Avaya Keeps Crown Jewel, Contact Center
With a Chapter 11 bankruptcy filing comes the end of company's gambit to sell off its contact center business for much needed cash.
For months, speculation has been that Avaya would sell its contact center business in order to pay down debt, leading to a more sustainable capital structure going forward. As part of a recorded video to customers discussing the company's Chapter 11 filing, announced yesterday, Avaya CEO Kevin Kennedy stated that such would not, in fact, be happening. "A sale of the contact center business at this time would not maximize value for our customers and other stakeholders," he said.
The contact center business has been called the "crown jewel" of Avaya by many, including TalkingPointz analyst and No Jitter blogger Dave Michels as recently as August 2016. Avaya's fiscal 2016 results, released yesterday, bear this out. "In constant currency, contact center and networking revenue increased double digit percentages from both the prior quarter and year-over-year, while unified communications products declined year-over-year and grew sequentially."
To understand better what today's announcements mean for the Avaya contact center business going forward, I spoke to Karen Hardy, Avaya's vice president for customer engagement product management. With all the public hoopla around the announcement, yesterday found Hardy heads-down, conducting a boot camp for partners around Oceana, the company's next-gen contact center application.
One of Hardy's first comments was, "Partners are relieved that the news is out."
One can imagine that Avaya contact center partners do face less uncertainty with the business staying as part of Avaya than they would have with it as a separate entity. Many, though certainly not all, Avaya contact center partners also offer the unified communications solutions and a single, unified Avaya is simpler for them.
Hardy's follow-up comments spoke to what a lower debt load will mean not just to the company, but to her as a product management leader. The promise is of more money "to invest in sales, to invest in technology, and to turn up the marketing machine." Don't expect any of that money to be spent unraveling the contact center and unified communications components from one another. "There are no current plans to split the contact center and UC solutions," Hardy said.
From a selfish perspective, Hardy would like to see Oceana get a nice chunk of those new dollars. Since its general availability in October 2016, Avaya has deployed 50 Oceana proof-of-concepts (POCs) with customers. While Avaya talked about Oceana initially being a premises-based solution, those POCs have all been deployed as single instances from Amazon Web Services. Though no formal announcement has been made, I wouldn't be surprised to see an AWS deployment option for Oceana as early as the second half of 2017.
I also had the opportunity to speak to an Avaya contact center partner today. While he said it would be "Pollyanna to think there won't be challenges," he added that Avaya contact center has "a solid product and a loyal user base." I think the 50 Oceana POCs -- deployed in the midst of the uncertainty of the last quarter -- is a testament to that loyalty.
For now, Avaya contact center business is proceeding as usual. And, as always, Avaya will be part of the Contact Center/Customer Experience track at Enterprise Connect 2017, coming March 27 to 30, in Orlando, Fla. Avaya CTO Laurent Philonenko will be joining the Contact Center Executive Forum, and Mark Castleman, VP of corporate strategy, will be participating in a session on the role of bots, artificial intelligence, and the Internet of Things in customer care. (If you haven't yet made your plans to attend Enterprise Connect, register now using the code NOJITTER to receive $300 off an Entire Event pass or a free Expo Plus pass.)