Sanjeev Aggarwal's Blog

July 22, 2009

Avaya-Nortel will prove to be a formidable competitor for Cisco in the SMB Voice & Unified Communications Market

Avaya will be runaway market share leader in the SMB and Mid-Market Voice Communications Segment with the purchase of Nortel Enterpriser Solution business

Avaya has been in heavy competition with Cisco for the SMB and Mid-Market Unified Communications market, with Cisco steadily gaining market share in the SMB IP-communication segment. However, the combined Avaya-Nortel will position them with roughly twice the market share in the worldwide SMB market – close to 30%, almost 2X of Cisco.

Sure there is product overlap between Avaya and Nortel SMB and mid-market products on the TDM and IP telephony side. However, the Nortel BCM product line is very strong and appealing to the SMB sector. Avaya has no products on the data networking side.

Avaya has been facing problems competing with Cisco on the IP-Telephony side, as Cisco can address both the IP-telephony side and the data networking product requirements of this market segment. Now that Nortel enterprise solutions include a strong data network portfolio – WLAN, secure routers, wireless access points, firewalls, etc.; Avaya will be able to offer a much more complete and competitive solution to the SMB market.

In addition to the products, Nortel will bring Avaya:

  • Large and loyal customer base
  • Leading partnerships with a large number of country leading telecom service providers like BT, Bell Canada
  • Significantly expanded routes to market with stronger portfolio of data-centric distributors and VARs (in most cases there is not much overlap in the channel)
  • Expanded geographic coverage

The current tough economic conditions have prompted SMB to somewhat slow-down the rate of migration from TDM to IP based voice communications and unified communication solutions. As the economy improves in 2010 and SMB’s again start to review their migration to IP-based solutions – the Avaya-Nortel combination will present a much stronger competitive front to Cisco.

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