It appears Avaya Holding Corp.’s second time through the Chapter 11 wringer could end up producing far better results than what took place six years ago.
Earlier this week, the Morristown, N.J. firm announced that it had successfully emerged from the bankruptcy reorganization process with a “growth-oriented capital structure that includes upwards of US$650 million in liquidity.
“Today we turn the page and enter a new future for Avaya, our people and our customers,” said Alan Masarek, Avaya’s chief executive officer (CEO). “We are moving ahead with significant financial resources to accelerate investment in our portfolio as we continue delivering innovation without disruption to our customers.”
Those customers, he said, are at different stages of their cloud journey. “They want to move at a pace that meets their business needs – and in a way that allows them to adopt advanced functionality without business disruption.”
In terms of the company’s product roadmap, he said that will continue to focus on the Avaya Experience Platform which, he said, “enables organization to enhance their customer experience capabilities across myriad communications channels.
“We are also pleased to welcome a new board of directors with extensive industry and financial leadership experience that will help Avaya usher in a new era of growth.”
While the reorganization will not help the many investors who have been hit with paper losses worth hundred of millions of dollars – Avaya shares were trading at a paltry US$0.29 at 3:07 p.m. on Monday, prior to the announcement – two industry observers today expressed optimism about Masarek’s strategy plan, now that Avaya is formally a private company.
John Annand, principal advisory director at Info-Tech Research Group, described it as “pretty good news” for an IT infrastructure and operations (I&O) vice president and certainly for those using Avaya’s contact centre and customer experience offerings.
“Avaya’s revenues in 2022 were roughly US$2.76 billion. Enterprise customers like Avaya, and so do partners such as RingCentral. Having shed a reported US$3.4 billion worth of debt and emerging on the other side with US$650 million in liquidity ensures that Avaya can continue to remain viable and serve its existing customer base and the revenue stream that goes with it.”
Avaya, said Annand, now has the breathing room to fund innovation in a rapidly changing Unified Communication-as-a-Service, Omnichannel, Customer Experience Platform, and Cloud Collaboration market.
He added that the recent pandemic forced businesses to change the way they “interacted with their customers There was a lot of experimentation rushed into production because of necessity. Well, now that those trials or forced PoCs (proofs-of-concept) are over, the enterprise is in a position to go to market for the features and capabilities they know they really need.”
“Meeting rooms, calling trees, supervisor oversight in calls, whiteboards, sentiment analysis, agent metrics, and even basic whiteboard features that all came for “free” as part of an existing software subscription were fine in the pinch of an emergency, but now the enterprise wants refinement and a more seamless experience.”
Communications and telecom analyst Jon Arnold, the principal of J. Arnold & Associates, a Toronto-based independent research firm, met with Masarek last March during an analyst briefing and said, “everything he told me then was basically what was in the press release.
“The only update would be the listing of the board members. This time around, he was able to negotiate more favourable terms, meaning that the investors were willing to play ball, so to speak, in order to create the right environment that will give them some financial stability.”
Avaya’s primary customers, he said, are still largely premises-based vs. cloud-based, and that is their forte and it always has been, and there is a “big chunk of the enterprise market that is going to remain premises-based for the foreseeable future.”
The latest move, said Arnold, puts the company in a “much better position now to rebuild brand equity, because that’s what you look for particularly if five years down the road Avaya gets acquired, they (the buyer) want a customer base that has growth, not a beaten-down company.”
In the short-term, said Annand, “vice presidents of IT infrastructure can breathe a sigh of relief they will not have to find a way to shoehorn in a ‘replace UCaaS project’ to their 2023 infra roadmap – never a small or low-risk project. In the long-term, they retain a proven enterprise vendor in their back pocket if and when their business needs more than just ‘good enough’ communication and collaboration.”