Avaya announces integration with Google after missing revenue targets

Amid buyout rumours and missed first-quarter revenue targets, Avaya Holdings Corp. is swinging back with a major announcement.

Avaya announced the general release of Powered by Avaya IX, its new cloud unified communications-as-a-service offering that runs on Google Cloud Platform and leverages containers, microservices, and Kubernetes. For channel partners looking to become more profitable selling cloud unified communications (UC) to small businesses, this is a compelling offer, indicated Chris McGugan, Avaya’s senior vice-president of solutions and technology.

“Powered by Avaya IX now gives SMBs an attractive cloud communications option with many of the capabilities, features, and benefits previously associated with larger enterprise offerings,” McGugan said in a press release.

The new offering – initially available in 24 countries globally, including the U.S. and Canada – will make it easier to configure instances within minutes. So while selling UC to a business with 50 or fewer employees may not have been cost-effective because of how long it took to set up clients, the time-savings changes that, he added.

Avaya launched an online store earlier this year through which businesses can purchase cloud products directly from Avaya, but the company relies on channel partners for three-quarters of product revenue.

“Partners can leverage Avaya’s popular communication offer deployed on Google Cloud, without the need to invest in and support their own infrastructure, providing an attractive option over competing cloud offers,” said McGugan.

One of those competing cloud offers made it well-known what it thought about legacy providers like Avaya. RingCentral’s founder, chairman and CEO told attendees at its ConnectCentral 2018 conference last November that Avaya and Cisco are losing the cloud game, and that the few million legacy seats will eventually move to the cloud; but it won’t be to Avaya or Cisco’s platform. RingCentral’s chief commercial officer repeated this message during the company’s latest earning’s call earlier this month.

“The key to our success is our proven ability to transition customers from legacy on-premise systems like Cisco and Avaya to RingCentral Office and Contact Center,” said David Sipes.

Avaya currently has approximately 3.7 million cloud seats between its public and private offerings. Avaya says it added 200,000 cloud seats over the past year but missed its revenue targets in the first quarter of the 2019 fiscal year. It probably didn’t help that Reuters published a story a week before the quarter closed which said a private equity firm had proposed a $5 billion USD leveraged buyout.


Our thanks to investment research platform Seeking Alpha for the transcriptions from Avaya and RingCentral’s 2019 Q1 earnings call.

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Jim Love, Chief Content Officer, IT World Canada

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Alex Coop
Alex Coophttp://www.itwc.ca
Former Editorial Director for IT World Canada and its sister publications.

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