PHOENIX — There’s no bigger target than Avaya and its 100 million seats in the business communications market, and during the Avaya Engage conference, chief executive officer Jim Chirico wasn’t afraid to admit his executive team had their work cut out trying to stop droves of customers from jumping ship last year prior to announcing a partnership with RingCentral in October.
“We didn’t have a public UCaaS [Universal-Communications-as-a-Service] solution,” Chirico told Channel Daily News during a question period with reporters. “In fairness, that installed base was pretty ripe for picking for our competitors. And there may have been a perspective that the young guns, the startup guys, wouldn’t get the penetration as quickly as they did. So we needed to protect our base and our customers.”
But the road to stability has been a long one. Avaya exited bankruptcy protection in December 2017 and began trading publicly almost a year after being placed in Chapter 11 by its private equity owners TPG and Silver Lake. Avaya had lost its innovative chops, indicated Chirico, and it couldn’t waste any more time talking about the future – they needed a new UCaaS solution or Avaya’s competitors would slowly eat away at their market share from the bottom up.
That’s where RingCentral comes in, and today, Avaya officially introduced Avaya Cloud Office (ACO) by RingCentral.
Launching at the end of March, Avaya says that ACO combines RingCentral’s UCaaS platform with Avaya phones, services, and migration capabilities to deliver cloud services with communication and collaboration capabilities for businesses.
Avaya’s message to its enterprise legacy customers that they had an Avaya-branded UCaaS solution ready whenever they were to use it appears to have resonated. Avaya added 6,000 new customers in 2019. More than 500 of them, added Chirico, were competitive displacements against, Cisco, Mitel and 8×8.
“I wouldn’t say we’re completely secure, but we’ve cranked that valve pretty tight,” explained Chirico, noting they now have a huge upper hand when bidding on projects. “We have a significant advantage over small vendors who need to pull in resources from elsewhere.”
Avaya has found the right partner, but …
Jon Arnold, analyst and principal with J. Arnold & Associates in Toronto, said overall, Avaya and RingCentral should be congratulated for successfully “stopping the bleeding”.
“They couldn’t risk not having a fundamental offering on the table,” he told the publication, adding RingCentral gets access to the enterprise market and a massive installed base, while Avaya finally has a solution to sell that it couldn’t develop internally in addition to its existing on-premises offerings.
But Avaya can’t afford to step off the gas.
“Once you give people options to go elsewhere, it’s very hard to convince them to stay,” said Arnold.
Avaya’s also had a hard time retaining some of its top executives.
Avaya previously announced that as of November 2019, Gaurav Passi, Avaya’s former head of cloud, who replaced Mercer Rowe in November 2018, no longer works for the company.
Turnover at that executive role doesn’t concern Chirico, he told CDN, but Arnold said he thinks it undoubtedly has an impact on the company.
“You’re either all in or you believe it’s a sinking ship and you bail,” he said. “If you can’t retain your top executives, that’s a signal to the market that they don’t believe in your vision. But to be fair, Cisco has recently gone through some significant changes as well.”
Cisco underwent a major reshuffle towards the end of last year on the heels of a mixed earnings report.
But Arnold praised Avaya’s focus on culture and customer experience during day one of the conference. The addition of Simon Harrison, the former Gartner analyst who is now Avaya’s chief marketing officer, is a sign that the company is willing to go in a different direction to fill out its executive roster and rejuvenate its culture.
“It’s hard to get a second chance,” noted Arnold. “This is an important event for them.”
*Alex Coop is attending Avaya Engage as a guest of Avaya’s. Avaya did not review this article prior to publication.