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Interview Synopsis

Avaya – Cloud Business Acceleration

  • Credit
  • TMT
  • North America

Avaya Holdings is battling to stave off potential bankruptcy for the second time in five years as financial and internal obstacles continue to mount. According to a former senior executive at the communication software company, Avaya needs to make “big bets” if it is to change its fortunes over the next 3-5 years.

Avaya to “double down” on CCaaS amid rising uncertainty

In an Interview with Third Bridge Forum, the specialist said “more and more” enterprise businesses are moving to the cloud from both a telephony and contact centre perspective. They told us that they expect the CAGR in UCaaS to be 8-12% over the next 3-5 years, with CCaaS a “couple of points higher”. See an article on CCaaS growth trends.

We heard that nearly all enterprise conversions incorporate plans to migrate to the cloud, with on-premise cloud penetration expected to hit 25-33% over the coming years. The specialist said that enterprises are shifting from CAPEX to OPEX given the current macroeconomic environment. This is a mild headwind for companies like Avaya, according to the specialist, given companies have already invested in CAPEX and are subsequently taking a phased approach to cloud migration.

Meanwhile, the specialist expects Avaya to “double down” on CCaaS, having seen it grow from 30% of the business in 2019 to 45% as of today. They called CCaaS a potential “golden goose” for Avaya, citing its favourable ARPU of USD 90 vs USD 30-40 for UCaaS.

The specialist told us Avaya’s partnership with RingCentral helps to fill the company’s lack of a public cloud offering. However, they told us the partnership is non-exclusive, and that RingCentral has similar partnerships with Avaya’s competitors Mitel and Atos. We also heard Avaya could become an acquisition target for either Oracle or Amazon.

The specialist believes 2024 will be “a pivotal year” for Avaya, pinpointing it as the time when its fortunes should begin to turn. However, the company has “a lot of work to do” between now and then, according to the specialist, if it is to right a quickly sinking ship. 

Click here to access all the human insights in Third Bridge Forum’s “Avaya – Cloud Business Acceleration & Enterprise Vitality” Interview. 

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