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Avaya CEO talks competition, debt, innovation

Tim Greene | April 1, 2013
Avaya is pushing a new range of unified communications products, but is finding that managed services are becoming more popular among its customers who would rather turn over complex UC transitions to someone else for a predictable monthly fee, says the company's CEO Kevin Kennedy.

So it has more to do with comfort zone than size?

It's the comfort zone because of potentially the complexity of what they have. I can think of numerous cases where people have systems from many other suppliers, they may have gone through a lot of mergers and acquisitions so they're dealing with complexity, and they're looking for people to take that complexity and migrate it to a single solution over time. That's not the only case but that is a prevalent case.

Who do you see as the decision makers for UC?

You're pointing to a very interesting rotation within customers. At one point there were voice organizations and then there became data organizations and then there became application organizations. Depending on the segmentation of the customer, increasingly unified communications is being aligned with the application side of the house as opposed to a raw infrastructure side of the house. In the middle market it's still an IT organization but certainly the chairs continue to swirl. We're of course quite comfortable in that because a good piece of our communications is the contact center, which is an application that requires you to know people's business, how you integrate with many, many pieces of the business. We really straddle what I would call voice infrastructure as well as application space. But you are correct that in many places in the industry those organizations' changes are evolving.

How does it stand now? Do you see more of the application guys?

The dominant spend in the industry is largely in the application. That's where the velocity and in the end that's where the end-user benefits are. In some tier of the segmentation if the Fortune 1000 you see an increasing alignment of spend and governance with applications providers.

Avaya scored No. 1 in North America among businesses with less than 100 phone extensions supported. Why is Avaya ahead in that market?

I don't know specifically. Generally we seek to lead in several dimensions. One is toward the low end we've recently come out with a new product, IP Office, and that particular product comes out at about 20% to 25% less cost than the two primary alternatives. We do in one server what it takes the others perhaps up to six servers to do. We boot and are up and running in about 30 minutes. It's a new product, a new product cycle. It deploys very, very quickly which is good for our partners. That's really all a partner play. It's simple because it's one box and does what others do in many, and we have priced it so it is more cost effective than our leading two competitors. If there's something beyond that to be honest I don't know. Those were the design points and we've pretty much confirmed those design points. As I've mentioned last quarter we grew either 17% or 20% quarter on quarter, and this particular product has been growing pretty well for us.


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