The acquisition of the enterprise division of Nortel Networks will accelerate Avaya Inc.’s move to a channel-centric model, said Avaya President and CEO Kevin Kennedy, speaking to 950 of its dealers at the 2010 Avaya Americas Partner Conference this week in Nashville.
The privately held Avaya was the winning bidder in the September auction for the business unit, which was put on the blocks as part of Nortel’s ongoing bankruptcy proceedings. The acquisition is still pending regulatory approvals, which are expected later this year.
“We need to invert the pyramid to get to 85-15 ratio of indirect to direct sales,” said Kennedy. “Over the last year, organically we have achieved 60-65 percent. We probably could have gotten there in three to four years without the acquisition of Nortel. That will just accelerate it and we can get there in two years.”
Nortel’s sales are about 80 percent indirect.
Jeremy Butt, vice president of worldwide channels, told partners attending the Nashville event the year-over-year increase in Avaya’s channel centricity worldwide was about 9 percent. In North America, specifically, it increased 11 percent and in CALA 42 percent.
Kennedy added that Avaya’s move to channel centricity is “a company strategy, not a sales strategy.” He assured partners that “any dissonance [on the part of company leadership] is largely in the past.”
“We are focused on making the transition a success. I think we are working hard to figure out if we have the details to make it a success. Only time will tell bear that out,” he added.
Kennedy said he expected regulatory approvals for the Nortel acquisition by Nov. 15, noting there aren’t “any red flags at the moment.” Analysts, however, have said they expect it to be later in the year. Should the approvals come as Kennedy expects, the Avaya team is planning on revealing its product roadmap to partners in December with a public launch in January.
Kennedy characterized the acquisition as “an answer to some of the transformations” the company is trying to make. “This is not a case of a company that we are going to acquire to do cost-cutting,” he said, citing two primary goals of adding net-new business via the channel and human capital.
If the acquisition is completed, Nortel partners will sell Nortel products under the new Avaya Connect global framework announced Wednesday at the partner conference. He said the partners would be brought at their existing metal levels March 1. They will have to be certified to sell Avaya products and achieve the same competencies as existing Avaya partners. Avaya partners can sell Nortel products as well, but Butt said he expected most partners would want to wait to see the product roadmaps.
Avaya already has recruited 145 Nortel partners to sell Avaya products.