Spectel story needs to get out – Avaya boss

11 Mar 2005

HANNOVER: While the physical integration of Dublin-based Spectel is going to plan, Avaya is failing to capitalise on the strong market potential of Spectel’s call conferencing technology, Avaya’s boss has admitted.

“We’re doing a good job integrating the technical resources … we have work to do to be a strong advocate for Spectel’s technology in all our markets,” said chairman and CEO Don Peterson, speaking yesterday on the opening day of the CeBit trade fair in Germany.

Avaya bought audioconferencing firm Spectel last year in a US$103m all-cash deal that has resulted in the transfer of 210 jobs to Avaya.

New Jersey-based Avaya makes PBXs, the communication servers that run corporate and call centre phone systems. Its acquisition of Spectel enables it to continue expanding its capabilities in conferencing, a core business communications technology.

In an interview with siliconrepublic.com, Peterson declared himself a huge fan of Spectel’s technology but said that Avaya’s salesforce was not yet up to speed on its benefits and consequently was under selling the story. “What I’d like to see is a lot more of our salespeople being much more aggressive in positioning it and I’m finding that educational process has not yet caught up with our ambition – so I need to go back and raise hell.”

He added: “Enterprises should be using that product. The savings you get are nothing short of spectacular. Anyone who’s not using it is not paying attention and unfortunately most of the world is not using it so therefore they’re not paying attention – our problem, not theirs. We’ve got to get it out there. But the cost-benefit analysis of bringing conferencing inside is literally months to pay back the capital.”

Commenting on Avaya’s wider acquisition strategy, Peterson said that the company would continue to be on the look out for potential buys that either increased Avaya’s reach geographically or else offered good technology. “But you won’t see us buying things that are far away from what we do. We won’t be offering a Vonage-type [voice over internet protocol] service or become a carrier but we will move fast when we can improve our product or service-based businesses – particularly in the European market,” he said.

Avaya is exhibiting at CeBit for the first time since it completed the USD370m acquisition of German PBX vendor Tenovis last November. Always a strong player in the US market, Avaya saw the Tenovis deal as a chance to build an equally strong position in Europe. The combined business is targeting global revenues of about US$5bn this year.

Avaya made several major announcements at CeBit around its technology, the most significant of which was that it is partnering with Nokia in order to integrate PBXs with mobile devices running Nokia’s Series 60 operating system. Avaya said its Communications Manager software would turn such mobile devices into fully functional office phones, extending full business telephony features – such as call transfer, multi-party conferencing and call recording – to mobile users. Such users will be able to obtain this functionality by downloading the client software for Communication Manager to both new and existing Series 60 second-edition devices.

According to Geoffrey Baird, vice-president and general manager of Enterprise Mobility at Avaya, the application is to be launched in the summer and jointly marketed by Nokia and Avaya.

In a similar vein, Avaya also announced that it is to extend its partnership with Symbian, the consortium of mobile phone firms that licenses Symbian OS, a popular smart phone operating system. Through the partnership Avaya will develop applications that deliver advanced enterprise telephony and collaboration capabilities to Symbian smartphones including those manufactured by Nokia, Samsung and Panasonic.

Avaya also announced a new customer in the contact centre space. Avaya is to provide three AOL Europe contact centres covering 14 locations with IP telephony. Existing IPT clients include eBookers, the online travel booking engine.

By Brian Skelly
Avaya was spun off from Lucent Technologies in late 2000. Although it struggled initially as the technology recession hit, the company has been profitable for the last three years and is now the leader in the global IP telephony market and the world No 2 in the corporate PBX market. It is has been particularly successful in the call centre industry.

Peterson said the single biggest challenge facing Avaya was growing revenue. “If the dust settles on all this five years from now and we still have 12pc market share [of lines installed] of the global PBX market we will have failed. We would like to have 25pc but 40pc would be better.”

By Brian Skelly