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Nortel will accelerate Avaya’s channel growth

Avaya executives say the Nortel acquisition will accelerate the vendor's push for channel centricity and help it achieve its primary goal: growing net new customers

NASHVILLE, TENN – Networking vendor Avaya‘s goal of reaching 85 per cent channel centricity will be achieved twice as fast if its acquisition of the enterprise business of Canadian technology icon Nortel Networks is approved.

Avaya has pledged to reach to 85 per cent channel centricity within two years and, with Nortel, that time-frame would be cut in half said Kevin Kennedy, Avaya’s president and CEO. He added this acquisition isn’t about removing a competitor. Rather, it’s about adding net new customers.

“This isn’t a case of a company we’re going to acquire and do cost-cutting,” said Kennedy. “Our two principal motivations are the continuation of the momentum of commerce and organizational potency.”

Avaya hopes to close the acquisition by Nov. 15, pending regulatory and governmental approvals, with product road map decisions to be announced in January. Any products that Avaya decides not to go forward with will still be available for 12 to 18 months, and supported well into the future.

The enlarged Avaya will be a US$6 billion company with 22 to 28 per cent EBIDTA and 15,000 to 20,000 employees.

Nortel will add 1000 to 1100 sales reps to Avaya, along with 300 systems integrators and solution providers and 150 channel account managers.

“A big part of this is channel coverage,” said Todd Abbott, senior vice-president, worldwide sales and president, field operations for Avaya. “We welcome your (Nortel partners) expertise.”

Avaya is looking at March 1st to bring Nortel partners into Avaya, and the vendor’s new partner program, Avaya Connect, will be the program they’re welcomed in to. They’ll be brought into Connect based on their revenue levels, but to gain access to the Avaya portfolio they’ll need to achieve the same training and competencies as Avaya partners.

“It’s not about the quantity of partners, it’s about competency,” said Jeremy Butt, vice-president, worldwide channels with Avaya. “We’ve done some fairly extensive pre-work with our soon to be Nortel colleagues, and we think we’ve got a solid way of bringing them in.”

For Avaya, Butt said the Nortel deal is about its customers, its partners, and some great technology. But the channel culture is particularly important for Avaya.

“They’re very channel centric. The DNA of the company says it’s about the channel,” said Butt. “They’ve got some great technology too, and we’re not going to throw things away without consideration.”

Before the acquisition was announced, Avaya was running an aggressive program to poach Nortel partners concerned about the stability of the vendor operating under bankruptcy protection. The program added 145 partners to Avaya globally and will now shift from attack to onboarding.

In Canada, however, Avaya has been less aggressive in courting Nortel partners said Mary Whittle, Canadian channel director for Avaya Canada.

“We did sign a few Nortel partners, but there has been some wait and see as well,” said Whittle.

With the acquisition soon to close though, Whittle said Nortel partners are keen to leave the period of uncertainty behind, get back to work, and learn more about Avaya.

“Talking with Nortel partners, they haven’t heard about Avaya’s new technology (such as Avaya Aura). They’ve been heads-down,” said Whittle. “It wasn’t an attractive investment time for partners with the economy.

While Nortel will help Avaya fill some coverage gaps in Canada, Whittle said it’s important to her they get trained and certified on the Avaya portfolio. And while it’s too early to speculate about whether all current Nortel partners will be welcomed into Avaya, Whittle said she does need to be judicious about growing her partner base.

“I can’t have too many partners when the business isn’t large enough today. A business needs to be a certain size and have a certain threshold of profitability for a partner to stay healthy,” said Whittle. “So I can’t just introduce 20 partners into a market; the only thing that happens then is price erosion.”

One partner that has long-term experience with both Nortel and Avaya is Unity Telecom, a Newmarket, Ont.-based IP communications solutions provider.

“The Avaya and Nortel partner programs aren’t that much different from each other, they’re pretty similar,” said Dave Sherry, president, Unity Telecom. “All are trying to achieve the same things. If they bring them together they’ll be very closely aligned.”