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Avaya bets on Web services

Allotting 90% of R&D spending to software, Avaya aims to deliver IP telephony features.
By John Webster , Network World , 04/24/2006
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Avaya is in transition. Over the past year, company officials have been laying out a software-centric product strategy with the goal of moving beyond PBXs and into the realm of services-oriented architectures and Web services.

Avaya's intent is to increase the strategic value of IP-based voice applications by letting independent software vendors (ISV) and enterprise users integrate communications software, provided as Web services, and business applications, says Karyn Mashima, the company's vice president of technology strategy. "We break down an IP communications platform into telephony, contact centers and collaboration applications, and ask which ones would be useful to developers [so they can] dynamically develop and customize applications and processes," she says. So committed is the company that it is pouring 80% to 90% of its R&D budget into software, she adds. (In fiscal 2005, Avaya spent $393 million on R&D.)

Of course, the move toward software isn't exclusive to Avaya, says Nora Freedman, research analyst at IDC. Nor is success a given, even for a company that has handily transformed from a pure telecom vendor into a major IP telephony player, she adds.

Since its launch in 2000, Avaya has built itself into a formidable telephony supplier by providing hybrid PBXs to enterprises that weren't ready for a full migration from TDM to IP. That strategy has positioned Avaya as the third-largest PBX vendor worldwide, behind Cisco and Nortel, Dell'Oro reports. In fiscal '05, the company, No. 30 on the NW200, had $5 billion in revenue. Software sales accounted for 33% of revenue, vs. 27% in 2002, Avaya says.

One concern Freedman has is how well Avaya can manage the software transition with its resellers, which the company says accounted for 51% of 2005 sales. "Are maintenance, licensing and upgrades going to change the channel? If the channel revolts, that will cause Avaya headaches and sabotage its installed base," she says.

Anatomy of intelligent communications

Avaya has dubbed its software strategy Intelligent Communications to describe a "distributed, ubiquitous, real-time communications platform" built on IP telephony infrastructure, Mashima says.

To help users build this infrastructure, Avaya will provide communications software components, such as click-to-call or conference, as Web services or composite services that combine several actions. An application developer at an enterprise moving toward Web services and an SOA for deploying communications applications then could use notify, respond and setup conference modules to establish teleconferencing, for example.

Avaya provides Web services interfaces with several product lines, including its Communications Manager call-processing software and Eclipse-based Dialog Designer development environment for voice self-service applications. And it plans to ratchet up the number of Web services modules over the next three to five years, Mashima says.

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