The January 19 announcement from Avaya that it will be seeking Chapter 11 Bankruptcy protection creates an opportunity for hosted UCaaS resellers and service providers.
The company, which is being pulled under by $6B of debt and $1.7B of unfunded pension liabilities, currently supports about 100 million endpoints. Without a doubt, many current Avaya customers are now evaluating their options. Many who felt settled with an on-premise PBX may be reconsidering that position. Others that had decided to put off migrating to the cloud may well be ready to make the move sooner, rather than face the uncertainty that the coming months are sure to bring.
It’s still unclear whether Avaya will be able to emerge from bankruptcy with a customer base intact. When Nortel filed for bankruptcy in February 2009, the resulting uncertainty caused enterprise revenue to drop by 50%. Back then many Nortel customers migrated to Avaya. This time around, I predict that many of those customers will be migrating to the cloud.