1. Avaya has posted respectable results the past few quarters in a down market. What are the growth objectives going forward?
Avaya has made significant financial and operational improvements since its spin-off from Lucent. We have restructured our business, improved liquidity and stabilized revenues. We now have several consecutive quarters of strong performance in a number of key areas: Our balance sheet is the strongest it has been in our three-year history; we grew revenues, expanded margins and increased cash flow; our IP revenue and line shipments increased; and we've taken further steps to globalize our business. We're delivering proof that our strategy is sound, and we can stay the course. With improvements in the economy and acceleration in the technology transition to IP by our customers, Avaya is well positioned to make continued progress.
Our comprehensive portfolio, including industry-leading enterprise solutions, contact center applications and world-class consulting and maintenance services, provides an evolutionary migration path to IP telephony, enabling customers to enjoy the benefits of VoIP while preserving a significant portion of their current investments and aligning with strategic goals.
2. Which of your CRM/Contact Center solutions do you believe will provide Avaya with the most significant growth in the near future?
The overall growth of IP Telephony in the Contact Center is a key growth opportunity for Avaya and will extend our leadership in the call/contact center market. Avaya's IP Telephony solutions, combined with the Avaya Customer Interaction Suite, are creating a paradigm shift in contact center architectures, enabling widely distributed contact center resources to be centrally managed in a highly flexible and cost effective manner.
The shift from call to contact centers, and the increasing adoption of contact center solutions by mid-size business is expected to fuel the growth of our Contact Managements solutions. Speech self service will continue to expand as an opportunity for contact center managers looking for cost efficiencies and customer automation.
Business consulting and integration services will also be key going forward, providing customers with valuable insight, analysis and expertise for validating their contact center strategies and optimizing and their evolving integrated communications solutions.
3. Avaya is making a major investment in IP Telephony. In a market that is rapidly becoming more crowded, how does Avaya differentiate their IP offerings from such companies as Aspect and Cisco?
We have differentiated ourselves by providing a complete suite of communications applications; “no-compromise” architecture that is highly scalable, functional and available; an end-to-end services portfolio. We focus on the customer's business imperatives to reduce costs, lower risks and grow revenue. The goal is to optimize how people work, and part of this is creating a migration path that allows customers to re-use as much as 85 percent of their existing infrastructure, while transitioning to IP Telephony at their own pace. We can IP-enable their existing PBX or provide client server architecture – the important factor here is choice.
Avaya sees IP Telephony as an opportunity to allow enterprises to change the way they approach contact centers. We have utilized the technology to allow customers to “flatten” their contact centers and make them more distributed, efficient, and economical. With our existing suite of solutions we are delivering on this promise today and leading the industry in our ability to impact our customer's businesses.
4. How has Avaya changed since its spin-off from Lucent Technologies?
Lucent did our customers a huge favor. The spin-off freed Avaya to think about our business in new ways, and energized us to move in new directions, including a greater focus on applications such as CRM.
5. Although the economy appears to be improving, many of our sponsors have indicated that it is still sluggish. Do you agree? If so, what obstacles is Avaya encountering that are slowing down your sales cycle?
We are seeing improvements in the global economy and an acceleration in the technology transition to IP by our customers. Customers are cautious about their technology investments and are careful to choose products that allow for smooth transitions at a pace of their choice. Studies by CMP, META Group and others are showing that early adopters of IP telephony, who largely expected cost reductions (and have attained them), now say that the primary value in IP telephony will be the flexibility it confers on communications applications. They now foresee growth and competitiveness from IP-based applications, having first committed to IP because of the cost saving potential. Avaya IP Migration services and product solutions are uniquely designed to speed these customers to high-value outcomes.
6. What direction can we expect Avaya to take in the foreseeable future regarding target markets, and the development of product and service offerings?
We envision significant demand for communications applications, such as contact center, unified messaging, wireless and eventually, presence/SIP-based applications. Adoption and integration of these new technologies will drive demand for services, in particular professional consulting services, systems integration, maintenance and outsourcing.
7. Can you explain the benefits you intend to accrue from the Vista acquisition?
The addition of Vista people and technology assets strengthens our portfolio. Our field strength is enhanced with additional highly trained, industry-certified consulting experts. The technology assets expand our existing tool set that includes patented Avaya services technologies, such as ExpertNet and Expert Systems.
This new software enables our experts to provide for streamlined integration across multiple types of hardware systems and software applications and provides "translation" between platforms (such as IVR, PBX, CRM software and front office and back office applications). Our clients are then able to implement more effective communications strategies and information collection processes to improve customer responsiveness.
8. You recently acquired Expanets. What are Avaya's intentions regarding the development of distribution channels both in the U.S. and internationally? How will such channels complement your direct sales organization?
Avaya continues to serve our customers through a mixture of direct sales resources and authorized business partners. The mixture of these direct and indirect resources differs somewhat by region based on specific market dynamics in each territory. Small businesses are served primarily through our indirect channels, while mid and large size businesses are served through a mixture of channel resources.