Over a month has passed since Avaya’s January 19 filing for Chapter 11 protection in the US bankruptcy courts.
This petition marked the next step in a long journey of uncertainty for Avaya that started in 2009 when it acquired Nortel. Burdened by a large debt ever since – one that ultimately reached nearly $6 billion – Avaya seemed destined to struggle financially as it battled the triple challenge of debt payments, legacy pension obligations and declining revenues.
Despite this, Avaya continued to innovate and compete with a well-regarded portfolio. Mitel respected Avaya as a strong rival; the two companies contended regularly, with both claiming their fair share of wins across the small business and enterprise segments, and the private and public sectors.
So, what’s next for Avaya? More to the point, what’s next for its customers and those who were considering Avaya?
Since January 19, Avaya customers have been targeted from all angles by other vendors keen to lay out their credentials. From long-established competitors like Mitel to relatively new market entrants like Ring Central, Avaya customers have been presented with a myriad of options, including staying put.
Here’s a look at the three primary options that competing vendors have been promoting to Avaya customers over the last few weeks:
The Avaya option: inertia
For many Avaya customers, uncertainty will result in inertia. Sit and wait. Wait and see.
Their Avaya equipment works fine at the moment, so why not pause and see what happens post Chapter 11? Avaya itself would endorse this approach; its recent communication to customers has, understandably, been to reassure, to dampen down concerns and to paint a positive picture that Chapter 11 will help it restructure and emerge leaner and fitter.
The reality is that no one knows what will happen. It may be fine. It may not be. It’s all speculation.
Avaya’s future lies in the hands of the bankruptcy court and a complex multi-party negotiation that will include first lien debt holders, second lien debt holders, the pension fund, the management team and of course the bankruptcy court. No one can confidently predict the outcome.
It’s this uncertainty that brings risk to Avaya customers.
In what form or structure will Avaya emerge from Chapter 11? Which products will be supported going forward? By whom? For how long will products be protected from the ongoing cyber-security threat? What future investment will be applied to the product roadmap? Will commercial terms remain the same?
So many questions. So few answers.
Is inertia a prudent strategy in the face of Chapter 11? Our message to Avaya customers—review your business communications strategy and ensure that you have a clear view of the potential paths forward. Either make a move now or at minimum review the viable alternatives, shortlist them and be ready to implement.
For those that were considering buying an Avaya solution, Mitel’s view is simple. Don’t do it. In the face of an uncertain outcome, like the Chapter 11 process, why take an unnecessary risk when there are better paths forward.
The “pure cloud” provider option: On-premises is dead
One of the more zealous viewpoints put into the market lately is from “pure cloud” providers. Several, including Ring Central, have declared that “premises-based communications is dead, cloud has won.” This position should be no surprise, coming as it does from companies that offer only pure cloud solutions, are relatively recent market entrants and have no on-premises communications experience.
It’s a message that aims to frighten organisations into action and it’s disrespectful to the Avaya customers they are targeting—organisations that have made significant investment in on-premises communications based on reliability, scalability, performance and integration with other business applications.
Is there merit to a 100% cloud strategy? Yes, for those customers that are happy to move all of their communications to a cloud-based subscription model (Mitel can help with that; in fact, we are the #1 global provider of cloud communications*. Just saying.).
But for most mid-sized and large enterprise organisations, the reality is that on-premises systems are alive and kicking as part of an integrated hybrid unified communications and collaboration (UCC) strategy that blends the best of both on-premises and cloud, allowing organisations to leverage existing investments while adding cloud applications for particular users, departments or locations at the time and pace of their choosing.
Should Avaya customers be wary about provocative claims from smaller vendors? Should they consider a more rational approach with vendors that can support both on-premises and cloud requirements. We think so.
The Mitel option: Choice
It’s critical that organisations insist on choice, flexibility and agility to successfully negotiate their way through a period of unprecedented industry and technology disruption. While several companies try to lock Avaya customers into a single path forward, we pledge maximum choice and flexibility.
Whether organisations need to reduce costs, increase team productivity, improve customer satisfaction, transition to the cloud or fully embrace the collision of voice and the Internet of Things (IoT), we can help them evolve, efficiently and pragmatically.
How? Via a balanced approach that combines both premises and cloud-based communications.
We call this hybrid unified communications & collaboration (hybrid UCC). And it’s the model we would strongly view as the best path forward for most organisations, especially mid-sized and large enterprises. Mitel’s approach to hybrid UCC is also recognised by Gartner, achieving its highest score in 2016 for satisfying hybrid UC requirements in a use case study**. (Mitel is also the only vendor in all five Gartner Magic Quadrants covering business communications.)
See how we rank in Gartner Magic Quadrants for business communications >
We live in interesting times in the business communications industry
For Avaya customers right now, interesting also means uncertainty and turbulence, neither of which are good stablemates for business-critical communications. To help cut through the noise and boisterous marketing from vendors seeking to step in, consider this simple three-step approach:
- Be proactive. Plan an alternative strategy now. Inertia is not a risk worth taking for your business-critical communications.
- View overly provocative or aggressive marketing from newer entrants with healthy scepticism. Avaya’s unfortunate situation does not justify dismissing an entire category of communications technology used by millions of businesses worldwide.
- Insist on choice. Don’t be forced down a single-track road. Consider hybrid UCC as a better, evolutionary path forward that uses the best of both premises and cloud communications.
Mitel can, of course, help Avaya customers with all of this. We also have exclusive time-limited offers for both premises and cloud communications for Avaya customers and organisations considering Avaya. Take a look. We’d be delighted to hear from you.