Avaya Cloud, Subscription Pivot Requires Partners To ‘Run The Plays’

‘Avaya has the playbook, but how do you get us to run the plays?’ asks one Avaya partner. ‘They have the vision and the products to get there … but they need more work on how to do it.’

Avaya was late to the cloud game, but the premises-based unified communications powerhouse giant is now pushing its RingCentral-powered UC-as-a-Service offering and a subscription-based buying model. And the company said it needs channel partners to help it make its transformation a success.

Avaya, however, still has a large base of legacy partners that need help making the pivot to the cloud, said Bob Blazek, president and CEO of Altura Communication Solutions, a Fullerton, Calif.-based Avaya Diamond partner that has worked with Avaya for nearly 20 years.

"Avaya has the playbook, but how do you get us to run the plays?" Blazek said. "They have the vision and the products to get there in terms of product development and who they are working with in their broader product ecosystem, but they need more work on how to do it—how to operationalize the strategy."

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[Related: Avaya Collaboration, Contact Center Portfolios Receive Upgrades, AI Injection]

Shifting the culture of the Santa Clara, Calif.-based company to take on a cloud and subscription focus hasn't happened overnight, but Avaya has been making progress, Avaya CEO Jim Chirico told CRN.

While moving to a subscription-based buying model won't be a fit for all Avaya customers, Chirico said he would like to see at least 75 percent of its customers move to subscriptions in some technology segments.

"It won't fit all sizes, but I think it's going to get significant traction for us," he said.

Subscriptions will help partners stay current with their customer base because it provides a path to the cloud, said Frank Ciccone, general manager for North America sales and service delivery at Avaya. To that end, the company has been changing its internal compensation models to make sure Avaya sales reps are more focused on selling subscriptions. It also has made changes to the Avaya Edge channel program to incent partners to sell subscriptions instead of maintenance renewals.

"Our customers have been telling us it's about time. It's no secret that the market, in general, is moving to subscriptions," Ciccone said. "For partners, the subscription discussion is all about innovation, additional functionality, and growing their business."

Vox Network Services, a Brisbane, Calif.-based MSP and Avaya Diamond partner, is earning close to 60 percent of its revenue on IT consulting, collaboration, networking and security services via a recurring revenue model today, said Scott Landis, president and CEO. Serving up solutions through a consumption-based model is what customers are looking for from their solution providers, he said.

"The move toward cloud and subscriptions is where the industry is going now, so it's something we're excited about being able to offer," Landis said. "Our value is to look at the holistic, bigger picture, so it's important for partners to be able to deliver subscription models, bundled with whatever solutions the customer is looking for."

Avaya Cloud Office powered by RingCentral (ACO), the company's new flagship UCaaS offering, will be available to customers and through the channel in March.

Vox has its own enterprise UCaaS offering that uses Avaya technology, but ACO will fit a need in the midmarket space for Vox, Landis said.

Anthony Bartolo, chief product officer for Avaya, is working on customer journey mapping to understand Avaya's customer base and to help partners learn about their customers’ goals and existing processes and then help them migrate to the cloud at their own pace.

"There's an element of imposter syndrome with customers who think they know where they want to go, but they can't quite pinpoint it. That's where you have a trusted adviser come in and help every step of the way," he said.

But vendors must be transparent with their product strategies, in addition to customer mapping, so their partner community knows the direction. Bartolo, who joined Avaya in November, will be building out Avaya's product road map with the help of the channel. "It won't be in secret. It will be in consultation with the partner community, but driven by the customer perspective," he said.

There's more work to be done, but Avaya's cloud efforts and subscription-based offerings have already begun to pay off in the form of winning deals that would have been awarded to another provider if the company hadn't introduced ACO, executives said at Avaya Engage 2020.

"Contrary to what you might hear, we are winning against Cisco, Five9, 8x8," Chirico said. "I can tell you we are just warming up."