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Life at IBM Corp. was never like this.
In July, four days into Mohamad Ali's new job as senior vice president for corporate development at Avaya Inc., the enterprise communications company made a $475 million stalking-horse bid for a unit of bankrupt Nortel Networks Corp. In September, Avaya won the auction by nearly doubling its offer, to $915 million. Now, while the deal awaits regulatory approval, Ali is planning an integration where a key objective is to accelerate a change in how Avaya sells its own products.
Ali, who holds a master's degree in electrical engineering from Stanford University, is also overseeing a new emerging products and technology function that includes research and custom applications development. Oh, and he's Avaya's interim chief marketing officer, too.
It's not that Ali wasn't plenty busy at IBM. As vice president of business development and strategy for the information management division of IBM's huge software business, he led 14 acquisitions over the past four years, including the $5 billion purchase of Cognos Inc. But helping drive the strategic and cultural transformation of a former Ma Bell unit now owned by private equity firms -- and operating in a sector where consolidation is in the air and mighty Cisco Systems Inc. has been setting the pace -- is something else again. "I have not gone through one of these before," says Ali, "and it's an experience that I'm learning a lot from."
The biggest difference, one that brings a certain clarity to Ali's efforts, is the milestone toward which Avaya is steering: an initial public offering a few years down the road. "Right now I have a fairly well defined concept of what it would take for us to do an IPO," Ali says. "And that's sort of the endgame. And then I back up from the endgame, and I figure out what does the company need to look like in terms of growth, debt leverage and so forth."
Spun out of Lucent Technologies Inc. in 2000, Avaya was taken private in October 2007 by TPG Capital and Silver Lake for $8.2 billion. Ali is one of several high-powered executives brought in since, many of them Cisco veterans. When CEO Lou D'Ambrosio stepped down for medical reasons in June 2008, it was Charles Giancarlo -- a former Cisco corp dev chief and a leading candidate to succeed John Chambers as CEO there before leaving for Silver Lake -- who took the reins.
In January, Giancarlo, who remains chairman, announced Avaya's new CEO: Kevin Kennedy, most recently CEO of JDS Uniphase Corp. Kennedy also spent eight years at Cisco and, before that, 17 years with AT&T Bell Labs, part of which now resides with Avaya.
The acquisition of Nortel's enterprise unit is meant to strengthen Avaya on multiple fronts, including telephony (where it will vault past Cisco and stay far ahead of Siemens Enterprise Communications Group, which it bested in the auction), geographic reach and R&D, an important consideration as digital technology continues to change how companies communicate.
But one area in particular is especially relevant to those IPO plans: the addition of the thousands of distributors, resellers and systems integrators around the world that bring Nortel's gear to market. Avaya historically favored a direct-sales model, which offers higher margins but limited reach. Cisco's indirect model has been a strength for it, especially when it comes to placing its gear with medium-size companies.
So as Ali and his team think about how to integrate the Nortel unit, tapping the growth that's achievable when other people sell your goods for you is a big goal. "That's one of the key work streams," says Ali. "How to integrate and retain all these channel partners, and have them take both their current Nortel products as well as Avaya products to market."
Partnerships of various kinds figure almost as prominently as acquisitions in Avaya's plan to be one of the consolidators in its sector. Besides expanding Avaya's access to customers, partnerships also add to what Avaya can offer them. No company is likely to bring customers into the promised land of so-called unified communications -- voice, video, instant messaging, e-mail, data -- entirely on its own.
Previously, partnerships were handled either in the sales or product organization. But that, too, is changing as Avaya's leaders press ahead with one eye on industry trends and the other on the IPO. "There are probably a half a dozen or so that are really strategic to the company," Ali says. "And those will be managed through the corporate development function."
Where else?
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