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Infoweek 500 's annual survey provides an industry-by-industry view of investment strategies.

Across most industries, the response to "What has been the most effective productivity push?", the answer is "new forms of collaboration software." This can take various forms, such as Unified Communications, social networking, and web conferencing.

There were a few noted exceptions. For example, in retail, Business Intelligence solutions are king, not surprising given that understanding customers is so important to the top and bottom lines.

This bodes well for UC suppliers, who need to sell the values of their solutions, with an eye on non-traditional suppliers of other forms of collaboration software, including those that deliver cloud computing solutions.

The US DoJ is apparently investigating whether there are any anti-trust aspects in the Avaya purchase of Nortel Enterprise.

When I visited the DoJ web site, I couldn't find anything on this, suggesting it's in very early stages, though my Nortel friends tell me that the DoJ is in an intensive data-gathering mode.

Here's my take.

This is a highly competitive market that is being transformed from a PBX-centric environment to one that is "UC as an application"-centric. The same is generally true for the contact center space. Looking at historical market shares is not useful.

New entrants are coming in many forms: Microsoft, open source, cloud computing, Skype-like offers. Enterprises have many ways of evolving their telephony and contact center environments.

The DoJ has not, to my knowledge, questioned Cisco's market dominance of 70% in the router space,. Why would the DoJ care about a much smaller share for Avaya-with-Nortel in the voice space.

The DoJ process needs to be wound up very quickly; otherwise it is actually discouraging competition, weakening Avaya's prospects and giving Cisco an advantage.

The courts approved the acquisition of Nortel Enterprise by Avaya and dismissed any Verizon objectives.

My Nortel friends tell me that the acquisition is moving ahead, anticipating the the DoJ investigation will not impact these plans (my take on the DoJ in an upcoming blog).

Now execution begins towards long-awaited industry consolidation.

Sorell Slaymaker does a good job describing what needs to be done. But what needs to be done is very hard in a normal merger (e.g., had Nortel merged with Avaya or Siemens before bankruptcy, as had been rumored) and even harder in this situation.

In a normal 'merger' situation, best-in-class capabilities from each company would be chosen to enhance the offer to customers and to be most competitive in the marketplace.

But this is not a merger but an acquisition under Chapter 11. Business reality says you can layoff an Avaya employee and pay severance or layoff a Nortel employee for no cost. Financial pressures definitely get in the way of doing the right strategic thing.

In fact, Joel Hackney, the president of Nortel Enterprise, has already admitted that only 60% of Nortel employees (excluding Nortel Government Systems and employees in certain countries) will be layed off. I haven't heard of any Avaya layoffs.

My heart goes out to all those Nortel employees that will be dumped in this most inhuman way.

At the same time, Avaya executives have a huge job to do since they have to demonstrate short and long term value to their owners (Silver Lake Partners) from their $900M investment.

The last thing we need is failed industry consolidation leaving customers with less choice than before.

While one can question the tactics of Research In Motion's co-CEO< Mike Lazaridis in challenging the sale of Nortel's Wireless business, there is a net benefit.

Nortel was a technology-driven company with many brilliant engineers. Over the decades, their collective work has moved the technology forward, created business opportunities, and established Nortel leadership.

It is now clearly understood that Nortel's key patents should not be sold outright with the business units and should be monetized in some other way: either sold on their own and or even established as an on-going revenue stream.

After a marathon auction, Avaya has agreed to buy Nortel's Enterprise business for $900M, much better than the original $475M. Great selling job, Nortel!

A while back I blogged:
"It's good for Avaya-Nortel's VoIP market position globally." It's still so. Cisco watch out.
"It's good for Avaya-Nortel's Contact Center market position with two leading portfolios and opportunities for cross opportunities." It's still so, but antitrust concerns in this area may delay the purchase, which is bad all around.
"It's good for Avaya-Nortel's application and service business, which has been a strong emphasis of both entities." This is a huge opportunity, as it 's central to the new world of telecom.
It's good for Avaya-Nortel's UC position, if they can rationalize their positioning with MSFT and IBM." I see this as a major challenge, as Avaya has not been a leader in this space.

"It's bad for R&D and support effectiveness since there's a lot of product overlap (five call servers just from Nortel)." This is a huge challenge going forward.
"It's bad for Nortel's Data business unless Silver Lake Partners (private equity owner of Avaya) brings together their Cabletron assets with Nortel's to bring back Bay Networks (or something along those lines)." There has been no indication that this will happen.

Finally, is it good for customers? Too early to tell. Certainly, Avaya needs to rapidly clarify their support plans for Nortel products given Verizon's concerns about national security concerns of the deal.

So it's over when it's over, and it's not over yet!

The sale has to be approved by various bodies (particularly addressing Verizon's concerns and antitrust issues).

Hopefully this will be done at lightening speed.

Any further delays (it's taken 9 months to get to this stage) will be painful all around.

Alan Sulkin, an experienced market watcher, has published his 2Q09 North American view on IP Telephony market shares, putting Cisco at #1 and Avaya and Nortel as #2 and #3 respectively.

According to Alan, Nortel + Avaya, if no other bidders submit bids by the end of the week, would be #1 with a combined 27% vs 21% share for Cisco.

A couple of other interesting points:

The market 'rebounded' by some 10%, a positive indicator of CIO mindsets on economic recovery.

This may be Alan's last IP Telephony share analysis as he argues that all PBXs support IP in some form and so the IP PBX designation is no longer relevant. He will be talking just PBX market share going forward. Alan could have argued this almost 5 years ago.

Mike Z, the last CEO of Nortel, failed on three counts:
1) to rebuild a great company- instead he filed Chapter 11;
2) to re-emerge from bankruptcy- instead he undertook a sale of all its assets; and
3) to get maximum value for these assets- instead only one fourth of the company has been sold and that is under government review, and there is still no plan for getting maximum value from thousands of patents.

Employees, that have built the company and shown so much commitment to service and technology excellence over the years, have been left the task of turning off the lights.

Corporate greed has destroyed a great company and impacted employees, past and present, in so many ways. Very sad.

Mike Z, the last CEO of Nortel, failed on three counts:
1) to rebuild a great company- instead he filed Chapter 11;
2) to re-emerge from bankruptcy- instead he undertook a sale of all its assets; and
3) to get maximum value for these assets- instead only one fourth of the company has been sold and that is under government review, and there is still no plan for getting maximum value from thousands of patents.

Employees, that have built the company and shown so much commitment to service and technology excellence over the years, have been left the task of turning off the lights.

Corporate greed has destroyed a great company and impacted employees, past and present, in so many ways. Very sad.

Here's my view on the proposed sale of Nortel Enterprise to Avaya.

It's good for Avaya-Nortel's VoIP market position globally.
It's good for Avaya-Nortel's Contact Center market position with two leading portfolios and opportunities for cross opportunities.
It's good for Avaya-Nortel's application and service business, which has been a strong emphasis of both entities.
It's good for Avaya-Nortel's UC position, if they can rationalize their positioning with MSFT and IBM.

It's bad for R&D and support effectiveness since there's a lot of product overlap (five call servers just from Nortel).
It's bad for Nortel's Data business unless Silverlake (private equity owner of Avaya) brings together their Cabletron assets with Nortel's to bring back Bay Networks (or something along those lines).
It's bad for creditors- a lowly US$475m is pttance for a business that generated $2.5B in sales a short time ago.
O yes, and it's bad for Cisco.

As for customers, we'll have to wait to see what the plan really is going forward.

I recently highlighted Coke's new Freestyle dispenser.

Bob Evans made some great observations: "Coke's new ultrahigh-tech Freestyle dispensers are also new-product labs, customer-experience workshops, wireless repositories, data warehouse gateways, merchandising machines, inventory managers, and, perhaps above all else, truly transformative devices that shift more and more choice, options, and freedom from the seller to the buyer."

He also highlights the fact that Freestyle is the result of the first-ever deep collaboratiuon between Coke's research arm and its IT organization.

There are lots of IT lessons to be learnt here, not the least of which is thta IT needs to understand the business.