Avaya Potential Bankruptcy is due to the Cloud

David Byrd : Raven Call
David Byrd
David Byrd is the Founder and Chief Creative Officer for Raven Guru Marketing. Previously, he was the CMO and EVP of Sales for CloudRoute. Prior to CloudRoute, He was CMO at ANPI, CMO & EVP of Sales at Broadvox, VP of channels and Alliances for Telcordia and Director of eBusiness development with i2 Technologies.He has also held executive positions with Planet Hollywood Online, Hewlett-Packard, Tandem Computers, Sprint and Ericsson.
| Raven Guru Marketing http://www.ravenguru.com/

Avaya Potential Bankruptcy is due to the Cloud

It was with great interest that I read the story of Avaya’s spending bankruptcy. The first thought that I had emanated from the summary of the story which stated that the owners of Avaya were having difficulty meeting the debt payments that they had incurred in purchasing the company. Avaya was purchased by Silver Lake and TPG Capital for $8.3 billion in 2007. The intent was to grow the company and take it public. Due to market changes and slipping performance, a public offering was abandoned. Today, the move towards cloud PBX solutions by Avaya’s competitors has increased while Avaya continues to sell hardware based TDM and IP based PBX’s with limited success in the growing cloud PBX space. It is for those reasons Avaya is facing the alternatives of bankruptcy or selling off parts or all of the company.Global PBX Revenues

The debt payment issue is a result of Avaya not properly positioning itself sooner with a cloud PBX solution. Avaya announced their move to IP PBXs and eventually into the cloud with some fanfare. But they remained behind with Cisco, Microsoft, BroadSoft and others with both strong Cloud PBX Solutions and the commitment to make them successful. Avaya had 22% share (Eastern Management Group) of the PBX market in 2010 and has seen a drop in that share to 17% (IHS) in 2015 and that is in a shrinking market. Today, new TDM PBX sales and additive lines for existing TDM PBXs continues to drop, and the growth of the IP PBX is less than that of cloud PBXs.

The reasons for the disparity in growth between PBXs and Cloud UC are cost, scale, future-proofed technology, features, customization and more. Unified Communications (UC) via the cloud is the new way for businesses to conduct business communications and collaboration.

It is not surprising that Avaya was late to the cloud trend. As an incumbent equipment provider, it faced a difficult decision as to when it should begin to cannibalize its hardware sales and push as a top priority a software/cloud replacement. They are not the first to face such a decision nor the last to incorrectly time the switch. The transition to the cloud and cloud technologies is rapidly forcing both legacy hardware and software vendors to establish cloud strategies that can effectively maintain and grow their businesses.

Growing the business is dependent upon the development of strong and relevant messaging, branding and mining the existing customer base as well as prospecting for new customers. As a leader in high-tech and telecom marketing, Raven Guru can assist companies in transforming themselves into cloud solution providers.

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