Avaya ‘all-in’ with growth plans

Avaya CEO Jim Chirico has revealed a $300m investment in new technology after admitting the company had previously lost its way on innovation.

Speaking to attendees at the vendor’s user conference, Avaya Engage, Chirico said the last 12 months have seen the firm “get back to its roots” by expanding its product portfolio and enhancing its ecosystem.

“We went all-in in 2019,” he said. “We have invested significantly in our product portfolio. We’ve been executing our customer-first strategy. And we’ve remained committed to our company, despite the quarterly pressures.”

Three years after coming out of Chapter 11 bankruptcy, Avaya has now reduced its debt by $250m and bought back about 12 million outstanding shares, said Chirico.

He compared the company to the San Francisco 49ers, which went from a 2019 losing streak to finalists in last week’s Super Bowl. “They brought in the talent that was necessary to compete and develop new plays,” he said. “They focused on execution. And they changed the culture of that team to always remain focused on winning outcomes.

“They understood it was going to be difficult to transform, but they stayed true to their course and never lost sight of their objectives – not unlike the changes we’ve made at Avaya.”

In particular, said Chirico, Avaya had greatly intensified its efforts in the cloud – most notably with a new unified communications-as-a-service (UCaaS) offering, Avaya Cloud Office, in partnership with RingCentral.

“Customers and partners have been asking Avaya for years, ‘please bring to market a multi-tenant, UCaaS solution’,” he said.

Avaya has also brought in new leaders as part of its makeover, including Jon Brinton, who takes responsibility for the global Avaya Edge partner programme. Formerly president of Mitel’s Cloud Division, Brinton joined Avaya in December with a mandate to “transform the company as the partner of choice for communications solutions…with an emphasis on cloud and new subscription models”.

As part of the shift, the vendor said it had increased partner incentives to encourage more subscription and services sales. In its first-quarter financial, released today, cloud, alliance partner and subscription revenue made up 18% of the firm’s revenue.

Rufus Grig, chief strategy officer at Avaya partner Maintel, said it saw several innovations coming from Avaya Engage, with the partnership with RingCentral complementing partnerships with Nuance, Google, Affiniti and others.

“It’s also great to hear that partners still remain central to Avaya’s strategy,” he told MicroScope. “We look forward to continuing success in cloud with Avaya – it’s a key component of both of our strategies.”

Elsewhere, in the face of needling by “cloud-based” rivals in the form of prominently placed advertising by Genesys and Five9 near the event in Phoenix, Chirico pointed to Avaya’s installed base of more than 100 million seats with “hundreds of thousands of customers”, including 90% of the Fortune 100.

The CEO added that Avaya signed up more than 6,000 new customers last year, including 500 competitive displacements. “Contrary to what you may read, contrary to what you may hear, these wins are against the likes of Cisco, Five9, Genesys, 8X8 and Mitel,” he said.

Another recent hire, chief product officer Anthony Bartolo, added: “We will be checking the tree in this space, and we won’t be shaken out of it easily.”