Avaya Looks To Channel For SMB, Services

Cisco essentially has IP-based solutions, products and offerings, whereas I would position Avaya as the leading hybrid solutions provider to the SMB segment. By hybrid I mean we have a strong position in the digital area with key systems and TDM systems. Today we understand the requirements of our SMB customers much better than our competitors; hence we are better positioned to offer the right solutions including applications like mobility, conferencing, messaging, presence, etc. bundled with telephony systems, including refreshing existing systems.

We're investing not only in IP-based solutions. We're also investing in the existing legacy digital solutions so we will have more offerings in the digital area as well as new offerings in the IP area. Channel partners who partner with us have a broader set of portfolio offerings compared to our competitors.

What kind of services are Avaya's channel partners that serve the SMB offering? Do you see a strong revenue opportunity for them there?

This is a new area of focus for Avaya. The big legacy base that we have out there was acquired essentially through a direct go-to-market model. Our success in SMB depends on our success with our channel partners. We are developing the right services options and offerings, including converting and upgrading the existing legacy base to these new offerings. We will do that exclusively through our channel partners. Going forward this is absolutely a new source of revenue for our channel partners that does not exist as of today.

We look to start deploying that starting the first fiscal quarter for us which is October 2009. That starts with maintenance, that being the lowest hanging fruit, then moving up the value chain to implementation, moves, adds and changes and also with the right set of partners, some managed services offerings as well. Clearly we see tremendous potential for our channel partners to generate for themselves new services revenue opportunities starting with maintenance, moving up to implementation and then to managed services.

How long do you foresee it taking for these plans to take shape and Avaya's channel partners to start offering these services?

Our plan is for these offerings to start being implemented starting our first fiscal quarter which is October 2009. For the new and evolving go-to-market strategy, especially on the services side, to take foot and for channel partners to see more benefits I would outlook at least two more quarters before it's widely deployed. Initially we will start with our existing channel partners, and perhaps start with a smaller subset of our current Avaya channel partners, work with them because they already obviously understand Avaya products and solutions, so it will be easier for them to transition to the new services offerings. On a broader basis, I would say two quarters, beyond that new channel partners will start offering them as well. So initially it will be with the existing channel partners and then new channel partners. We will use that as a means to recruit new channel partners as well.

What else is Avaya doing specifically to recruit new channel partners, especially those that focus on the SMB?

At this point, I'm not in a position to share details given that we are conducting an audit of our existing channel partners. We believe there is more opportunity for our existing channel partners and for Avaya to better deploy our products, solutions and services. We want to ensure that we exhaust all of our opportunities with our existing channel partners before we start an active campaign to recruit new channel partners.