Avaya To Partners: Attack The Midmarket, Upsell The Enterprise1:01 PM EST Thu. Nov. 15, 2012
Avaya told top solution providers Thursday that it's more committed than ever to being a stronger channel partner, and that continued investment in demand generation, marketing and training resources -- combined with a renewed push to stave off channel conflict -- will help the Avaya channel thrive in 2013.
"We will not engage in an enterprise or construct, or embrace a program, or pricing scheme, or product launch that does not take in the need, the mandate, of the people in this room have to make a fair rate of return," said John DiLullo, president of Avaya Americas sales.
What's more, Avaya has a bigger opportunity than ever to attack the midmarket, said Tom Mitchell, senior vice president and president, Avaya Go-To-Market, who urged partners to go after midmarket deals while selling "high and wide" in their enterprise accounts.
DiLullo, Mitchell and other top Avaya channel and sales executives addressed several hundred top Avaya partners during the kickoff of Avaya's Americas Partner Executive Forum in Cancun, Mexico.
Avaya has done much to make itself easier to do business with, DiLullo argued, including the paring down of its formerly five sales organizations to one and the collapsing of what was once 29 business units down to four. Avaya is also now doing about 74 percent of revenue through the channel -- shy of the 80-plus CEO Kevin Kennedy had mentioned three years ago -- but increased from previous years, company executives said.
Avaya's financial stability has been questioned as the company continues to post quarterly losses and discussion of its potential IPO has faded. But according to DiLullo, Avaya's seen eight quarters, out of the last 11, of sequential growth, and it has made a 40 percent improvement in its overall cost of goods while bringing down such costs as the average cost of maintenance per port on Avaya equipment.
Avaya is making targeted investments that will directly benefit its roughly 9,000 global channel partners, DiLullo explained, including $300 million poured into its services business to cover everything from service stock to services support programs.
Avaya is also investing in demand generation, and in the past few months it has increased its territory account managers who focus on midmarket and general channel demand by 30 percent, as well as increased the number of overall Avaya resources purely focused on the demand generation aspect by 100 percent. Avaya marketing dollars that were previously reserved for Avaya's corporate marketing activities are also now used for co-marketing with partners, DiLullo said.
Avaya will also focus on keeping channel conflict at bay. Any time an Avaya Americas rep wants to take a deal direct, DiLullo said, it requires DiLullo's personal approval.
"My approval will not be forthcoming," DiLullo told the room, adding that thanks to Avaya's demand generation push, he expects to bring Avaya partners at least 10,000 new prospects in the new year.
NEXT: Avaya's Two Most Important Sales Motions
Mitchell, who runs Avaya's overall go-to-market strategy and is also its global channel chief, told Avaya partners that the company's two primary selling motions will be about fueling the midmarket and stabilizing the enterprise. Avaya partners are now "very competitive" in the $8.8 billion total addressable midmarket, meaning global market share for employees with fewer than 1,000 users.
"The highest customer satisfaction [for Avaya] is in the midmarket right now," Mitchell said.
Mitchell said he's convinced the midmarket is a red-hot opportunity for Avaya solution providers, especially behind well-received products like SMB UC system IP Office, but that enterprise accounts can also be preserved and expanded thanks to a stepped-up focus on upselling enterprise customers, increasing services and boosting attach rates.
"You have to sell as a platform. Sell wide and high in your enterprise base," Mitchell said. "Target new markets with dedicated account teams. Target transactional, volume-based sales in midmarket, video and data where demand for Avaya competitive advantages is strongest."
Against Cisco, ShoreTel and other competitors, Mitchell said, "We can go toe-to-toe with the products we have."
IP Office is among Avaya's fastest-growing lines, as are its branch networking products and the video solutions it acquired with Radvision earlier this year, according to Mitchell. Contact center, SME/midmarket and video are among markets with opportunity-rich transitions taking place.
Avaya partners need to focus on creating future revenue streams, Mitchell urged, not just milking an annuity base of customers. Forward-thinking partners are already changing their model.
"Sell everything you've got. Sell the applications. It's a game of hitting singles and doubles, that's what you do when you're in a flat market," Mitchell said.
Avaya also plans to overhaul its much-criticized channel services strategy, Mitchell said. Over the next few months, Avaya partners will see announcements pertaining to the clarity, quality and consistency of how it approaches maintenance, professional and other services programs.
Among other ways Avaya has sought to preserve its partnering model, the company has also continued to root out grey market resellers. Avaya opened 71 grey market investigations, and in the process, terminated 15 partners and 6 employees -- including two Avaya managing directors -- that had enabled grey market sales of Avaya product.
Mitchell added that One Source, the software platform through which Avaya will provide common business processes and a dramatically simplified global pricing structure, the Avaya Pricing Model, will finally roll out to U.S.-based partners in 2013, and that Avaya is revamping its global learning program to reduce partner expenses and the learning hours expended.
Avaya partners will directly see the benefits Avaya's created over the past six months. Mitchell said partners need to attack opportunities using a "take share" mentality.
"This is not a conversation we could have had six months ago," Mitchell said. "Six months ago, we did not have a solid midmarket enablement to 1,000 users. We do now."
PUBLISHED NOV. 15, 2012