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Cloud Transition Complete: It’s Go Time for Avaya

Avaya’s user event, Engage, kicked off this week in Phoenix, Ariz. Engage 2020 is unique in that it’s the company’s first as a company that’s all-in on cloud. The company has talked the cloud talk for years, but they didn’t have the complete portfolio. They had a solid private cloud story for years – perhaps the best in the industry – but it never had a true SaaS product. The “Powered By” program for IP Office, particularly the version that ran in Google, was “cloudish” but didn’t have the ease of deployment and agility that an actual multi-tenant offering does.
In 2019, Avaya closed that gap when it announced Avaya Cloud Office (ACO) via a deal with RingCentral and Avaya IX-CC cloud contact center, which is a modernized cloud platform running on Microsoft Azure. RingCentral is a best-in-class UCaaS solution and is ideally suited for the IP Office base. IX-CC is built from the ground up to be competitive with other CCaaS vendors at least for the foreseeable future.
In addition, the company announced a number of other products that complement its portfolio of private and public cloud UC and CC offerings. Here is a highlight of some of these products:
  • Spaces – This is a cloud-based meeting and team collaboration app, which integrates voice, video, screen sharing, task management, and more. Avaya has priced Spaces aggressively in hopes of convincing customers to drop their incumbents. I’ve used Spaces a few times, and while it doesn’t have the feature set of a Zoom or Webex (transcription, translation, virtual backgrounds, etc), it’s a solid product and is worth a look. I would expect to see Avaya adding new features with many capabilities coming from DevConnect or A.I.Connect partners. Spaces is available now, with new features expected in Q2.
  • OneCloud ReadyNow – Avaya’s private cloud for UC and CC replaces the older Collaboration Pod that was more of an engineered system than a private cloud. ReadyNow is a true private cloud and has been extremely popular with many of Avaya’s global customers, where a SaaS model doesn’t work.
  • Avaya IX OneSpace – One of the cooler products that Avaya has developed in recent memory – as it unifies communications and collaboration – OneSpace is a customizable, single interface that aggregates Avaya and non-Avaya applications.

In actuality, these products were announced previously at Gitex 2019 in Dubai last year, where I was fortunate enough to see them. However, most of the Engage audience wasn’t at Gitex, so these products will be new to them, so the show provides a great platform to re-announce them.

The approach Avaya took to rounding out its cloud portfolio is a testament to CEO Jim Chirico’s leadership skills. The easy solution would have been to buy one of many struggling UCaaS vendors, but those companies are struggling for a reason. Many are built on old technology that won’t scale and would need a major investment to overhaul. RingCentral gives Avaya a market-leading solution, without having to invest the time and money to build one from scratch. With IX-CC, the company could have taken a similar route and tried to partner with someone like Five9 or TalkDesk, but the industry is much earlier in the contact center cycle. Building it made more sense. These were tough calls, but I believe the right ones for Avaya.
The product pieces are in place, and the entire leadership team has been turned over. Dave Michels did a nice job of summarizing the new executive team in this article. Also, it looks like Avaya is making some of its people a level or two down from the E-staff, such as Karen Hardy and Steve Forcum, more visible. This group has strong customer credibility and should be used for product-level discussions.
The title of Dave’s blog was “Rising from the Ashes,” but I’d debate the accuracy of that. At almost $3 billion in revenue, the company wasn’t dead. They needed to transition into the new world of cloud, and they've done that. The new leadership team, combined with new products, means it’s time to execute on the plan.
Now that the product strategy is in place, it’s time to look ahead. Last week, Chirico posted this thought leadership blog highlighting that Avaya is now “all in” on transforming customer and employee experience. At Engage, the company is introducing the term “multiexperience economy,” which highlights the importance of blending UC with CC. Avaya defines the key attributes of multiexperience as:
  • Enterprise-grade – delivering scale, migration, and tools supporting any size organization
  • Easy to connect – A single provider of a full enterprise and blended stack between the front and back-office and across multi-devices and multi-modal experience
  • Innovative – Helping to deliver new outcomes that are seamlessly adopted with existing environments and also opportunities to innovate at the edge with open APIs
  • Ecosystem supported – An unmatched ecosystem of channel and technology partnerships
  • Flexibility to consume – Offering the most comprehensive and flexible set of consumption and deployment models for any size of enterprise – public, private and hybrid
Much of the success in the execution phase will fall on the shoulders of newly appointed CMO, Simon Harrison. I’ve said for some time that Avaya has the coolest and best technology that flies under the radar. The CU 360, OneSpace, Vantage phones, and IoT integrations are just a few products that need more airtime. This doesn’t mean more technical mumbo jumbo, but in stories that show the transformative nature of Avaya’s technology. This will make the job of Avaya’s SVP of U.S. sales, Frank Ciccone, much easier. Ciccone can be a rock star, but he needs Harrison’s help in putting the narratives together that will get Avaya more swings at the bat.
Chirico’s job now is to communicate to Wall Street the journey Avaya is going through and not to focus solely on revenues. Transitioning to the cloud and a subscription revenue model requires more than flipping a switch. It can be highly disruptive to the business as the flow of revenue changes. For the next year or so, a successful quarter should not be measured on revenue, but on the activities and assurance that they are doing the right thing. Investors should want an increase in subscription revenue, even if that means overall revenue takes a hit, as it sets Avaya up for a better future.

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Looking to learn more about Avaya and their technology? Then, make sure to catch Avaya in the Exhibit Hall, booth 1418, and various sessions at Enterprise Connect 2020! Registration is now open, and use code NOJITTER to save $200 off the current rate!