Challenges await Avaya’s grand plans

BOSTON -- Customers can expect newly private Avaya to push harder to integrate its communications software into business applications, industry analysts were told at the company’s two-day briefing last week.

“We believe this is the area where this industry is going,” says CEO Lou D’Ambrosio, referring to applications that can automatically trigger communications to speed up business processes.

That is but one highlight of the insights Avaya executives offered in their first shot at analysts since the company was bought for $8.2 billion earlier this year and taken private. Other directions include focusing more on small and midsize businesses, shaking up its sales force, improving services and fixing problems with its supply chain.

The company is pitted against Cisco, Nortel and Alcatel-Lucent for dominance in VoIP technology, placing first or second with Cisco in most categories. For instance, Infonetics places Avaya first in sales of IP PBXs and Cisco first in sales of desktop IP phones.

But the real battleground, analysts say, is for integrating VoIP with software that runs businesses to improve business efficiencies by speeding business processes along from step to step. As a result, all the top VoIP vendors are partners with Microsoft and its Office Communications Server and other software developers.

Avaya already has a significant partnership program called DevConnect to bring about these communications-enabled business processes, he says. Its partners include Bearing Point, IBM, SAP, Microsoft and Verizon.

“The long-term winners in VoIP are those who figure out how to create a community around themselves. DevConnect is by far the most mature of these [VoIP] vendor-development programs, moreso than Cisco,” says Zeus Kerravala, an analyst with the Yankee Group who attended the analyst event. “The value is all the things you can embed VoIP into.”

The company will shake up its sales force to accomplish this, D’Ambrosio says. By the end of the year, it will hire 350 salespeople, retrain many of them and perhaps lay off some that don’t snap around to selling Avaya hardware and software as solutions integrated into customer business processes rather than as isolated products.