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.

Tags: Unified Communications Information, Unified Communications Information by Vanessa Alvarez
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Our UCStrategies.com team has been discussing the acquisition of Siemens Enterprise Networks (SEN) into a joint venture with The Gores Group, who also owns Enterasys and SER.

As we pondered the situation, it became clear that this is an ideal time for some dramatic action.  SEN has arguably the best software stack for UC solutions in the entire industry in their OpenScape Communications Suite.  (Yes, we mean just the OpenScape Suite, not all the updated telephony-centric products such as the HiPath 8000, et al.).  

Our modest proposal is that the new SEN look past the traditional converged voice and PBX market, in which they are in a money-losing fourth place position (this according to their own slides from yesterday’s announcement) and look instead to the future via Unified Communications. 

What if they told all of their installed base customers that the new SEN is different?  The new SEN will not declare end-of-support on all that good Siemens technology that still works.  Instead, the new SEN recommends that the customers don’t waste their time replacing PBXs with IP PBXs and buying new phones, but rather spend their time and money installing OpenScape, connected to any PBX they own (old or new, of any brand).  Since OpenScape provides the complete set of communications tools that integrate seamlessly with both Microsoft and IBM (SEN has alliances for this with both companies) and with the enterprise back-office or hosted solutions (think SAP, Salesforce.com and more), SEN has the best chance of any company to come out as the market leader in Unified Communications. 

Hmmm. So the choice is to continue to sell PBXs, where SEN lost 602 million Euros on revenues of 3,200 million Euros in FY2007 and try to hold on to fourth place with declining market share, or to use this opportunity to truncate the loses in PBX selling (but continue the more profitable servicing business) and shoot for the leadership position in UC.  Losses/share laggard or smaller but profitable leader?  Oh, yeah, let’s be the leader! 

So, there’s our modest proposal.  What do you think?  Please post away on our blog here.

Tags: Unified Communications Information, Unified Communications Information by Marty Parker
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Independent consultants (IC) symbiotically aid both the customer and the vendor. We help the customer better understand the vendors, and we help the vendors better understand the customer. So why then do some vendors have such a negative reaction to ICs? That’s a question I am periodically left asking myself, wondering why some vendors resist the use of an IC on a project. I wonder why they don’t seem to understand how the customer>consultant>vendor relationship can benefit all constituencies. I believe vendor resistance to ICs falls into two primary categories. One category I’ll loosely characterize as “friction”, and the second category I’ll call “competition”. This month I’ll focus on the “friction”. The “friction” speaks to the perception some vendors have that ICs sit “between” them and the customer. While not the only objection cited, one of the most common is that an IC may slow the sales cycle. I unapologetically agree with that, as we seek to bring some structure to the project and move it away from the raw “pitch” stage. Yet, there are a number of friction related complaints with which I disagree. A few of the most egregious follow: Looking at the sales cycle example, one should look at the associated opportunity growth. An IC may cause a 60-day opportunity to become a 120-day opportunity. But, that opportunity will likely grow 3, 4, or 5 fold as we help the customer better understand the magnitude of their requirements, and help them better understand why they should invest in the extra capabilities, functions, redundancy, and the like. If you are an investor, wouldn’t you wait an extra two months to increase your return four times over? Sometimes the vendor believes the IC keeps the customer from understanding the “real value” of the vendor solution. In fact, a significant portion of many IC projects involves customer education. We might not always agree with the vendor that something is “special”, but we do educate the customers to help them see the “value” of all their options.

‐ Vendors often forget the ways in which an IC can reduce the vendor’s pre‐sales time expenditure. We help the customer understand and articulate their needs; we help develop designs; we help articulate the customer’s position, their pricing requirements, their service levels requirements, and more. We also often play a crucial role, without which any vendor would be stymied - we help with the internal business case packaging for senior management so that the project actually gets funded.

‐ Customer satisfaction grows if a skilled IC is involved. We work to make the customer understand what they are buying and what they can expect from it, and we develop a clear set of criteria. Furthermore, if the customer is dissatisfied despite the vendor performing as agreed, we seek to recalibrate the customer’s expectations. We actually do push back on the customer as warranted.

‐ ICs are, in military parlance, a “force multiplier”. A vendor can spend one perishable hour with a customer. Or, a vendor could spend an hour with consultant, and see that hour pay dividends at multiple customers. Of course, if you are vendor and you choose to establish an adversarial relationship with the Consultants, then the multiplication may prove problematic for you.

In the end, vendors will be well served recognizing that independent consultants are their allies. Our allegiance is to our clients, but we really do help both parties.

Due next month… the “competitive” resistance

Tags: Unified Communications Information by Tom Marsh
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