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Avaya
Company Profile

by Faulkner Staff

Copyright 2020, Faulkner Information Services. All Rights Reserved.

Docid: 00017756

Publication Date: 2002

Report Type: VENDOR

Preview

Avaya, which emerged from Chapter 11 bankruptcy in December 2017, has been known as one of the world’s largest providers of enterprise-class call
center software and telecommunications equipment. The company’s product lines include unified
communications and collaboration platforms for video, voice and messaging;
customer experience management and call center; and cloud services. Avaya’s products are designed for multiple
sectors and the vendor is expanding its cloud offerings and capabilities.

Report Contents:

• Fast Facts
  

• Related Reports
• Profile
• Strategy
• Product Lines
• Activity

Fast Facts

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Name: Avaya Inc.
Headquarters
4655
Great America Parkway
Santa Clara, CA 95054-1233
(866)
462-8292
Web: https://www.avaya.com/
Type of Vendor:
Communication Systems Provider
Founded: 2000 (As Avaya)
Service
Areas: Worldwide
Stock Symbol: AVYA

---

Profile

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Avaya offers digital communications systems and software for small- to
large-sized businesses, government agencies, service providers, and many other
organizations worldwide. With a presence in about 175 countries, the company’s offerings include communications
software, hardware, and cloud services. Avaya’s
main product area is "unified communications", which
integrates mobile and IP voice, e-mail, instant messaging, and video for enterprise customers and contact
centers that support customer service with contact applications and
intelligent routing. Avaya serves more than 90 percent of Fortune 100
companies. 

History & Milestone Events

Avaya is the former enterprise networks group of Lucent Technologies and became an independent
company on September 30, 2000. In
2007, it was acquired by a pair of equity firms as part of a
privatization move.

Significant events are listed in the following chronology:

• 2000 – Is spun off from Lucent Technologies as an
  independent company. The same year, the company sells its US sales division to
  Expanets.

• 2001 – Makes several acquisitions to solidify its role in
  the enterprise communications market.

• 2003 – Acquires VISTA Information Technologies and
  Expanets; sells its connectivity solutions division.

• 2004 – Realigns itself into two operating units.
• 2006 – Appoints Louis D’Ambrosio as president and CEO
  after Donald Peterson resigns his position.
• 2007 – Becomes a privately held company after being acquired by
  Silver Lake and TPG Capital.
• 2008 – Announces the appointment of Kevin
  Kennedy as president and CEO.
• 2009 – Introduces a services delivery specialization program that
  allows BusinessPartners and AlliancePartners to provide services in
  conjunction with Avaya.
• 2010 – Completes the acquisition of Nortel Enterprise Solutions,
  including 6,000 employees.
• 2011 – Acquired audio equipment company Konftel as
  well as speech analysis company Aurix. Later in the year,
  the company filed for a $1billion IPO with the Securities and Exchanges
  Commission.
• 2012 – Acquired communications company Radvision for $230
  million. 
• 2013 – Named the official telecommunications equipment provider
  for the 2014 Sochi Olympics. 
• 2016 – Introduced a virtual networking system for
  health care environments, called SDN Fx Healthcare, with the capabilities of
  networking and managing thousands of medical devices.
•  2017 – Filed for Chapter 11 bankruptcy protection
  in the US. Avaya’s operations in Canada and worldwide were not affected by
  the filing. Extreme Networks acquires Avaya’s networking business for $100
  million. Jim Chirico, the company’s COO, was named CEO after Kevin
  Kennedy, president and CEO, announced his retirement. The company
  announced in December that it had completed Chapter 11 restructuring.
• 2018 – Avaya’s common stock begins trading on the New York Stock
  Exchange under the ticker "AVYA." Avaya acquired Spoken Communications, a contact-center-as-a-service company. 
• 2019 – Avaya partners with RingCentral to bolster its cloud
  solutions and increase its transition to the cloud. 

Strategy

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Avaya’s strategy is built around offering business collaboration
and unified communications for seamless global collaboration. The
company has rolled out a strategy centered around four key
pillars: 

1. Innovation in core businesses. By capitalizing on its expertise in
   unified communications and the contact center, Avaya is committed to
   enhancing its core solutions areas through the delivery of secure, scalable,
   and reliable products and services. 
2. Deliver emerging technologies. Avaya is dedicated to
   targeting artificial intelligence and mobility technologies while partnering
   with the right companies to drive new business opportunities for
   customers. 
3. Breadth and depth of cloud services. Avaya is building and
   investing in a cloud ecosystem to ensure a cloud-based approach combined
   with security, reliability, and power that customers require.
4. Delivery of high-value services. To help customers maximize
   investments and drive business, Avaya offers global services and expects to
   expand those offerings based upon customer requirements. 

In addition to its standard corporate strategy, Avaya is working to integrate cloud services into its
offerings and expand its cloud and hybrid cloud solutions. 

Strengths

Avaya is one of the most recognized brands in the enterprise communications
market, and it has continued to maintain its market share as it has shifted its
focus toward collaborative services, unified communications, and cloud
computing. Additionally, the unified communications market has been gaining
momentum over the past few years and there is no slowing down in the foreseeable
future. Grand View Research anticipates the global unified communications market
to hit $167.1 billion USD by 2025, reaching a CAGR of 16.8 percent. The firm
expects such trends as workforce dynamics, the growth of Unified Communications
as a Service (UCaaS), and data and device virtualization to bolster adoption of
unified communications.¹

In 2019, Avaya announced a partnership with RingCentral, enabling the vendor
to deliver its Avaya Cloud Office with a complete suite of features, the ability
to reach new customers, and accelerate transition to the cloud. Avaya Cloud
Office is blended with RingCentral’s UCaaS platform, giving it a new and
differentiated solution. When asked why this partnership is so important, Avaya
CEO and President Jim Chirico said, "RingCentral is a technology leader and
UCaaS is multi-tenant and no better fit than to bring that technology into our
portfolio to service our customers."²

By early 2018, Avaya had emerged from bankruptcy protection and had
returned to trading on the New York Stock Exchange. CEO Jim Chirico can be
commended for leading the company during some of its most difficult times
and helping to turn it around. 

Weaknesses

Avaya’s accumulation of debt, partly due to its buyout of Nortel
Networks, led the company’s finances to suffer and ultimately led the
company to file for Chapter 11 bankruptcy protection in the United States in
January 2017. The company had also been unable to turn a profit for about a
decade.

Outlook

After years of historically focusing on the enterprise customer, Avaya now
offers its products to smaller businesses since IP technologies can
support advanced services at a much lower cost than legacy ones. The company
views this as key to expanding its ability to compete in more markets while
spending is on the decline. Avaya is looking to further strengthen its cloud
offerings in 2019 and will do so through partnerships and investments. 

Lastly, the company’s financial fortunes have
been trending in the right direction. Avaya emerged from Chapter 11
bankruptcy at the end of 2017 and in early 2018, after more than 10 years, the
company’s common stock was back trading on the New York Stock Exchange. Several
new executives joined the company and Avaya COO Jim Chirico was named CEO. 
In 2017, amid its bankruptcy proceedings, Avaya
sold its networking business to Extreme Networks for $100 million because it
needed cash to settle debts.

The October 2019 partnership announcement with RingCentral, a provider of
enterprise cloud communications, collaboration, and contact center solutions,
helps Avaya accelerate its own cloud transition. The company will deploy Avaya
Cloud Office by RingCentral, a UCaaS offering. This alliance gives Avaya a full
suite of public, private, and hybrid cloud offerings, enabling it to better
compete with other vendors while delivering the cloud solutions its customers
require. 

Product Lines

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Avaya develops products for unified communications, contact centers, and the
cloud. The company is also recognized for hardware, including phones, headsets,
and multimedia devices. Aside from its major products, Avaya promotes tailored
solutions for companies in the healthcare, hospitality, government and public
safety, education, financial services, and media and communications industries. 

Highlights of Avaya’s product portfolio are detailed in Table
1.

Activity

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Products and Services

Avaya previewed the
Avaya IX Onespace. This “industry-first” UCC (unified
communications and collaboration) offering is designed to help
expand the capabilities of the Avaya IX Workplace UC portfolio.
This customizable, intelligent workspace specifically integrates
multiple communication channels and applications into a single
view with a “personalized” interface.

(10/09/2019)

Avaya is updating the IX
Contact Center portfolio. New elements will include the addition
of IX Teamspace, for deepening integration with back-office
channels; an IX Dashboard open modular platform for delivering
real-time snapshots of performance; and an Agent Scripting
call-flow scripting platform.

(09/24/2019)

Avaya announced that
Shelby County, Tennessee has conducted a test call leveraging
NG911 (next-gen 9-1-1) data with detailed, location-based
discovery. Avaya introduced 911 Secure to the county as a POC
(proof-of-concept) exercise, initially targeting three floors of
an administration building.

(06/13/2019)

Avaya introduced its
new cloud-native, Unified Communications-as-a-Service solution
running on the Google Cloud Platform. According to the company,
the new solution will “help customers of all sizes, including
small-to-medium businesses (SMB), more fully leverage the
flexibility, efficiency and scalability of cloud.” The product
will initially launch in a total of 24 markets across the globe,
with plans to expand to additional locations later. The offering
focuses on providing a customizable, “just-in-time” cloud
communications infrastructure designed for cost-reduction and the
capability to provision services for customers at “cloud speed.”

(05/30/2019)

Alliances and Joint Ventures

Avaya and Afiniti, a company that
provides AI (artificial intelligence)-based behavioral pairing
technology, announced a joint offering. The Avaya AI Routing with
Afiniti AiRo platform, which is part of Avaya’s IX Contact Center
portfolio, is designed to help improve customer interactions and
employee engagement by pairing customers with contact center
agents using AI.

(02/04/2020)

Avaya and RingCentral have introduced the Avaya Cloud Office by RingCentral. This
offering delivers “seamless communication and collaboration,”
through multiple channels, to offer cloud-based services and
communication and collaboration options. The release combines
the RingCentral UCaaS (Unified Communications-as-a-Service)
platform with Avaya phones, services, and migration capabilities.

(02/03/2020)

Avaya partnered with Noble Systems to
enhance Avaya’s IX Contact Center solutions. Noble will provide
with additional new toolsets, including gamification for employee
engagement; data analytics for intelligent process automation;
and other elements to improve customer contact strategies.

(01/28/2020)

Avaya and RingCentral closed their
strategic partnership with the introduction of the new Avaya
Cloud Office by RingCentral. This public UCaaS (Unified
Communications-as-a-Service offering will combine RingCentral’s
platform with Avaya technology, services, and migration
capabilities. The offering is planned to roll out “in the first
quarter of calendar 2020.”

(10/31/2019)

Avaya is collaborating
with Bell Canada, Komutel, Combat Networks,
and the Ontario Provincial Police to conduct a “Next Generation
9-1-1” – or “NG9-1-1” – emergency test call in Canada. This call
was delivered in Ontario via Bell, and featured call-handling
architecture from Avaya and Komutel. The country plans to
roll-out next-gen emergency calling services in June 2020, with
current E9-1-1 infrastructure to be decommissioned three years
later. The technology – which is based on a “cross-industry
initiative” – is designed to strengthen how emergency calls are
handled; reimagine emergency service possibilities; and provide
improved context, smoother workloads, and greater operating
efficiency to help better respond to emergency.

(10/28/2019)

Avaya entered into a
resale agreement with NVT Phybridge. This
partnership will see Avaya provide the company’s Long Reach,
Single Pair PoE (power-over-ethernet) switches for IP
Modernization as part of the Avaya UC (unified communications)
portfolio.

(10/23/2019)

Avaya and Data Hub
Integrated Solutions, a wholly owned subsidiary of the Dubai
Electricity and Water Authority (DEWA), signed a MoU
(memorandum of understanding). The partnership will see Avaya
assist with a digital transformation project for DEWA’s contact
center.

(10/21/2019)

IBM and Avaya reached an agreement to
work to expand Avaya’s ReadyNow private cloud UC (unified
communications) and contact center portfolio. In particular, IBM
will provide access to hybrid cloud-based technology to allow
Avaya to add ReadyNow private cloud offering availability. The
companies will also work to implement a hybrid cloud strategy,
through which Avaya plans to tap into other “advanced” technology
such as AI (artificial intelligence).

(09/18/2019)

Avaya has joined the Industry Council for Emergency Response
Technologies (iCERT). This organization brings together companies
that are involved in emergency communications and response
technology.

(09/16/2019)

Avaya and CTI solutions
provider Tenfold
announced a strategic partnership. Through this collaboration,
the companies plan to natively connect Tenfold’s real-time cloud
integration layer and intelligent integrated desktop agent with
the Avaya IX Contact Center and IX Workplace unified
communications (UC) platforms.

(07/30/2019)

Avaya expanded an
agreement with Koopid as part of its Technology Partner alliances
program. This partnership will integrate Koopid’s AI-powered
Customer Experience Orchestration platform and AI (artificial
intelligence) and ML (machine learning) models into Avaya’s
contact center solutions to enable “seamless transitions” from
AI-driven customer self-service to live human assistance on chat
or voice while also providing conversational context.

(07/16/2019)

Avaya has expanded its
integration with Afiniti
as part of a bid to improve customer experience and contact
center performance. This partnership will provide it with new
capabilities for applying behavioral pairing AI (artificial
intelligence) to outbound campaigns and digital customer
notifications. Specifically, Avaya plans to integrate Afiniti’s
Enterprise Behavioral Pairing into the IX Contact Center software
set. Further details are available via the Avaya Web site.

(06/25/2019)

Avaya accelerated its
ongoing relationship with Collab9, a UCaaS (Unified
Communications-as-a-Service) and CCaaS (Contact
Center-as-a-Service) provider partner. Together, the companies
announced a joint “go-to-market” strategy that will make Collab9
the “exclusive” FedRAMP platform for Avaya in delivering the
OneCloud Contact Center and UCC (Unified Communications and
Collaboration) suites to US federal, state, and local government
organizations. The expanded partnership will help Avaya and
Collab9 better address critical government needs related to
undertaking digital transformation.

(05/21/2019)

Avaya revealed that it is
furthering its integration partnership with Google Cloud. This
extension will specifically allow both companies to leverage AI
(artificial intelligence) and cloud-based capabilities, and will
provide Avaya clients with new capabilities. Avaya, in
particular, plans to embed Google Cloud’s ML (machine learning)
technology within its conversation services to power the contact
center, streamline the integration of digital AI (artificial
intelligence) capabilities for a consistent and intelligent
customer experience.

(04/10/2019)

Personnel and Organizational

Avaya has appointed
Simon Harrison as SVP and CMO, effective January 27th. Harrison
joins Avaya from research and advisory firm Gartner, although he
has also held leadership roles with Cirrus, Vocalcom, and Siebel
Systems, among other companies.

(01/22/2020)

Avaya hired William Madison as VP of Cloud Sales for North America. Madison comes to Avaya from Masergy Communications.

(01/15/2020)

Avaya named Jon Brinton as VP, North America Channel Sales. Brinton comes to Avaya from Mitel Networks, where he was President of the Cloud Division.

(12/02/2019)

Avaya announced the
return of executive Anthony Bartolo as Chief Product Officer,
effective December 9th. Bartolo – who will report to President
and CEO Jim Chirico – most-recently served as an exec with Tata
Communications, and formerly led Avaya’s UC (unified
communications) and Contact Center business units.

(11/19/2019)

Avaya appointed Kieran
McGrath as SVP and CFO, and Pat O’Malley as SVP, Growth
Initiatives, both effective immediately. Both will report to
company President and CEO, Jim Chirico. McGrath is a former
exec with CA Technologies and
IBM, while O’Malley – who
joined Avaya in 2017 – led Financial Transformation as the
company sought to restructure its financial position and
transition to a publicly-traded company. In addition to these
announcements, Avaya also noted that SVP, Innovation, Laurent
Philonenko will also be departing the company “this month” to
become CEO with an Avaya “business partner.”

(02/15/2019)

Financials

Avaya experienced net
losses of approximately $54 million for the fiscal 2020 first
quarter ended December 31, 2019. This amount – which equates to
loss-per-share of $0.54 – compares to FY19Q1 profits of $9
million, or $0.08 per share. No reason was cited for the decline.
Revenues, meanwhile, totaled $715 million, which is down by 3
percent from fiscal 2019 first quarter sales of $738 million.

(02/10/2020)

Avaya logged
year-on-year income declines, into the red, for both the fiscal
2019 full-year and fourth-quarter periods ended September 30,
2019. For the 12-month period, losses totaled $671 million, or
$6.71 per share, which is down by 334 percent when compared to
fiscal 2018 profits of $287 million, or $2.58 per share. Revenues
over this period, meanwhile, were $2.89 billion, an amount that
is up by 1 percent when compared to fiscal 18 sales of $2.85
billion. For the fourth quarter, Avaya’s losses were $34 million,
or $0.31 per share, which is down from a FY18Q4 net income of
$268 million, or $2.41 per share. Q4 revenues were $723 million,
which is down by 2 percent from fiscal 2018 fourth quarter sales
of $735 million.

(11/20/2019)

Avaya provided an update regarding its review of potential “strategic
alternatives” following its late-2017 emergence from Chapter 11
Bankruptcy. This “ongoing” process – which was expected to be
finalized by “mid-September” – involves Board members,
management, and legal and financial advisors working
“expeditiously to conclude the deliberate and comprehensive
review.” Avaya noted that it will not provide additional
information “unless or until it determines that further
disclosure is necessary.”

(09/16/2019)

Avaya saw increased
net losses, year to year, for the fiscal 2019 third quarter ended
June 30, 2019. Company losses totaled $633 million, or $5.70 per
share, compared to fiscal 2018 Q2 losses of $88 million, or $0.80
per share. Revenues, meanwhile, were $717 million, which is up by
4 percent from fiscal 18Q3 sales of $692 million.

(08/13/2019)

Avaya cut down on its
net losses by about 90 percent, year to year, for the fiscal 2019
second quarter ended March 31, 2019. Company losses were $13
million, or $0.12 per share, compared to year-ago net losses of
$130 million, or $1.18 per share. Revenues, meanwhile, were $709
million, which is up by 6 percent from fiscal 2018 second quarter
sales of $672 million.

(05/09/2019)

Avaya‘s earnings fell by
96 percent, year to year, for the fiscal 2019 first quarter ended
December 31, 2018. Profits were $9 million, compared to a fiscal
2018 first quarter income of $237 million. Revenues, meanwhile,
were $738 million, which is down by 2 percent from fiscal 2018
first quarter sales of $752 million.

(02/11/2019)

Major Competitors

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• Alcatel-Lucent Enterprise: https://www.al-enterprise.com/ 
  Amazon: https://www.amazon.com/ 
  Cisco Systems: https://www.cisco.com/
• Genesys: https://www.genesys.com/
• Google: https://www.google.com/ 
  Huawei: https://www.huawei.com/ 
• LogMeIn: https://www.logmein.com/ 
  Microsoft: https://wwww.microsoft.com/ 
  Mitel: https://www.mitel.com/ 
  NEC: https://www.nec.com/ 
  Poly: http://www.polycom.com/
  Vonage: https://www.vonage.com/ 
  Zoom: https://zoom.us/ 
  ZTE: https://zte.com/ 

References

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¹ "Unified Communications Market Size Worth $167.1 Billion
by 2025." Grand View Research. May 2019.
² Patrick Watson. "Avaya’s CEO on RingCentral Partnership." UC
Today. October 9, 2019. 

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