AVAYA set to replicate Enterprise Success in SMB Space

The SMB sector is showing definite signs of fast growth. According to Access Markets International (AMI) Partners, SMB spending on IP telephony across the Asia-Pacific region (excluding Japan)

– including IP Centrex, IP PBX, and IP phones/adaptors – is set to experience a compound annual growth rate (CAGR) of more than 45 per cent in the next five years. VARIndia recently met Sanjay Singh, Head (SME Business Unit), Avaya Global Connect, who discussed the company’s plans to target SMBs in India.

Success in the SMB market is something companies can ill-afford to lose sight of. Spending on IP telephony by SMBs across the Asia-Pacific region (excluding Japan) will exceed US$500 million this year, up more than 40 per cent over the last year. According to New York-based Access Markets International (AMI) Partners, Inc. overall, SMB spending on IP telephony is set to experience a compound annual growth rate (CAGR) of more than 45 per cent in the next five years. The research reveals that IP telephony is slowly but surely making strides as a viable telephony alternative.

“So far as IP telephony for SMB is concerned, I would say there are two things in that. One, it is growing for sure, people are more aware than ever before, are inclined to use IP telephony for the benefits it brings to the organizations.””“However, there is hindrance due to the regulation aspect which is not yet clearly defined,” says Singh.

Avaya, a name synonymous with IP telephony, is all set to make itself a force to reckon with in the SMB space. Of late, analysts are veering round to the view that SMB is one the fastest growing market. However, the jury is still out on the definition of SMB. It would not be an exaggeration to say that there are as many definitions as the number of companies. As unanimity on what constitutes an SMB is nowhere near the sight, organizations have come out with their own versions. Avaya Global Connect, the Indian subsidiary of Avaya Inc., has found it viable to segment the SMB sector into three layers. “Primarily, we have divided SMBs into the three layers. One is the very low-end segment that is almost 30 per cent of the total enterprise market. The segment is catered to by even some unbranded stuff, which are selling in large numbers,” says Sanjay Singh. But Avaya does not intend to cater to this low segment as it is a very price-sensitive market. Here, the customers do not look for any kind of applications; they just look for basic communications system.

Then comes the middle-level SMB segment. This segment is taken care of by established companies like Seimens, LG and Samsung. The products used by this segment are value- for-money solutions. Customer sees value in these products and he is willing to pay some premium for these product lines. This is how the middle line is defined by Avaya. Finally, there is a top-end layer within the SMB and this segment is showing definite signs of growing. The top-end segment comprises specially IT and FMCG companies. These companies are earlier adopters and believe in investing in technology. “They will go to any extent not to compromise on quality and features. They insist on going by the brand name most of the time – I would say, all the time,” says Singh.

Not short of resources and revenue, the top-end companies of the SMB segment never fight shy of investing money to enhance their business performance.

“If they deploy Avaya IP office for example, they don’t see it merely an extension of their effort to strengthen the infrastructure but as a way how they can leverage the strength of the product by enhancing their services to their customers. As a result, they would not mind the high value of the product,” says Sanjay. “We are targeting the very top-end and middle segment of SMB. Avaya has different products for these two segments,” adds Singh.

To meet the requirements of the top-end of SMB, Avaya has IP office, called Avaya IP office. Basically a high office application, it is equipped to support the Compact Contact Centre (CCC) application. CCC is a highly modular solution designed for companies that need a sophisticated solution to their customer service needs.

To cater to the middle layer SMB, Avaya entered into a strategic alliance with Cyberoam, unified threat management (UTM) appliance provider, for the distribution of its Identity-based UTM appliances in India. The alliance goes a long way in bringing a one-stop solution to SMB customers, providing both IP telephony and security solutions at a single point, reducing their dependency on multiple solution providers.

Avaya has entered into a partnership with LG for value-for-money kind of solutions. The company sources it directly from Korea. This is the only product that LG is not selling directly from LG India.

A look at the Avaya product lines reveals that 40 to 50 per cent of the company’ product portfolio comes from alliances. These alliances have been inked with a view to offer complete offerings to the customers. The company has partnered global technology leaders – Polycom, the world’s leading video-conferencing solutions provider; NICE Systems, the Israel-based customer experience management specialist; LG, a leading global player in EPABX and KTS products; and IEX, a Tekelec company and the leading provider of contact centre workforce management solutions. The company has strategic alliances with systems integrators such as IBM, HP, Servion, Cable & Wireless, CMC and Tata Infotech.

Avaya Global Connect has a distribution network of business partners consisting of system integrators, value-added resellers and channel partners. The company is targeting 30-per cent market share in the IP office solutions for small and medium enterprises (SMEs) in the next three years.

As per the estimates, the total revenue of IP PBX market in India is likely to nearly double from $82 million in 2005-06 to $160 million by 2007-08. “The SME sector would comprise an estimated 40 per cent of this total market revenue,” Singh says.