Avaya puts service offerings at the heart of its future strategy

Patrick Lelorieux, Avaya`s President, EMEA, believes that one of the company`s future key competitive differentiators will rest with the services it offers in the converged communications market, forming an integral part of the company`s overall strategy.

Capitalising on its technical services background, Avaya, a leading provider of communications systems and software for enterprises, is in pole position within EMEA to exploit the potential of the growth market for services offered by equipment vendors.

Avaya is focused on four core competencies within EMEA, comprising the provision of IP telephony, contact centres, unified communications and services. All four areas are aligned with the strategic direction Avaya has set at a corporate level.

In a recent exclusive interview with industry analyst Niamh Spillane of Frost & Sullivan`s Fixed Telecommunications team, Lelorieux sounded an optimistic note about Avaya`s prospects in the services sector, projecting revenues from IP telephony to be a significant growth opportunity for the company going forward.

As the company does not have a large installed base in the European switched voice market, IP telephony and its related applications are seen as the core future business focus for the company.

Spillane stresses that Avaya`s moderate installed base in traditional telephony across most of EMEA fuels the company`s interest to push convergence. Strategies currently being employed to promote converged communications include an attractive pricing structure, assisted migration and continuous education of the market.

"However," she notes, "Avaya is faced with numerous challenges on this road to convergence. Customer perceptions need to be altered considerably. Avaya needs to be recognised as a communications solutions vendor as opposed to a call centre solutions provider. In addition to offering traditional voicemail solutions, Avaya wants to migrate the market to the implementation of unified communications in a completely integrated software environment."

Avaya is still struggling to obtain brand clarity in EMEA, compounding customers` prevailing confusion over the company`s key product offerings. In order to become recognised as a key player in the communications market, Avaya needs to address its brand values and communicate a new message.

A number of steps within the branding strategy are clear. Avaya is trying to position itself as broadly as possible to increase recognition of the name. In addition, the depth of content within the company`s communications and publications has been significantly increased to reinforce its message.

Within EMEA, IP telephony is a relatively new proposition, contact centre solutions are developing fast and unified communications are still in the early growth phase. There is tremendous scope for vendors to develop a whole range of associated service to facilitate a relatively painless transition from switched telephony to next-generation solutions for the end-users.

Thus far, very few equipment vendors have taken the decision to focus on services as part of their core business.

"Avaya claims to be in the process of building on its ability to offer services spurred on by an aggressive push from customers who require more assistance. This multi-vendor maintenance service has been commercially rolled out in the US, and is due for deployment in EMEA in the coming months," Spillane remarks. Avaya professes to be experiencing strong interest in its consulting, network assessment and managed services offerings.

Services undoubtedly represent a significant opportunity for a company like Avaya. Network operators are moving towards increased support for their customers and, in turn, require greater assistance from the equipment vendors. Ultimately, most of these network operators are trying to build relationships with vendors to complement their service capabilities.

In pursuit of the number one position in the IP telephony arena, Avaya is building its business model around convergence. Clearly, competition in this space is intense and various economic factors continue to impede growth in the market.

Mass market take-up of converged communications solutions still hasn`t occurred, but the signs are increasingly positive that it will happen. This delay has given companies like Avaya the necessary time to devise their strategy and build on their core competencies.

Now they are ready and waiting on the sidelines for the long-awaited `explosion`. However, in light of the current somewhat sluggish growth pace, a sudden explosion seems unlikely.

Instead, the provision of additional network assessment and maintenance services to assist the end-user in a phased migration to convergence could be a successful growth strategy.