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Avaya Engages with MidMarket Select Packages

by in Telecom

This week Avaya announced its new Midmarket Select Program for its Connect Channel Partners.

The program is both an obvious and difficult thing to do. Before I explain that, let me first highlight Avaya’s recurring themes of midmarket and IP Office.

If you did a word cloud of the past few years of Avaya press releases the largest terms would be “IP Office” and “Midmarket.” “Contact Center” (midmarket and enterprise) is not far behind. The midmarket strategy is reasonable as it is huge, global, and highly fragmented. This strategy seems to be working as many of Avaya’s competitors (the usual suspects) have confirmed to me that they are seeing Avaya as a strengthening competitor.

So what is the midmarket? Demographically the definition seems to include businesses with between 500-2000 employees, though I’ve seen definitions as high as 5000 and as low as 50. It seems simple enough, but keep in mind the typical 3000 employee business is much bigger today than a 3000 employee business a decade or so ago. What I mean by this is that 3000 employees used to mean a total of 3000 phones probably split across a handful of locations; so perhaps no system bigger than 1000 ports.

Today, it is more likely that a 3000 employee system will have a single UC solution across all locations. On average, each of those 3000 employees will have 3 devices (smartphone, desk phone or soft client, and potentially additional endpoints at home and/or secondary computers). This system is supporting 9000 endpoints is also likely supporting voice, IM, video, and various workflow integrations. Oh, I should mention that those endpoints may be connecting over internal wired/wireless LANs, inter-site networks using MPLS, virtual private networks, and possibly public networks.  While the size of the midmarket hasn’t really changed over the decades, the complexity has.

This brings me to the Select Program. What Avaya is doing can be described in a single word – Bundling. It seems pretty obvious as vendors have bundled goods for decades or even centuries. It’s probably why we use PowerPoint instead of one time market leader Harvard Graphics. At some point Microsoft bundled PowerPoint with Office, and that was that. Bundling works.

What hasn’t worked is the UC-network bundle. It has been tried. Cisco tried and failed with UC on the router. Siemens Enterprise tried when it acquired Enterasys – which it then sold off just prior to changing its name to Unify. NEC has just recently reorganized in the Americas to put its networking and UC divisions together as it sees an emerging opportunity with SDN. Although Alcatel-Lucent Enterprise (ALE) has several networking and UC joint accounts, it has largely sold its products separately and through separate channels.

The UC network story, which makes sense, has never made cents.

So what’s changed? Well nothing suddenly, but there are three elements in play that Avaya hopes to capitalize on.

  1. Its own networking capabilities. Avaya has a pretty strong networking story. They developed a solution called Fabric Connect which combines standards and SDN technologies to simplify networks, reduce protocols, and increase control. The solution includes switches, routers, access points, and even network adapters for really dumb devices. It solves a lot of data center challenges, but it doesn’t require a data center. That sucking sound you hear in the clouds is all the data centers going away.
  2. SDN in general. A window of opportunity presents itself whenever there is a shift in technology. Software defined networking is that shift.
  3. Complexity has become public enemy number one. This has been a very gradual shift. For decades the pattern was to increase complexity. It sounds crazy, but think through your TV remote controls over the decades. When I was young they were simple, and over the years they got bigger and more complex. I recall my VCR remote that had hidden buttons under a cover and a large LCD display so you can do all the programming on the remote and then just transmit the complete instructions. Most things got more sophisticated and more complex every year because that’s what the market wanted. There’s so many examples from the number of mouse buttons to car ignitions. My car used to have four positions on the ignition – now the key stays in the pocket and all that’s required is a push of the button. Of course TV remotes are also pretty sane again. Now everyone wants things to be simpler. This is a general trend with consumer and business: SMB to large enterprises.

What Avaya is doing is combining items 1-3 above with a midmarket optimized bundle to create a reasonably unique offer. Midmarket firms have a lot of complexity, but so does everyone else. What is different with midmarket firms is the lack of economies of scale. Enterprises have more vendors targeting them, and more internal resources to piece it all together. The midmarket has less of each to address comparable challenges. In other words simplicity is a stronger card in the midmarket sales deck – plus there’s less dealers too. Neither Microsoft nor Cisco are terribly focused on the midmarket.

As I opened, this Select Program program is both an obvious and difficult thing to do. How do you convince a company that potentially already has a desktop video solution and/or a wireless solution already in place to consider a new full-stack bundle from Avaya?

That’s the hard part. However, the low hanging fruit likely resides in the contact center, or Customer Engagement center in Avaya-speak. These new bundles will provide contact center solutions with pre-integrated video solutions and networking (including wireless) in a single stack. The value prop is to get back to supporting customers instead of figuring out what the next software upgrade will break.

Although the packages promise simplicity, it requires a reseller that is savvy across Avaya’s portfolio. Thus the program is limited to Connect Channel Partners. The potential multiplier for Avaya could be more dealers becoming certified across the portfolio due to these bundled discounts.


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Dave Michels By

Dave is an independent analyst focused on enterprise communications. he provides public content on TalkingPointz and other industry websites, and also works with clients directly.