"Well, knock me down with a feather." That was the first reaction of Liz Miller, VP & Principal Analyst at Constellation Research, to the news that Avaya had filed for chapter 11 bankruptcy.
Indeed, last week's announcement surprised very few, with Avaya releasing a slow drip feed of statements regarding its finances soon after Alan Masarek became CEO.
That was in July 2022, and by August, Avaya had cast doubt over its future.
In a release on August 9, the vendor stated:
As of the date of this release, the company has determined that there is substantial doubt about the company's ability to continue as a going concern.
After, there ensued a more significant drop off in revenue, reports that debts were due, and an onslaught of questions about the money Avaya raised just before the previous CEO left the business.
By the end of the year, it became clear that settling debts through voluntary renegotiations was a nigh-on impossible task, and murmurings that Avaya had started bankruptcy preparations began.
Throughout this period, Avaya engaged with analysts in the space, what Miller coins "purposeful transparency" into its restructure – not its debts - attempting to avoid a mass exodus of clients. As such, the news has not come as a huge shock.
Nevertheless, the announcement is the second time the vendor has filed for bankruptcy in six years, leaving many to pour scorn on its future.
While much of this comes from competitors, questions about its future dependability are inevitable. Yet, such speculation often overlooks one critical point…
Avaya Remains One of the Biggest Players In Enterprise Communications
In 2022, Avaya’s revenues reached $2.76BN (TTM), down from $2.94BN in 2021. The vendor forecasts that these revenues will continue to drop until the beginning of 2025.
Nonetheless, such figures showcase its stature within the space. Consider its market rival NICE – often pegged as a contact center market leader – its revenues rose to $2.13BN (TTM) in 2022.
Moreover, Avaya is in 190 countries, has a significant partner ecosystem, and works with approximately 90 Fortune 100 companies.
These statistics perhaps support the claims of Dave Michels, Lead Analyst at TalkingPointz.com - from an upcoming edition of CX Today’s BIG News interviews. He believes it remains one of the biggest vendors in enterprise communications.
"I don’t think people realize how big Avaya is," says Michels. "Particularly from competitors, I’ve seen a lot of stuff on Twitter when they announced Chapter 11, like: "Why bother?", "We don’t need them anymore!", "They’re obsolete!", all that stuff."
To Michels' point, here is just one of many examples.
This company will fail again and will never survive
— Bruce miller (@Brucemiller49) February 14, 2023
Yet, such comments downplay the prominence of Avaya within the space. Indeed, while many vendors are converging on CCaaS, this is only half the market.
The other half has stuck by its legacy solutions, in which there are only a handful of players – with Avaya a leading figure.
In addition, it could be much more than half of the market, with NICE CEO Barak Eilam estimating in February last year that: "85 percent of the market is still on-prem," during an earnings call.
"You can say they have been losing customers for a decade, but to this day, they are still one of the biggest vendors in enterprise communications," adds Michels.