Avaya Plus Tandberg?

In what is probably the first really interesting consolidation rumor I've heard in a long time, there are reports that Silver Lake, the private equity firm that owns Avaya, has approached Tandberg about acquiring that video-focused vendor.

Eric Krapf

August 21, 2008

3 Min Read
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In what is probably the first really interesting consolidation rumor I've heard in a long time, there are reports that Silver Lake, the private equity firm that owns Avaya, has approached Tandberg about acquiring that video-focused vendor.This would be a complementary acquisition rather than a duplicative one; it'd be a vendor (or its owner) buying technology, rather than buying market share. In other words, it'd be the kind of acquisition Cisco does. Which happens to be a pretty successful model.

Indeed, a Silver Lake-Tandberg deal -- assuming Avaya played into the scenario -- would really set Avaya apart and would arguably make Avaya the most credible alternative to Cisco for enterprise communications. It's getting harder and harder to escape the conclusion that video is moving from nice-to-have/status symbol, to critical element of a communications solution going forward (Irwin Lazar thinks so). Of course, video means lots of different things: Desktop, room, telepresence. All but desktop seem like a pretty good bet to take off for business purposes (also see this Wainhouse Research feature article.

But if there's another big winner in this scenario besides Avaya, I'd have to say that, in fact, it's Cisco, on both the perception and the reality. In terms of perception, an Avaya-Tandberg mashup essentially validates Cisco's big push into telepresence. I was among those who were very skeptical about telepresence; it just seemed too expensive and, frankly, over the top -- with the lighting and the color design and the C-shaped table and all. But what the ensuing two years have taught us is that the telepresence room may well be the Apple interface writ large: It's just cool, and it makes people go, "Ooooh" and "Aaaah." Technologists discount this factor at their peril.

And, of course, Cisco wins big on the substance if video/telepresence rooms become a standard feature of corporate offices, because that's gonna take a *lot* of bandwidth. In fact, that was one of the reasons I was skeptical of telepresence when Cisco first came out with it: It seemed like just too naked a ploy, too obvious an attempt to get people to upgrade their routers yet again. But damned if it didn't work. Cisco just keeps figuring out ways for its competitors to sell more bandwidth and QOS for Cisco to provision.

A final aspect to watch is the competition/cooperation/partnership view of things. Cisco looms as the only real end-to-end choice, the one-stop shop. Microsoft could be this at the application layer, but you'll always have Cisco in the network, where Microsoft is absent. The contrasting vision is, if not best-of-breed, at least multivendor. With the Siemens-Enterasys JV, there's clearly an attempt to leverage new accounts for both vendors, at the same time that there's a realization that Enterasys still needs customers beyond Siemens users, and Siemens users will have vendors besides Enterasys in their IP infrastructures.

Some enterprises may be truly all-Cisco shops, but going forward it's likely that many will remain multivendor, whether intentionally or by circumstance (M&As, installed base not going away, etc.). Which raises a point about telepresence: If it does become business-critical, or at least something that every business has, there will be intense pressure on the vendors to make their systems interoperate, which they don't today. Cisco may not be thrilled by that, but it will be driven by its own success.

About the Author(s)

Eric Krapf

Eric Krapf is General Manager and Program Co-Chair forEnterprise Connect, the leading conference/exhibition and online events brand in the enterprise communications industry. He has been Enterprise Connect.s Program Co-Chair for over a decade. He is also publisher ofNo Jitter, the Enterprise Connect community.s daily news and analysis website.
Eric served as editor of No Jitter from its founding in 2007 until taking over as publisher in 2015. From 1996 to 2004, Eric was managing editor of Business Communications Review (BCR) magazine, and from 2004 to 2007, he was the magazine's editor. BCR was a highly respected journal of the business technology and communications industry.
Before coming to BCR, he was managing editor and senior editor of America's Network magazine, covering the public telecommunications industry. Prior to working in high-tech journalism, he was a reporter and editor at newspapers in Connecticut and Texas.

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