Avaya announced today that it has acquired Edify, a Santa Monica, California-based company that over the past six years has built a CCaaS/CPaaS platform. Financial details of the deal were not disclosed but since 2019, the company has had multiple investment rounds from venture capital firms.
As one looks for the rationale for the acquisition of Edify by Avaya, there could be no better set-up line than Zeus Kerravala’s statement in the No Jitter piece "Five Thoughts From Avaya’s 2024 Analyst Summit." He wrote, “AXP (Avaya Experience Platform) Public Cloud is a serviceable offering today, but there is still a sizable feature gap between it and many of its competitors,” Kerravala wrote.
Pre-acquisition, Edify described its flagship product, Edify CX, as uniting contact center (CCaaS), and real-time communications platform (CPaaS/API) functionality in a no-code cloud-native solution that lets users move seamlessly among channels within one conversation, just as people do on their phones. It is the no-code orchestration and additional workflow capabilities that Avaya found most attractive.
The management of companies with established solutions that require additional functionality always goes through a “build vs. buy” decision. In this case, the question was how long would it take Avaya’s engineering team, using available resources, to build roadmap capabilities already available in Edify CX balanced with the cost to purchase Edify and the time to integrate it with Avaya Experience Platform.
In a quote in the press release, Alan Masarek, CEO, Avaya refers to the acquisition as a “tuck-in,” a term typically applied to purchases for technology. But he goes on to discuss that it will bring “world-class engineering talent into Avaya’s engineering organization.” While Edify’s chief technology officer, David Funck, has not been with Edify long (8 months), I have known him for several years as a solid product executive with a strong track record in the contact center.
Having followed Edify since its inception, I can also attest to the fact that there is world-class marketing and sales talent at Edify as well. Tony Lama, CEO, Edify was a sales leader for Aspect (now Alvaria), AWS Amazon Connect and Twilio Flex. I have worked closely with Candace Sheitelman, CMO, in this market for over 20 years, at Concerto, Aspect, and Edify. While not discussed in the announcement, my guess is that all of the employees of Edify will be offered employment at Avaya and most will accept.
I see this acquisition as a contact center market consolidation move, similar to Nextiva’s acquisition of Thrio earlier this year. Both Edify and Thrio were helmed by entrepreneurial leaders with forward-thinking visions of what the next generation of cloud communications technology could be. Both companies’ platforms were built by teams of outstanding contact center and enterprise communications engineers using the latest and greatest tools available.
The final commonality between Edify and Thrio is the one that led to each being acquired by companies with large installed bases of customers and years-long channel partnerships. While each had built a great technology stack, they were faced with a market difficult to break into - crowded with larger incumbents with established reputations. Acquisition was the only play they had to get their technology in front of a wider customer base.
The acquisition is a great signal to the market that Avaya is executing its plan to deliver innovative customer experience to its existing and prospective customers, quickly. I do not imagine it will be long before Avaya is ready to present a new roadmap for AXP that includes Edify capabilities. As is often the case, I believe Avaya will find assets in the Edify CX platform beyond what can be learned during an acquisition process – when they are able to dive into the breadth of its capabilities. Also, the company has hinted that there will be a continued interest in augmenting and accelerating key customer experience capabilities. Translation: their buying spree may not be over!
It is easy to say your financials are all in order, but an acquisition is a strong outward signal that Avaya has both the strategic and financial wherewithal to invest in success.
