Brian Riggs
Brian is a member of Ovum's Enterprise team, tracking emerging trends, technologies, and market dynamics in the unified communications and...
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Brian Riggs | February 08, 2016 |


Avaya Straightens Out Midmarket Cloud Strategy

Avaya Straightens Out Midmarket Cloud Strategy Lays down its new approach to cloud-based UC services in a two-pronged service and platform announcement.

Lays down its new approach to cloud-based UC services in a two-pronged service and platform announcement.

When it comes to cloud services Avaya has walked a long and winding road.

It has the Private Cloud Services for the largest of large enterprises, and AvayaLive Connect for the smallest of small businesses. The former, inherited from Nortel, mainly provides managed services, but can also deliver services in a hosted model. The latter delivered UC in an innovative SaaS model, though it never really took off and is now being decommissioned.

The company offers services for messaging, virtual meeting rooms (VMR), software development, and business conferencing in this totally trippy virtual world. There's a slew of platforms and pods for providers to build their own services. And there's the old Avaya On Demand services that launched way back in 2006. They're ancient history and of course have no bearing on anything the company is doing now. That said, it's good to remember that vendors like Avaya have been trying to get into the hosted UC and contact center services game for a good long time.

But let's talk about the midmarket since that's what Avaya is talking about today. As with the company's other cloud offerings, there's a midmarket service -- branded OnAvaya Google Cloud Platform -- and a midmarket platform -- branded Powered By Avaya IP Office. Here's a comparison of the two before and after today's changes:


So, in an even smaller nutshell, Avaya has expanded the Avaya-provided hosted IP Office contact center service to include UC functionality, and the partner-provided hosted IP Office UC services platform to include contact center functionality. Additionally, the Avaya-provided service is no longer restricted to agents using Chromebooks, which -- come on, let's be honest -- was really weird. The net result is a more well-rounded set of hosted IP Office-based services than either Avaya or its partners could previously deliver. And both the OnAvaya service and Powered By Avaya platform are both connected to a backend infrastructure that automates provisioning and service delivery... something lacking until now.

How It Compares
Compared with UC services based on Cisco Hosted Collaboration Solution (HCS), the Avaya IP Office-based services scale down more cost effectively. As a platform, IP Office scales from around 100 to 2,500 users. In the field, the partner-provided Powered By Avaya services typically target businesses with 100 to 500 users per company, while OnAvaya targets companies with 50 to 100 users. Cisco HCS can scale down to around 500 users per customer. But it's optimized for large enterprises with thousands to tens of thousands of users, and this is typically how providers position their services based on it. But HCS-based services have been around for years. Dozens of providers have sold millions of licenses on it. So it's clearly the more mature platform.

Compared with UC service based on BroadSoft, the IP Office-based services tend to be more feature-rich. That is BroadWorks can be paired with UC-One to provide a rich set of UC features, but most providers use the platform to deliver a fairly plain vanilla sort of telephony service that competes on price rather than features. So IP Office-based services will probably be more feature-rich but more expensive than most BroadWorks-based services... at least those without the UC-One add-on. And because BroadWorks supports full multi-tenancy (OnAvaya and Powered By Avaya services don't), it will scale down better to small businesses. (But things could change... for more on BroadSoft, see today's post, "UCaaS/CCaaS Consolidation: BroadSoft Acquires Transera.")

It's possible to draw comparisons to a seemingly unending list of cloud-based UC services for the midmarket, but it's time to move forward...

Who's Providing the Services?
So who's delivering the hosted IP Office services anyhow? As mentioned, when it comes to OnAvaya, Avaya hosts the platform and partners sell it. I failed to ask what resellers have signed up to sell it so far. I'll update this blog if I find out.

For the Powered By Avaya services, I've got a few names:

  • Sabio – Announced in early 2015 as parts of its OnDemand portfolio. It must have been an early adopter because this is a hosted contact center service based on IP Office offered a year before Avaya announced hosted contact center for IP Office.
  • ScanSource – Announced in late 2014 as part of the Cloud Solutions portfolio; the IP Office software is hosted by ViaWest. This seems to be UC only, no contact center.
  • Six Degrees Group – Announced in late 2014 as its UCaaS offering. The service is available in the U.K., and seems to be UC only, no contact center.
  • Synnex – Announced in mid-2014 as part of the CloudSolv portfolio of services. This is UC only, no contact center. Offered to Synnex resellers in the U.S. only. No word on number of resellers selling it or customers subscribed, though Synnex told me the average customer ranges from 20 to 750 users.
  • Telmex – Announced in mid-2015 as part of its Comunicaciones Unificadas portfolio. Telmex hostes the IP Office software in its Triara data center. Service is available in Mexico, and can be sold in Latin American countries where Telmex does business. Seems to be UC only, no contact center.
  • Westcon – Announced in late 2015 as a new UCaaS offering available to resellers in the U.S. and Canada. The IP Office software is hosted by Telagility. I'm not sure if this is UC only or also contact center.

At the risk of stating the obvious, a striking number of distributors sit on the Powered By Avaya partner roster. This is good for Avaya in that distributors have relationships with large numbers of resellers, and large numbers of resellers will be needed to make a success of these hosted IP Office services. And thanks to Cisco HCS -- which powers hosted UC services from Ingram Micro, CDW, and Tech Data -- the distributor-as-hosted-UC-service-provider model is, well, fairly well established.


Learn more about cloud communications trends and technologies at Enterprise Connect 2016, March 7 to 10, in Orlando, Fla.

View the Cloud Communications track sessions; register by this Friday, Feb. 12, using the code NJPOST to save an additional $200 off the early bird rate. Note, this discount code, which is valid for Entire Event and Tue-Thu Conference passes, represents a total savings of $700 off the onsite price. As an added bonus, you can get even bigger savings when you register three or more attendees from your company.

I'm a bit concerned that Avaya-provided OnAvaya and distributor-provided Powered By Avaya services are both ultimately sold by resellers. So isn't Avaya competing directly against its distributor partners? I mean, why should a reseller get its hosted IP Office service from a distributor when it can get the service directly from Avaya? And isn't Avaya arming resellers it has a direct relationship with to win business from Synnex, ScanSource, and other distributors' resellers?

Avaya calls out a number of reasons why this won't be a problem. "Some distributors will provide both Avaya's OnAvaya and their own Powered By Avaya services to their resellers," the company contends. "Resellers with a direct relationship with Avaya will sometimes operate in different regions than resellers working through distributors," it adds. This may be the case some times. But I'm pretty sure conflict will crop up too. Conflict is probably a problem Avaya hopes it has. It means demand for the services is taking off... and if that happens I'm sure it will tweak the go-to-market model to smooth things out.

UC Vendors as UC Service Providers
Vendors have been banging their heads against the UC services wall for years and years. With its latest approach to cloud-based UC services, Avaya remains as much as newcomer to the market as it was when it launched and quickly shut down Avaya On Demand 10 years ago, and when AvayaLive Connect went live four years ago.

Avaya is by no means alone:

  • Unify (then Siemens Enterprise) flirted with providing its own hosted UC services back in 2011. (Does anyone remember if OpenScape Cloud Services was ever actually released?)
  • NEC Univerge Blue is a revamp of a previously announced hosted UC service.
  • Office 365 E5 is Microsoft's third or maybe fourth go at providing a proper hosted UC service.
  • ShoreTel bought its way into the UC services market with its 2012 acquisition of M5 Networks, and over the ensuing years slowing and cautiously evolved it into Connect Cloud.
  • Cisco has moved extremely cautiously. For years it kept things focused around video conferencing, launching Tandberg-designed Callway in 2011, morphing this into WebEx Telepresence, and then adding a VMR service to the mix. Cisco finally branched into hosted UC just a few months ago, when it added telephony and a basic PBX feature set to Spark.

Mitel has gone through a lot less trial and error, but clearly, getting the hosted services thing right is a struggle for many vendors in the UC space. Does Avaya have it right this time? Do the others? Time, as they say, will tell.

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