Avaya Back on Track
Reading Blair Pleasant's recent No Jitter article “Reassess. Establish Partnerships. Consolidate” got me thinking. The article points out that business communication vendors need to actively evaluate and reassess their product portfolios and partnerships, identify gaps in product portfolios and offerings, and “find ways to fill the holes with the appropriate offers that meet customer requirements.” This will ultimately lead to industry consolidation as companies look to acquisitions in order to provide complete solutions that include voice/telephony, collaboration, and contact center.
I’ve given some thought to which companies would be good acquisition targets, and Avaya came to mind. I remember having discussions with some of the BCStrategies Experts about Avaya when the company started down a troubled path, and several of us thought that Avaya’s days were numbered. There were rumors about the company being split up, followed by rumors about Mitel and others acquiring the company. Most of the naysayers underestimated Avaya's staying power.
Yes, Avaya has had challenges over the past few years, but the company has been surprisingly resilient due to several factors. Most companies would kill to have the channel partner and customer base the size of Avaya’s. No one can dispute Avaya’s large installed base of customers, many of which have invested time, money, and resources in their Avaya systems. When these customers are ready to migrate to the cloud, there’s a good chance that they’ll want to leverage their investments and move to an Avaya cloud (or hybrid) solution.
Avaya also has a large base of channel partners that, similar to its customer base, have invested time, money, and resources into their Avaya practices. For the most part, Avaya’s channel programs kept partners loyal, although not exclusive. These partners are sitting on an installed base of customers that are increasingly ready to move to cloud services.
While there’s no denying that Avaya was a bit late to the game when it came to the cloud, the company is known for having industry-leading, feature-rich, solid products, for telephony, unified communications, and contact center. Even throughout its “lost years” when dealing with financial issues and the fallout of the bankruptcy, Avaya continued to grow. In fact, its IP Office product outpaced all of the new cloud-based competitors in the SMB market. Fellow BCStrategies Expert Phil Edholm estimates that Avaya had 20M of IPO seats at the end of 2019, far surpassing Ring Central, Vonage, 8X8, and others.
It's a New and Different Avaya
Over the past few years and since the company has been out of bankruptcy, Avaya has updated and revitalized its management team, developed and introduced new products, and announced new technology partnerships. Additions to the management team include heavy hitters such as:
- Anthony Bartolo, Executive Vice President and Chief Product Officer
- Simon Harrison, Senior Vice President and Chief Marketing Officer
- Karl Perkins, Chief Technology Officer
- Stephen Spears, Executive Vice President and Chief Revenue Officer
Avaya rebranded and simplified its entire communications portfolio under the Avaya OneCloud name, and features OneCloud UCaaS, OneCloud CCaaS, and OneCloud CPaaS. New technology partnerships include companies such as Afiniti, Google, and RingCentral.
Avaya as an Acquisition Candidate
As a potential acquisition candidate, Avaya has a lot to offer:
- Installed base: First and foremost, as already mentioned, Avaya has an enviable installed base, with 100,000+ customers, more than 100 million UC seats and 5 million contact center seats, covering 90% of the Fortune 100.
- Full stack offerings, including contact center, telephony/unified communications, and CPaaS, as well as a professional services organization to provide enhanced services to customers. Products/services include market-leading premise/private cloud contact center assets and a near-term roadmap for an enterprise CCaaS platform, as well as Avaya Spaces, a cloud-native, highly scalable collaboration solution that is natively video first.
- Devices: As opposed to most of its competitors, Avaya offers a full device portfolio with evolving endpoint products. I’ve heard rumors that a new video offering and next-gen phones are in the works.
- R&D: R&D has always been a key focus, and Avaya invests $200M+ annually into R&D, as evidenced by the company’s patent portfolio with over 4,300 US patents issued and applied for, and far greater internationally.
- Global reach, operating in more than 175 countries.
The good news for Avaya and its customers is that Avaya is back on the path to success with or without an acquisition. Better days certainly lie ahead.
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