CANCUN, MEX. – Very little was known about Richard Sterenka, Avaya’s recently appointed worldwide channel chief, when he joined the company. He was brought on board to solidify the networking and collaborations vendor’s channel strategy after a bit of a revolving door at the position. Sterenka followed Tom Mitchell, who lasted just about a year; before him, there was Jeremy Butt.
Sterenka took the stage at the Avaya Executive Partner Forum and outlined the company’s top five channel priorities. They are:
- Align with new segments and selling motions
- Grow mid-market through coverage areas
- Drive outcomes through incentives
- Align services strategy with cloud, APS and ACS
- Improve the ease of doing business with Avaya
After he read out the list, Sterenka made sure to say that these priorities are “critical and mandatory.” However, every senior executive believes his plan is critical. What he made clear to all the solution providers and service providers in attendance was the term “mandatory”. As there is no other option.
“We recognize that we have a challenge here. We have not kept pace with competitors especially on ease of doing business. We need to get this done this year,” Sterenka said.
He added that the marketplace and Avaya are at an inflection point. “We’re not the same company we were 10 years ago. Today, two out of every three sales come from software and services instead of hardware.”
This fact has forced Avaya to change its go-to-market strategy in many ways. The first and the most relevant is that 79 per cent of Avaya business goes through the channel. The days when Avaya Canada, for example, operated with just one solution provider partner are a distant memory.
Another factor that Avaya has had to adapt to is rapidly changing customer consumption models. Sterenka said that the company is fully on-board with supporting OpEx models over CapEx.
“There is a shift happening with CapEx, but it’s not all about the cloud or renting services on a monthly basis. Partners are not able to get more of those $10 million deals. This is a trend we expect to continue. Customers are looking for alternative solutions and we need to support that,” he said.
Sterenka also advised partners to stop focusing on declining markets, saying that the value has moved out of the stack and into software. “The enterprise customer is sweating out their assets and sitting on technology and not moving. They’re reducing the number of end points and that means a reduction in revenue.”
Solution providers should instead concentrate on the new market opportunities created by big gata such as business analytics, security and video.
“We have to grow where the market is growing. We have to leave that long-standing notion that companies are not spending money on IT. Customers are spending money on IT. The market is opening itself up for us,” Sterenka said.
Proof points are 3,000 per cent growth in video solutions; 41 per cent growth in collaboration platforms; and 13 per cent growth in IP Office.
Sterenka’s approach to channel partners was as frank as it gets in this industry. He knows there are major challenges ahead for Avaya channel partners and this pushing the envelope tactic may be the right medicine for the channel team inside of Avaya and for the solution provider community.