Around the Internet today – twitter, blogs, LinkedIn – most agree that Avaya called it quits.
After coming lighter out of bankruptcy almost two years ago, Avaya was looking to sell itself. When that didn’t happen – probably due to the price tag and the debt load – Avaya agreed to a $500M investment from RingCentral and exclusivity as a joint partner. This JV doesn’t seem much different from other ILEC JV’s that RC has. For example, AT&T resells RC as @Hand.
The pair will launch an exclusive UCaaS offering, “Avaya Cloud Office by RingCentral” in 2020. This will likely chase after the 600K Avaya IP Office seats that sit out there now.
Imagine having $3B in revenue, 4700 partners, 100M users. Imagine that and then imagine calling it quits. This is what is fundamentally wrong with the HPBX/UC space. A bunch of quitters and copycats.
Now if the other UC players – the other 2000 providers out there who did not just buy the Avaya customer list for $500M – can get out there and steal some business since this definitely marks the day Avaya premise is done.
I don’t know how Mitel survives this. They tried to merge – which would have been a disaster. Now with Avaya waiving the flag, Mitel has to ratchet up the cloud noise even more – or face collapse.
The sad thing for Mitel, Shoretel, Avaya, NEC. Panasonic and the other PBX boxes is that they have had 15 years to figure out the cloud and transition over. 15 years! It reminds me of bookstores and newspapers.
Avaya basically followed Panasonic. Panasonic did a deal with Star2Star as the cloud service, effectively marking the end of life to the Panasonic PBX division.
NEC and Mitel now need to scramble. The Mitel and NEC partners are watching all this and are making plans. They have their own businesses to worry about.
The biggest problem Avaya, Mitel et al faced was how to transition to cloud while still preserving hardware. They kept the same personnel (salespeople and SEs) and didn’t change compensation enough to force sales to the cloud. They were hedging their bets
The only one who had a decent plan was Shoretel. But Shoretel would have been better off keeping the cloud comms as a separate company – a competing company. It should have compensated Shoretel sales for referrals to cloud. It could have kept running the old Shoretel as it was, just getting leaner over time. Meanwhile, the New Cloud Company could have built itself up without the premise mentality mixed in.
Oh are the next 12 months going to be interesting.
Good look at the details of the deal HERE.