Three Reasons On-Premise Call Center Software Provider Avaya Declared Bankruptcy in 2017

The utility of legacy, on-premise contact center solutions seems to have peaked, and Avaya’s bankruptcy could be the unlikely death toll of that once-great industry. At least, corporate treasurer John Sullivan hints at that in his statement to Network World regarding Avaya’s bankruptcy. Sullivan said, “Over time, with the explosion of applications and software-as-a-service, together with growing customer demand for a more flexible OpEx/subscription model for technology purchases, we have evolved to a software and services-led business.”

But such a statement raises more questions than answers. Other communications providers, even ones with on-premise solutions, have successfully migrated from legacy systems to cloud-based solutions without initiating Chapter 11 proceedings. Something seems to have gone awry with Avaya’s digital transformation, resulting in its bankruptcy and, more recently, sale of its networking business to Extreme Networks. Here, we’ll look at three factors that might have contributed to the on-premise contact center’s downfall.

Leadership
A few months ago, Kevin Kennedy headed Avaya. Not so today—Jim Chirico holds the position of chief executive officer. However, he seems cautious in his new role. Simon Sharwood at The Register comments, “I was left feeling that he [Chirico] understands the changes Avaya needs to make in order to operate profitably, but that he’s reliant on others to articulate where it should go next.”

There’s nothing wrong with seeking counsel from others. The old proverb goes, “Where there is no guidance, the people fall; but in an abundance of counselors there is victory.” Chirico’s hesitation could be more problematic than that. Sharwood concludes his article, “I was left with the impression that Chirico’s Avaya will indeed be whatever customers need it to be. But that it may not yet be capable of leading customers to places they don’t understand they need to go.”

The thing is, many of today’s communications customers don’t understand where they need to go. They hear about the cloud based contact center or predictive dialer software and think they need it, but they may or may not know why. They need a leader who understands and offers direction concerning the constantly evolving communications landscape.

Avaya seems to lack that leadership base, perhaps explaining its slow adoption of cloud-based technologies and financial troubles. But other leading companies, including TCN, have it. They track the current world of communications and monitor trends. That’s why they offer the solutions and advice businesses need to succeed.

Deployment
Avaya also faces deployment issues in addition to leadership concerns. As an on-premise provider of call center solutions, Avaya typically installs hardware and software at all their customers’ business locations, computers, and servers.

No problem—except that many businesses have multiple locations or remote workforces. Installing hardware and software at each location and on everybody’s computers poses difficulties, not to mention interruptions to business operations. On-site deployment means upfront and ongoing costs. Legacy equipment, after all, typically requires onsite maintenance, not automatic updates and upgrades in the cloud.

And such deployment issues aren’t imagined. Kat Hall at The Register reports that Maintel, a UK-based communications and networking integrator and Avaya partner, faces lower customer demand this year because of Avaya’s bankruptcy. Hall states, “its managed services division was ‘negatively affected’ by delays to customer installations caused by the telco [Avaya] taking longer than expected to emerge from Chapter 11.”

The answer to deployment woes may rest in turning to cloud-based contact center software. Such technology delivers low, upfront costs; rapid, on-demand maintenance; automated updates and minimal disruption to daily workflows. Businesses that choose the cloud-based option are able to stay focused on core business functions rather than lose time to lengthy implementation processes.

Attempts to Modernize

Avaya made attempts to shift its on-premise solution to cloud. While these adjustments have helped gain them traction in the modern contact center space, solutions often end up as a hybrid of legacy, on-premise solutions mixed with cloud functionality. One of the primary benefits of solely cloud-based solutions is the total scalability and freedom from hardware, making Avaya appear to have missed the mark. A hybrid solution can be frustrating.

In a Forbes article discussing full migration to the cloud, Mark Rhyman explains why native cloud solutions avoid the clunky, frustrating experience of a late-comer hybrid of on-prem and cloud:

“True cloud vendors design their solutions from the ground up for the cloud. They code their software to perform better as a fully hosted solution and build talent and expertise around hosting, maintaining, and managing the software across hundreds of servers and across multiple levels of data redundancy in their own multi-tenant cloud environments.”

Scalability
Scalability issues could contribute to Avaya’s failure, too. On-premise contact center solutions largely depend on hardware and proprietary software, two things that are inherently not scalable.

Businesses and organizations want communications solutions that meet their needs now. They don’t want to wait around while Avaya figures things out. Fortunately, they don’t have to. Technologies like the cloud-based call center already exist, and it affords components necessary to quality communications and TCPA compliance—things like predictive dialer software, cell phone scrubbing, and SMS applications.

Avaya failed this year, but businesses don’t have to follow in its footsteps. Protect your company by moving it away from inflexible on-premise solutions to cloud-based technologies. To learn more about making the switch, read TCN’s eBook “Fred Flintstone vs. George Jetson: 6 Reasons Call Center Execs are Moving from On-Premise Solutions to the Cloud” today.