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Disrupting an Industry: How Avaya's Recent News Will Impact Telecom

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What News?

Since the last reports around the end of November of this year, major telecom player Avaya stands with approximately $600M in debt, repayment of which is due in October 2017. While Avaya is still an undisputed giant in the industry, they have reported losses over several quarters since a high point of about $1 billion back in 2015. A highly trending article from the Wall Street Journal even speculated that Chapter 11 bankruptcy and other financial restructuring options are certainly on the table for the hardware vendor.

At the heart of the one company’s struggles, however, we see that there’s a bigger theme occurring in the telecom market: change of business models.

The Shift to SaaS

Avaya and other established technology hardware vendors are feeling the pressure from the rapid growth and adoption of cloud-based products and services. As a result, these businesses have begun repackaging and rethinking their offerings. Look at the latest activity in the Communications-Platform-as-a-Service (CPaaS) industry, for example. In the last five years, Avaya has formed Zang, Cisco has acquired Tropo, and Vonage has acquired Nexmo. These are preparations for what’s to come, not passing trends. Researchers predict that CPaaS is slated to rocket to an $8.1 billion market by 2019, so everyone seems to be jumping on that train as soon as possible.

Businesses are expected to continue dumping private infrastructure hardware in exchange for cloud systems as risks related to security are addressed, and communications is part of the picture. Web-based softphones, SIP instances, and virtual communication centers are all offerings that continue to rise in popularity across the spectrum of business, from startups to enterprise organizations.

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Hardware isn't going to hold businesses back anymore.

Upcoming Changes to Telecom

The business communications experience will change on three, interconnected fronts: for wholesale vendors, resellers, and end business users. The underlying motivator? Personalization.

Vendors

Telecom vendors will be expected to provide a balance of flexibility, scalability, and reliability in order to have the most marketable product.

  • Flexibility: A voice system that can be customized via pricing controls, account management, workflow processes, and perhaps most of all, the ability to customize integrations via a versatile API framework.
  • Scalability: The system will need the underlying network and infrastructure to handle millions of numbers and make provisioning and other account changes a simple process even for an end user.
  • Reliability: Call quality expectations are at an all-time high, and it’s imperative that vendors bring only top-tier carriers to the table.

One thing missing from this list is pricing, but the race to zero is alive and well, and though there is some variation in pricing now, numbers can only get so low, regardless of the vendor’s position and product.

Resellers

As mentioned above, CPaaS solutions will hit hard and fast, and resellers will be expected to provide a wider range of functionality for their systems. Customers will also demand a unique, custom experience that best suits their needs. A truly unified solution will include voice, video, and other communication functionality such as integration with chat apps like WhatsApp or Facebook Messenger. Companies will grow more accustomed to the ability to request a “perfect fit” solution, and thus will likely start making demands for functionality that works best for their business model.

In order to react appropriately, resellers will require a voice offering with a high number of API options so that various applications can be integrated. Even though the core system will remain the same, every solution can be presented as a wholly unique product, with the option for more add-ons.

End Users

In terms of what businesses are looking for, it’s pretty simple. Give them a system that works wherever, whenever, and however they need it to. Easier said than done, but the limits of cloud-based telephony are more or less boundless at the moment.

Do you want more information on cloud technology’s impact on telecom and what customers are expecting to get from their systems? Download the free guide, Speaking Clearly: How Cloud is Changing Business Communications. Click here to request your copy now.

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Tagged: future of telecom, CPaaS