Toshiba Exits North American Telecom Market
At the end of the week before Enterprise Connect 2017, we were all waiting to hear the plan for Avaya to emerge from bankruptcy when another piece of telecom news came out, Toshiba announcing they are exiting the North American business telecom equipment market. In the letter to their dealers shown here, Toshiba announced that, as part of the overall global Toshiba restructuring, they are winding down their Telecommunications Systems Division (TSD) in North America. Channels were told that the last orders must be placed by May 22. While Toshiba is committing to support under current contracts, they are openly encouraging customers to move to third party support. Beyond the U.S. wind-down, Toshiba is also terminating its TDSD business in Canada and Mexico.
Clearly, the business telecom market has shifted in North America and vendors that are not well situated financially are increasingly challenged to succeed. Whether a company with heavy debt like Avaya or with a parent organization that is challenged like Toshiba, it is becoming increasingly clear that the overall financial health of vendors is a critical consideration in acquisitions. In some ways, this is an argument for cloud subscriptions that do not have a large up-front commitment to a vendor. I am sure we will hear more about this next week at EC17.