July 26, 2010, 1:58 PM — While Avaya's contact center and unified communications announcements last week signal the company wants a dominant position in those areas, it faces internal challenges and formidable competitors including Microsoft and Cisco.
The company is in the midst of digesting and integrating Nortel's enterprise division, which it bought last year for $900 million and from which it expects to reap big returns by next spring. At the same time, it is dealing with the same generally soft economy that other vendors are -- though Cisco is registering surprisingly strong revenue gains.
Avaya's CEO says the next six to nine months are critical as it tries to integrate the former Nortel Enterprise division -- including network infrastructure and business telephony -- into its fold. The purchase was finalized last December, so the company has just completed its second full quarter since the acquisition. "On most operational details we have the normal first quarter challenges from shipments and logistics. Second quarter things are feeling pretty good, and the litmus test is ahead of us," CEO Kevin Kennedy told Network World in an interview at Avaya's offices.
That test is whether the company can nail down significant long-term commitments from Nortel telephony and contact center customers and lock them into a migration toward Avaya UC. At the heart of that challenge is convincing Nortel customers to buy Avaya Aura, the company's flagship communications server. With Aura customers can step into IP telephony, glue together disparate VoIP systems and -- most significantly for Avaya -- lay the foundation for adopting UC.
Kennedy says Aura can support Session Initiation Protocol trunking immediately to bring cost savings to corporations and over time bring increased productivity that will save money long-term but might have a longer return on investment.