On the outset, Avaya’s move is aimed at bolstering its Voice-over-IP (VoIP) products and solutions in the face of stiff competition in the market. The strategy, however, is not without challenges. Said Gartner analyst, Phua Sin Hun, “Vendors selling in this market will continue to further develop their solutions, although providing legacy interfaces and applications at cost-effective price points are real challenges. True tests for all vendors, including Avaya, are a distribution strategy that will capture both voice- and data-centric buyers, and the ability to gain and maintain market share/mind share. The biggest area of concern to enterprises is support services to meet the high demand for reliability.”
To facilitate the full service support, Avaya has rolled out service tools like the Avaya Expert Systems Tool and the Avaya ExpertNet VoIP Assessment Tool. The Expert Systems Tool can be thought of as a remote diagnostic tool, based on a server platform capable of performing 29,000 check points. The server platform is housed in Singapore and the tool has proven itself in the recent World Cup Korea/Japan 2002 where it monitored the tournament’s network. With this tool, Avaya claims that it has managed to detect and solve over 90% of network problems for its US customers before any serious downtime occurred. What is unique in Avaya’s tool is that the system not only raises network alarms, it can provide details to the problems, automatically provide the solutions and identifying faulty hardware parts to facilitate faster response time to the engineers.
Citing VoIP as an example, Subramaniam said that over 70% of US companies who implemented VoIP without any assessment tools experienced failure at some point. With its assessment tool, Avaya claims a customer success rate of more that 95% with the remaining 5% being problems with the clients’ network infrastructure.
Avaya currently has in the region of 75 to 80 engineers in the Asia Pacific, of which more than half have multiple certifications in products from Cisco, Alcatel, Siemens, and Nortel, for example. The company has been re-training and re-certifying its channels partners to provide multiple product and platform support in the past 12 months. There are more than 100 distributors in the Asia Pacific currently.
Profitable service
In terms of corporate performance, Avaya revealed that the services portion accounted for 52% of its worldwide revenue last year. In Asia Pacific, the make-up is more conservative, taking up 25% of the total Asia Pacific revenue.
Looking ahead, the company plans to grow the services business by 25% for the coming year. This may be an ambitious task for the vendor, considering the current services market situation. According to Gartner’s prediction, telecommunications equipment/infrastructure manufacturers will double their market share of network support and professional services delivered to enterprises in Asia/Pacific by 2005. Said Phua, “Gartner has witnessed many hardware manufacturers growing their services businesses, e.g .Unisys, but over a period time. By 2006, Asian enterprises will become serious buyers of services as well as or instead of IT products. Therefore, it might take another few years before Avaya can realize its target.”
Meanwhile, is Avaya’s move a sign of thing’s to come? Gartner certainly thinks so; the analyst firm believes that the convergence plans are finally moving off the drawing board. Said Phua, ” Large systems integrators and outsourcers are least often considered in the market of IP voice and data convergence. However, as the technologies mature and these initiatives become integrated components of the enterprise network infrastructure, systems integrators and outsourcers will see more of these technologies and related services become part of their contracts.”
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