In this episode, Max Clark talks with Steve Forcum, a technologist at Avaya on Avaya’s partnership with RingCentral, and how their offering has evolved to support their clients during and post-pandemic.
INTRO: [00.00] Welcome to the Tech in 20 Minutes podcast, where you’ll meet new tech vendors, and learn how they can help your business. At Clarksys, we believe tech should make your life better, searching Google is a waste of time, and the right vendor is often one you haven’t heard of before.
Max: [00.19] Hi, I’m Max Clark and I’m talking with Steve Forcum who is the Avaya Technologist… Actually, that’s Technologist at Avaya?
Steve: [00.26] There you go.
Max: [00.27] Steve, welcome.
Steve: [00.28] Hey, thanks for having me.
Max: [00.29] Steve, what does Avaya do?
Steve: [00.32] So we’re a communications company, and what that really means is… Our software helps connect people when they need help, with the people and resources who can give them that help, and that’s really one of the things that people underappreciate about our company, is that almost every day, almost every human being on this planet uses our solutions. Sometimes they know it, you know, you pick up a desk phone, it’s got an Avaya logo on it, but most times you don’t. If you’ve ever, pre-COVID, been stranded in an airport because of a flight delay or cancellation and you know, you pick up the phone to call into the contact center because the line at the counter is a mile and a half long, we were the ones that got you the help when you needed that help. If you’ve ever checked on a loved one while they were recovering at a hospital, chances are it was an Avaya solutions that got you the information when you needed that help. Or even if it’s just something like those millions of moments a day when lives hang in the balance and you call up and need help… Our public work public safety you know, saves lives. So it’s… 90% of the Fortune 1000, is the current scorecard, uses Avaya solutions. We’re pretty much everywhere, and we’re pretty beloved in the contact center and the unified communications space.
Max: [01.42] And Avaya is a company in transition. I mean, this is an old business, pioneers in the phone system and PBX space – as we refer to it – and even before PBXs were PBXs, and now it’s a transition into cloud services. What does that mean for Avaya customers and for, you know, people looking at and evaluating cloud collaboration and communication systems?
Steve: [02.03] Yeah, that’s a great question. So the last three years specifically, I’ve been a part of a little startup inside of the company, focused on public cloud services, and that’s the first thing that makes Avaya different when you think about cloud versus others that are in the market, is that we don’t force you down a single path. You know, we realize that the world is different and unique, and what works for the pizza shop on the corner is going to be dramatically different than what works for, you know, a Fortune 500 insurance company, right? Their needs are different, their wants are different, their functionality requirements are a lot different. But at the end of the day, there are commonalities that they’re both looking to get, usually sometimes it’s about financials, you know, the per user per month model of cloud is attractive for any type of business. Some of the other benefits of cloud, around conferencing and integrated messaging to actually get work done with less work, can be exceptionally valuable. So that’s really what makes us different, is that we have a variety of paths; we have a private cloud practice, so a lot of our larger businesses live on that private cloud solution, but over the last three years specifically, we’ve been diving into the public cloud space, so this way customers of any size who are looking for a simple and fast cloud solution can literally get a quote, turn it up in a matter of minutes, and be up and running, getting work done, literally within minutes of clicking ‘buy’.
Max: [03.27] So, pre-COVID we were talking a lot about this as it related to distributed workforce, remote workforce, work from home – it’s the common terminology. And now post-COVID, there’s really two parts to post-COVID, right? We’re talking about some companies in transition, and how do they move the workforce into being able to work remotely, and then there’s what happens as a longer term of how companies adapt and either stay remote, or remote becomes a significant percentage of what they’re doing. How has Avaya responded and how have you helped existing customers deal with a very quick shift into remote? And also, net new customers, people that were looking and saying, “Hey, what do you do here and how do we respond to this?”
Steve: [04.12] Yeah, great question. So we had to help our customers move nearly overnight, from their office spaces to their homes, and we reacted. So we offered a variety of different offers to help our customers through this situation, because it was a time to pitch in, not necessarily to sit there pitching product. So we helped moved, I think it was hundreds of thousands of seats, from on-premise to work from anywhere – that’s what we call it – because in today’s COVID world you’re working from home, but in a future world you want to be equipped to let your people work from anywhere. So we helped people, we facilitated that shift, we gave customers, you know, free licensing, we came up with cloud-based offers with our cloud collaboration platform spaces, and we also – now with our partnership with RingCentral – our newest cloud product, the Avaya Cloud Office, we came up with a COVID offer for that for the workers that were on the frontlines, so we can actually service you with no monthly recurring costs while they’re going through this pandemic.
Max: [05.13] The Avaya cloud offer is an interesting offering when you start talking about layering Avaya intellectual property and infrastructure on top of an existing service provider infrastructure. It’s… I don’t know of anybody else doing it this way, I’m curious if you could explain the benefits that Avaya sees out of taking this approach.
Steve: [05.33] Yeah, absolutely. So to answer your question: no. This is a first of its kind partnership between two leading competitors, coming together to build the solution that, frankly, we think our customers are just going to love. So what we’ve done, is we looked at the marketplace, and we took stock of where we were. I mentioned I’ve been doing this for about three years at Avaya, in the public cloud space I was competing with RingCentral and everybody else in that space. And we were doing a really good job, we were catching up fast; we were late to this market, you know, Ring and others had been in this market for probably ten to twelve years, and over the last three years specifically, since we first launched with seat zero, we grew our user base to about a half million seats. So to put that into context, the industry leader in this space is generally around two million seats, and they’ve been doing this for about ten to twelve years, so you know… Ten to twelve years to build to two million users, and in three years we had already got into half a million. So that begs the question – or it begged it of me when we started the partnership – what are we doing? Why are we partnering with RingCentral if we’re catching up so quick? And the answer lied in two key areas: one was, we were investing a minor fortune in terms of time, talent and treasure from our R&D group to catch up. Our platform was missing functionality that was considered industry-standard, things like texting from your business phone number, speech to text voicemail, global reach – that was the biggest challenge. And the amount of money that we were wasting by partnering with a company like Ring, we immediately had access to that featureset. Overnight, we had access to that functionality. So, we’re not playing catch up anymore – that’s benefit one, but benefit two is: what we were doing with that R&D investment, we could now refocus into other parts of our cloud portfolio, because that’s the other thing that really makes Avaya different in cloud, is that… You know, there’s a lot of companies that do one thing, there are some that do a couple of things in the cloud – some companies just do unified communications, so companies just do contact center, some companies just do APIs, some do maybe two things… We’ve built a whole shelf of cloud-based services that our customers can use to solve real problems. So what we did with Ring was we basically said, “Let’s work together for this one service, and then we can take what we were spending in R&D and put it toward other services in that portfolio.” You know, as an example we’re actually bringing out to market a contact center solution the cloud now, as well, and we actually accelerated its launch because of COVID. So originally we were targeting to have it in market in the fall, but because of COVID and because of the resources that we have, we actually moved that launch forward, so starting in June of this year, our customers will be able to leverage a multichannel contact center out of the code that has speech analytics built it, so real-time while you’re on call with a customer, it’s going to be listening, transcribing the call, and identifying questions and making suggested answer to the agents. It’s going to be notifying supervisors when calls need attention in real-time, and you’ll be able to also extend support to your customers, not just by voice, but by email, by web-chat, by SMS, by social media, and a whole host of other things. So we’ve got a whole portfolio of cloud services that we can offer, and the value is that they all come back with a single hand to shake. So, whether you’re looking at you know, Avaya Cloud Office, our RingCentral – our partnership, our developed products like contact center, notification service, cloud-based IVR, it’s really nice to have everything flow through one. So you kind of come back to the partnership; what we did with Ring, we took the best of what they do. They’ve got a really robust, feature-rich platform that they’ve been developing for twelve years, and to your point, we’re bringing Avaya solutions to it. So our devices, our most popular features from communication manager, IP office, CS1000 platforms, we’re bringing that stuff there, so this way our customers can move to a cloud-based solution without the compromise they used to have to make in terms of features and functionality, and even just a consistent device experience.
Max: [09.49] I was a little surprised when I saw the announcement initially –
Steve: [09.52] You and me both!
Max: [09.53] – it had this like moment of, what just happened? You know, and talking with Avaya since the announcement and actually since launch, more specifically, what was originally – I would have said – positioned as like, dilutive towards Avaya is now kind of being… It’s more like you’re becoming this premium offering and premium product that’s built on top of RingCentral, so it’s interesting also from RingCentral’s standpoint, because to some degree you’re commoditizing their platform even more than – somebody would argue saying… It doesn’t matter, I guess a parallel I’d go to is Netflix… You don’t care what cloud Netflix is running on, you want to use Netflix, right? It seems like the same kind of approach that Avaya is taking, and it’ll be interesting to see how this matures and develops over some time.
Steve: [10.38] Yeah, I think a better analogy would be more like a Hulu versus a Netflix, right? With Hulu you can get television shows from different networks, ABC, NBC, but it’s an aggregator that has them all under one roof. And a lot of the time it’s the same price as what you would pay for your cable company, if you just bought Hulu. That’s the real kind of… Key value proposition of our partnership with RingCentral is we’re not competing with each other. You know, RingCentral is still a separate competitor, but what we’ve done with this partnership is, we’ve adopted their core technology, we’ve built on top of it – to your point – so we’ve got something very unique, but we’ve also entered into a pricing parity arrangement, where we’re not going to instigate price wars with each other, because the real competition in market is not Ring, it’s the other cloud vendors that are in market. That’s who we really are looking to market this solution against. You know, RingCentral has been a great partner to us, they’ve been a great platform, we’ve been using it internally as we’ve been developing Avaya Cloud Office… It’s very, very robust, and we’ve been able to kind of add things that are distinctly aligned to it, that we’ll continue to roll out over the coming months, and our customers are just going love it, because again, they can move to the cloud, get all the benefits of a calling, messaging and video product, without the compromises that they used to have to make in terms of the user experience, especially on the desk phone.
Max: [12.02] How does this adjust your customer profile that you’re going to market with? You say 90% of the Fortune 1000, these are obviously very large companies, you know, it requires a lot of infrastructure to deploy traditional, you know, PBX that’s going to support twenty thousand stations in a campus environment. You know, launching and pushing more cloud-based solutions and deliveries, I mean is this bringing the Fortune 1000 to the cloud, or is this also about opening you guys up into SMB market space?
Steve: [12.29] I think it’s both, but obviously the lowest-hanging fruit in this partnership is going to be going after our install base. So, if you look at the unified communications market in its entirety, there’s about four hundred million seats deployed around the world. When you look at the Avaya slice of that pie, we own about a hundred million seats. So, if you think about it, even if we just moved, say, 2% or 3% of our market to this platform, we would immediately dwarf most cloud vendors on the market today, because most of the cloud vendors have kind of built up from the ground, from the SMB space. We see a potential opportunity to take that up market to a lot of our customers that are in that larger enterprise, majors and global organizations, because of two things. One, we understand their business better than most in this space, because we were the ones that helped build it in the first place. So we understand their needs, we understand some of the challenges that they’ve had when thinking about moving to the cloud before, a lot of the cloud guys are, you know, frankly hammers, and to them everything looks like a nail. But like I said, what works for you know, a small doctors office, is dramatically different than what’s needed for a hospital. So, we have the knowledge base, and frankly the patents behind a lot of that stuff, so we’re working with our partners at Ring, to bring the features that our customers depend on, to their platform. So, you’re going to see features like Call Park’n Page and bridged appearances start to move over to the Ring platform in the near future. Then secondarily, we have our people – and this is really probably the most important layer of the Avaya Cloud Office cake, is the services layer. So you know, after the – once you choose Avaya Cloud Office, our client success team will be responsible for helping you get up and running, and the value to a customer is – especially an existing Avaya customer is – we speak Avaya as a first language. You’re not wasting time talking to some person on the other end of a phone to explain well, “What does that button do when you press it? How does that feature work when you use it? Why is that call flow built that way?” We have all that stuff, you know, down cold. We understand that, so there’s less business risk in the shift… Secondarily, we’re using our automated tools to help you migrate to the cloud, to further eliminate that risk. And then after you go live, like I said in the beginning, we have one hand to shake service. So, even though this is a partnered product with RingCentral, you’re not having to queue up out front waiting for service from RingCentral. You call Avaya, we troubleshoot the issue and if it’s something we need to bring to our friends at Ring, we do that on your behalf. Then as you add to that service, so if you start with Avaya Cloud Office to support a work from anywhere workforce, and then you realize, you know what? The auto-attendant… I want to do more than just press one for this, press two for that… I’d like to have a speech-enabled auto-attendant, so people can ask questions and I can cut down on the amount of calls that need a live answer… Well, we have that on our shelf! You can add cloud-based IVR. If you want to notify your users and your customers of an event, of an emergency, of a facility change, cloud based notification systems are perfect for that; you can notify your users via voice or SMS, by leveraging a cloud service. We’re the only vendor that has the breadth and depth in that cloud portfolio – and again it all funnels back to one hand to shake – so if you have a problem with your UC, if you have a problem with contact center, you call us, if you have a problem with cloud notifications, you call us. We troubleshoot it all for you, so it eliminates the multi-vendor headache, and it gives you that one hand to shake service for an easier experience.
Max: [16.19] I mean you talk about, you know, existing install base, and quantity of you know, seats existing within your portfolio. When you look at a customer who’s got thousands of phones deployed, there’s a significant investment in that hardware, and being able to support a migration path for them of taking that investment and bringing it into a cloud service… That in of itself is a pretty powerful, you know, conversation, and also you know, I understand that you have a lot of tooling that you’re writing about around this, to be able to take and run an export of data from an on-premise and do the import and do that work for the customer and actually help them get ready, to bring their system across into a cloud-hosted environment, where it’s not… On their IT department to go figure out – to configure a phone system from scratch, do the imports and make the voicemail buttons, you know… You know, where are you guys with that, and how has that been evolving?
Steve: [17.10] Yeah, absolutely. So the first release of our migration toolkit is going to launch this summer. Originally that was kind of the target for Avaya Cloud Office general availability, but when the deal closed earlier, when we received regulatory approval earlier than expected – we moved everything forward. So our first general availability date for Avaya Cloud Office was March 31st, so we’re still playing catch up to a certain degree – so the first migration toolkit will become available this summer, and it’ll allow customers that are using the IP Office platform to basically take a backup of their system, upload the database into this toolkit, and it will migrate the user database over to your Avaya Cloud Office subscription. So using automation, we’re going to have a streamlined experience to help minimize, if not eliminate, the risk of that transmission. But even absent the toolkit, again it’s our people that make the big difference, because to your point, an IT organization isn’t spending time not only trying to learn how to manage the system in cloud – because frankly it’s kind of easy – but it’s also the explaining to somebody how the existing system works, how the existing users leverage their existing toolkits. That – you can’t minimize the value of having somebody that understands that world and the world you’re moving to, versus somebody that basically says, “Hey I know how this side works, but I’m not sure what you’re doing over there.” That’s tremendously risky, that’s really where a lot of those go-lives go wrong, because stuff gets missed, stuff gets lost in translation, that’s really the value of what we do there, is that we can kind of make it seamless.
Max: [18.49] When you mentioned doing like, speech enabled of an IVR… Is this something where the intention is going to be customer self-service? They’re going to log into a portal and see a list of all the options available from Avaya and say, “I want feature three in blue,” and click a button and have it turned on. Is this customer self-service, is this collaborative, is this you taking care of it? What’s the intention behind that, or the plan?
Steve: [19.11] It’s kind of a d: all of the above. So, we’re developing a storefront so customers can go in, order services on their own if they choose to… But ultimately, most of our customers work with a trusted advisor, so that they – these are the types of things that the trusted advisor would bring to the customer. Like, “I know your business, I’ve been working with you for decades, I know that you have this issue, Avaya has a solution for it.” You know, and they’ll kind of develop it that way, right? Then the third element – or third layer of that – is our client success team. So when you choose one of our cloud products, whether it’s Avaya Cloud Office as the foundation – which that’s the doorway for a lot of our customers – you’ll be assigned a rep from our client success team, and the client success team is there to – at a high level – project manage your go-live to make sure that happens as smoothly as possible, but then secondarily, be kind of your…. Your Avaya buddy, to talk to you about what’s new, with the product you already have – you know, part of the value of cloud is when there’s updates, you just get access to whatever is the latest and greatest, you don’t have to go and buy an upgrade. So the first responsibility is to keep you up to date on what you already have, but then secondarily keep you up to date on the other things that Avaya’s innovating on, so this way you understand all the value and all of the potential solutions that we have to fix problems that you’re currently wrestling with.
Max: [20.31] I mean, when you say that you’re price parity with RingCentral, that would imply that you’re going to be in the twenty to twenty five dollars per seat territory for most people, or most applications?
Steve: [20.41] That’s a fair ballpark. Yeah, we’ve adopted their subscription nomenclature, so on the unified communications side, we have standard, premium and ultimate, depending on which features and capacities that you need, there’ll be different features for different price points for what you’re looking to do, but all of them include calling, all of them include messaging, all of them include video, with really generous capacities. So what we’ve realized in this COVID environment is things that used to be shared by resources like a video meeting bridge, are now no longer optional; every user needs to have one, just like they have a computer. That is baked into each user’s subscription, and therein lies another benefit that a lot of our customers realize when they look at Avaya Cloud Office, is they can save a ton of money by moving to cloud and consolidating some of the spend sprawl that is developed over the years. You know, when you move from on-premise to cloud, you no longer need your phone lines, you no longer need to maintain that phone system, but also you no longer need that web conferencing service that you’re probably spending a mild fortune on. If you’re using a third-party messaging service like a Slack or something like that, if you’re paying for that, you no longer need that, because that’s built in. Some of our customers have been lookin at this solution have actually had a really compelling return on investment by moving to cloud, never mind the features and capacities it gives you, just the fact of “Hey, everything’s bundled under one easy to consume monthly rate,” is tremendously valuable for the organization.
Max: [22.13] Save money and get more, who wouldn’t love it? Steve, thank you so much for your time today.
Steve: [22.20] No problem, thanks for having me.
OUTRO: [22.22] Thanks for joining the Tech in 20 Minutes podcast. At Clarksys, we believe tech should make your life better, searching Google is a waste of time, and the right vendor is often one you haven’t heard of before. We can help you buy the right tech for your business, visit us at Clarksys.com to schedule an intro call.