CANCUN – Avaya’s partners need to up their game when it comes to the cloud or they risk losing relevancy with their customers, the company’s sales chief told them Tuesday.
Speaking at the company’s Avaya Executive Partner Forum event here, Pierre-Paul Allard, senior vice president of worldwide sales, issued the warning in very stern terms to a number of the company’s top partners.
“If cloud is not top of mind with you, at least 30 to 35 per cent of your engagement model, a lot of you won’t be in this room next year,” Allard told attendees. “It has to be in your engagement model, and we have to help you get there in a way that makes money for you and goes after the markets that are growing, not shrinking.”
Cloud is certainly key in many key markets for Avaya. Allard said the company expected a $61.9 billion market in cloud-based UC by 2018, $12 billion cloud PBX and UC services market by the same year, and a $10.9 billion market in cloud contact centre by 2019. Bob Romano, director of marketing for video solutions, said the company expects cloud-based videoconferencing to surpass on-prem videoconferencing revenues by sometime next year.
While it certainly comes as no surprise that cloud is a growing part of any technology market in 2015, Allard’s harsh warning to partners underscored the challenges many partners have in transitioning significant portions of their revenues to the cloud. In a panel of about 10 top Avaya partners with press and analysts at the event here, all said they were shy of Allard’s recommended 30 to 35 per cent ratio, although they declined to elaborate on how far they were from that number. Still, the market for cloud is undeniable, and the desire to find profitable ways to embrace the cloud was high among panelists, who were themselves in a variety of states in terms of their engagement.
“The world is moving to cloud, and very rapidly,” Allard said. “If we’re not playing in the cloud, and offering these services collectively, we’re working in a declining market.”
In that comment is the likely crux of Allard’s issue – the company knows it needs the channel to succeed in its traditional strongpoint in the SMB market and its growing midmarket opportunity. But Allard seems to suggest there’s a gap developing between the appetite of those customer groups for cloud-based services in the markets Avaya serves, and the ability and aptitude of partners to sate that appetite.
Other top opportunities on Allard’s mind in his presentation include the aforementioned growing midmarket space, which he said accounts for $53 billion in annual IT spend. However, here, as in SMB, the need for new types of solutions (read: cloud) looms large.
“[The midmarket is] underserved, and it’s now willing to invest in IT in ways it hasn’t in the past. It now recognizes the opportunity and differentiation in technology in ways it didn’t before,” he said.
The core networking business was also high on the executive’s mind. He cites network fabric as a $25 billion market for Avaya, and one where the company has designs to grow at a 40 per cent clip in the current fiscal year. Fabric, he said, is set to pass traditional network hardware in revenues by 2018. Part of the reason, Allard suggested, is that high-volume applications like contact centre and unified communications are taxing the limits of current network infrastructure.
“Things happen too fast, and it blows the network up. We find ourselves fixing MPLS networks every day,” Allard said. “Fabric should be 30 per cent of your revenue, or you’re missing a great source of growth.”