CEO Kevin Kennedy spoke to industry analysts this morning, both reviewing Avaya's 2009 performance and talking at a high level about the Nortel acquisition. (As has been reported, a product roadmap is expected to be delivered January 21, 2010.) In a combination of a formal presentation and candid answers to questions, some of the highlights of the session are described below.While some financial indicators improved in Avaya's FY 2009, such as gross margin, EBITA and cash balance, revenues were down a substantial near-20 percent. With FY 2008 revenues reported as $5.1 billion, that means a $1 billion dollar decline to just over $4 billion in FY09. The new combined entity was described as having revenues of ~$5.5 billion, making Nortel's Enterprise business around $1.5 billion. That makes it about half the size it was in 2006.
Nortel's Agile Communications Environment (ACE) was mentioned by Kennedy more than once as a key strategic asset Nortel brings to the table. As I noted in a No Jitter blog in July, ACE is a solid complement to Avaya's Aura strategy. That said, I was a little surprised by Kennedy's response to my question about where ACE will fit in Avaya organizationally. At Nortel, the ACE work was done in a Multimedia Applications group that had responsibility for Contact Center, Messaging and Voice Portal applications.
Instead of becoming part of either the UC or the Contact Center portfolios, Kennedy said that ACE will sit in the R&D organization run by Alan Baratz. That team has responsibility for application and developer partnerships, and Kennedy said ACE will give "critical mass to the work that had been being done." So while Nortel positioned ACE as part of the product portfolio, it appears that Avaya will treat it more as an enabler of new applications. Some of these will likely be productized, others delivered custom for specific customers.
When discussing massive acquisitions, companies and analysts alike always say it's all in the execution. This has clearly become a mantra at Avaya, mentioned by SVP Todd Abbot in press interviews last week and repeatedly by Kennedy today. Those of us who work with Avaya on an ongoing basis have seen the hard work and focus in the past few weeks. Looking forward to seeing the roadmap!
