The Avaya-Nortel Strategic Roadmap: A Little Help PleaseThe Avaya-Nortel Strategic Roadmap: A Little Help Please

A couple of months following their roadmap announcement, I'm still not sure which way Avaya is headed...

A couple of months following their roadmap announcement, I’m still not sure which way Avaya is headed...

Allan's No Jitter Blog
I read Allan Sulkin's No Jitter piece "Avaya Product Roadmap for Nortel Offers Has Few Surprises" on January 18, 2010 (one day before Avaya’s official announcement "Avaya/Nortel Enterprise Solutions Integrated Portfolio Roadmap"). Allan's a smart, savvy analyst who works closely with Avaya, so I figured he had the analysis nailed.

In Allan’s blog, I focused on a few key phrases such as "the current list of product cancellations is quite short" with the MCS 5100 and Nortel Multimedia Conferencing biting the dust and replaced by Avaya's Presence Server and Meeting Exchange, respectively. His comments that the CS1000 and BCM products "will continue to be sold indefinitely" seemed straightforward, implying that these Nortel systems would be viable technology for the next few years.

My takeaway: if a customer had wanted to buy Nortel in the past but put their decision on hold because of Nortel's bankruptcy, they could now buy that CS1K with confidence, knowing the system would be a supported for the next several years with new major software releases, patches/fixes, as well as full manufacturer maintenance services going into the next decade.

Certainly Avaya's winnowing of its desktop portfolio down to SIP compliant devices made sense. Frankly, there are just too many devices for Avaya to support and for customers to choose from anyway.

Allan’s insights into Avaya's "Applications Sequencing" and plan to abstract call setup/routing onto Session Manager with telephony features/functionality residing on a separate server (using the best features of Avaya and Nortel) looked quite interesting.

As always, good information from Allan.

Avaya's Roadmap
Still, I thought it best to validate Allan's post by attending Avaya's roadmap announcement webinar on the 19th. I tried to attend the webcast 5-6 times but successfully failed to access it until the last 5 minutes, as the event was oversubscribed. Not a good start for the "new" Avaya-Nortel. I ended up having to watch the announcement via instant replay.

A few comments about the broadcast:

* Make sure everyone who was invited can access it.

* Stop trumpeting EBITA as a measure of your financial health. To quote Charlie Munger (Vice-Chairman of Berkshire Hathaway Corporation and Warren Buffet's cohort): "I think that, every time you see the word EBITDA [earnings], you should substitute the word 'bull****' earnings."

Or to put it more gently, "EBITDA hides reality by concealing normal expenses a company will encounter, and gives a false sense of the profit potential of the business." These normal expenses include interest and taxes.

I believe it's safe to assume that Avaya has significant interest expenses from financing the Nortel deal (and to take them private) which may explain the rumors of Avaya going public again. You have to take these costs (and taxes) into account to really understand how well they're doing. So instead of talking about EBITA, let's see income statements for the past few years to better evaluate their financial well-being today.

* Lastly, Avaya will absolutely sell Nortel's CS1000 and BCM products now. To paraphrase Dr. Allan Baratz's comments during the broadcast: if you have or want an Avaya or Nortel environment and are looking to buy a system...no problem, we'll sell you an Avaya or Nortel system (to hear his actual comments go to minutes 22-24 of the Avaya roadmap re-broadcast).

OK, while not thrilled about not being able to access the broadcast and with the lack of specifics on the roadmap timelines, the message seemed consistent with Allan's blog. That is, if you want to buy a Nortel CS1000 or BCM, you can buy it from Avaya now. My conclusion was that Avaya will continue to enhance, sell, and support the product "indefinitely" just as Allan wrote.

I also attended one of Avaya’s "live" roadshow conferences in February. Sorry to say but this was not Avaya's best work with no new or meaningful information provided. Though the Olympics video was pretty funny with Avaya touting its role at the games while showing their logo slapped on Nortel 1100 series phones. Suggest they "pilot" these roadshows with real customers/consultants next time before doing it again.

Stephen Leaden's No Jitter Article
Fast forward to March with Stephen's article posted on the 10th. Thought the piece was great by offering specific information and good advice about doing your due diligence (that regrettably few customers will follow). If you're a Nortel customer and haven't read it, I strongly recommend you do.

So why am I confused? Stephen's analysis of Avaya's Nortel roadmap seriously conflicts with Sulkin and Avaya's information, especially about the CS1000 and BCM products.

Instead of presenting a short product cancellation list and talking about products being sold indefinitely, Stephen describes a long list of product cancellations and specific information about systems that will be designated "End of Sale" in the next 12-18 months such as CS1000, BCM, CallPilot, and Contact Center.

So who's right? Until I hear otherwise, I'm inclined to go with Leaden's more detailed analysis. I spoke with him at the last VoiceCon conference and his article is based on his discussions with Avaya and his own estimates/opinions of what will take place based on historical trends, years of experience, and the financial commitments of any organization having to support two distinct product lines.

That said, I'll try to confirm Avaya's direction next week when I'm at their consultants' conference in Denver.

I'm not sure why Allan's blog wasn't more specific but guess he "got what he got" from Avaya and depended on them for the accuracy of information. That said, I am disappointed that Avaya hasn't been more forthcoming and frequent with product roadmap specifics to guide customer and consultant thinking about critical buying decisions. It feels like we're responsible for doing the research and sorting the roadmap out ourselves. I can also tell you that the Avaya and Nortel clients I've talked with over the past few months aren't being told much if anything by Avaya or their channel partners.

What about Avaya End of Sale and Extended Support?
To better understand what Avaya (and Stephen Leaden) mean by End of Sale, the Avaya website states:

What does this mean? End of sale = dead end product. So why would you buy a product announced as End of Sale?

I also understand that if you want your existing Nortel system's software to be supported (aka Partner Assurance Support Services or PASS), Avaya will provide maintenance support until 2017 under an extended maintenance plan but you need to be no more than two releases behind the current system version by July 1, 2010. If you're >2 releases behind, you need to upgrade your Nortel system. In some cases, you also need to upgrade your adjunct systems such as voice mail and contact center platforms to address integration issues between new and older systems.

Also be aware that extended support has its limitations. According to an Avaya document (same link as in the discussion on End of Sale above) entitled "Avaya Global Services Introduces Extended Support", this service:

* Current engineering support (Tier IV)

* Further hardware/software maintenance enhancements (e.g., PCNs, "bug fixes," interaction/usability solutions)

* Since new replacement parts are no longer manufactured for End of Sale products, parts shortages on some products or components may require replacement with substitutes, which may cause delays in repair and response times or require upgrades to other components at customer expense

* Per Incident (formerly Time & Materials) Support will end simultaneously with the end of Manufacturer Support.

Not what I would call reassuring....

Conclusion
I'll limit the conclusion to a few observations with an open invitation for comments (which you can post here) from Avaya, Avaya's channel, customers, analysts, consultants, or anyone else who can bring clarity to the discussion:

1.) If I'm a Nortel-only channel partner, I'm not feeling too good about the future. What can the Avaya Connect program offer to get these partners certified, competitive, and competent quickly against established players like NACR, Cross Telecom, Verizon, and Shared Technologies--not to mention Avaya's competitors? (Avaya Connect is the new channel partner program announced in February 2010)

Just because they've signed up 264 partners (62 percent of the total Nortel Enterprise Solutions partner base, according to Channel Insider, April 7, 2010) doesn’t mean that they’re ready to go to market. There is some serious heavy lifting (not to mention costs) needed to get these channel partners on par with the Avaya certified partners and the competition. Does Avaya really have enough capital and organizational resources to fully support this effort?

2.) If you're a Nortel customer looking to replace or expand your infrastructure, are you really going to make a major investment in new Nortel technology now? Doubt it. I can't see why you'd bet your critical communications infrastructure on their quickly fading technology. In fact, Avaya is recommending you buy their maintenance and then "layer" Avaya Aura Session Manager on top of upgraded Nortel systems and then start replacing the legacy Nortel systems with Avaya.

3.) Why hasn't Avaya been more forthcoming with specific roadmap details and timelines instead of us having to rely on 3rd party experts like Sulkin and Leaden?

4.) Why the July 1 deadline for Nortel system upgrades for software support? Forcing many customers to make this capital investment mid-year when their IT budgets are fixed (and limited) is a lousy way to build customer goodwill (and a good way to open the door to the competition).

The Avaya channel partners I've talked with aren't keen about this tactic or the conversations they're having with their customer base about this "upgrade and support program" even if Avaya is offering deep discounts. From my experience, customers who are strong-armed by vendors into procurements will remember how this was handled and it WILL impact their next major buying decision.

That's enough for this post. Again, I'll provide an update from the Avaya conference next week. I also invite your comments (which you can leave here) and look forward to hearing from you.

Douglas Carolus is Director, Communication Solutions at N’compass Solutions, an independent IT technology consulting firm located in Minneapolis, MN and focused on communication and data center solutions. If you want to comment on or respond to this article, you can do so here.