Vice President
TomSenior
Mitchell
and President of Go to
Market
Avaya Americas
Cancun Executive Partner Forum:
State of the Channel and Our FY13 GTM Strategy
Tom Mitchell, Avaya Senior Vice President
Agenda
Global Economic Outlook.
Market Opportunities.
Channel Services Strategy.
Initiatives to Reduce Partner Cost.
Call To Action.
Summary.
Global Economic Outlook
The Global Market
Where is the Spend?
Avaya Momentum and Visibility







SME
UC/CC Apps
Web Collaboration
Business Analytics
Video
Security
Speech

Call Control

Voice
Endpoints
TDM
Systems/Sets


Traditional Voice
Support
Global Market Share for <1000 Users
$8.8 Billion:
Total value of Mid
Market segment
in 2012
LG Huawei ShoreTel
1.7%
2.3% 2.2%
Samsung
3.2%
Aastra
4.7%
Others
15.0%
Cisco
20.2%
Mitel
4.8%
Siemens
6.2%
Panasonic
6.4%
Alcatel
7.1%
Avaya
16.1%
NEC
10.1%
14 - 16 November 2012 | Cancun, Mexico
Where Is Avaya’s Growth?
Fact
Fact
Fact

 IP Office to BCM
sales ration:
- 3:1 in FY11
- 10:1 in FY12

IPO growth rate is
accelerating
-
46% QoQ
-
100% YoY
This data does not
include sets!

Avaya’s FASTEST
GROWING solutions
- IP Office
- Branch
Networking
- Radvision
14 - 16 November 2012 | Cancun, Mexico
Market Opportunities
Base Business Proposition
US FY13 Business Envelope
Upside
Downside
Q1
Q2
Q3
Q4
Mid Market (<1000 users, with sets) has smaller risk than Enterprise
Need for Two Unique Sales Motions for Growth
Mid-Market / Commercial
Enterprise / Major



Major account expansion by portfolio,
go wide and deep
Strategic account management,
executive sponsors and solution
selling
Holistic customer approach
Stabilize the Enterprise
!
Customer Focused
Growth in critical customers




Channel/Partner growth
–
New partner
recruitment/development
–
Existing partner expansion into
underserved high growth
portfolios
Quick time to cash focus (volume)
Low complexity selling
Increasing net new customer
acquisition
Fuel the Mid-Market
Market Focused
Broad coverage driving growth in
strategic areas
!
Sales Strategies for Low-Growth Environment
Competitive take-share strategy to win larger share of shrinking opportunity
Sell wide and high in your Enterprise base
- Target top customer priorities with use cases
- Mobility, including BYOD, is key differentiator
Target new markets with dedicated account teams
- SME/Mid Market
- Target specific competitors
- Cisco, ShoreTel
Upsell Your Base Platforms: Networking Additions
Identity Engines 8.0
ERS 3500 5.0
Easy, secure, automated
BYOD for employees & guests
Single command switch set up with IP
Office at price points up to <50% than a
major competitor
Avaya Collaboration Pods
VSP 7000 10.1
Cloud-ready, turnkey solutions designed to
accelerate application deployments
Top of rack horizontal switching
Upsell Your Base Platforms: UC Additions
RADVISION
Flare® Experience iPad
High performance video making
collaboration simple relevant and
spontaneous
Unparalleled business communication
experience on iPad
Avaya Aura® Conferencing 7
AvayaLive™ Connect
Integrated UC and collaboration experience
with Audio & Web (in CI)
Highly flexible, integrated unified
communications via public cloud
Upsell Your Base Platforms: CC Additions
Avaya Aura® Call Center Elite 6.2.3
Avaya Aura® Contact Center 6.3
SIP Agent features and Multichannel
customer experience
Unrestricted GA end-to-end SIP enabled
Contact Center, with streamlined
installation and higher availability
Avaya Aura® Workforce
Optimization 11.0
Proactive Outreach Manager 2.5
Seamless integration for low TCO and
Optimum Customer Experience
Enhanced User Interface and improved
agent and business efficiency
Capturing Your Fair Share of SME/Mid Market
Partner can now match solutions to varying customer
preferences in the mid-market

IP Office 8.1 provides affordable solution for <1000 users

Avaya Aura provides more sophistication at higher cost
NA
30%
CALA
6%
Scalable, Turnkey Collaboration,
UC and Telephony
APAC
30%
EMEA
33%
APAC
EMEA
CALA
NA
Full Spectrum Capabilities and
Customization
Top line and profit maximization for Avaya partners will result from positioning IP
Office in the majority of mid-market opportunities moving forward
Why Some Partners Are Winning
Moving NT Base
ACL: 200 user consultancy and business services firm in Canada

CS1K customer with Symposium

Partner won with IP Office Server Edition

Why Customer chose IP Office:
–
Fit our contact center and overall company’s size
–
Price and total cost of ownership are in our range
–
Support model meets our expectations
–
“Raving” customer references for IPO
200 User IP Office Quote
Avaya Solution
Sale Price
% of Total
IP Office Hardware
$27,378
13%
IP Office Software
$72,819
35%
Endpoint sets (UC)
$90,067
43%
Data Networking
$20,565
10%
Total Deal
$210,829
As reported SME
portion 48% of total
Avaya sale
 Overall deal size and constructs are larger than expected
Why Some Partners Are Winning
Beating Competition
Cell Signaling Technology: global research company with 385 users


ShoreTel call Center Customer linked to an
NEC System with Sites around the Globe
Partner won with IP Office Server Edition &
XIMA Dev Connect
 Why Customer chose IP Office:
–
Robust Feature built into IPO 8.1
– Ability to add Call Center agents with Ease
(40 Currently)
– Centralized Licensing & Management of
Systems
–
IPOSS Offer from Partner
385 User IP Office Quote
Avaya Solution
Sale Price
% of Total
IP Office Hardware
$10,852
6%
IP Office Software
$37,716
19%
Endpoint sets (UC)
$88,628
47%
XIMA Call Center
$13,500
7%
Services
$39,500
21%
Total Deal
$ 190,196
As reported SME portion 25% of
total Avaya sale
– Overall
Avaya’s Global

dealReach
size and constructs are larger than expected
Growth Partners Are Winning:
Breaking Patterns
Selling Full Platform; Sipera, Radvision, Data,
APS
Shifting Business Models Away
from Legacy to New,
Balancing Enterprise with SME
Creating Future Revenue Streams, Not Milking
Annuity Base
NEW Channel Services Strategy
Services Go To Market Strategy
Delivering a Clear and Committed Services GTM Strategy For Our Partners
Clarity
Quality
Consistency

What we will jointly sell to Customers

Where partners should invest (and not)

How partners will make money

Ensuring customer satisfaction with delivery

Ensuring quality compliance

What quality partners look like to Avaya

Three year commitment from Avaya

Our approach to channel conflict

Execution against the stated GTM strategy
14 - 16 November 2012 | Cancun, Mexico
ACS GTM Strategy
Strategic consistency leading to greater levels of predictability
Clarity
Quality
Consistency
Avaya will:
Key Elements:

invest to improve service delivery

preserve co-delivery model for highly capable partners

reward partner performance (attach, renewal, coverage, quality)

train field sales to sell services in partnership with our channel
community

Deliver more white-label managed services for partner resale

Partners should:

pursue new customers and technologies

do not pursue maintenance contracts without product sale

do not invest in monitoring tools as we see this as Avaya’s role
14 - 16 November 2012 | Cancun, Mexico
APS GTM Strategy
Strategic consistency leading to greater levels of predictabilit
Clarity
Quality
Consistency
Avaya will:
Key Elements:

invest in optimization and innovation capabilities.

focus less on basic enablement services, but we are not
exiting the enablement services business.

reward partner performance (implementation quality,
strategic alignment)

make it as easy for Partners to engage with APS

Partners should:

invest in their own enablement capabilities, including
implementation and integration

leverage APS for large, complex, or new/emerging
technology engagements

meet quality requirements to ensure high Customer
satisfaction
14 - 16 November 2012 | Cancun, Mexico
Channel Initiatives
To Reduce Partner Cost
Gray Market
Stopping the Supply at its Source
Opened 71 gray market investigations; closed 60 with 39 resulting in penalty or enforcement action
Terminated 6 Avaya employees, including 2 Managing Directors for conspiring with gray market resellers or lack of fiduciary responsibility
Terminated 15 authorized partners for actively participating in gray market
Fined an authorized partner $230,000 for abusing the special bid process
Issued gray market warning letters to 4 Avaya employees and 13 authorized partners
Issued 30 legal cease and desist orders to unauthorized resellers
Completed a 3 month internal audit of our global special bid discount process w/22 corrective actions to be completed by year end
Strengthening our special bid discount controls to validate end customers
Contracted with third-party resources for ongoing special bids auditing
14 - 16 November 2012 | Cancun, Mexico
Avaya Learning:
Collaborative Learning Model
Always on
- When you need it, how you want it
Single source content
- Unscheduled
- Self-directed
- Business relevant
Aligned with Avaya’s market strategy
- Collaboration
- Virtualization
- On Avaya
- BYOD
Reduction in Learning Hours and Partner Expense
Number of Learning
Hours
Learning Hours
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
Ntwk
SME
CC
UC
2011
2012
2013

Reduces partners time in learning and up to 29% in partner expense

Focuses partners on critical learning path

Reduction driven by: elimination of redundant content, reduction of non-critical content, prioritization and filtration of content
Recommended Partner Actions
Checklist for Success: Step 1
Leverage Your Enterprise Base
Sell high and wide
Position full portfolio based on customer needs
Hunt new customers; don’t rely on slow growing base
Balance long enterprise sales cycle with Mid Market
transactions
14 - 16 November 2012 | Cancun, Mexico
Checklist for Success: Step 2
Build a Mid Market Practice
A volume based, transactional business to offset slow moving enterprise
sales
- Higher forecasted growth means lower risk, higher upside
Target with dedicated sales team
- Focus new sales people on shorter sales cycle solutions and time to cash
- Less investment, less training required, faster time to ramp new hires than
enterprise
- Be in more deals with increased coverage in mid market white space
Take share from Cisco and ShoreTel where demand and Avaya competitive
advantages are strongest
14 - 16 November 2012 | Cancun, Mexico
Summary
Economy: forecast is poor, but opportunities still exist
Key Take-Aways
Low-growth market requires competitive take-share strategies
- Leverage enterprise base to address customer priorities like mobility,
video and security and networking.
- Mid Market offers higher growth opportunity with fast time to cash
Consistent, 3-year service strategy supports strategic partner investment
Invest in implementation resources & simple integration
Leverage Avaya to fill in the gaps.
Avaya plans improvements that will drive cost out of your bottom line
- Less cost to market, price, design, and order Avaya solutions
Partners need to change your business to fit market demands
- Sell high and wide in your enterprise base, positioning full portfolio based on customer needs
- Target transactional, volume based sales in mid market, video, data where demand Avaya competitive advantages
are strongest
14 - 16 November 2012 | Cancun, Mexico