Best Options for Avaya
In last week’s Q3 earnings call, Avaya management disclosed in was in advanced discussions regarding several strategic review options, and that it will update the street within 30 days. I expect the update will come sooner.
What might happen? At a high-level, there are not that many options. The company may get acquired or not. If it gets acquired it will most likely be by private equity, a competitor, or unrelated firm that sees an opportunity. If it doesn’t get acquired, Avaya will continue with plan A – serve its customers as best as it can and hopefully improve on its ability to execute new initiatives.
It gets much more interesting when we dig into any of these possibilities. For example, the competitor angle has multiple rings. The first being Mitel, Genesys, or Cisco looking to consolidate their premises-based share. The second ring might include providers such as RingCentral, Vonage, and 8×8 that see a pipeline opportunity for migration and business expansion into premises-based systems, enterprise CC, and hardware. Ring 3 might be companies like Oracle, Salesforce, or Microsoft with market/portfolio adjacencies. Ring 4 and beyond are also possible and can be filed under Science Fiction. All of these scenarios seem plausible.
There’s also a good chance Avaya remains public and independent.
I can’t quite decide if being public is a benefit or liability. The traditional school of thought is private is best during times of transformation. On the other hand, I think being public might be what Mitel values about Avaya.
I can go on all day, but don’t read – watch – I assembled a panel of experts on this topic.