Talk time

Michael Bayer, EMEA president for enterprise telephony vendor Avaya, sat down with Roger Field to discuss the firm’s plans and its recent Nortel acquisition.

Tags: Avaya IncorporationCommunicationsSMBUnited Arab Emirates
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Talk time BAYER: One of the challenges is clearly that the decision cycles in the enterprise space have got a lot longer.
By  Roger Field Published  December 27, 2009 Arabian Computer News Logo

What is your message to endusers for the remainder of this present year?

For us it started with the Voicecon this year in March and we are just continuing that message. It is all about our SIP enabled architecture which we call Avaya Aura, and Avaya Aura is for us a starting point for customers to consolidate multi-vendor environments which can potentially give you huge benefits.

You are able to follow your depreciation route to upgrade in terms of applications centrally. It gives you savings because you can cut down on so-called PSDN costs. You offload more of your traffic on your wide area data network than through the public PSDN and then the final stage it allows you to move all of the applications into a datacentre and so the application is then driving the implementation instead of local implementations and phone features driving them.

When we introduced Aura, we intended it to be primarily for multi-site large enterprises so, what is the next wave of innovation? In my opinion, the next wave is the single site small-to-medium side customer. But how will you address them?

For them, we have launched what we call a mid-size Avaya Aura solution, the benefit of which is that it is again fully SIP enabled. It’s one server for all applications you can see, which drives down costs and simplifies the solutions on the market. We have shown it to our sales people last week, installation for the whole solution is less than half a day, which also makes it interesting for our channel partners. It is really about savings, simplicity, focus on unified communications – what the right applications are for the mid-sized market.

Is there an increasing push to work more with telecom operators as well?

We changed the go-to-market for the company a lot starting 18 months ago. With people like myself coming into the leadership team of the company, we now have a lot of service providers in our history. But we realised that the service provider side driven by Avaya was somehow more tactical, it wasn’t that strategic and over the last 18 months we really have expanded the way we go to market with service providers on a global basis.

And also here in the Middle East we have significantly increased our coverage model with customers like Etisalat and STC, who have traditionally been end customers of ours for their call centre solutions or for their own infrastructure. We have broadened that now to a value proposition for resale of managed services to the market that is definitely the way to go.

Also the trend is a bit different operator to operator. We see a lot of the operators going into the enterprise space with what I would call hosted solutions – so they host it for a specific customer. It is a customised hosting if you will. Then there are others who are much more interested in a managed solution and are building a platform that will be able to scale to multiple customers at the same time.

That is very different service provider to service provider. Here in the Gulf area I see them more looking into the hosted area right now to get the bigger enterprises closer together.

We see operators as one very strong channel in our channel landscape, and we are continuing to invest in to them.

How much of your business does the SMB sector account for?

The SMB in general is very different country to country. In essence it is around 10%, in some countries less, in some more. Hence the reason for that is that we have not had a really consistent strategy on the SMB in the last three or four years. That started with the fact that if you went on our website, you could not find an SMB section. That has changed and we really went serious on that topic a year ago, and have much better scoped out the way that SMB is going to go.

This new mid-market Aura solution is complemented by a product which we call IP Office, which is now going to scale down to less than 20 users, and that was not where we were playing. We were playing well in the range of 50 to 100. You might argue also in the range of 30 to 50, but definitely not less than 20. This is where you see a lot of growth of Asian companies and a lot of alternative providers. There is going to be a specific IP office release coming within the next four months, purely addressing the sub-20 as a bundled offer through our partners.

What are the main challenges you are seeing in the MEA market?

One of the challenges is clearly that the decision cycles in the enterprise space have got longer. A lot of decisions are now processed in a steering committee or a decision board that was not in place six to nine months ago. In essence I would say that enterprise sales cycles has been extended by three months.

When I was here last year, ROI was not a discussion last year. It was nice to have but it was more driven by customer satisfaction, scale and expansion. Now the ROI discussion and total cost of ownership has really kicked in with these investment committees. I also see challenges in the SMBs because of the liquidity challenges they have.

We have seen a slowdown across the board with SMBs because they focus on their core business and might defer any decision on ITC another six, 12 or 18 months, and make sure their company does the right thing.

How do you see things picking up in the next year?

You know for us it was important not to de-invest, we have not de-invested in our emerging markets. I also think we have seen the ground. I have seen the impact of the economic crisis in MEA, in Africa a bit earlier but in the Middle East not before May, so we have seen the crisis starting in the US in October 2008, then it hit Europe around January.

In Feb people said they had it under control, and then in May it was present everywhere and so now I think we have seen stabilisation since May. The question now is, are  we going to see a slight growth this quarter and we truly believe we will see slight growth going into the new year – not the same rates as we had before – but it should be high single figures from my point of view.

What is the current state of the Nortel acquisition?

Obviously now everyone is speculating about how our Nortel acquisition is going to go. We filed all of the anti-trust requirements around the globe, we are expecting the next guidance in November.

Then if all of that continues positively we are going to be the owner of Nortel Enterprise by the end of the year.

That is the plan we are working towards. We are still competing with their folks but on the other side very heavily preparing scenarios how to integrate and therefore it helps us that we are privately owned because our owners have a lot of experience with acquisitions and they are driving a kind of professionalism into that whole process that is quite astonishing to me.

I have done acquisitions before and been acquired before but the level of preparation and focus and processes make me confident that it is going to be a very smooth transaction. It is also a transaction that I think is different to a lot of other mergers and acquisitions because the people in Nortel are looking forward to have a new future. It is very different from companies that are doing well on the market and getting acquired and enjoying being on their own.

This is a company that was in Chapter 11 and the people and the talent they have are looking for a future and they are desperate to get a good integration going from their side as well.

I think that is a compelling reason why this is not going to distract us from business. It is just going to make us stronger.

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