Avaya Acquires Konftel for $15 MillionAvaya Acquires Konftel for $15 Million

A small Swedish company adds high-quality audio technology to Avaya's capabilities--and a line of conference endpoints

Avaya announced today that it's acquiring Konftel, a Swedish company that makes high-quality audioconferencing devices. The price tag was $15 million.

Though miniscule compared with audioconferencing giant Polycom, Konftel has some interesting products whose addition to Avaya's portfolio builds on the momentum of last fall's Flare/tablet announcement.

Konftel's newest product, its Konftel 300M, pictured below, promises high-quality audio on a conference-room-type speakerphone via a 3G cellular connection, using a SIM card. We tend to think of the road warrior as a loner, a knight without armor in a savage land, but this Konftel product seems to be targeting mobile workers who travel in packs and need to be able to stage a conference call while detatched from the office network.

The underlying technology for all of Konftel's products is OmniSound, the company's name for its high-quality audio technology. Alan Baratz, senior vice president and president of Global Communications Solutions at Avaya, called out this technology in the company's announcement of the deal:

(Emphasis mine)

The last comment likely explains why Avaya went the acquisition route despite Polycom's dominance in this field: Avaya intends not just to sell Konftel's existing devices, but to build its technology into Flare, the Avaya endpoint user interface. Avaya sees Flare as a compelling UI now, but also as the groundwork for whatever software users deploy as their communications portal longer-term. It's natural to think that future UIs need to include higher-quality audio, and Avaya also seems to be trying to grow more video technology in-house as well, the better to battle Cisco and Microsoft.

One other note of interest: Avaya announced that Konftel will run as a wholly-owned subsidiary, rather than being integrated into Avaya. This seems to me to suggest that Avaya wants to keep the existing Konftel products as a niche line, and use the company going forward as a kind of R&D lab for Flare.

The obvious question is to what degree the Konftel acquisition drives a wedge between Avaya and Polycom. Avaya may be looking at Polycom's close relationship with Microsoft, and figuring it needs a stronger internal story for conference phones; or may be expecting Polycom to get acquired such that the market would be upended. But given Polycom's market dominance in this field, the openness of its devices, and the fact that they have relationships with all the major players, I can't see Avaya going too far to alienate them. So this is likely more about building Konftel's underlying audio technoloogy into Avaya products going forward, than it is about Avaya trying to grab conference endpoint market share.