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UC in an Avaya + Nortel World
Monday's news was Avaya's stalking horse offer to buy Nortel Enterprise Solutions, forming a "New Avaya". Here's my take on the Unified Communications (UC) implications of the potential deal, including business strategy, customers, product lines, channels and services.As a business strategy, UC will have to be front and center for the New Avaya. The company will have great products for IP Telephony in both large enterprises and SMBs, as well as for Contact Center solutions. But those are mature markets from which much of the value has already been extracted. Just making a bigger version of either company's historical business seems to have little chance of producing a breakout or enough synergies to fund the investors' expected return. Therefore, new value propositions will have to pave the way.
The New Avaya strategy will need to emphasize UC to create the revenue growth required for success, especially as non-traditional competitors such as Microsoft, IBM, Cisco Webex, Google, RIM and others move aggressively to capture the emerging UC revenue and profit streams.
However, customers will first want to know what's happening to their existing installed base systems and whether their favorite products are going to go forward or be replaced. Thus, there's a risk that UC will stall out in the New Avaya conversation for the coming year(s).
New Avaya will need to be extra energetic to keep the UC product story at the forefront of the customer discussions, budgeting, and decision-making for both 2010 and 2011; indeed, the UC story should be the centerpiece of its roadmap. It will have the largest enterprise telephony installed base in the world on the acquisition date, but if those customers don't buy and deploy UC, the New Avaya will not be the leader three years from now.
So, what UC products and services will New Avaya offer? In polling my UCStrategies.com associates, we picked the following:
* For Conferencing and Collaboration, we recommend the Nortel product line. The MCS 5100 is already a complete, solid multi-media conferencing system with audio, video and web conferencing services on a platform that can work with almost any PBX. This will make MCS 5100 easy to adapt both to the Nortel Meridian and CS1000 installed base systems and to the Avaya Definity and Communications Manager installed base systems. MCS 5100 could be enhanced with some of the presence federation that Avaya has been developing.
In addition, Nortel has two great assets here: Diamondware, which provides 3D positional voice technology and brings life-like sound to virtual web and voice communications; and Web.Alive, a secure virtual world platform for collaboration, assisted E-Commerce and virtual learning and training applications. This level of innovation is critical to meet the rapid advancements in Collaboration we are seeing in the market.
* For Mobility, we recommend the Avaya product line. The Avaya one-X Mobile Edition extends enterprise communications functions and dial plans to essentially every mobile brand and network, supporting Palm, RIM, iPhone, Java, Windows Mobile and Symbian devices. Also, this will seamlessly integrate with the call coverage options of the likely IP-PBX winner, Avaya's Communication Manager.
* For Desktop integration, we would choose the Nortel software, because it's ahead of Avaya in partnering with both Microsoft, via the Innovative Communications Alliance (ICA), and IBM. This is the toughest area to predict, since Avaya has fiercely promoted its one-X solution for the desktop, while cautiously integrating with Microsoft and IBM products.
Nortel clearly recognizes that the hundreds of millions of desktops running the Microsoft Office suite (Outlook, SharePoint, Office Communications Server, et al.) or the IBM Lotus suite (Notes, Quickr, Sametime, et al.) are here to stay. An embracing view of presence, with excellent interoperation with Microsoft, IBM and many other presence sources, also will be key, favoring the Nortel alliance approach. Hopefully, both for themselves and for the UC industry, New Avaya will find a way to build on the Nortel alliances.
* For Communications Enabled Business Processes (CEBP), we choose the Avaya Aura architecture for integrating multiple communications platforms and potential new SIP-based applications, but would preserve and extend the Nortel Agile Communications Environment (ACE) as the best of the application development and integration engines. To date, most Avaya tools for CEBP have been rooted in its highly functional call center technologies (e.g. the Application Enablement Server - AES), but ACE offers a more UC-centric approach focusing on click-to-call, IM, location and presence.
All of this will need to be backed by a channel strategy that emphasizes the professional services value of UC, especially in the enterprise market segments. There will immediately be too many channel partners for the consolidated New Avaya product set, leaving those partners open to conversion to other vendors' offerings. But, if New Avaya can rapidly energize, train and support the combined channels in the growth opportunities of UC - both in products and in higher margin pro services -- this could ignite the growth fires that New Avaya will need.
In summary, if the Avaya acquisition of Nortel goes through, the New Avaya will have a huge opportunity to emphasize UC from the outset. It will have the right building blocks and have relationships with a huge customer base. Leaving the UC emphasis for later, until after the integration and the IP-PBX product line rationalization, could place New Avaya in the lead of a declining telephony market, while non-traditional competitors capture the UC applications of the future. We'll bring you the front-row observations as the play unfolds.