One year after filing for Chapter 11 bankruptcy protection, telecom giant Avaya has emerged, poised to hold on to their leadership of the unified communications segment with innovative new technologies. We talked to about it with Jonathan Buckle, Area Channel Leader - US West at Avaya.
Last January, the management of communications giant Avaya surprised the technology community by filing for Chapter 11 bankruptcy protection.
“I have been asked how a company that reports strong financial results can at the same time file for chapter 11 restructuring,” Avaya VP and CFA John Sullivan said at the time. “After looking at the multiple options of how to deal with our debt, we decided it was a critical next step in our transformation from a hardware company to a software and services company and the best path forward for our customers, partners and employees.”
Less than one year later, Avaya has emerged from Chapter 11, stronger than ever – with energy and – and plans for a robust future. We chatted just before the holiday about the company’s transformation with Jonathan Buckle, Avaya’s channel leader for the western region of the United States.
Life After Chapter 11
Datalink Networks: Congratulations on emerging from bankruptcy protection. How has the Chapter 11 process affected the way the company operates?
Jonathan Buckle: Well, my answer might be a little bit surprising, because it actually really hasn’t affected the way we have operated. And the reason I say that is the underlying business we have had has always been very healthy, we’ve really been through a restructuring of our balance sheet during the process.
I saw some stats as we exited Chapter 11 in the past week that -- we actually closed about 4,000 customer contracts , major customer contracts in that period and recruited 1,000 new partners during that time.
As a company we’ve been on a journey, Telecom has always been, in the old world, very hardware-centric. We’re making that shift to software and services. As we finished the last quarter, nearly 80% of our revenue came from that avenue.
A few weeks ago I brought my team together.for our new year planning, the team was absolutely brilliant. They were excited, they were energetic, it’s really the people in Avaya that have always made the difference. I’ve managed sales teams for a few years but I don’t think I’ve really ever experienced the energy, passion, and the commitment the team brought to the meeting. The excitement about exiting the Chapter 11 process and the opportunities we have, , . for the company and for the individuals moving forward.
Datalink Networks: You make it sound like there was a kind of a silver lining to the process – that it spurred you on to doing a reorganization you guys needed to do anyway?
Jonathan Buckle: Well, I don’t know who said it, but when the going gets tough, the tough get going. I think that’s what we’ve been through as an organization, change is difficult for people, but it has pulled the Avaya team together.
We’ve always been a close team, the C11 process has made us more robust and stronger as a company, as individuals and as teams, because we’ve had a bit of a battle on our hands? People have said things about us that we feel are a little bit unfair, we’ve put our best foot forward and got closer to our customers and partners,turned up more and listened more. And we’ve seen that we’ve beat our expectations for the period we were in Chapter 11 so now we’re excited about what the future holds for us.
A Cloud First Approach
Datalink Networks: And what does the future hold? What are your plans as you exit this period?
Jonathan Buckle: Where do I start? There’s lots going on. Having gone through what we’ve gone through … before, we went into Chapter 11 we had made quite significant improvements in our business model with this move to software and services I alluded to. We’ve had record profitability as a percentage of revenue, you could say industry leading as opposed to some of our other competitors. Our Net Promoter Score has become world class, we’ve put a lot of attention and focus into delivering customer satisfaction because happy customers do tend to work closer with companies that deliver that exceptional service, we’ve been on that journey already.
Now we’ve just got the benefit of a huge reduction in our debt and increased cash flow. Our debt load went from about $6 billion to under $3 billion so we have much greater financial flexibility now to invest in growth and technology innovation, and really focus on our contact center and unified communications portfolio.
We’re also significantly investing in cloud technology, as you might well imagine? We’re actually creating a separate cloud business unit to drive that cloud strategy and the R&D to take a Cloud First approach with all our solutions. That’s a new investment we’re making, partly enabled by some of the operational constraints that have been lifted. You know, we are driving a more customer-centric [approach] to what we do and the products we develop. I think that’s been brought about by the situation we’ve been in… We have a lot of boards now set up with both our partners and customers to give us feedback and we’re listening to what they needto be successful, because with their success is our success.
One of the other things we’ve really done is re-energize the partnerships - not only with the sort of traditional value-added resellers that are so important to us, but broader partnerships in … you could say, an eco-system. Earlier in the year, we announced a very close relationship with Salesforce.com, for example.
We’re working with some companies that might seem unusual for us, Artificial Intelligence companies like Sundown AI, who are really helping us to take advantage of those types of technologies in the contact center. And some of our partners like Arrow SI who do a whole raft of work in the sphere of Internet of Things. We actually just reached a milestone with one of our products very recently where we can actually connect with over a million types of IOT devices now. That’s the capability we have, we’re doing quite a lot.
I should probably mention as well that as we’ve exited Chapter 11, we’ve actually exited as a public company, we’ve surprised many people that we’ve actually gone through the process and are actually now coming back to the public markets. So we’re currently finalizing the steps to list on the New York Stock Exchange and in fact on January the 17th we will be ringing the bell as our stock is formally traded on that exchange.
One of the things to probably highlight is we have a big event coming up called Avaya Engage - that’s our annual event with our Users Group. This year it’s going to be in New Orleans - I probably said that wrong. As you can tell, my American accent is not the best. But we’ll be there the 28th through the 31st of January. That will be a huge event - we’re expecting probably four and a half to five thousand customers and partners. And we’re going to have lots of announcements and lots of launches of the newer products and things we’ve been doing and sort of quietly working on in the Chapter 11 process.
Datalink Networks: That’s a huge amount of things happening just in the next few weeks.
Jonathan Buckle: You have to keep up with the internal communications - it’s pretty hard at the moment, there’s a lot of energy being created around the exit. The best thing to do is use that energy to really push the company forward and you could say, the shackles are off with Avaya. The shackles are off and we’re excited and aggressive about the difference we can make to the industry and to our customers. We’ve always been innovators, we’ve now got more resources to drive greater innovation and so we’re happy to lead on that.
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