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. Its parent company is Avaya Holdings.
Avaya divides its operations across three segments. Two of the segments -- Global Communications Solutions (GCS; 45% of total sales) and Avaya Networking (5%) -- 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 200 leased facilities and two owned facilities spanning nearly 60 countries. It has 13 primary research and development facilities in Canada, China, Germany, India, Ireland, Israel, Italy, and the US.
Sales and Marketing
About a quarter of Avaya's sales were made directly in 2014, 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 more modern, converged, IP-based systems.
Avaya's revenue slide continued in 2014, dropping 5% to $4.4 billion. Its Global Communications Solutions and Avaya Global Services segments posted lower sales, but Avaya Networking's results increased. The Global Communications Solutions drop was blamed on diminishing demand for its legacy and core products and services. Weakness in legacy and core products also hurt Avaya Global Service revenue.
The company reduced its net loss to $133 million in 2014 from $231 million in 2013. The sale of Avaya's ITPS business in 2014 helped reduce the loss.
Cash flow from operations dropped to $40 million in 2014from $151 million in 2013 due to changes in accounts receivables, increases in cash used in payroll and benefit obligations, and a decline in deferred revenue.
Avaya sold non-core businesses and released a plethora of products in 2014, seeking to turn its fortunes around.
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 2013.
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 products.