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Job Cuts at Siemens: Portents of Consolidation?Job Cuts at Siemens: Portents of Consolidation?

The New York Times is reporting that Siemens Enterprise Communications plans to cut 4,000-7,000 jobs in Germany and Brazil, in hopes of bolstering the company's chance of being acquired. Siemens' enterprise business has been on the market for a year and a half, ever since the carrier division merged with Nokia.

Eric Krapf

February 25, 2008

3 Min Read
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The New York Times is reporting that Siemens Enterprise Communications plans to cut 4,000-7,000 jobs in Germany and Brazil, in hopes of bolstering the company's chance of being acquired. Siemens' enterprise business has been on the market for a year and a half, ever since the carrier division merged with Nokia.

The New York Times is reporting that Siemens Enterprise Communications plans to cut 4,000-7,000 jobs in Germany and Brazil, in hopes of bolstering the company's chance of being acquired. Siemens' enterprise business has been on the market for a year and a half, ever since the carrier division merged with Nokia.When it comes to vendor acquisitions, it does seem to be a buyer's market right now, what with the Bain Capital/Huawei acquisition of 3Com also apparently falling through, and Aastra picking up Ericsson's PBX business for a relatively modest $103 million.

So who might be inclined to go shopping for some bargains? Jim Burton of UCStrategies has suggested that Microsoft is or ought to be in the market to acquire a PBX vendor. When I interviewed Gurdeep Singh Pall of Microsoft recently (podcast here), he flatly denied that Microsoft was, in fact, considering such an acquisition. But right now, the biggest challenge Microsoft faces in cracking the enterprise voice market is OCS 2007's short list of PBX-style features/functions, and Microsoft can't overhang the market forever. Will they revisit the idea of an acquisition aimed at getting heavy-duty PBX functionality into OCS 2007 sooner rather than later?

What about Cisco's (distant) competitors in the LAN/WAN market--Juniper, Extreme and Foundry? They've resisted so far, and anecdotal evidence has suggested the pressure has been more in the other direction--enterprises that are already Cisco data shops find Cisco voice an easy decision to make. When approaching customers that are already significant users of not-Cisco data gear, what would ownership of a PBX product line offer an Extreme or Foundry that they don't already have thanks to partnerships with Avaya and Mitel, respectively? And, what Cisco IT shop is going to jump to Extreme or Foundry data gear based on these smaller vendors' voice plays? Such a decision, to the extent it gets made, would have to be bound up in the switch/router aspect. And finally, given the installed base of the voice vendors now on the block, it's not as if buying one of these companies is going to make Juniper or Foundry a major player in voice overnight.

One name that gets bandied about as a Siemens acquirer is HP, which does have a strong Ethernet switching play and is completely without a voice strategy at this point. So maybe that's another company that could jump in if the price is right.

Finally, you look outside the traditional networking companies at maybe an Oracle or SAP. Mark Straton of Siemens likes to position voice call control/Unified Communications engines as the real-time communications equivalent of one of these enterprise software companies. I haven't seen any indication that they would make a play in this area.

We've been saying for some time that consolidation is coming. Maybe it'll turn out that the biggest obstacle to consolidation is too few willing buyers.

About the Author

Eric Krapf

Eric Krapf is General Manager and Program Co-Chair for Enterprise Connect, the leading conference/exhibition and online events brand in the enterprise communications industry. He has been Enterprise Connect.s Program Co-Chair for over a decade. He is also publisher of No Jitter, the Enterprise Connect community.s daily news and analysis website.
 

Eric served as editor of No Jitter from its founding in 2007 until taking over as publisher in 2015. From 1996 to 2004, Eric was managing editor of Business Communications Review (BCR) magazine, and from 2004 to 2007, he was the magazine's editor. BCR was a highly respected journal of the business technology and communications industry.
 

Before coming to BCR, he was managing editor and senior editor of America's Network magazine, covering the public telecommunications industry. Prior to working in high-tech journalism, he was a reporter and editor at newspapers in Connecticut and Texas.