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Avaya continues to rationalize its partner base. Heading into last year's Avaya partner conference, it had completed a paring-down of the global channel community in which it parted ways with more than 400 UC partners in the U.S. alone.
At the time, it also began emphasizing cross-portfolio sales, urging Avaya partners specialized in areas like telephony systems and virtualized UC to push its data networking strategy and wrap more services around their deals.
Avaya observers say it's hard to tell how effective that effort has been.
The chief executive of one Avaya solution provider said the company tried to do "too much, too soon" with both the channel overhaul and the Nortel acquisition in the same year, but it took them two years to truly work their way through each.
"In many ways, Avaya is still playing catch-up to their own ambitions. Nortel was integrated from a product perspective but you still have a legacy Nortel base and a legacy Avaya base that aren't nearly the same thing. Same with partners," said the executive. "I think what you have seen in the past year, especially, is Avaya acknowledging to partners it bit off a lot when it did those things. If there's one thing I hear from them now that I didn't two years ago, it's that they want to empower good partners, cut bad ones and make sure we're all aligned."
The right channel approach will bolster Avaya's effort to maintain its customer base.
"They're in trouble," said Jon Arnold, principal of analyst firm J Arnold & Associates. "I think anyone who watched them wouldn't answer that in any other way. They've held on to big customers and on verticals where they're strong, like government and healthcare. But, those segments will be vulnerable over time, because they are not perceived as the best and brightest solution."
Arnold, like many partners and analysts, believes that shifts in how customers want to buy -- their embrace of cloud computing, their interest in building converged networking and data center architecture to consolidate IT assets -- can threaten Avaya's UC and contact center dominance.
That's especially true as Cisco -- at $46 billion in annual revenue, more than nine times Avaya's size -- leads the charge on converged infrastructure, and a host of other challengers, from Microsoft, with its Lync platform, to ShoreTel, with its aggressive inroads into cloud-based UC, gnaw at the Avaya and Nortel customer bases.
"There may be a run of a couple years where they're going to bleed a lot of business -- legacy incumbent business that's going to eventually go elsewhere," Arnold said. "It could be Cisco, it could be other places. But if buyers aren't comfortable with them -- if they're not perceived as having the best solution -- and their financial stability stays in question, that's a huge problem for Avaya.
"It is a worry, but most of the competition has their own financial challenges," said Converged's Melchiorre. "We've gotten used to it. They've made a major commitment to the channel by saying we're going to reduce the sales from a direct perspective. So we're always concerned, but we're comforted to know what a large company they are, and we are confident in their new innovative solutions like cloud solutions."