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Avaya CEO on effects of Nortel enterprise deal

Posted on October 15, 2009 at 11:03 AM
Filed under: Acquisitions | Corporate Strategy | Integration
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KevinKennedyAvaya125.pngIn a recent column on enterprise communications equipment maker Avaya Inc., I talked about one of the company's main strategic objectives in a deal it recently did.

The deal was the $915 million acquisition of the enterprise unit of bankrupt Nortel Networks Corp., agreed to in September. And the objective was to accelerate Avaya's move away from reliance on its own sales force and toward channel sales, where it works with third parties. The Nortel unit has thousands of distributors and resellers around the world, and as Mohamad Ali, Avaya's SVP for corporate development explained, a big part of the pending integration involves bringing them over to Avaya.

On Wednesday Avaya CEO Kevin Kennedy (pictured), speaking at the 2010 Avaya Americas Partner Conference in Nashville, put a number on the goal. According to a report on ChannelWeb, he expects the deal will enable Avaya to achieve 85% of its sales through third parties by 2012. Alas, the report doesn't say where Avaya is today on that scale.

Todd Abbott, Avaya's SVP for sales, also spoke at the meeting, and his remarks make clear how much wooing and diplomacy is involved in a transition like this. From the ChannelWeb report:

Abbott said Avaya would add between 1,000 and 1,100 Nortel salespeople to its sales organization. He also said Avaya had recruited about 145 Nortel channel partners around the world in the past year, and asked that Avaya partners "trust us, because we know we're not the easiest company to onboard with."

"I hope we've gained some credibility with you," he said. "We are dead serious about channel-centric. You don't have to tell me we are not the best marketing company. I already know. We know we have to get better at this."

What's so great about channel-centric? It's the best way to generate top-line growth -- which Avaya, owned by PE Firms Silver Lake Partners and TPG Capital, is keen to do ahead of an anticipated IPO in a couple of years. - Kenneth Klee




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