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Summary:

Avaya’s bid to acquire SIP application vendor Ubiquity was a tip-off that Voice over IP is becoming the center of importance at the enterprise telephony provider. Tuesday during Avaya’s earnings call the company confirmed that focus, announcing that it had sold more than 1 million IP […]

Avaya’s bid to acquire SIP application vendor Ubiquity was a tip-off that Voice over IP is becoming the center of importance at the enterprise telephony provider. Tuesday during Avaya’s earnings call the company confirmed that focus, announcing that it had sold more than 1 million IP phone lines for the third straight fiscal quarter, showing that corporate adoption of VoIP shows no signs of slowing.

While Avaya’s overall results seemed in line with analyst expectations, the IP numbers are increasing lines in the sand pointing toward an overall move from TDM to IP in the corporate communications arena. Avaya also said that investments like the Ubiquity buy will help it increase the integration of communications and business applications, a direction Avaya said it will look to for growth beyond its traditional telecom-supply businesses.

During the conference call Tuesday, Avaya gave an example of some early work in this direction, claiming it had helped a manufacturing company build direct communications functionality into a supply-chain application, that allowed the application to communicate levels of inventory and trigger replenishing actions. By “communications-enabling” such core business apps, Avaya is seeking to differentiate itself in the telecom business while seeking bigger margins and more overall growth.

“We’re embedding communications into the fabric of our customers’ core business,” said Avaya president and CEO Lou D’Ambrosio, who added that Ubiquity is “an important element as we extend that functionality in a SIP environment.” Expect to hear more IP telephony news when Cisco announces its financials Feb. 6.

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  1. Avaya is feeling the heat because its core business is going down the tubes because new emerging players have better and more cost effective solutions.

    “Avaya also said that investments like the Ubiquity buy will help it increase the integration of communications and business applications, a direction Avaya said it will look to for growth beyond its traditional telecom-supply businesses”.

    Funny it may be a new direction but Avaya is a novice when it comes to integrating business applications.

    Oh and cerebral money quote from Avaya president and CEO Lou D’Ambrosio, “We’re embedding communications into the fabric of our customers’ core business”

    Hilarious !

  2. With the great UI improvements hinted by Apple’s iPhone, we should be pressuring Avaya and Cisco to continue the progress., especially Avaya. The last UI breakthrough Avaya made was during the early 80s.

  3. With the consistently poor service we’re continuing to see from Avaya even as they’re losing our business, I couldn’t possibly care less about their moves into the IP front. From all I’ve heard, they’re developing some cool features on their new products, but, based on the fact that even after paying tens of thousands of dollars a year in support costs I still pay over $200/hr to talk to their support people on the phone, I’m just tired of them continually dipping in the well while at the same time providing poor service. Their support department even had the audacity to refuse to join a conference bridge in an outage situation over the weekend. Amazing. Just one more reason we’re deploying Cisco IP Phones enterprise wide instead of an Avaya solution.

  4. Interesting posts. Clearly Avaya is feeling the pain. Many of their customers are asking for on demand offerings. Their recent acquisition of Ubiquity is a step in the right direction allowing them access to the Carriers. I’m sure more acquisitions are to follow. The challenge here is that Cisco’s balance sheet is much stronger and is apparently looking to start making some acquisitions in the application space (On demand). Rumor has it Cisco wants to acquire companies with SME expertise to complement their LinksysOne offering. My guess is that the companies will have the following DNA:
    1) OnDemand model (company acting as its own carrier)
    2) SIP & Linux
    3) Multi tenant
    4) Selling to SME and Mid Market (untapped huge market)
    5) Big margin business (either Mobile or Contact Center)

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