Avaya CEO: How Video Will Change Business World
Last Wednesday, Avaya, Inc. made a splash in New York City with a portfolio of new collaboration products, including the Flare Experience multimedia conferencing system, a new tablet designed to support the Flare software and the web.alive (stet) virtual reality meeting service, among other offerings. (http://www.networkworld.com/news/2010/091510-avaya-tablet.html) In the latest installment of the IDG Enterprise CEO Interview Series, IDGE Chief Content Officer John Gallant talked with Avaya leader Kevin Kennedy about the company's collaboration strategy, how the new products change the competitive battle with Microsoft Corp. and Cisco Systems, Inc., and what it's going to take to make video a part of everyday life for business users.
Q: A lot of the pre-launch buzz about your announcements centered on Avaya developing a tablet in a market that already has a variety of tablet options. But that wasn't really the focus here, was it? How would you encapsulate the key news of the rollout?
A: Today, the fact is that people buy isolated high-def video for enterprises and they probably spend $5,000-$6,000 to put that on their desks. The second fact is that most desktop video consumes a lot of bandwidth, 1.5M to 2M [bit/sec]. That's limiting for global companies that want to go to Asia, South America, and so forth. It's a boundary that can't be crossed at that level. Third, these are disparate systems, so it's hard to do things like forward an unanswered video call into voicemail. Integration is poor because [systems are] isolated.
Today was about accessible videoconferencing collaboration, meaning it's a lower acquisition cost and lower bandwidth, so your operating cost is less. We tried to put a fun user interface on this and we called it Flare. It's a user experience that features a lot of integration, whether it's directories from the consumer or the enterprise world, or it's making use of SIP infrastructure. So, number one is innovation; number two is execution for over a year on innovation; number three is a new set of devices that solve a real problem in the enterprise; then lastly a software experience that we can put on any device, we just happened to introduce one [the tablet] today.
Q: You made some big claims about the improvements that this brings, one of them being a 10X productivity improvement. How do you support that? Where does that number come from?
A: Let's walk through an audit of what it takes you to have a board call. I don't know about you, but we may all dial in, and the first thing is that everybody comes in differently because the end points have to come onto the call. That process alone can take sometimes five or ten minutes - as opposed to simply dragging a set of people from a directory into a spotlight, which takes seconds. Right off the bat we've got, call it, single-digit seconds versus double-digit seconds. Then you do a roll call in today's world, because you don't know who's actually on. Then, let's say you want to ask the two lawyers to exit so you can have a private company conversation. Then you hear a beep-beep after you've asked, they go away, then you want them to rejoin, and you call them up again. Hopefully, they get it. If they don't get it, you leave a message on their Blackberries, and then they come back in, it's beep-beep-beep, and you do a roll call. Versus swipe, bring them in, swipe, put them into a separate area, and swipe, bring them back. Literally we've done an audit and the improvements could be as much, in some cases, as 20 times faster.
Q: What would you say are the two or three key messages you want people to take away about Avaya from this launch?
A: Number one, innovation is important to us, and we have taken great strides in building a track record on execution for innovation. Secondly, we have aligned ourselves to new markets that are growing, video being one. Third is that we've taken a differentiated approach versus our competition: Low bandwidth versus high bandwidth; a user experience that is phenomenal; and an integrative approach versus products today that are standalone and don't have that user experience.
Q: We've seen customers embrace very high-end telepresence videoconferencing systems for some very specific uses. But what is going to make video become part of our daily lives? We haven't crossed that threshold.
A: I think there are two items. I've been in communications all my career. In my early days with modem technology - now I'm really dating myself - and in my early days at Cisco where we would come up with smaller and smaller routers, a very interesting calculus would emerge. Every time you dropped the price in half of a functionality, you'd have anywhere from a three- to six-fold increase of either the numbers of people who bought it or the size of the market. The mere fact that we're bringing a high-def video capability at one third [the cost of] what people are purchasing today, I believe that's going to expand the market. The second is that if you have a user experience that's fun, more integrative - you know, Facebook, LinkedIn, Twitter, as well as Active Directory - all of a sudden you're going to become more dependent on it. So I think it's really two things: the price point's a crucial thing. But then the second is that user experience is really the art of the sale.
Q: Let's talk about the tablet, the desktop videoconferencing device you announced today. What's your expectation on the market for that? How many customers do you think will use that versus, say, their desktop PCs or the versions of the software that you come out with for mobile devices?
A: Hard to say. The best way for me to answer that is how I think about it in our own company. Today, I have a $6,000 device in my office, I have a conference room with a device that's bigger and even more expensive, and at home I have no video. Would I be inclined to have a device that we shared today with the Flare experience on my desktop, in my conference room, as well as at my home, all for the price of what I have paid just for that one device? You bet I would. Of course, the goal is over the next 18 months to provide that same user experience frankly on almost any device that you want. A big piece of this is the recognition that our business model is about the software and the experience.
Q: How does this change the competitive landscape versus Cisco or Microsoft?
A: There was a point in time where Microsoft's architecture and the premise was that everyone would want all capabilities to be convergent on a single device that was Windows-based. I believe that that has less momentum today than it had a year ago. I don't believe that has anything to do with Avaya, by the way, with all humility. [That has to do with] the advent of social networking and the fact that directories other than Active directory are important. [It has to do with] the advent of new devices which people just fall in love with, like the iPad. The consumer world cannot be bounded and [it's] coming into the enterprise. As that has happened, this premise that there is only one device that's the convergence point for all is less strong.
Also, the cost for those desktops and operational upgrades is becoming too prohibitive, so people want to centralize that capability, again giving the opportunity for devices other than the laptop to be the convergence point. My belief is that this is a great time for a new device, but an even better time for a user experience that makes people more productive. That's what we're doing.
Q: Avaya has strong customer loyalty, Nortel has strong customer loyalty, but how do these announcements open you up to a new customer
A: They actually do two things. One is [generate] new sales motion with our existing customers. At the end of the day, people absolutely have budgets for video, whether it's their motivation is to save travel cost, or motivation for collaboration - this now allows us to have a different conversation. I know that you have a video budget; I now have a user experience that you've never seen before. In terms of new customers, absolutely. By reducing the cost of the infrastructure, reducing the cost of the WAN facility, and reducing the cost of the device, and actually taking it to software, a small business can put it on any device. That has to open up the market.
Q: Are there plans to work with application vendors to integrate some of these collaboration capabilities into the more widely used applications?
A: Yes, absolutely. Obviously ERP systems and tighter integration with our own call-center capability are all going to be opportunities for us.
Q: Talk about web.alive. (http://www.avayA:com/usa/product/web-alive) How do you see people using it? People experimented with Second Life for business and it never really hit the potential that they hoped for. Will they find it here?
A: I can give you two use cases which relate to customers that have already bought it and what they're doing with it. This is not an ethereal hope. This is reality. One group of customers is using it for distance training. It does not take a lot of bandwidth and the use of these Avatars affords a lot more diversity in the audience. The spatial 3D voice is phenomenal. If you've had a chance to experience it, it surprises you when you do it. It's almost disarming. Because it's low bandwidth, it works great for large-scale, geographically dispersed work forces. The second [usage] is as a showroom. It allows consumers to call in and say, "I want to see this." You can have specialists on the chat piece of it; you can walk around the room and see diagrams, demos. While there will be many more, this is reality now. We have multiple purchases of significance and tens of millions of dollars in these two cases: the distance learning and the virtual showcase.
Q: You've talked a lot about the innovation. What's coming in the year ahead?
A: Number one is the delivery on the promise of getting this Flare user experience across more devices, as well as we'll have our own additional devices. The real purpose is to achieve a larger number of price points for the industry for that user experience. Second, we'll do more in the size of the installations that we can support. Third is really the integration - whether it's the integration with web.alive, integration with virtual desktops, integration with our call centers, or integration with ERP systems and so forth. Integration is going to be a very, very important piece of this for the enterprise.
Q: Avaya's been through a lot of changes over the past couple of years. Define for our readers the unique position that Avaya has in the market.
A: The combination of Avaya and Nortel is very unique in the sense that we're the only company that spent four decades migrating the Fortune 1000 from one architectural change in real-time communications to another. We're going to interoperate with our competitors and we're going to try to innovate so we give Fortune 1000 a low-risk migration. We've been doing for 40 years, and we're going to step it up.
John Gallant is the chief content officer for IDG Enterprise, which is comprised of Computerworld, CIO, CSO, InfoWorld, Network World and ITworld.com.