Aastra Acquires Ericsson's Enterprise Business

February 18, 2008

Ericsson has divested itself of its Enterprise communications business and this move reminds me a great deal of Lucent spinning off its enterprise division in 2000 or so. For Ericsson the logic behind the move is sound as it wants to focus on the service provider space and the company has never been able to penetrate the US enterprise market effectively anyway.

Truth be told, the company seemed to never have the will to become a player in the US. They never had a consistent branding message or seemed to really want to sell PBXs on our shores.

This is sad because the company is a part owner of Sony Ericsson and the synergies between these devices and corporate PBXs is immense. Somehow the company could not capitalize on this powerful differentiator. Of course Ericsson is not alone in this regard... At least one Japanese company has an incredibly strong mobile device business which doesn't seem to help its PBX business.

Another reason this move is sad has to do with the cycles of business in the service provider and enterprise space. Traditionally, one side of the business is strong while the other is weak.

Lucent spun off Avaya when the service provider business was at its peak and now Avaya seems to be the better company of the two in terms of sales growth and potential. This could all change in a few years of course but traditionally the enterprise space slows when the service provider space grows and vice versa.

For Aastra, this move is smart as it gives the company access to sales channels in Europe, Asia, Australia, the Middle East, Africa and South America.

As the world migrates to IP, this channel will certainly help Aastra grow into a major world player.

So in the end this move makes Aastra much stronger and also allows Ericsson to focus on its core competency of mobile, IMS and other service provider solutions. I also think the customers of both companies will be better off now than ever before.

One wonders of course if Alcatel-Lucent will be spinning off its enterprise business soon as well. I somehow see Avaya ending up with this division if it does happen.

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