Aastra Fortifies European Power with Ericsson Enterprise Acquisition

| February 21, 2008 | IT Infrastructure | Competitive Intelligence Report

| Enterprise Communications | Analyst: Rob Arnold
| Contact Center Solutions | Analyst: Michael Barbagallo

Current Perspective: Positive
Vendor Importance: Very High
Market Impact: Moderate/High

Event Summary

February 20, 2008 - Aastra Technologies Limited announced that it has entered into an agreement with Ericsson to acquire Ericsson’s Enterprise Communications Business.

Analytical Summary

• Current Perspective: Positive on Aastra’s proposed acquisition of Ericsson’s Enterprise Communications Business because it will provide Aastra with a much expanded customer base in Europe, increase its footprint to reach additional global markets, and infuse the company with technology assets necessary to compete against the rapidly advancing innovations of rival enterprise communications systems developers.

• Vendor Importance: Very high to Aastra because the purchase is in line with the company’s initiatives to grow rapidly through acquisition. Ericsson’s enterprise business is one of the company’s largest acquisitions to date, and is one that will vastly expand its sales opportunities. Very high also to the Ericsson Enterprise Communications Business, which lingered for years as secondary to its parent company’s carrier-focused initiatives, and will now become a core part of Aastra’s enterprise-oriented focus.

• Market Impact - Enterprise Communications: High on the enterprise communications markets of Western Europe, because with the acquisition, Aastra will become the region’s PBX market share leader according to the company and several third-party firms. Leveraging these resources and Ericsson’s footprint may fuel Aastra’s growth in other global markets, as well. Ericsson Enterprise customers and partners may, too, benefit from the focus that Aastra pomises. However, the transaction will have a low impact in North America where Aastra and Ericsson each have a very minimal stake in the PBX market.

• Market Impact - Contact Center Solutions: Moderate on the contact center solutions markets, because although Aastra will become the PBX market share leader in Western Europe with the acquisition, its contact center solutions will continue to have limited appeal to non Ericsson or Aastra voice systems customers. The transaction will have a low impact in North America where Aastra and Ericsson each have a very minimal stake in the PBX and contact center markets.

Recommended Competitor Actions

• Ericsson Enterprise’s competitors in Europe should launch targeted sales initiatives focused on winning over existing Ericsson PBX customers. Many are ripe for migration to newer Ericsson platforms, such as Enterprise Multimedia Server or MX-ONE, and could well be swayed to a competitively priced alternative solution from a developer perceived as more stable.

• Alternative developers should suggest that Aastra is primarily a holder of PBX companies that has done little to integrate or advance the technology it has acquired. As such prospective customers would do well to align with more innovative developers.

• Alcatel-Lucent, Avaya, Nortel, Siemens Enterprise Communications and others with more well defined services programs should challenge Aastra on its capabilities with regard to field support for channel partners and customers, a perceived weakness that is not enhanced by the Ericsson Enterprise acquisition.

• When marketing to multinational enterprise customers Alcatel-Lucent, Cisco, Avaya, Mitel, Nortel and Siemens Enterprise Communications should continue to question Aastra’s ability to offer a consistent set of products and services across its operating territories.

Recommended End User / Customer Actions

• Ericsson PBX customers should demand details on development direction and future support for their communications systems.

• Aastra PBX customers should inquire about when, if at all, they will be able to benefit from Ericsson technology, such as the company’s UC, contact center, FMC and other solutions, which are arguably more robust and feature rich than those developed by Aastra.

• Multinational enterprises seeking to deploy or expand their contact centers in the next 18 to 24 months should include Aastra on their long list of candidates, along with Alcatel-Lucent, Avaya, Cisco, Nortel, Aspect Software and Siemens Enterprise Communications, but only after ascertaining how the company will integrate its various platforms and applications and provide globalized support.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

| Client access - Full report in Enterprise Communications | More information
| Client access - Full report in Contact Center Solutions | More information

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