Nortel: Consultant Says Avaya Purchase Means Failure

Doubt about the Avaya Inc. acquisition of Nortel Networks Corp.’s enterprise unit seems to be growing.

One anonymous communications industry consultant said this week in a No Jitter blog that Avaya is most likely to fail because it doesn’t understand the importance of bringing talented people together quickly.

“The deal and its ability to succeed is ultimately about employees, customers, channel partners, and suppliers. It is about making the deal happen with speed, minimal debt, and minimal impact to these key groups of people,” the consultant wrote.

The writer emphasizes he or she believes in Avaya’s technology and earnest intent to improve its strategy.

“But I also believe they just don’t have the resources, expertise, experience, or stamina to pull off the Nortel merger,” the person wrote in No Jitter. “We’re talking about Avaya, a company so burdened by debt that they apparently are furloughing their sales people this year for two weeks. Their sales people, for heaven’s sake.”

That’s a fair point to make. If Avaya can’t afford full-time work for the people who have the most immediate impact on the bottom line, what’s to say it won’t get rid of the talent that creates the Nortel technology Avaya wants?

There’s also the question of how Avaya can realistically integrate Nortel’s channel partners. Avaya still is struggling to run its own channel program to its fullest and, the blogger wonders, “how in the heck will Avaya be able to integrate Nortel’s channel into theirs with any kind of speed and agility?”

Again, another fair point. On top of all of that, Avaya does have statistics working against it. The No Jitter writer refers to studies that show 66 percent of all mergers fail. Sprint-Nextel, anyone?