Avaya's Mercer Rowe: Company Well On Its Way in Cloud Transition

Plans for growing the new Avaya Cloud organization.

Edward Gately, Senior News Editor

January 31, 2018

7 Min Read
Avaya's Mercer Rowe at Engage 2018
Mercer Rowe talks cloud at Avaya Engage.

(pictured above: Avaya Cloud’s Mercer Rowe on stage at Avaya Engage in New Orleans, Jan. 30)

AVAYA ENGAGE — The leader of Avaya‘s new organization focused on driving cloud products and services for the company has big plans, and says partners will play a big role in its growth and success.

Earlier this month, Avaya appointed Mercer Rowe, formerly with IBM, as senior vice president and general manager of Avaya Cloud. His responsibilities will span public, private and hybrid cloud offers, including cloud R&D, application development and services, as well as sales for the newly organized business unit.

Last month, Avaya emerged from chapter 11 bankruptcy as a public company with about $350 million in cash and a little less than half the debt it had when it filed last January.

All this week at Avaya Engage in New Orleans, Avaya executives have been hitting home the message that Avaya means cloud.

As vice president of strategic partners for IBM’s cloud and Watson platforms, Rowe led global cloud and artificial intelligence initiatives. Before joining IBM, he founded and served as CEO of VMware vCloud Service, a joint venture with SoftBank to deliver cloud services in Japan. He also incubated VMware’s own cloud-services business, and spent a decade with cloud-powered startups, building sales, channel and services organizations.

In a Q&A with Channel Futures, Rowe talks about how his past experience will help him lead Avaya’s cloud initiative.

Channel Futures: How will Avaya Cloud benefit partners? Can you give some examples?

Mercer Rowe: We have a lot of great partners that are already hosting our services and are already offering cloud business models on top of our products, but they’re having to do that on top of products that were developed for enterprise use cases. So one thing it’s going to do is, as we build out this cloud service, it’s going to allow us to learn all of the use cases around how you build a cloud product, how you multi-tenant it and so forth. And then I’m going to give that IP to partners. So I expect partners to continue to host our services, but we’re just going to make it more efficient because they’re going to get the advantage of all the IP that I develop in the cloud so that they can then run their own multi-tenanted services and they can actually run it with the same tech that [I am].

The other way it’s going to help them is for partners who don’t want to host or who are changing their business models to more services-oriented, integration-oriented services. They’ll be able to broker using our new agent model into the cloud service so they can sell, and not only can they sell, but we’re creating a model where they are sticky, and they are attached to each order so they not only benefit from the initial sale, but they benefit from every up-sale, every renewal and increasing consumption, which is unique to this model in the industry.

CF: What feedback have you received so far from Avaya’s partners?

MR: A lot of excitement and enthusiasm. The biggest comment I’ve gotten – and certainly at this show – has been, “Wow, finally.” They’re so excited to see that we’re moving in this direction and that we’re actually putting our money where our mouth is, and that we have the right focus, structure and organization to make this happen.

CF: How does your previous experience come into play in putting together this new cloud unit?

MR: This will be my fourth company affecting a cloud transition, going from a typical kind of on-premises, perpetual license products and maintenance to the cloud. I’ve learned a lot and I have scars, and I think a lot of times it’s that experience of making this change that positions me well, and also our business well, because I understand that we’ve already done a lot of the hard work. One of the big things as a company, that really straps a lot of organizations, is financial management. We’ve come out of chapter 11, we have a healthy margin structure and … 80 percent of our business is software and services. A lot of times the big transition that a company goes through, and especially as a public company, it’s difficult; you have to set expectations on the street and so forth. But we’ve already done all that hard work. So while the company was private, it already made a lot of those transformational elements on the company side, and now it’s just a matter of getting the products into play.

CF: What have you been doing so far in your new role and what is the status of this new business unit?

MR: Six weeks in, I’ve been really focused on two main things. One was the Spoken Communications acquisition, that’s been taking up a lot of my time, but it’s really important to us, and the cloud and AI are going to be critical components. That team is going to be a big piece of my business as well, so I’m really looking forward to welcoming the Spoken team and a lot of their leadership are going to take key roles in my business. The other thing I was focused on was delivering some key early wins, the IP Office announcement, which was both a matter of taking the feedback from the partners that my team and I met with early on, and showing them that in eight weeks we can fix real business problems; as well as launching a model associated with that [which] I think is industry-leading in terms of the way that we’re working with partners to deliver that service.

CF: Is there a possibility for more M&A to benefit the cloud business unit?

MR: We will be opportunistic as interesting chances arise.

CF: What would be an example of a technology that would be useful to the cloud unit plan?

MR: As far as M&As go, I can’t really comment on where we would go, which direction, but I can tell you in terms of where we’re investing. We’re going to invest more in AI; we’re going to invest in the Internet of Things (IoT). There are a number of these technologies, these adjacencies, that we’ll be investing in, but I’m also going to be investing in the underlying platform architecture that’s going to support others integrating with our platform. We need to be a better ecosystem player, and if we really want to be successful in this market, we need to build a platform where all adjacencies can plug into. I feel very strongly as a platform player that we don’t have a monopoly on good solutions. We’ll have our own good solutions and we will continue to invest there, but I want everybody to be able to plug into our platform.

CF: Are partners going to be integral to the growth and success of this business unit?

MR: Absolutely. There is no way that I ever am going to scale this organization to the level to be able to a) reach all of our customers, or b) provide the services and capabilities that they need. This is especially true as you start going outside the United States … so having the large, global partner network that we have is essential. There’s no way we will be successful in this business without it.

CF: What will you like to have accomplished a year from now?

MR: I would like to have trained the market … we are rapidly releasing new solutions, that we are at the center of everyone’s discussion on communications strategy, and I would love to have people come to Engage expecting, know that Avaya’s going to announce new, groundbreaking technologies.

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About the Author(s)

Edward Gately

Senior News Editor, Channel Futures

As news editor, Edward Gately covers cybersecurity, new channel programs and program changes, M&A and other IT channel trends. Prior to Informa, he spent 26 years as a newspaper journalist in Texas, Louisiana and Arizona.

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