Quick Take
Event Summary
Avaya announced cloud versions of the company’s unified communications, contact center and video enterprise offerings, as well as a managed private cloud contact center offering to serve the cloud service provider (CSP) marketplace. The offerings are designed to give the CSPs the ability to provide a choice of options for enterprises to implement Avaya’s UC, contact center and video services. The video and UC & CC offerings will be delivered via the CSPs and the contact center managed service will be delivered by Avaya directly or as a co-branded solution with a CSP.
Analytical SummaryPerspective
• Positive on Avaya’s announcement of UC, contact center and video cloud solutions as well as the roll out of a managed private cloud offering, because this provides a look at an overall Avaya cloud strategy that is long overdue. If implemented successfully, the portfolio will quickly fill a gap in enterprise product offerings and satisfy a desire among service providers to offer credible cloud offerings across the UC, CC and video markets.
Vendor Importance
• High to Avaya, because the action will counteract a competitive weakness that has been used against Avaya by major adversaries, as well as meet the needs of partners and end user customers and prospects with a desire to move to the cloud and that have a product preference and allegiance to Avaya. Without this announcement of a cloud strategy and portfolio Avaya was in danger of losing a considerable share of the UC/CC and video markets to other vendors that have already introduced cloud portfolios to facilitate sales through SP partners.
Market Impact
• Moderate on the cloud-based UC and contact center markets, because the disclosure of a more complete cloud strategy by Avaya will relieve the pent-up demand that has existed for such an Avaya solution on the part of service providers and end users. However, since major competitors such as Alcatel-Lucent, NEC, Siemens and especially Cisco have already made similar full or partial cloud strategy announcements, and are already capturing business with those products, it remains to be seen if Avaya’s portfolio will have a significant impact.
Competitive StrengthsCompetitive Positives
• The addition of Avaya cloud platforms for service providers to build hosted offerings to their end users that are seeking Avaya brand and quality standards will enhance the partnership standing with partners that have pent-up demand for Avaya UC, CC and video services. In addition it will offer a broader choice of quality options to service providers not yet standardized on a cloud solution.
• Avaya’s service provider offerings of virtualized, multitenant cloud solutions for UCaaS, CCaaS and VaaS will be well received by service providers looking to simplify and economize on its data center resources by utilizing existing IT platforms and systems to serve cloud-based customers with UC, contact center and video services. It will distinguish the Avaya offerings from competitive offerings that do not yet have fully virtualized software platforms.
• Avaya is emphasizing inter-enterprise federation on its cloud platforms, which will allow interoperation across the cloud, will enable UC, CC and video interoperability beyond the local enterprise and open up functionality that can enhance collaboration between enterprises and business partners. This is a strong, potentially differentiating position in a market for cloud UC services that is still confused and complex at best.
• Avaya’s Cloud offering for UC and contact centers allows multitenancy management on a single Aura platform that will simplify the operations of cloud service providers offering both UC and contact center services to its end users, helping to drive efficiency.
• The utility subscription model offered by Avaya to service providers using the Avaya platforms should prove attractive to those partners looking to minimize their up-front license investment. The “pay for only what is used” approach is still somewhat unusual in the marketplace today and will likely be popular with service providers seeking to enter the market with limited financial risk. It also demonstrates that Avaya is willing to share risk with partners on the timing of the cloud revenue opportunity.
• Avaya’s service provider offerings of virtualized, multitenant cloud solutions for UCaaS, CCaaS and VaaS will be well received by service providers looking to simplify and economize on its data center resources by utilizing existing IT platforms and systems to serve cloud-based customers with UC, contact center and video services. It will distinguish the Avaya offerings from competitive offerings that do not yet have fully virtualized software platforms.
• Avaya is emphasizing inter-enterprise federation on its cloud platforms, which will allow interoperation across the cloud, will enable UC, CC and video interoperability beyond the local enterprise and open up functionality that can enhance collaboration between enterprises and business partners. This is a strong, potentially differentiating position in a market for cloud UC services that is still confused and complex at best.
• Avaya’s Cloud offering for UC and contact centers allows multitenancy management on a single Aura platform that will simplify the operations of cloud service providers offering both UC and contact center services to its end users, helping to drive efficiency.
• The utility subscription model offered by Avaya to service providers using the Avaya platforms should prove attractive to those partners looking to minimize their up-front license investment. The “pay for only what is used” approach is still somewhat unusual in the marketplace today and will likely be popular with service providers seeking to enter the market with limited financial risk. It also demonstrates that Avaya is willing to share risk with partners on the timing of the cloud revenue opportunity.
Competitive WeaknessesCompetitive Concerns
• The Avaya Collaborative Cloud portfolio enters a cloud UC/contact center market that is increasingly well defined. Cisco and Siemens Enterprise have hosted UC/CC service offerings that are more mature and established in the marketplace. Mitel has long been actively selling hosted UC services to SMBs, and a range of service providers already offer UC on a hosted basis. Avaya will have its work cut out establishing a presence in this increasingly crowded market, either for services it hosts itself, or for the new multi-tenant platforms.
• The Avaya Cloud UC and Contact Center service provider offerings are not offering the full enterprise feature set included in the current Avaya premise-based solutions. Although it is unclear what is included and not yet available in the cloud solutions, this could limit acceptance by service providers seeking specific functionality found in the premise-based solutions as well as put potential end users in a waiting mode until full functionality is offered in the cloud.
• The Avaya Cloud UC and CC offerings, although unified on a single platform, are distinctly separate from Avaya’s video as a service (VaaS) platform. This will require service providers looking to provide UC, CC and video cloud services to acquire, implement and maintain two distinctly separate offerings, which will likely be more expensive and time consuming than a unified cloud suite offering.
• The Avaya Communications Outsourcing Solutions (COS) Express, a single tenant contact center managed service, is capped in scalability at 500 concurrent agents. While this will certainly cover the SMB and mid-range enterprise contact center marketplace, it will not be sufficient for larger contact centers wishing to implement a cloud solution from a service provider with an Avaya platform. In addition, it may eliminate the offering from the short lists of mid-range centers with plans for future growth.
• Despite the ability of newly announced Avaya UC and CC platforms to offer federation on an inter-enterprise basis, the original Avaya Live Connect collaboration offering for small businesses continues to restrict federation to intra-enterprise interactions which will limit its effectiveness to serve customers wishing to include partners and customers in collaboration networks.
• The Avaya Cloud UC and Contact Center service provider offerings are not offering the full enterprise feature set included in the current Avaya premise-based solutions. Although it is unclear what is included and not yet available in the cloud solutions, this could limit acceptance by service providers seeking specific functionality found in the premise-based solutions as well as put potential end users in a waiting mode until full functionality is offered in the cloud.
• The Avaya Cloud UC and CC offerings, although unified on a single platform, are distinctly separate from Avaya’s video as a service (VaaS) platform. This will require service providers looking to provide UC, CC and video cloud services to acquire, implement and maintain two distinctly separate offerings, which will likely be more expensive and time consuming than a unified cloud suite offering.
• The Avaya Communications Outsourcing Solutions (COS) Express, a single tenant contact center managed service, is capped in scalability at 500 concurrent agents. While this will certainly cover the SMB and mid-range enterprise contact center marketplace, it will not be sufficient for larger contact centers wishing to implement a cloud solution from a service provider with an Avaya platform. In addition, it may eliminate the offering from the short lists of mid-range centers with plans for future growth.
• Despite the ability of newly announced Avaya UC and CC platforms to offer federation on an inter-enterprise basis, the original Avaya Live Connect collaboration offering for small businesses continues to restrict federation to intra-enterprise interactions which will limit its effectiveness to serve customers wishing to include partners and customers in collaboration networks.
Response & Recommendations
• Avaya should emphasize its triple play (UC, CC and video) of cloud offerings with a single, centralized administration overlay, as well as its private managed cloud contact center offering through the service provider channel as an advantage over other platform providers that emphasize one or two cloud offerings as a method of attracting more service providers to its offerings.
• Avaya should move as quickly as possible to merge its UCaaS and CCaaS platforms with its VaaS platform so that service providers can service all cloud customers with a unified and tightly integrated Avaya platform. This will allow service providers to take advantage of the inherent economies offered by a single platform with multiple functionality in terms of cost, ease of implementation, maintenance and serviceability.
• Avaya should emphasize its relatively low cost of entry for hosted UCaaS/CCaaS/VaaS with virtualized platforms and “pay-as-you-sell” utility pricing of licenses (no pre-buy) as a strong competitive advantage against competitors requiring usage minimums and those that do not offer virtualized platforms.
• Siemens Enterprise should stress its better established OpenScape Cloud offering for UC and contact center, positioning it as a more mature offering and similar in scope to Avaya’s new cloud offerings.
• Aastra, Alcatel-Lucent and other developers of UC solutions should monitor the progress that Avaya, Siemens Enterprise, Interactive Intelligence and Mitel make in attracting customers to their respective cloud UC services. Though a sizable market for cloud services has yet to materialize, adoption of the existing cloud UC and contact center services (vendor direct and service provider delivered solutions) should demonstrate if the UC cloud market is truly becoming more attractive and marketable to end users.
• Service providers already utilizing Cisco’s HCS platform (e.g., Vodafone, BT and Verizon) should leverage Cisco’s considerable brand equity in the marketing of their respective hosted services based on Cisco’s hosted UC platforms. Cisco’s value to service providers is that the company brings enterprise customers to them.
• Avaya should move as quickly as possible to merge its UCaaS and CCaaS platforms with its VaaS platform so that service providers can service all cloud customers with a unified and tightly integrated Avaya platform. This will allow service providers to take advantage of the inherent economies offered by a single platform with multiple functionality in terms of cost, ease of implementation, maintenance and serviceability.
• Avaya should emphasize its relatively low cost of entry for hosted UCaaS/CCaaS/VaaS with virtualized platforms and “pay-as-you-sell” utility pricing of licenses (no pre-buy) as a strong competitive advantage against competitors requiring usage minimums and those that do not offer virtualized platforms.
• Siemens Enterprise should stress its better established OpenScape Cloud offering for UC and contact center, positioning it as a more mature offering and similar in scope to Avaya’s new cloud offerings.
• Aastra, Alcatel-Lucent and other developers of UC solutions should monitor the progress that Avaya, Siemens Enterprise, Interactive Intelligence and Mitel make in attracting customers to their respective cloud UC services. Though a sizable market for cloud services has yet to materialize, adoption of the existing cloud UC and contact center services (vendor direct and service provider delivered solutions) should demonstrate if the UC cloud market is truly becoming more attractive and marketable to end users.
• Service providers already utilizing Cisco’s HCS platform (e.g., Vodafone, BT and Verizon) should leverage Cisco’s considerable brand equity in the marketing of their respective hosted services based on Cisco’s hosted UC platforms. Cisco’s value to service providers is that the company brings enterprise customers to them.
Analytical Perspective
We are positive on Avaya’s Collaborative Cloud strategy announcement, which includes cloud enablement for service providers wishing to offer unified communications (UCaaS), contact center (CCaaS) and video (VaaS) applications as cloud based services, as well as a new contact center managed service offering. Avaya has been overdue in its delivery of cloud versions of its Aura unified communications and contact center platforms for resale by service providers, and this announcement fills a competitive gap. In addition, Avaya’s UCaaS and CCaaS utility-based pricing model allows CSPs to pay only for what customers are using on a monthly basis. This will allow SPs to enter the cloud services market using Avaya Aura platforms with minimal financial risk, and grow the services as their end user customers’ requirements change. The new offers also enable SPs to evolve and augment enterprise communications services with cloud-based solutions as well as provide greater interoperability by federating communications across vendors, domains and protocols. The inclusion of a UCaaS, CCaaS and VaaS package to service providers is a strong and comprehensive offering that will make it unique in the marketplace. Overall, this announcement will be positively received by SPs and end user customers alike, and will satisfy a pent-up demand for Avaya solutions in the UCaaS and CCaaS markets.
However, Avaya’s delay in delivering a telephony and/or contact center cloud option to end users and service providers lags other marketplace leaders, such as Cisco, Mitel, NEC and Siemens Enterprise in the UC market, so Avaya will have its work cut out for them to catch up in market perception and mind share in the cloud services market with both service providers and enterprise users. In fact, the service provider selection process of the platforms used to provide cloud services is getting crowded and many have already selected technology partners, which may hinder Avaya’s partner seeking process in the coming months and years. Although Avaya talks of pending deals with more than 20 partners, few have been made public to date. Also, upon introduction the announced UC and contact center solutions do not offer the full feature complement of the Avaya premise-based offerings which could hinder acceptance of some end users requiring specific capabilities in their telephony and customer care platforms. Finally, the Avaya Cloud UC and CC offerings, although unified on a single platform, are a distinct and separate platform from Avaya’s video cloud offering platform which is based on Radvision technology. This will require service providers wanting to offer the full complement of Avaya cloud services to acquire, implement and maintain two distinctly separate offerings, which will likely be more expensive and less efficient than a unified cloud suite offering.
However, Avaya’s delay in delivering a telephony and/or contact center cloud option to end users and service providers lags other marketplace leaders, such as Cisco, Mitel, NEC and Siemens Enterprise in the UC market, so Avaya will have its work cut out for them to catch up in market perception and mind share in the cloud services market with both service providers and enterprise users. In fact, the service provider selection process of the platforms used to provide cloud services is getting crowded and many have already selected technology partners, which may hinder Avaya’s partner seeking process in the coming months and years. Although Avaya talks of pending deals with more than 20 partners, few have been made public to date. Also, upon introduction the announced UC and contact center solutions do not offer the full feature complement of the Avaya premise-based offerings which could hinder acceptance of some end users requiring specific capabilities in their telephony and customer care platforms. Finally, the Avaya Cloud UC and CC offerings, although unified on a single platform, are a distinct and separate platform from Avaya’s video cloud offering platform which is based on Radvision technology. This will require service providers wanting to offer the full complement of Avaya cloud services to acquire, implement and maintain two distinctly separate offerings, which will likely be more expensive and less efficient than a unified cloud suite offering.
