With its $475-million purchase of Nortel Networks’ enterprise business, Avaya will leapfrog Cisco Systems to become the industry’s largest enterprise voice equipment vendor, according to the Yankee Group.
The deal will add Nortel’s 9% share of the market (widely considered to be one of the bankrupt company’s most valuable assets) to Avaya’s 16%, giving Avaya, privately held for the past two years, 25% of the market, Yankee Group said today.
“This new market share helps Avaya tremendously, as it has been able to convert its own customer base to VoIP but had trouble acquiring new customers,” Yankee’s senior vice president Zeus Kerravala said. “The company now has a huge installed base to go sell to and, at the same time, can provide those customers some closure to the long period of uncertainty regarding Nortel.”
Nortel’s enterprise business contributed about $2.4 billion in revenue last year. After its pending sale to Avaya and the pending sale of Nortel’s CDMA and LTE wireless assets to Nokia Siemens Networks, Nortel’s remaining assets will represent less than half of the company’s 2008 revenue.