Man on the rebound: Avaya's Jim Chirico

Arabian Business catches up with Jim Chirico, president and CEO of Avaya Inc, one year after it exited chapter 11 and began its recovery
Man on the rebound: Avaya's Jim Chirico
Chief executive Jim Chirico is the force leading technology firm Avaya Inc. into its recovery
By Peter Branton
Fri 30 Nov 2018 01:20 AM

Avaya is now 11 months out of Chapter 11. What’s been the progress of the company in those months?

The progress has actually been fairly significant. We stabilised our revenue. In fact, the last two quarters, we’ve had revenue growth, which is the first in the company’s history.

We’ve introduced over 120 products. We’ve done significant acquisitions, and we are signing up alliances with Affinity which is driving our artificial intelligence (AI) and more importantly, we are investing back in the people, so it’s been a very exciting time.

Is the company on track in terms of its performance?

The company is performing quite well. We have the best business model in the industry. We are still generating 25 percent EBITDA of revenue, we are generating cash roughly 10 percent of our overall revenue and we have significant gross margin. So from a financial perspective, the company is actually performing quite well.

We have also done a fair amount of investment not only in people, but also in technology. Today, 30 percent of our product revenues are products that were released in the last 12 months.

So, it’s really picking up on the innovation cycle. We are significantly gaining from an offensive perspective. We have had 5,000 new logos [customers] in just the last 11 months, signed more than 1,000 business partners, and 300 deals worth over $1m. The business momentum is definitely picking up.

The level of performance has been consistent, so I’m quite pleased now that we have been able to achieve that in a relatively short period of time

We have done an awful lot in re-establishing our credibility with our customer base, the company is much more productive than we had been before. The level of performance has been consistent, so I’m quite pleased now that we have been able to achieve that in a relatively short period of time.

You acquired Spoken Communications earlier in the year.  What difference has that made to Avaya’s product portfolio?

Spoken was a significant technology investment, not necessarily a revenue investment and we did that to fortify our contact centre’s cloud solutions.

Now we have the capability to move to AWS or Google cloud with our contact centre solutions. We have a multi-channel, multi-tenant capability in our contact centre business.

We have actually signed three customers. We have 40,000-42,000 seats under contract today, so it’s been significant in the sense that we now have a contact centre cloud solution, and the contact centre business is now the core of the company. We can move our customers to the cloud when they’re ready to move.

How are you incorporating advanced technologies including blockchain and artificial intelligence into Avaya’s product range?

We’re looking at emerging technologies on three fronts. One is in cloud, not only from a contact centre perspective but from a unified communication perspective, our Unified Communications-as-a-service (UCAAS) solutions.

We’ve actually been able to do that seamlessly now and we do that with bots, whether Ava bot or from [an] IVR perspective, we can do that by multi-channel, multi instance capabilities.

The second one is in AI. We actually have three AI solutions that we are marketing today. Many of our competitors are advertising that they will get to a position where they can have an AI product — we have three!

We have an agent assist programme, which was part of the Spoken acquisition, which was a separate company that they had called Intelligent Wire. So we can actually provide the capability to assist the agents [in] real time.

Second, the alliance we did with Affinity earlier this year gave us smart routing and behavioural pairing capabilities, and last but not least we have an intelligent self-service capability.

So not only do we focus on the TCO for our customers, but we are really honing in on the overall ‘customer experience’.

The third front is around mobility. We actually have the capability now when someone calls into a contact centre that they actually can take that and convert it into a mobile number so they don’t have to pay a carrier, so they get a much cheaper rate. We are now building on that with identity services around biometrics. So these are three very significant growth areas for us as we go into the future.

What has been the reaction from your customers and channel partners to the new products and solutions?

The channels are actually very excited. We have historically been a premise-based company for all intents and purposes. In the last year-and-a-half we introduced an IP Office solution in the mid-market space, and in fact that’s a cloud solution. We actually drive that through our channel partners, and in this crucial mid-market I am pleased to say we are up about 45 percent quarter-on-quarter; in the enterprise space we are up over 100 percent; and year-on-year our cloud performance is 300 percent greater than what it was a year ago. So when you crunch the numbers we are growing at greater rates than the industry.

Our channel performance is up this year over last year, and relationships have improved quite a bit

The channel is very excited to work with us, to really drive cloud solutions. We have also done an awful lot of working with the channel on building relationships. The company, in all fairness, had a sort of love-hate relationship with the channel, but it generates about 70 percent of our revenues, and we have been working long and hard to make sure that both companies would be profitable and that we could actually drive and improve the overall demand. In fact our channel performance is up this year over last year, and relationships have improved quite a bit.

What do you have planned for Avaya for the next 12 months?

For the next 12 months we are really focusing on developing our four strategic growth pillars.

One is focusing on our current customers, our installed base. We are the largest, and have over 145 million seats installed in the market today We are by far the largest incumbent. So we are providing and investing in our core business and can continue that expendability and our products moving forward.

Secondly, we are investing an awful lot of cloud and building out our cloud portfolio, both in the contact centre, and in unified communications, and that covers the full breadth, from SMB to enterprise and also hybrid solutions for UC and CC, so we have the full complement of contact centre solutions.

The third is around emerging technologies. So it’s really around continuing to build our chatbot capability, virtual assistance capability, AI capabilities and mobility; and security is a wrapper around all of that. And last but not least, the services. About 59 percent of our revenues today are recurring, services-oriented revenues; 82 percent of our revenues today are software and services. So we have made the transition from a hardware company to a services and software company, and services are definitely key.

So we will have a virtualised private cloud for our large enterprise customers, we will build out our professional services base, we will expand into service providers and systems integrators, and provide offers in that market where we have [historically] been under invested in and under penetrated. We will continue to provide offerings and services to meet business needs. Those are our four key strategic pillars as we look into our fiscal year 2019. So we’re very excited about the opportunity in front of us.

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