In an interaction with CRN, Fadi Moubarak, Vice President – Channel, Avaya shares insights into the company’s strategies post Chapter 11 and how it is creating a federated application development model for the channel ecosystem.
Avaya recently emerged out of Chapter 11 successfully. How significant is this development from the company’s perspective in terms of winning customers and building channel partnerships?
It’s an exciting time for Avaya as the recent restructuring has made our balance sheet very strong and also freed a lot of cash that we could reinvest into the business. The restructuring happened in such a way that it is now giving us a financial competitive advantage. From the risk compliance perspective, a few of the customers had put discussions with us on hold. But now, we are having full-fledged business discussions without obstacles. In fact, we are now operating at our full potential.
This is, off course, complemented by the increment in our free cash flow by $300 million less of interest payments. This will be available for strategic investments into the company, our partners, or any other area where we decide to go. We remained confident and that is why you see that in the past three quarters during the financial restructuring, our revenues did not decline. We kept on winning new customers. Some were on hold but we did not lose any major customers.
We were aware of the fact that that this adverse situation was not because of our ability to innovate and that’s why we did not fire people. We did cost optimization like any other company, because the problem was not confidence. It was something in the balance sheet structure, which we had to agree with our creditors on the way forward. .
In this endeavour, we are utilizing the Partner Edge Tour to share our story with the partners, put the action plan forward, discuss strategy, what’s in the store for them, where are the market opportunities, and show them the way we can achieve the joint priorities together. And it’s just not about the growth. We are aware of the opportunities and our market relevance. We have taken an innovative approach, wherein we are no longer pushing our products into the market but the solutions that are built around our products as well as third party products. We propose our partners to resell and have given them a free hand build their own solutions on the top of our offerings.
Being a global company, we realize that one size does not fit all. Hence, whatever is the faster route to the market we are ready to take it. The different markets are at the different stages of the adoption of the transformation technologies. And we do acknowledge the fact that the best people to help us are our partners, as they are closer to the customers. We constantly create a dialogue with our partners and interact with them to show our growth path.
Has this called for a realignment of your go-to market strategy?
It is not the financial restructuring that has called for realignment of our go-to market strategy. Our strategy has been realigned in line with the changes in the industry, technology, and consequently, the consumer requirements.
Moreover, in this digital disruption era, it is not about the technology that you are using for digital transformation. Rather, it is about the customer experience you are driving and how you are evolving to serve your customers better using digital technologies. The understanding of customers and markets comes from our presence with the partners with whom we work to identify the right roadmap for digital transformation.
As part of your portfolio, you look at different geographies. In your interactions with partners from India, do you come across any specific challenges that are unique and require a different approach?
As mentioned earlier, every country has some uniqueness and come with different flavours. India is very advanced on integration and business process outsourcing. It has been traditionally ahead of others in terms of adopting the technology, especially the skills that people here possess. In that sense, we do not face the skills challenge here in India. Besides, India has its own financial dynamics that you must take into consideration while evaluating the solutions.
Similarly, every country has its own set of dynamics. That is why you see cloud solutions much more advanced in countries where the indirect costs like cost of resources and people are high. We see that in the APAC region, where Australia is the most advanced on cloud adoption. But at the same time, it does not mean that they are advanced on technology adoption. These are two different things because cloud is not an advanced technology; it is a way to consume technology. It is a financial model. The technology behind cloud could be advanced or basic. People often believe that everything on cloud is an advanced technology.
India is definitely at the forefront of advanced technology adoption. Here, we monitor the different vertical industries with the help of our partners and not what is happening in technology. And we come up with solutions that are aligned with the business priorities of different industries where we are operating.
When we talk about digital technologies, India is still facing the shortage of highly skilled partners. Are you putting any efforts towards the enablement of your channel in this direction?
Technical training of our partners is an ongoing journey. The release of new products and solutions requires us to update our partners. Today, everybody’s biggest obstacle or criteria for business success is not the technical skills. It is about whether we are working on the correct digital transformation strategy. Success or failure is never technical. We must see whether we are ahead of the customer requirements. This is where we see the digital transformation getting succeeded or failing.
Avaya has transitioned from hardware to a software and services company. How having a right channel strategy is helping the company?
We started working on the strategy about 12 to 18 months ago. Today, you would see that there are at least 8 to 10 applications partners who are developing the solutions on the Avaya platform. Then, there are traditional partners who are hiring new talents from software development background.
Besides, the box seller partners are also gradually transforming into the application development partners. All our large partners, who were in the past more focused in the system and the implementation, now have an application development practice. That’s the way the partners are transforming. Here, we are working through and allowing these partners to develop solutions on our platform, which they can go and sell back to their customers. We are embracing the partner ecosystem and asking them to see the strength of our platform and build solutions which the customers need. Partners can monetize those solutions not only in India but where ever the customer needs. It’s a much federated application development model.
What sort of messaging do you want to give it to the partners and what’s the roadmap for the next couple of years?
We have a few simple messages for the partners. The first one is related to the growth, wherein we are growing together with them. Our strategy is to work with our partners, whether it’s full engagement, addressing the business journeys of our customers, or building complete solutions and not just only selling our products and solutions. We encourage them to build their own intellectual property or collaborate among themselves.