Company gains about 10% additional market share with $900 million purchase
Avaya emerged as the winning bidder for Nortel’s Enterprise Solutions business over the weekend, essentially doubling its initial offer to $900 million. Avaya outbid Siemens Enterprise Communications for the unit, which will add about 10% revenue market share to Avaya’s enterprise telephony base.
That means Avaya has also widened the gap between itself and Cisco, the Nos. 1 and 2 players in enterprise telephony respectively. According to Dell’Oro Group, Avaya had 16.6% of the $16 billion enterprise telephony market in 2008. Cisco had 14% and Nortel had 9.6%.
At the close of the Nortel enterprise unit purchase, Avaya will inherit a substantial double digit lead on Cisco in the market.
Cisco won’t take this lying down. Nor will any other Avaya competitor. Expect the FUD to start flowing and customer poaching from Cisco, Siemens, Microsoft, IBM and any other telephony/unified communications rival.
Beyond that, what should Cisco do?
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