Global distribution strategy will be cloud-centric
Avaya is adding cloud structure and strategy to its global channel partner program, the company told CRN exclusively.
Given that Avaya does approximately 80% of its business through partners, the company needs consistency in channel direction across all of its geographies if it is to succeed in the cloud, said Dennis Kozak, senior vice president , Global Channel for Avaya, at CRN.
Kozak was promoted to global channel manager earlier this month when the company launched a new global channel strategy that would not rely solely on channel managers overseeing their respective geographies. As part of the plan, Avaya in September appointed Steven Spears as its first chief revenue officer to manage global sales and global channel manager for the first time in years to oversee all indirect sales efforts.
The new approach to indirect sales comes at a time when the channel is more critical for Avaya than ever before, as it pushes its cloud-focused portfolio, including Avaya Cloud Office (ACO) Avaya Spaces and its contact center as service (CCaaS) suite. The cloud, unlike premises-based solutions, is not limited to a single geographic area, so neither can channel efforts, Kuzak said.
“It’s extremely important to get it right…everything has to work together as one big cohesive strategy because we have to keep the lights on and create new business,” he said.
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Kozak joined Avaya in 2019 to help the company transition to the cloud. The company was at the time in talks with RingCentral for its first public cloud offering, ACO, but its channel was still largely focused on on-premises UC and contact center hardware and solutions.
“The cloud is a different sales move and a different consumption model…and we really launched ACO without a program,” Kozak said. “After ACO was available for a few months, I knew there was more to do in the cloud and our channel program wasn’t quite designed for it.”
Avaya is currently working on a channel program that will recognize the full scope of its partners’ business volume, including on-premises offerings, subscriptions and public cloud offerings, Kozak said. Over the past year, the company has updated partner recruitment, onboarding and compensation as part of its partner program. Avaya will tie it all together in 2021 with a partner program that’s “aligned with where the puck is going,” he said.
“Our tradition [Avaya Edge Partner Program] does not take cloud activity into account,” he said. “We have the opportunity to bring the service and sales components together and match them with the existing businesses to really look at the whole envelope that the partner has with Avaya so that we can differentiate our biggest and best partners.”
To that end, Avaya will hire to support its cloud-focused global channel efforts. Mike Coleman, former mobility channel manager for Samsung, joined Avaya in December as the new vice president of North America channel sales., replacing former North American chain chief Jon Brinton, who left the company in September.
“We cannot do without a geographical execution model. The relationships [geographic leaders] having in the country is important,” Kozak said. “The strategy, the offerings, the enablement, it all needs to be executed by the Global Partner Program. We will create this global team that will build things centrally so they can be deployed locally.
Carousel Industries, an Exeter, RI-based solutions provider giant and longtime Avaya partner, has sold many of Avaya’s private cloud-based offerings over the years, but its ACO business is growing significantly, according to James Marsh, chief revenue officer and owner of Carousel. “Just in two quarters, we have already doubled our number of ACO seats,” he said.
Appetite for the cloud has only grown, especially in 2020 when customers were concerned about capital expenditures, Marsh said. Carousel’s 5,000+ customer base still largely uses on-premises solutions, so there will continue to be “a big surge” around cloud and CCaaS over the next 18 months.
Avaya’s large global customer base and new business transformation efforts put the company in an excellent position to help businesses scale, Marsh said. “They have a very good history to move [customers] from premise to cloud – they are the best people to do it – and we can drive that adoption and activation as a partner,” he said.
Once considered a leader in on-premises unified communications, Avaya’s cloud and software-as-a-service business has doubled in the past year alone, Avaya president and CEO Jim Chirico told CRN in November. . Much of this growth is due to channel partners, he added.
“The channel generated about 75-80% of our subscription revenue and we doubled the number of cloud customers this quarter,” Chirico said. “A significant increase which was mainly driven by the channel, which is changing with us.”
Revenue from Avaya’s Cloud and Alliance Partner segments, as well as subscriptions, grew quarterly in 2020. These three areas now account for 33% of Avaya’s total revenue in the fourth quarter of 2020, which ended on September 30, compared to 18% in 2020. in the first quarter of 2020. The company expects Cloud, Alliance Partner and Subscription to represent between 35 and 40% of Avaya’s total revenue in 2021, according to the company based in Santa Clara, California.