Partners ‘Not Wholly Optimistic’ About Avaya’s Future
Avaya executives have spent the last two weeks facing a growing chorus of concerns about the viability of their company, some coming from channel partners.
Third-quarter revenue for the organization was down 20% year over year to $577 million, according to its earnings report. Avaya’s audit committee of the company’s board of directors began an internal investigation, reviewing the third quarter results. The committee is also examining a whistleblower letter.
Possibly of equal concern is the debt Avaya carries — the company borrowed $600 million in June alone. Avaya says it has taken cost-cutting measures, though the company still has a sizable amount of convertible debt maturing in less than a year.
Partner Reaction
Bill McClain is founder and CEO of StratusDial. McClain said the partner community is concerned about Avaya’s ability to survive. Although McClain is not an Avaya partner, he said he has friends who are. They’re looking to take their business elsewhere — sooner than later, he said.
“The partners worry that there might not be a future for Avaya. Do you want to wait for the Avaya system to shut down?” McClain asked.
Eric Asquino is president of Los Angeles-based ACS Cloud Partners. He said he didn’t have much confidence in Avaya going forward, adding that the company’s financial troubles were “another sign they don’t have the product set or ability to compete with the increasingly crowded field of larger well-funded cloud-based UCaaS providers.”
Asquino is concerned that Avaya gear has limited compatibility with other UCaaS providers.
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“If a customer were to make a change away from Avaya, they would need to purchase all new equipment. This could lead to some customers taking a wait-and-see approach to avoid the potential additional cost,” he said.
Avaya Response
Avaya is not waiting to respond to its partner base, especially since partners account for most of the company’s global revenue. In a statement to Channel Futures, an Avaya spokesperson discussed the company’s relationship with its partners.
“We remain in regular communication with them, guided by our focus on transparency, and continue to work collaboratively with them to best serve our collective customers. Avaya is taking action to implement our recently announced savings initiatives and expects to identify additional areas as our work continues. We fully expect to …
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