Tag Archive for Avaya

The Future for Avaya is Cloudy

The Future for Avaya is CloudyBack in 2017 former telephony giant Avaya (AVYA) declared bankruptcy. Since then there has been a number of attempts to break up the firm. Extreme bought the Avaya network division in 2017. In 2019 there were rumors that Mitel was going to attempt a leveraged buyout of Avaya.

RingCentral will pay Avaya $500MEventually, Avaya made a deal with Unified Communications as a Service (UCaaS) vendor RingCentral (RNG) to save its bacon. With the deal, RingCentral will pay Avaya $500M and will be Avaya’s exclusive provider of UCaaS solutions. The two firms announced the “strategic partnership” in October 2019.

It’s February 2020 and the Avaya – RingCentral collaboration will start to show some results – next quarter. The beleaguered vendor announced at its Avaya Engage love-fest that beginning March 31, that in the U.S. the unimaginatively named Avaya Cloud Office by RingCentral (ACO) will be identical in features to the product RingCentral sells today. The rest of the world will have to wait – because RingCentral UCaaS is only available in seven countries.

additional Avaya features will creep into the offering through 2020It is reported that a few additional Avaya features will creep into the offering through 2020. The first two are targeted for release this summer are bridged appearance, and call park and page. Bridged appearance lets two desk phones maintain separate and shared lines, a feature typically used between assistants and their bosses. With call park and page, when a person places a call on hold, the system will automatically send a page to another department or user to pick up the call. The feature is particularly useful to retailers.

Towards the end of 2020 or later, the vendor expects to deliver features that include line appearance, call appearance, hotdesking, and support for the venerable Avaya Audix voicemail service.

Initially, Avaya Cloud Office by RingCentral will only work with three models of Avaya’s J series desk phones: 139, 169, and 179. Avaya will work with RingCentral to certify B series conference room phones, L series headsets and the CU360 video conferencing system. However, most IP Office customers are likely using older devices, given that Avaya launched the J series only one year ago.

Avaya is also developing software to automate the process of migrating settings and users from its legacy gear to the cloud, although that tool won’t be available until later in 2020.

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No Jitter points out that faced with the threat of its large installed base that goes back to legacy Nortel platforms, dumping Avaya – Avaya needed to do something.

To me this looks more like a win for RingCentral. For a relatively small investment ($500M on a market capitalization of $10.5B), RingCentral becomes the preferred UCaaS provider for the large Avaya installed base (100M+ seats) likely planning on a move to the cloud. Meanwhile, Avaya picks up a fully developed UCaaS to sell – if it can execute. Which has been its problem all along.

Can Avaya hold on long enough to develop the promised automation tools move complicated things like CMS to a cloud interface? – we will see.

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Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedInFacebook, and Twitter. Email the Bach Seat here.

Mitel – Avaya Hook Up?

Updated August 28, 2019 – Rumors confine to swirl about the future of Avaya. Channel Partners is reporting there are 2 offers on the table. They cite reports from Bloomberg that Avaya is considering a bid by Mitel and Reuters is reporting that Avaya is considering an all-cash offer from private equity firm Clayton Dubilier & Rice.

Channel Partners speculates that the Mitel-Avaya deal would “…result in a company with a market share that would rival key industry players Cisco and Microsoft.”

Avaya buy-out rumors are back. Last month it was thought that a PE firm, possibly Searchlight Capital Partners was going to buy Avaya. The unknown private equity firm valued Avaya at more than $5 billion, including debt.

The newest report is that Ottawa-based Unified-Communications-as-a-Service provider Mitel is looking to acquire Avaya in an all-stock merger valued at between $2.2 billion and $2.4 billion, according to The Wall Street Journal.

The reported deal would value communications equipment and software provider Avaya at $20 to $22 per share, a premium based on its current stock price of about $18 per share on Monday 04/29/2019. If Avaya and Mitel are able to strike a deal, the merger could happen as soon as next month, the WSJ said, citing mysterious people familiar with the matter.

compete against their larger UC competitorsCRN says that the Avaya-Mitel deal could help the two companies compete against their larger UC competitors. Mitel typically plays well in the small to midsize market, while Avaya has a large install base of enterprise customers because of its legacy in the UC hardware arena.

Zeus Kerravala at NoJitter points out that the reported $2 billion purchase price doesn’t into account Avaya’s roughly $3 billion in debt. With debt included, the offer would have to come in for a total enterprise value of $5 billion to be of interest to shareholders.

Mr. Kerravala believes that a successful merger between Avaya and Mitel would create a behemoth of a company, bringing the number two and number three voice vendors together. He cites Synergy Research Group data that shows Cisco (CSCO) the leader with about 44% market share, Avaya second at 10%, and Mitel third at 8%. He believes a combined Avaya and Mitel would hold the industry’s biggest installed base.

Synergy enterprise voice market share estimate

Source: Synergy Research Group

The merger would also be beneficial as the industry becomes more artificial intelligence (AI)-centric, data and scale are must-haves. Mr. Kerravala believes Avaya and Mitel are stronger together than apart on AI. That said, if a deal doesn’t happen, the companies should still be fine continuing down their current trajectories, optimizing their internal resources while leveraging partners for AI. They can still do this, although it would be easier as a bigger company.

private equity firm Searchlight Capital PartnersAn investment group led by private equity firm Searchlight Capital Partners acquired Mitel in April 2018 with a $2.6 billion deal that took the company private. Mitel has a history of growing via acquisitions. In 2017 the company completed the acquisition of competing UC provider ShoreTel for $530 million. The move helped Mitel become one of the largest UCaaS providers in the world. The company lost out on its deal to acquire videoconferencing provider Polycom in 2016 to Siris Capital Group.

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This is just more of the same for Avaya. The crowning jewel in this deal is Avaya’s corporate call center business. Avaya’s call center business is the product of the acquisition of Nortel assets, after the Canadian networking giant’s bankruptcy in 2009.

This deal is really about the cloud. TechCrunch notes that Searchlight has a strategic stake in Rackspace, another legacy company that it took private for $4.3B in 2016.

Will Searchlight leverage its investments in Rackspace, Mitel, and now Avaya to build a cloud-based UCaaS juggernaut to take on the likes of Cisco, Microsoft, Slack, RingCentral, 8×8, even Google and Amazon?

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Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedInFacebook, and Twitter. Email the Bach Seat here.

Avaya Goes Chapter 11

-Updated- 03-07-17 As predicted Avaya spun off its networking business. The lucky winner is Extreme. The presser from Extreme is here.

Avaya Goes Chapter 11In one of the worst-kept secrets in tech, Avaya has finally declared bankruptcy. The Santa Clara, CA-based communications company filed for chapter 11 protection on January 19th, 2017 in the U.S. Bankruptcy Court for the Southern District of New York. Reports are that Avaya faced an end of January deadline to reach agreements with creditors to address its $6.3 billion debt or potentially default.

Avaya logoThe company’s presser announcing the bankruptcy characterizes the decision to seek Chapter 11 as a necessary re-do on deals made a decade ago. The company was spun off from Lucent, a former AT&T unit, in 2000. Avaya went private in 2007 when private equity firms Silver Lake Partners and the Texas Pacific Group took over the firm for $8.2 billion. Avaya was set up as a leveraged buyout – loaded with debt. At the time the new owners said going private would help Avaya to accelerate product development. In 2009 Avaya scooped up the remnants of Nortel for $900m.

The Nortel acquisition added Ethernet switching and VoIP to Avaya’s portfolio. While the move added needed hardware to the Avaya portfolio the rest of the tech world started the shift towards software-as-a-service and the cloud. Avaya was not able to digest Nortel while taking on Cisco, Microsoft, and the cloud at the same time.

$6.3 billion debtAvaya was both late with VoIP and Unified Communications. Neither Microsoft nor Cisco were competitors in the TDM/PBX era. Cisco joined the race with VoIP and Microsoft then came along with Unified Communications. Both have tremendous enterprise penetration and brand recognition.

The pressure forced Avaya to consider selling its crown jewel, its contact center products to Genesys in 2016, in the hope it would raise some cash. When the deal with Genesys fell through, Avaya decided to file for bankruptcy. Avaya CEO Kevin Kennedy said in a statement, “…chapter 11 is the best path forward at this time.

In order to keep the lights on during the reorganization, the company has secured a $725 million loan underwritten by Citibank.

As part of its debt load, Avaya owes its pensioners $1.7 billion in unfunded pension liabilities. According to NoJitter Avaya will honor it obligations to maintain and continue the pension (as did GM in its reorganization).

Chapter 11 only impacts Avaya’s United States operations. In the rest of the world, the company is moving to assure customers and stakeholders that it’s business as usual.

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My experience is that the Avaya IP Office product is way over-priced, even in a bid environment. Why would anyone buy an Avaya Ethernet switch or access point when you can get a Cisco or an HP?

So what is to become of Avaya? One likely outcome is that all of the business units will be sold off to satisfy the creditors. The only thing left of Avaya will be a service organization to care for the huge installed base of orphaned Nortel and Avaya systems.

I know people are already getting calls from Cisco about replacing Avaya.

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Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedInFacebook, and Twitter. Email the Bach Seat here.

Linux Turns 25

Linux Turns 25Linus Torvalds released the first Linux operating system kernel on Oct. 5, 1991. On Oct. 6, 1991, Torvalds began arguing with volunteer developers who would go on to make Linux an open-source powerhouse and eventually a household name. Today the Linux community is upwards of 86 million users strong.

Linux Turns 25As part of celebrations to mark Linux’s 25th birthday the Linux Foundation has published its annual Linux Kernel Development Report (PDF reg required). According to the Register, the report concludes that Linux is in great shape, “There may be no other examples of such a large, common resource being supported by such a large group of independent actors in such a collaborative way.”

The independent actors have a lot to collaborate on. The report notes that the first versions of the Linux kernel comprised about 10,000 lines of code. Now it’s nearing 22 million and growing at a rate of 4,600 lines a day.

Wall StreetWhile Linux may have started out as a hobby OS, that changed in the early 2000s. At the turn of the century, Wall Street banks demanded Linux support for their enterprise application servers says Tech News World.

“That was a moment that broke down resistance to Linux in the big IT vendors like BEA, IBM, and Oracle (ORCL). That hole in the dam was the start of a flood,” said Cloud Foundry CEO Sam Ramji. “Today Linux is the home of operating system innovation.

Linux user and open source advocateAporeto Virtualization Expert Stefano Stabellini, who has been a Linux user and open source advocate since the 1990s explained the transition. “… back when I started with Linux in the ’90s … [companies] did not understand it. They thought that open source was unsustainable, and Linux was niche and hobbyist.” He says that now everything has changed. Every company has an open source strategy now. “Microsoft (MSFT) was the biggest foe and now is a strong ally. Linux is the most widely adopted operating system of all times.

Dice points out that the most active contributors to the growth of Linux have included (in descending order) Intel (INTC), Red Hat, Linaro, Samsung (005930), SUSE, IBM (IBM), and various corporate consultants. Google (GOOG), AMD (AMD), and Texas Instruments (TXN) also ranked in the top 15.

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So my first pass at Linux was Red Hat Linux 5.0. when Novell bought into Linux. Yeap I was a Novell CNE 5 way back in the day.

The last couple of projects I have been involved with have used Linux and not Windows, CMS, IVR, PAFW’s, and storage.

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Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedInFacebook, and Twitter. Email the Bach Seat here.

Wi-Fi Charges Up Ethernet

Wi-Fi Charges Up EthernetInformation Technology prognosticators Gartner (IT) predicts that 40% of enterprises will use Wi-Fi as the default connection for mobile and non-mobile devices by 2018 according to Fred Donovan at FierceMobileIT. The prediction says that typically fixed location devices like; desktops, desk phones, projectors, and conference rooms will use Wi-Fi as their primary connection replacing Ethernet.

Wi-FI logoGartner says Wi-Fi is facilitating BYOD. The enterprise Wi-Fi network now allows workers to choose any device and move anywhere in the workplace. Gartner argues that the introduction of security measures like 802.1X augmented with Advanced Encryption Standard (AES) encryption has lessened IT’s worry about security breaches involving the Wi-Fi infrastructure. Ken Dulaney, V.P. and distinguished analyst at Gartner said;

Ethernet cabling has been the mainstay of business workspace connectivity since the beginning of networking. However, as smartphones, laptops, tablets, and other consumer devices have multiplied, the consumer space has largely converted to a wireless-first world

Facilitating BYOD

As the first connection to the enterprise infrastructure, Wi-Fi brings workers the ability to choose any device and move anywhere without worry. VP Dulaney continued;

WI-FI certifiedAs bring your own device (BYOD) has increased in many organizations, the collision of the business and consumer worlds has changed workers’ demands

Furthermore, cabling systems or even peer-to-peer (P2P) wireless solutions using technologies that offer cable replacement have had to deal with a variety of connectors challenges, such as USB and micro-USB, as video systems move beyond Video Graphics Array (VGA). The market research firm also argues that MACD costs will decrease.

MACD costsAdditions, moves, and changes are costly inconveniences that waste time for enterprise IT organizations. A move can sometimes involve cabling changes that can cost as much as $1,000 … With Wi-Fi printers, desktops, and other devices, all that is required is a cable to the power source, leaving workers free to move themselves making reconfigurations of offices easier.

Because of the many benefits of Wi-FI, Gartner VP Dulaney predicts firms are going to change how they connect;

we expect many organizations to shift to a wireless-by-default and a wired-by-exception model.

New Ethernet specifications

In order to deal with the new wireless-by-default reality, changes are needed on the wired network.  at FierceCIO reports that the vendor community is working to address the Wi-Fi first world. Unfortunately, there are two industry groups pushing their own new Ethernet specifications. Mr. Mah says that new Ethernet standards are needed to work with Wave 2 of 802.11ac wireless access points (AP) with a theoretical maximum throughput of up to 3.5Gbps.

NCaptain Ethernetew standards are needed because the existing Gigabit Ethernet is a bottleneck and current alternatives are not attractive. First, link-aggregating two Gigabit Ethernet connections for each Wi-Fi AP would need additional cabling and more expensive managed switches to support it. Using 10GbE would be overkill. Upgrading to 10GbE is a significant investment that includes new Category 6a or Category 7 cables, more power, and more cabling.

One faction, the MGBase-T Alliance, was formed in June 2014 and includes; Avaya, Aruba Networks (ARUN), and Brocade (BRCD) as well as component vendors Broadcom (BRCM) and Freescale Semiconductor. The other group known as the NBase-T Alliance was formed in October 2014. This faction consists of Cisco (CSCO), Intel, Xilinx (XLNX), Freescale, and Aquantia, a company that’s already making 2.5G/5G components.

Little agreement on standards

At the moment, the only agreement between the two factions is that 2.5Gbps and 5Gbps speeds are needed. The IEEE 802 LAN/MAN Standards Committee has set up the P802.3bz 2.5/5GBase-T Task Force to address this issue. The 2015 Q1 CommScope Standards Advisor reports that the 802.3bz Ethernet cablescommittee has decided so far that:

  • 2.5 GBase-T option will run on Cat 5e (Class D) 4 pair UTP up to 100M, and
  • 5 GBase-T option will run on Cat 6 (Class E) 4 pair UTP up to 100M.
  • There is no release date yet

The concern, however, is that vendors could jump the gun by shipping pre-standard products ahead of standards rectification, complicating matters and slowing down the development of the pertinent standards.

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Remember 802.11n? Pre-standard products? Given that there is no guarantee that systems built with components from the two groups will work together. Don’t jump the gun – waiting for the standard to solidify before buying into new 2.5G/5G Ethernet networking hardware.

For now, Dell’Oro Group analyst Alan Weckel told FierceCIO is that enterprises will probably be able to buy 2.5G/5G equipment starting in Q2 of 2015. 

 

Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedInFacebook, and Twitter. Email the Bach Seat here.