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Alcatel-Lucent Reportedly Will Sell Genesys to Private Equity Firm for $1.5 BillionAlcatel-Lucent Reportedly Will Sell Genesys to Private Equity Firm for $1.5 Billion

Reports say that the rest of the Enterprise unit will be kept in the fold at ALU, and perhaps even garner new investment from the parent company.

Eric Krapf

October 12, 2011

2 Min Read
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Reports say that the rest of the Enterprise unit will be kept in the fold at ALU, and perhaps even garner new investment from the parent company.

The Financial Times is reporting that Alcatel-Lucent has reached terms to sell Genesys, the contact center business that Alcatel bought in 1999. The buyer for Genesys is said to be Permira, the private equity firm that has been widely believed to be the leading contender to acquire some or all of ALU Enterprise.

FT is reporting that Permira may pay up to $1.5 billion for Genesys. Ironically, that's exactly the sum that Alcatel spent 12 years ago to buy the company, which at that time was a standalone firm.

It was initially reported that the ALU parent company would attempt to spin off the entire Enterprise unit, which includes PBX and other systems. But it now looks like that part of the business will remain with the parent company.

However, in what looks like an encouraging sign, FT's report states that, "Alcatel-Lucent is expected to invest further in this remaining part of the business, with hopes to extract higher margins from it." If true, that could actually provide ALU Enterprise's UC business with more stability than it would have had if it had languished on the acquisition block, its future uncertain.

However, there will be uncertainty about how the shearing off of the Genesys portfolio will affect ALU Enterprise's strategy for winning customers for next-gen Unified Communications. Most of the main competitors in this space--Avaya, Cisco, Siemens (but notably not Microsoft--have their own in-house contact center portfolios.

In fact, splitting off Genesys and selling it separately could make the future of that business more uncertain than it would have been had ALU Enterprise been sold off whole. That's especially true considering that Cisco claims to be making major gains in market share in the contact center market; in this article, John Hernandez of Cisco claims his company now has a 25% market share in contact centers, second only to Avaya and now surpassing Genesys.

If that's true, Genesys needs something to stay competitive with Cisco. Maybe returning to its heritage as a standalone vendor without ties to any single platform player may actually improve its chances by increasing its addressable market.

In any event, things seem to be finally moving on a story that's been percolating for several months now. More as things develop.

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.