Avaya Update

by Dave Michels

Avaya hosted its Americas partner event last week in Cancun. I could not be there (I was tweeting away at the Defrag conference). I did follow the tweets from Cancun and thus can offer a second hand update on Avaya:

  • Avaya has been busy with R&D. It came in 114th place last year in patents issued. It won the Thomas Edison Award for its method of enabling real time collaboration. Avaya has been increasing its R&D spend each year for the past four years
  • The fastest growing business units are IP Office, Radvision, and branch networking gear
  • IP Office sales are increasing significantly – growing at 46% quarter over quarter and 100 % year over year
  • 46 percent of revenues come from services and maintenance solutions
  • No IPO in sight
  • The company is pushing indirect channel sales and the Americas revenues are now 26% direct and 74% indirect
  • There is a strong push for partners to attach data gear
  • The Avaya Desktop Video Device continues to be a viable product (?), but Flare and Scopia on the iPad are positioned next
  • The company is seeing significant growth in video soft clients
  • Avaya announced a $30 million win with the Canadian Government

It all sounds pretty good. Many people don’t realize Avaya offers networking gear, the company got into that business as a result of its Nortel acquisition (Bay Networks). It has some strong solutions particularly in wireless, but it put a strain on its relationship with HP, Extreme Networks, and Foundry/Brocade.

There were surprisingly few tweets about Aura, but that doesn’t mean it wasn’t discussed. Nor were there any tweets about the Avaya Collaborative Cloud launched last Spring. The last I heard there was no channel play for the collaborative cloud. The point above about 46% of revenue being services is significant. Avaya has been making numerous changes to capture more in managed services including the hiring of Karl Meulema who previously ran Cisco Services.

The elephant at the beach was Avaya’s finances which are the subject of whisper conversations at many industry events. Revenues were down 9% year over year last June with a net loss of $166 million. The company began cutting operating expenses last month with a target of $235 million. However, the company has made five acquisitions in 18 months. Massetti, CFO since 2009, left the company and was replaced by Dave Vellequette last August. No new information here.

Tiffani Bova, Gartner Research VP, did a presentation likely on IT services. I wonder if it was the same great presentation she gave at Mitel’s conference last June.

Thanks to all of my tweeting friends – your tweets were read and appreciated.