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Nortel Enterprise Unit: Auction Set for Sept. 11
It's ominous timing: Nortel's Enterprise Unit -- which focuses on unified communications and VoIP -- will be auctioned off this Friday, Sept. 11, in New York city. Potential bidders are expected to include Avaya and Siemens Gore. But will Cisco Systems come calling? The VAR Guy doubts it. Here's why.
The VAR Guy
September 9, 2009
2 Min Read
nortel-enterprise-unit-auction
It’s ominous timing: Nortel’s Enterprise Unit — which focuses on unified communications and VoIP — will be auctioned off this Friday, Sept. 11, in New York city. Potential bidders are expected to include Avaya and Siemens Gore. But will Cisco Systems come calling? The VAR Guy doubts it. Here’s why.Here’s what’s known so far, according to the web site All About Nortel:
Avaya made a $475-million “stalking horse” offer but some people are suggesting the final price-tag could be as much as $800-million.
Nortel spokesman Jay Barta said there were “additional bids”, suggesting there are other bidders at the table.
The companies involved will make bids until no one decides to top the highest offer.
This news story, from IP Communications, goes into deeper detail — including the suggestion that Nortel’s creditors could place a bid.
Where ’s Cisco?
So, will Cisco jump into the bidding? Frankly, The VAR Guy doubts it.
Cisco typically acquires up-and-coming companies rather than broken or under-performing businesses. Plus, Cisco typically benefits from customer defections when big, under-performing networking companies merge or buy one another (prime examples: Alcatel-Lucent, SynOptics-Wellfleet, Bay Networks-Nortel, and the list goes on…).
The wise bet suggests Cisco will continue to raid Nortel’s customer base without actually buying Nortel’s enterprise business. It’s a familiar strategy. In recent months, Avaya, F5 Networks and Juniper each have launched channel programs to recruit former Nortel Enterprise partners.
Next up, somebody will actually acquire Nortel’s Enterprise Unit. The bidding begins — and ends — on Sept. 11.
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