Avaya helps to tie the corporate world together. The company's
communication equipment and software integrate voice and data
services for customers including large corporations, government
agencies, and small businesses. Its office phone systems
incorporate Internet protocol (IP) and Session Initiation protocol
(SIP) telephony, messaging, Web access, and interactive voice
response. Avaya also offers a wide array of consulting,
integration, and other managed IT services. The company sells
directly and through distributors, resellers, systems integrators,
and telecommunications service providers; more than three-quarters
of its sales are made indirectly. In 2017 the company filed for
Chapter 11 bankruptcy to deal with a heavy debt load.
Avaya filed for protection under Chapter 11 bankruptcy in
January 2017 as it sought to reduce its debt. The company took on
debt when it was acquired by Silver Lake Partners and TPG Capital
in 2007. At the time of the transaction, Avaya focused on providing
telecommunications hardware. Since then many of the tasks handled
through hardware have shifted to software. Avaya has had increasing
difficulty in meeting its debt obligations. The company arranged
$725 million in financing, underwritten by Citibank, to get it
through the bankruptcy proceedings.
Avaya divides its operations across three segments. Two of the
segments -- Global Communications Solutions (GCS; 44% of total
sales) and Avaya Networking (6%) -- make up the company's
Enterprise Collaboration Solutions product portfolio. The third
segment is Avaya Global Services (AGS; 50%).
GCS offers business collaboration and communications software
used to make IT infrastructure for communications contact centers.
Avaya Networking makes Ethernet switches, routers, a virtual
private network technology products, while AGS offers IT consulting
and advisement services.
Avaya operates through about 178 leased facilities and two owned
facilities spanning some 58 countries. It has 11 primary research
and development facilities in Canada, China, Germany, India,
Ireland, Israel, Italy, and the US.
Customers in the US buy 54% of Avaya's products, followed by
Europe with 26%, Asia-Pacific at 11%, and Canada and Latin America,
Sales and Marketing
About a quarter of Avaya's sales were made directly in 2015, and
the company's sales strategy has emphasized building its channel
partnerships. The company continues to offer traditional
communications equipment with an eye toward migrating legacy voice
network equipment to IP-based systems.
Avaya's revenue slide continued in 2015 (ended September),
dropping 7% to $4 billion. The company has lower sales through all
its market all geographic segments. Sales for its legacy product
continued to fall in 2015 while currency exchange rates also
While Avaya has lost money for nine out of the past 10 year,s it
has narrowed losses in the last two years. It reported a loss of
$144 million in 2015, compared to a $231 million loss in 2014.
Cash flow from operations rose to $215 million in 2015 from $40
million in 2014.
Avaya sold non-core businesses and released some 100 products in
2015 that expand its cloud computing and mobile offerings.
The company sold its IT Professional Services business for $101
million as well as the Technology Business Unit (for $14 million),
which had been acquired with RADVISION Ltd.
In 2014, the company expanded its cloud offerings and
capabilities and introduced 114 products, a 10% increase from
Mergers and Acquisitions
Avaya boosted its cloud offerings, in part, through
acquisitions. In 2015, it bought Esna, a provider of cloud-based
unified communications. Esna operate as a wholly-owned Avaya
subsidiary. The move helps position Avaya as a provider of mobile
and cloud-centric collaboration technologies.
The company previously acquired IT Navigator Ltd., a global
provider of cloud, social media, and management products and
services. The integration of their portfolios enhanced Avaya's
cloud as well as its unified communication and contact center