8/23/2012- Votacall Hosted VoIP & Cloud Based UC Solutions- Boston, Massachusetts- In the Telecom world, there are several large corporations who are thriving in the United States Telecom industry with the addition of Cloud Communications and Unified Communications. These companies all tried to expand sales into the European market and ran into problems that seem impossible to overcome. Alcatel-Lucent and Aastra are both generally European based and are having a tough time coping with the exchange rate back to the dollar. With neither economy experiencing great macro times, it is tough for companies to remain stable; especially when transferring funds and products between the two continents. ShoreTel pulled out of its European business because it posted a $450 million loss in that sector. They figured it was not worth the investment trying to get their foot in the door, with no guarantee they could gain a foothold. Avaya admitted that the foreign exchange rate was significantly hurting their balance sheet. Depending on what they decide moving forward, these companies could see a positive or negative affect from European markets.
Its tough for Avaya to keep taking losses in Europe because they are spending a lot of cash in other areas of operations, such as $461 million on research & Development. Usually in tough times, R&D takes a hit because companies need to cut costs somewhere and the development of new products is expensive. On top of research and development, advertising products in Europe cost lots of cash because its a whole new market with different trends. ShoreTel made the decision to stop foreign business because they have been recently successful in the United States, with expanding clients from small government organizations. ShoreTel remains smaller than the other large telecom conglomerates spoken about above, and therefore has the ability to cater to small clients regardless of the number of phones needed. Avaya has spoken about less government spending on communications, this may be another reason for them to keep trying to turn a profit in Europe. When it comes down to it, these companies are all successful at the moment, thanks to a thriving Telecom industry in the United States. With the new Cloud Communication and Unified Communication products/services being offered, these companies have been able to overcome a weak and challenging European market. We will soon see what their strategic plans are for future international business and will be able to relate those choices to immediate success or failure.
