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Avaya’s new services strategy to focus on cloud migration

Infrastructure

CANCUN, MEX. – Avaya announced a new direction for services at its 2015 Avaya Executive Partner Forum.

The new services direction will have four go-to-market motions, according to Avaya channel chief Richard Steranka.

They are:

  1. Avaya Private Cloud Services: this is an Avaya-Led direct services and sales motion for large/global enterprises;
  2. Avaya Powered Cloud Services: a partner branded and hosted motion for global CSPs/Sis;
  3. Avaya Branded Cloud Services: also to be partner branded and hosted but for regional CSPs; and
  4. Another Avaya Brand Cloud Services motion that is hosted and sold directly by Avaya and wholesaled through solution providers.

What Avaya is trying to solve with this new services approach is to encourage the channel to move customers over to the cloud.

Todd Johnstone, vice president and general manager, recurring revenue for Avaya, told CDN that the challenge on the services base is that more than 30 per cent of that base is still on legacy offering low price points.

This has propagated an inexpensive way for customers to stay with legacy systems instead of migrating to the cloud.

“The world is changing and we need to figure out how to migrate the channel off this lucrative revenue stream before competitors come in and offer an attractive upgrade option using an Opex model on cloud,” Johnstone said.

Currently channel partners are making calls on customers and charging high rates.

Keith Clemente, Avaya’s director of offer management and business analytics, said the price points are generous some reaching 70 points of margin. Channel partners have built models around this, but these services have become inefficient to those offering proactive and predictive services.

Under the new services direction, the channel can offer monthly billing cycles, while detecting and solving problems before the customer knows, Johnstone added.

The thought behind Avaya’s new services direction is to push the channel from simple break fix to services delivered in software that are predictive and proactive. “People are looking at big screens and put in trouble tickets is a remnant of the past. We need to modernize them and look to the future to what customers are demanding. They will want services not wrapped around the product but integrated into it,” Steranka said.

One of the goals of Avaya’s new services direction is customer uptime. Steranka told channel partners based in Canada and Latin America that the networking and collaboration vendor needed to shift away for customers who are struggling with budget cuts or are forced to reduce maintenance costs to providing services that add true value.

Another challenge, Steranka added, is that customers deal with 30 to 40 outages per day and 80 per cent of those are because of legacy equipment. “That technology is starting to fail. And, how we price this is another challenge. We need to thoughtfully move through this,” he said.

Steranka cited Walmart founder Sam Walton at the 2015 Avaya Executive Partner Forum saying “there is one boss and that is the customer and he can fire anyone by spending his or her money with someone else.”