Avaya Doubles Down on Cloud, Advancing Technologies

Avaya president and CEO Jim Chirico said 2018 was the first chapter of improving his company's trajectory as a business.

Edward Gately, Senior News Editor

January 21, 2019

7 Min Read
Avaya CEO Jim Chirico on stage at Avaya Engage 2019 in Austin, Texas, Jan. 21

(Pictured above: Avaya CEO Jim Chirico on stage at Avaya Engage 2019 in Austin, Texas, Jan. 21.)

AVAYA ENGAGE — A year into its 18-month turnaround, Avaya has the right strategy in place, is making the right investments and plans to invest more, including doubling down on investing in cloud research and development.

That’s a big part of the message conveyed to the nearly 2,500 attendees, including partners and customers, at this week’s Avaya Engage 2019 in Austin, Texas. Some 43 countries are represented at the conference.

A year ago, Avaya was fresh out of chapter 11 bankruptcy. President and CEO Jim Chirico said 2018 was the first chapter of improving his company’s trajectory as a business.

Earlier this month, Avaya unveiled a series of enhancements to its Edge partner program, designed to eliminate complexity and stimulate cloud sales.

“We wanted to get back to basic … to focus on simplicity and not boil the ocean,” Chirico said. “We unleashed their creativity, passion and drive. The company has transformed into a customer-led, customer-driven company.”

We recently compiled a list of 20 top UCaaS providers offering products and services via channel partners.

Previously, Avaya was further away from customers’ needs, and “in many ways missed the mark,” he said.

“We had this company, and were more focused around build it and they will come,” Chirico said. “That doesn’t work in this environment. You told us we needed to change, so we did.”

Avaya’s three key messages are: being customer-led in everything it does; simplification, including streamlining its solutions portfolio; and converging unified communications (UC) and contact center (CC).

“[Being] the envy of the industry separates us from the pack,” Chirico said. “No one else can deploy a 50,000-seat call center … [and] a 100,000-seat private cloud. Our coverage includes 4,000 people in field … and 4,700 partners — they’re a force multiplier.”

Chirico said for 2019, Avaya is focused on four key priorities:

  • Continuing its investment in its core UC and CC, including leveraging new technologies with partners.

  • Delivering new technologies, driving “significant value and differentiation.”

  • Providing breadth and depth around its cloud.

  • Emphasizing its services capabilities, including helping organizations transition to cloud and accelerating value for technology investments.

“Our brand today, our technology today, have never been stronger,” Chirico said. “Our core and essence remains.”

Gaurav Passi, president of Avaya’s cloud business group, said the company achieved $330 million in fiscal year 2018 cloud-subscription revenue with 3,600 customers.

“We have a lot of work today,” he said. “By 2021, we’re looking at 25 percent of Avaya revenue coming from cloud. That’s a big number — [yet] it’s not about revenue, but transforming those seats.”

Avaya introduced a new private-cloud delivery model of its Avaya OneCloud solutions for UCaaS and CCaaS. The new Avaya OneCloud ReadyNow private cloud offerings feature preconfigured, per-seat consumption and standard bundles of both UCaaS and CCaaS, the company said.

Cloud revenue encompassed 11-12 percent of overall revenue in 2018. Private cloud will play a significant role in moving larger customers to a cloud solution, therefore reaching the goal of $800 million in cloud revenue by 2021, Chirico said.

If Avaya is able to move 10 percent of its 145 million UC and CC installed seats to cloud over the next three years, that represents …

… $1.4 billion.

Avaya cloud will focus on: increasing its technology offers; migrating its base; aggressively competing in the midmarket; pursuing international expansion; working with its strategic cloud ecosystem to increase buying, implementation and management; and joint developments with its ecosystem.

“When you go midmarket, simplicity [is] going to be my theme for today and next couple of years,” Passi said.

Avaya also announced that ACS Technologies and FatPipe Networks, a customer and technology partner, have implemented its IX Mobility to accelerate the digital transformation of their contact centers, enhance smartphone interactions, drive down costs and deliver better customer experiences. Previously called Avaya Mobile Experience, IX Mobility reflects the Avaya Intelligent Xperiences – or Avaya IX – solution naming architecture.

In addition, it announced a simplified branding architecture for its solutions portfolio, based on input from customers and partners, that reflects the “wealth of experience Avaya brings to bear for customers as they transform digitally and move their communications to the cloud.

Avaya Intelligent Xperiences – or Avaya IX – includes the entire portfolio of solutions for contact center, UC and collaboration.

“We are committed to a customer-led approach to innovation that enables Avaya users to provide experiences that matter for customer and workforce engagement, and this includes our comprehensive cloud-communications portfolio across all business segments,” Chirico said. “We’ve heard from you the need for flexibility and options for solutions delivered via public, private or hybrid cloud. Our customers have told us they are looking for simple, comprehensive solutions for contact center, unified communications and collaboration from a single, trusted partner.”

Dino Di Palma, Avaya’s president of America sales and global accounts, said most of his company’s customer base is moving to a cloud-based environment, but it’s at different speeds for different customer segments. The enterprise segment want to move to cloud, but they need to ensure that it’s secure and in many cases they have more than 20 years of business experience that they need to maintain, and “it’s not just moving to a simple public-cloud environment,” he said.


Avaya’s Dino DiPalma

“So being able to work with Avaya in our private-cloud environment provides them the move into cloud, but with security and ensuring they can maintain their same business practices,” Di Palma said. “With the ReadyNow part, what’s exciting is that many of our enterprise customers want to understand what that means in that we can stand up an instance for private cloud inside of six- to eight-plus days and get it up and running so they can trial it and see what works, and at the same time they can leverage what it means to go to cloud, which is faster innovation. You can just continue to add to it.”

As for programs such as Avaya’s Loyalty2gether, which is designed to help customers migrate to a digital platform, “if you don’t upgrade, you really can’t get there, Di Palma said.

“The announcements are all around focusing our partners and customers to get to this new evolution, this new UC/CC world, which we know it’s where it needs to go, so we’re putting the programs in place to …

… enable that,” he said.

Kenneth Heitner, president and CEO of Consolidated Technologies, said Avaya is “admittedly playing a little catch-up on the cloud, but I do think great progress has been made.”

“We are eager to sell Avaya cloud as opposed to other suppliers,” he said. “I think the biggest challenge with cloud is the definition … but people have been in an Avaya cloud for years, whether you’re talking public, private or hybrid. So Avaya really had the infrastructure to build at a minimum large enterprise, private-type clouds. The question becomes how does it fit in more of a public cloud, and there [are] a lot of challenges, even if you’re purpose-built as a public cloud, if you’re an 8×8 or a RingCentral, they’re really challenged still in delivering that high-end experience, where Avaya has been doing it for years and is very good at it.”

When it comes to the midmarket, there is real competition and Avaya needs to “continue to work real hard to be known as a leader there,” Heitner said.

Bhaskar Ragula, FatPipe’s CEO, said Avaya’s increasing emphasis on cloud will be “very beneficial,” and since the company went public last year, “the profit that comes to Avaya stays in Avaya, and it has been able to increase its investments in all the new areas [it] wanted to do, but [previously] was hampered by the private-equity types.”

“That’s a big shift that you’re going to see, that Avaya has been able to invest back in new technology, new experiences and new partner relationships,” he said.

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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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