europe.
And equity buyout is another very likely option. That's presumably where Cerberus fits in. No messy product integrations, no regulators fretting over near monopolies. But also no synergies to leverage compared with a Siemens Enterprise buyer/partner in the comms space. So while things remain up in the air with Siemens' enterprise group, apparently they won't be for long. Siemens AG made it very clear that it expects to have completely spun off its enterprise group "within the first half of [2008]." The clock, it seems, is ticking. When it stops, Siemens Enterprise Communications will hopefully be a on a more stable corporate footing than it has been these past two years.
