Avaya Restructuring Presents Opportunities for Partners
It was announced last week by Avaya that they remain committed to offering the best services to solution providers and is set on remaining a strong channel partner. Through persistence in investing in demand generation, training resources and marketing, along with a new push to shrug off competition from the channel, Avaya will continue to grow stronger in the next year.
The president of Avaya America sales, John DiLullo, said: “We will not engage in an enterprise or construct, or embrace a program, or pricing scheme or product launch that does not take in the need and the mandate of the people; in this room we have to make a fair rate of return.”
Furthermore, the company is now in the best position to confront the midmarket, according to the senior vice president and president of Avaya Go-To-Market, Tom Mitchell. Partners are being encouraged, through Mitchell, to chase midmarket deals, all the while selling “high and wide” in their enterprise accounts.
Along with DiLullo and Mitchell, other leading Avaya channel and sales executives are focusing on the hundreds of top Avaya partners in the midst of the Avaya Americas Partner Executive Forum in Cancun, Mexico.
DiLullo also stated that Avaya is continuing in its attempts to make itself easier to do business with; this includes cutting down its sales organizations from five to one, and removing 25 of its business units (from 29 to 4). Three years ago, CEO Kevin Kennedy mentioned that the company would aim for 80-plus percent of revenue being conducted through the channel, and although this target has not been reached, it has still increased in recent years to 74 percent.
The financial stability of the company is also ambiguous, and Avaya keeps presenting quarterly losses. There is also focus on the fading of its potential IPO. However, DiLullo states that Avaya has seen sequential growth in eight out of the last 11 quarters, and has made an overall improvement of 40 percent in its costs of goods, whilst simultaneously reducing costs of average maintenance per port on Avaya equipment.
Targeting investments are also being made, and this will be advantageous to around 9,000 channel partners around the world. $300 million will also be invested in the company's services business, covering service stock, services support programs, and everything in between.
Demand generation is also being invested in, and over the last few months Avaya has increased its territory account managers who address the midmarket and regular channel demand by 30 percent. There is also a greater number of Avaya resources focused on the demand generation aspect by 100 percent. Marketing dollars in the company were saved previously for Avaya's corporate marketing activities, but now this is also being utilized for co-marketing with partners.
It is also important to Avaya that competition in the channel is kept at a distance. DiLullo's approval is required whenever an Avaya Americas representative wishes to take a deal direct. DiLullo said: “My approval will not be forthcoming,” a remark adding appreciation for Avaya's demand generation push; this is expected to create around 10,000 new prospects in the new year for Avaya partners.
According to Mitchell, who monitors Avaya's go-to-market strategy and is its global channel chief, the company has two key selling motions which will fuel the midmarket and stabilize the enterprise. Partners of Avaya are “very competitive” and the $8.8 billion midmarket means global market share for employers with fewer than 1,000 users. Mitchell stated: “The highest customer satisfaction [for Avaya] is in the midmarket right now.”
Furthermore, Mitchell is certain that there are many more opportunities available in the midmarket for solution providers of Avaya, and these are present through utilizing products such as the SMB UC system IP Office and enterprise accounts which can be kept and broadened through upselling enterprise customers, who increase services and push attach rates.
Mitchell stated: “You have to sell as a platform. Sell wide and high in your enterprise base. Target new markets with dedicated account teams. Target transactional, volume-based sales in midmarket, video and data where demand for Avaya competitive advantages is strongest.” Avaya is also confident that it can compete successfully against Cisco, ShoreTel and other competitors.
Avaya's branch networking products and IP Office are amongst its rapidly-growing lines. Avaya also has better video solutions which has been made possible through its acquisition of Radvision earlier this year. Contact center, SME/midmarket and video also have opportunity-rich transitions which take place. Partners now need to address how they are to generate more revenue in the future, rather than relying on an annuity base of customers. Those partners who are innovative and thinking of the future are already changing their model.
Mitchell adds: “Sell everything you've got. Sell the applications. It's a game of hitting singles and doubles, that's what you do when you're in a flat market.” Avaya's plan also sees a change in its channel services strategy, which has been questioned. Avaya partners will receive more clear and higher quality consistency of its approach to maintenance, professional and other services over the next few months.
Avaya has also attempted to get rid of grey market resellers and seeks to preserve its partnering model. 71 grey market investigations have begun, and 15 partners and 6 employees (including two Avaya managing directors) have been outed.
The software platform One Source will provide common business processes for Avaya, and will make simple the global pricing structure; the Avaya Pricing Model will be launched to U.S.-based partners next year. There will also be a restructure of Avaya's global learning program to reduce partner expenses and expend learning hours.
Partners of Avaya will reap the benefits of the company's work over the last six months. Opportunities need to be attacked by partners at every instance: “This is not a conversation we could have had six months ago. Six months ago, we did not have a solid midmarket enablement to 1,000 users. We do now,” said Mitchell. (CY) Link