Avaya Looks To Channel For SMB, Services

Avaya Inc. is putting a lot of weight on its SMB sales and services and is looking to the channel to help make it a strong communications contender for small and midsized companies.

That renewed focus, dubbed "the new Avaya," comes at a time of transition for the vendor, which recently saw its CEO Lou D'Ambrosio step down over heath concerns and the recent appointment if its first worldwide channel chief, former Motorola channel chief Jeremy Butt.

In April, the Basking Ridge, N.J.-based vendor also named Raj Sonty as vice president of solutions in its SMB division, bringing Sonty's expertise in the SMB channel to the forefront. Before joining Avaya, Sonty served as vice president of business operations for Xerox Corp.'s Office Group, where he oversaw the product portfolio, product and solutions management and channel expansion in the SMB segment.

Sonty is quick to admit that SMBs have unique needs and the solution providers that serve smaller companies face challenges. In his role, Sonty said he hopes to help them overcome the hurdles in the fast-paced convergence market with strong product and services offerings, building off Avaya's already solid installed base.

Recently, ChannelWeb caught up with Sonty -- his first interview since taking on his new role -- to ask 10 questions about the state of the SMB, the challenges SMB solution providers face and how "the new Avaya" plans to create harmony for its extremely important SMB partners and customer base.

With all of the transition within Avaya recently, there's been a lot of talk about "the new Avaya." What does that mean?

The new Avaya essentially is about reaching more customers through channel partners, so that's point No. 1.

Point No. 2 is: we have aligned our corporate strategy around four lines of business, which are unified communications, contact center and SMB. And the fourth line of business is services, which cuts across the other three lines of business.

So and#91;the new Avayaand#93; is around the four lines of business and reaching new customers through channels and channel partners.

How is Avaya's channel focus changing as this new Avaya starts taking shape? Is there anything new that partners or prospective partners should know about or should be on the lookout for as these plans start coming together?

There will be more focus on the go-to-market strategy evolving more toward an indirect model. That does not mean that overnight we will switch completely to an indirect model, but over time our plan is to shift more toward an indirect go-to-market model which essentially means channels and channel partners. We will be developing the right channel programs, looking at recruiting new channel partners and looking at enhancing the revenue opportunities of the existing channel partners. So there will be increased focus on the channel and the go-to-market aspect through channel partners.

You've been brought on to oversee the SMB side. How is Avaya changing its approach to small and midsize businesses?

First of all, the SMB has been identified as one of the three key initiatives or three lines of business within Avaya. We are making significant investments in RandD for products, solutions and services offerings. We're also making investments in sales and marketing, especially in developing the right attractive channel marketing programs as well as the services aspect of SMB. We are looking at engaging more and more of our channel partners to deploy the services offerings for SMBs.

What are the challenges solution providers face serving the SMB market and where is Avaya stepping in to ease those challenges?

Some of the challenges that the VARs and systems integrators face, especially in the SMB area, are that there is a lot of hype about IP and unified communications, etc. SMBs customers are looking for simple telephony solutions that meet their requirements.

Where Avaya is coming in, we're investing resources in training and educating our channel partners as to what the features, advantages and benefits of Avaya's unified communications offerings are for SMB partners.

There is a large base today, especially in the SMB arena, in North America and in western Europe of what we call legacy systems: key systems, TDM systems, digital telephony solutions. Avaya has a big potential advantage compared to our competitors. We have the No. 1 market share in those segments as we speak. We are better positioned than our competitors as we understand the requirements of these SMB customers. There are millions of them out there that currently have digital telephony systems and solutions. We will work with our channel partners converting and upgrading them at the right pace based on requirements whether it's a refresh of these digital systems and/or upgrades to IP telephony solutions.

You mentioned Avaya's competition. As Avaya targets the SMB space through the channel, who is Avaya coming up against most from a competitive standpoint?

In terms of the SMB marketplace, it's a fragmented market place looking at it globally. Clearly the strong leader, the new emerging leader is Cisco, and Nortel is a strong competitor of ours. On a global basis I would say Cisco and Nortel are our two competitors. On a regional basis it depends upon the region. For example in North America there are smaller players like ShoreTel, that are significantly smaller than Avaya, but in North America, particularly in the U.S., they are strong. In Europe we have Siemens, for example, and at the low end in Asia Pacific there are Toshiba and Panasonic. But globally speaking Cisco and Nortel are the two key competitors for us.

NEXT: Five More Questions For Avaya's Raj Sonty

Seeing that competition out there, which the channel partners will see as well, where are the revenue opportunities for channel partners who partner with Avaya to serve their SMB customers and clients?

Cisco essentially has IP-based solutions, products and offerings, whereas I would position Avaya as the leading hybrid solutions provider to the SMB segment. By hybrid I mean we have a strong position in the digital area with key systems and TDM systems. Today we understand the requirements of our SMB customers much better than our competitors; hence we are better positioned to offer the right solutions including applications like mobility, conferencing, messaging, presence, etc. bundled with telephony systems, including refreshing existing systems.

We're investing not only in IP-based solutions. We're also investing in the existing legacy digital solutions so we will have more offerings in the digital area as well as new offerings in the IP area. Channel partners who partner with us have a broader set of portfolio offerings compared to our competitors.

What kind of services are Avaya's channel partners that serve the SMB offering? Do you see a strong revenue opportunity for them there?

This is a new area of focus for Avaya. The big legacy base that we have out there was acquired essentially through a direct go-to-market model. Our success in SMB depends on our success with our channel partners. We are developing the right services options and offerings, including converting and upgrading the existing legacy base to these new offerings. We will do that exclusively through our channel partners. Going forward this is absolutely a new source of revenue for our channel partners that does not exist as of today.

We look to start deploying that starting the first fiscal quarter for us which is October 2009. That starts with maintenance, that being the lowest hanging fruit, then moving up the value chain to implementation, moves, adds and changes and also with the right set of partners, some managed services offerings as well. Clearly we see tremendous potential for our channel partners to generate for themselves new services revenue opportunities starting with maintenance, moving up to implementation and then to managed services.

How long do you foresee it taking for these plans to take shape and Avaya's channel partners to start offering these services?

Our plan is for these offerings to start being implemented starting our first fiscal quarter which is October 2009. For the new and evolving go-to-market strategy, especially on the services side, to take foot and for channel partners to see more benefits I would outlook at least two more quarters before it's widely deployed. Initially we will start with our existing channel partners, and perhaps start with a smaller subset of our current Avaya channel partners, work with them because they already obviously understand Avaya products and solutions, so it will be easier for them to transition to the new services offerings. On a broader basis, I would say two quarters, beyond that new channel partners will start offering them as well. So initially it will be with the existing channel partners and then new channel partners. We will use that as a means to recruit new channel partners as well.

What else is Avaya doing specifically to recruit new channel partners, especially those that focus on the SMB?

At this point, I'm not in a position to share details given that we are conducting an audit of our existing channel partners. We believe there is more opportunity for our existing channel partners and for Avaya to better deploy our products, solutions and services. We want to ensure that we exhaust all of our opportunities with our existing channel partners before we start an active campaign to recruit new channel partners.