My money is currently on Siemens Enterprise Communications to be the new owner of Nortel's Enterprise Solutions (ES) unit. Siemens would benefit from access to Nortel's vast distribution dealer network to reduce dependency on its own direct sales/service channel and to expand geographic market coverage. Nortel's strong position in the Federal government market, especially DOD, is also attractive to Siemens, because is has not been a strong player in the sector for many years.Avaya has also been rumored to be interested in Nortel ES, but I doubt that its owners, Silver Lake and TPG, currently want to increase their investment in a competitive market space with Cisco the current leader and Microsoft gradually expanding its presence.
The two private equity firms' original investment of more than $8 billion to acquire Avaya is probably worth half that amount today based on a variety of factors, such as: flat Avaya sales revenues for its past fiscal year and last year's firesale-like sell-offs of the Ericsson and Siemens enterprise communications units to Aastra Technologies and Gores Group, respectively, that depressed the market value of like companies; and the continuing rise of Cisco combined with the strong potential threat of Microsoft.
More than a few analysts, myself included, believe that Cisco and Microsoft will be the dominant enterprise communications competitors in the upcoming years, and that traditional PBX system suppliers, such as Avaya, will lose market share and struggle to retain their existing customer bases at current levels.