The only news from Avaya this past year has been that Lou D’Ambrosio was stepping down as CEO, announced back in June. Although the former CEO alluded to medical reasons for his sudden departure, I can’t help but think that this happened a year to the date when Avaya was taken private, acquired by SIlverlake Partners, in an 8.2 billion dollar deal. At the time, it seemed that Avaya was poised for growth. It had a great team in place, led by a great leader, as was Lou D’Ambrosio, with a strong story, “Democratization of UC”, which he preached at VoiceCon 2008. My initial thoughts were that this private equity firm was going to make the necessary investments and take Avaya to the next level, becoming a leader in this industry.
Now, a year and a half later, the CEO has stepped down; Charlie Giancarlo, an ex-Cisco executive, has been at the helm of the organization since June; and there have been significant lay-offs and “resignations” of key people at Avaya. Furthermore, and more importantly, product innovation has been stagnant. It seems that leadership at Avaya is busy, going through organizational restructuring, or in laymen’s terms, cutting out the fat from the organization. Although it’s not unheard of for organizations to go through some restructuring, particularly when private equity is involved, the lack of product innovation is happening at a wrong time, when the industry is moving so quickly, and innovation is happening at the blink of an eye.
Initially, I thought the privatization was a good idea; now, I’m not so sure. With no official CEO successor (Giancarlo is still interim CEO), and staff being slashed in droves, it almost seems as if the company was being dressed for two options: (1) To be merged with another company or (2) To reinvent itself. The latter would be the better option, but it will cost them. Time to market is everything, and the clock is a-ticking. Selling it would not be worth it at this point, given the economy and the state of Avaya as it stands now. So what does this mean for Avaya customers?
Customers must assess Avaya’s next moves and figure out what that means for them. This is a crucial moment for enterprises to start implementing a UC and collaboration strategy, and evaluating the right vendors, who are promoting interoperability, is key. So while Avaya has been a leader in telephony, I question their ability to take it to the next level of collaboration, as we saw a few weeks ago from Cisco. UC and collaboration is much more than just telephony, and traditional vendors will need to make the right additions to their product portfolio. Avaya was on its way, but seems as though it’s fallen off track. Their analyst conference is next week; stay tuned to this blog for an update.