Avaya: Will It Continue To Reign as a Contact Center Leader?
Avaya: Will It Continue To Reign as a Contact Center Leader?
By Donna Fluss
Avaya is having a hard time catching a break these days. The recessionary economy has hit Avaya, a provider of communications infrastructure, particularly hard. Recently, Gartner Dataquest, a respected source for contact center market share numbers, has moved Avaya to second place for new agent positions and system shipments in 2001, giving the leadership position to Nortel. While Nortels and Avayas methods for counting new shipments differed, this report caught the attention of Avaya and the market place in general and forced Avaya to take action to improve its competitive position.
As a long-time leader in the contact center field, Avaya got used to driving the direction of the market. Accustomed to calling the shots, it lost sight of customers needs and wants for too long. Its true that many of its woes are being compounded by the slowed economy, but others are the direct result of Avayas failure to heed customer demands and adapt to changing market dynamics.
Avayas contact center solutions remain some of the most dependable in the market. With over 22,000 installations around the world it is one of the most widely used switches. But the trend in favor of flexible software-oriented solutions remains a huge challenge for Avaya, as it only began competing in this area in May 2002, three years later than its competition. While Avaya has a good story for its new software-based solution and has done a good job of adding Internet Protocol (IP) and Universal Queuing (UQ) functionality to meet current customer needs, its delay in moving away from its hardware-based solutions and the immaturity of its new offering pose major market obstacles.
Avaya is now making a lot of the right moves. Avayas contact center road map, incorporating its Quintus acquisition, is clear. The company can provide an IP solution in a number of ways, including its recently released ECLIPS Portfolio with Avaya MultiVantage software, the Avaya S8100 Media Server with G600 Media Gateway (formerly IP600) that is geared for mid-range companies, or its IP-enabled DEFINITY Servers. Avayas workflow capabilities are strong, facilitated by its Mosaix acquisition. Avaya has the largest installed based of ACDs and, according to a 2002 report on the World Outbound Dialer Markets by Frost and Sullivan, is now the leader in the area of outdialing with 27% ownership of the market. Even with all of Avayas recent challenges, there is little question that if a company needs both PBX and ACD systems, it should be included in the list of vendors.
The last couple of years have forced Avaya to face some of the same economic realities as its competitors. Since October 1, 2000, the company has downsized by 43%, from a staff of more than 34,000 to approximately 19,500 and the restructuring is ongoing. In the long-term, these changes may help to strengthen Avayas performance. This still doesnt resolve the most common complaint about Avaya, which is that it doesnt listen to its customers and that its size has made it very hard for customers to gain access to the right people. Avaya is aware of these concerns and is trying to address them, while acknowledging that it is difficult to change.
In May of 2002 Avaya released its next generation enterprise class, software-oriented IP solution, ECLIPS. Its MultiVantage software was designed to give users the advanced PBX and ACD capabilities of its DEFINITY line on an IP converged network. The plans look good and the upgrade path well thought-out. Avaya claims 5700 new users of its MultiVantage Software, 70% in the US and 30% abroad, but can name only a few of the users and has less than a handful of referencable accounts. As a result, the effectiveness of its new environment cannot yet be determined.
Avaya has recently made progress in clarifying its contact center product road map, but has frustrated customers by introducing new strategy and products to the market and then moving on quickly in a new direction. An example is Avaya CRM Central, which was Avayas previous attempt to provide CRM functionality. There are only about 20 customers using CRM Central but those who purchased it with the promise that they were getting the first part of a comprehensive CRM offering have been disappointed to discover that they now need to replace it with Avayas Interaction Center. Avaya has built many APIs to facilitate integration between Interaction Center and other Avaya and external products.
Reporting has been an area of strength for Avaya and their CMS Reporting offering is well respected in the market. Avaya CentreVu CMS has been the primary reporting tool for Avaya ACDs for the past few years. Its reporting capabilities have been greatly enhanced and there are many detailed ACD reports that can be generated by CMS today. Interaction Center 6.0 has a new core-reporting module called Operational Analysis. This module allows for greater access to external applications than had been provided by the existing CMS reporting framework. Information gathered for CMS purposes can be downloaded into this environment. The catch is that users either have to run both the CMS and the newer Operational Analysis reporting modules in parallel, or recreate in the new environment all of the reports previously developed in CMS. Furthermore, Operational Analysis cannot go as deeply into classic ACD reporting functionality, such as trunking, as can CMS. This is a poor migration strategy as it forces customers who want to upgrade to recreate much of their reporting. Avaya needs to enhance its offerings to make the transition seamless for customers.
While there are few users of QUINTUS call tracking applications, Avaya has made it clear that it is not making functional enhancements to these modules. Instead, for CRM Suite functionality Avaya is pushing its relationships with Siebel and PeopleSoft and in the near future is planning to do the same with SAP. However, Avaya continues to sell the QUINTUS CallCenterQ application, which is not being improved functionally, to the international mid-market. These customers are going to quickly discover that theyve purchased a functionally deficient product. Avaya has indicated that its heard the market interest in more basic call tracking software rather than more complete CRM suites and is currently determining if it should revive and enhance QUINTUS CallCenterQ.
Avaya does provide UQ functionality but only for use with its own product and the Siebel suite. Avaya has looked into doing detailed integrations with Kana and other eService providers but, like many of its competitors, found that the simple integrations are not useful and its too difficult, costly and time-consuming to do deep integrations. Avaya does integrate with Microsoft Exchange, Lotus Domino and SMTP/POP3 e-mail servers. The bigger issue is that the majority of e-mail response management systems (ERMs) are home grown and companies want to integrate with what they have, not be forced to move to an Avaya ERMs solution. Avaya has the same integration challenge with non-Avaya chat and collaboration systems, but these are less pressing issues in the market, for now.
Avaya has a very large customer base to whom it can up-sell and cross-sell and continues to provide dependable offerings that satisfy many of their current customers. The question is whether Avaya, whose hardware-oriented systems remain closed and difficult to integrate deeply (unless the integration is done by Avaya or one of its partners) can adapt its strategy and offerings to the meet the changing needs of the market place.