Attack / Defense Against Avaya

Attack / Defense Against Avaya CSBU LEV Business Development

Agenda • Avaya’s offer • IP telephony • Contact center • What Avaya claims about: • Themselves, their solutions and Alcatel • Responding to Avaya claims • Competitive positioning • SWOT • Key differentiators • Price positioning • Summary

Avaya Solutions for MLEEnterprise Class IP Solutions (ECLIPS) • MultiVantage Software Suite: • Avaya Communiation Manager • Avaya Modular Messaging • Avaya Unified Communications • Avaya Converged Communication Server • S8100 • Blade in G600 • Win2000 • Up to 450 users • Up to 10 G600/CMC • No redundancy or hot swap • S8300 • Blade in G700 or G350 • Linux • Up to 450 users • Up to 50 G700/G350 MG • S8500 • Intel servers • Linux • Up to 2400 users • Up to 250 MG (G650, G700, G350) • Up to 64 PN (SCC1, MCC1) • No duplication • S8700 • Dual Intel servers (via fiber) • Linux • Up to 36K users / 12K IP • Up to 250 MG (G650, G700, G350) • Up to 64 PN (SCC1, MCC1) Media Servers DEFINITY Boards Cajun Boards • G600 • Stackable (4) • 10 slots • G650 • Stackable (5) • 14 slots • Used for new S8500 or S8700 configs. • MCC1 & SCCI • Legacy Definity “port networks” • Directly connect to S8500/S8700 • Can interconnect multiple via CCS or ATM • G350* • Standalone • 1 to 40 users • +S8300 for survivability • G700* • Stackable • 40 to 450 users • +S8300 for survivability Media Gateways * Connects to S8700/S8500 via CLAN card in a G650/MCC1/SCC1 (not direct over LAN)

S8100 S8500 S8500 S8500 Dual S8700 Dual S8700 G600 G600 IP IP S8300/G700 • S8300 G650 G650 G650 G700 (+ S8300* for survivabilty) G700 Avaya Solutions for MLESample configurations S8500 IP-Connect Branches S8700 IP-Connect S8100/G600 1 – 40 users New Systems G350 (+ S8300* for survivabilty) S8700 Multi-Connect S8500 Direct-Connect *AKA Local Spare Processor 40 to 450 users Migration SCC1 (or MCC1 or CMC) MCC1 (or SCC1 or CMC) 450 2400 36,000 Number of users

4630 IP Screenphone 4620 4612 Avaya Solutions for MLEPhones and Applications • 4600 Series IP telephones • 4602 – 2-line, display • 4606, 4612, 4624 – multi-line, LCD displays, speakerphone • 4610, 4620 – graphical display, web browser • 4630 IP Screenphone – color, touch-screen, Web access • 4690 – IP conference phone (Polycom) • 3616, 3626 – IP wireless phones (Spectralink) • Applications • Avaya Converged Communication Server (SIP) • Avaya Modular Messaging • Avaya Unified Communications • EC500 – Extension to Cellular application • IP Softphone and IP Softphone for PocketPC • VisAbility Management Suite

Avaya Solutions for Contact Centers • Customer Interaction • Avaya Definity/MultiVantage-based offer • Has been restricted to a voice-only solution • No multi-media capabilities • CTI is only an interface to third parties: no integrated softphone, no middleware • Proprietary ASAI interface to 3rd party apps • Avaya Interaction Center • Recent convergence of product lines – Avaya CentreVu (multi-media), Quintus and Interaction Management • Includes CRM, vertical packages, multi media and media blending • Is PBX-independent

Avaya’s claims about themselves and our responses • Avaya leads the world market in enterprise IP telephony port shipments for 2003 (Synergy Research) • Alcatel is ranked #1 globally in IP-PBX line shipments (Dell’Oro, 4Q03) • Avaya is the overall North American telephony market leader (Infotech) • Alcatel is #1 in EMEA (Dataquest) • Avaya is a global leader in contact centers • Genesys is #1 globally in web contact centers and CTI • Avaya has unsurpassed expertise in telephony solutions • Alcatel also has a long heritage in telephony, dating back to late 19th century • Avaya’s sole corporate focus is on the enterprise communications market • Alcatel has a strong focus on enterprise communications, but is better position to lead the evolution to the Next Generation Network, leveraging carrier/enterprise portfolios

Avaya’s claims about their solutions and our responses • Avaya offers a broad portfolio to meet all customer requirements • Avaya’s IP telephony portfolio comprises a number of components from multiple, incompatible product lines and is limited to certain fixed configurations. It is very disjointed and confusing • Avaya offers an open solution • Avaya does not support XML APIs and their SIP offer is very weak and disjointed from their IP Telephony and applications offers • Avaya has a strong networking strategy around QSIG • Avaya is playing catch-up to Alcatel with their QSIG strategy and does not provide the same level of feature-transparency as ABC • Avaya offers an unsurpassed contact center portfolio • Avaya’s Interaction Management portfolio is a disparate collection of components from various acquisitions trying to appear as a cohesive package • Avaya has a strong focus on professional services • Result of Avaya’s direct sales model • Contact Center is so complex (even the embedded application) it requires PS to implement/integrate

Avaya’s claims about us and our responses • Alcatel has the closest architecture for IP telephony to Avaya’s • Alcatel has a much more graceful, scalable, modular architecture with a single software application and mix-and-match hardware components enabling us to serve the smallest branch to the largest campus with a single, consistent solution • Alcatel is ahead in next generation, standards-based applications, e.g., OmniTouch UC and native SIP support • Alcatel forces customers into multiple switches in configurations over 5K lines • That’s because Avaya can’t manage multiple switches as a single virtual, distributed platform. There’s a benefit, especially over WAN and LAN, to have multiple distributed switches for higher levels of resiliency and autonomy • Alcatel is the one to worry about, not Cisco • You bet!

Avaya’s General Competitive Strategy • Channel • Direct sales, plus indirect (AT&T Solutions) • Continues to sell services with separate services only sales force • Repurchased Expanets addressing SME market in US • Marketing and advertising • Extensive advertising campaigns in North America: • Delivering the “Optimized Enterprise” • “Don’t reinvent - rethink” • “Don’t forklift! Reach IP Telephony your way.” • General • Avaya tends to “milk” their large installed base with add-ons, upgrades and services • Avaya is not winning a lot of “greenfield” business • Heavy focus on security and features for disabled people • Creating market hype to differentiate in these areas

Avaya SWOT Analysis • Strengths • Long history in voice, with strong traditional feature-set • Strengthening IP Telephony portfolio • Sole corporate focus on enterprise networking solutions • Strong Direct Touch and dedicated installed base in North America • Strong in contact centers • Weaknesses • Confusing IPT product-portfolio, with fixed hardware configurations • Weak data networking portfolio – Extreme Networks relationship TBD • Weak market penetration outside North America, except call centers • Still struggles with indirect channel management • Interaction Management is a convergence of disparate applications • Opportunities • Strong migration story for large installed base in North America • Strong traditional feature-set plus strengthening IPT solutions may help grow market-share outside No. America • Large emphasis on professional services provides additional revenue opportunities • Threats • Financial stability is vulnerable due to non-diversified market focus • Installed base is vulnerable to incumbent (non-Avaya) data infrastructure vendor • Traditional separation of SMB and MLE solutions continues with IPT, weakening Avaya’s branch office solutions • The spin off from Lucent limits their ability to provide a complete NGN enterprise solution.

OmniPCX Enterprise versus Avaya MultiVantage • Architectural flexibility • Cannot upgrade to MultiVantage with existing Definity CPU boards • Installed base must upgrade to new external servers to run new software • Hardware components are not mix and match • Configurations are limited to certain combinations of media gateways and servers • G350 have no direct signaling to the S8700 server: therefore cannot have network of branch offices with Cajun-family MG (G700/G350) controlled by S8700 – need CLAN cards in Definity-family MG (G650, SCC1, MCC1) • SMB product line separate from MLE, with little cross-over for branch office or small-of-large solutions • IP Office – different hardware, phones, management, etc. • Takeaway: complex, disjointed and confusing product portfolio

OmniPCX Enterprise versus Avaya MultiVantage • Intelligent networking • Avaya is migrating from proprietary DCS to QSIG • “Bottom-up” approach, i.e., gradually adding vendor-specific features over QSIG • Avaya’s implementation of DCS/QSIG does not provide the 99.9% feature-transparency or database synchronization of ABC • Complex dial-plan issues • Moving a user from a Definity to a MultiVantage / S8700 requires a numbering plan modification • DCS (legacy networking) only supports 5-digit dial-plans

OmniPCX Enterprise versus Avaya MultiVantage • Manageability • Weak branch office management solutions • G350/G700 media gateways are managed by a separate Cajun data device manager (major weakness in branch story) • IP Office product is managed by separate management tools • Weak management of networked systems • No support for real-time multi-node administration / configuration • No database synchronization in networked configuration • VisAbility is a collection of separate management tools • “We found it difficult to contend with so many different applications”, Miercom benchmark test report in BCR, January 2004 • High availability • No simple to manage, low-cost survivability option • G700/G350 requires an S8300 server blade in standby for remote survivability, S8300 stand by servers add to management complexity • S8700 redundant servers still connect over fiber, not LAN

OmniPCX Enterprise versus Avaya MultiVantage • Agile Workplace Avaya digital and IP phones do not have an alphanumeric keyboard • Prevents simple dialing by name • Not SIP/IM/SMS future-compatible (URL-based addressing) • Unified Communication Center • Four modules similar to OmniTouch Unified Communications • Integration with Microsoft only (not with Lotus) • Applications not based on latest technologies (no XML, VXML, SIP) • Converged Communication Server • External SIP presence server that supports: • Low-end Avaya IP phone (4602) via SIP with limited feature-set • Provides proprietary presence and IM to Avaya softphone (no SIP for voice call) • Does not interface to third-party presence servers, so “buddy list” is limited Avaya softphone users • No tie-in with Unified Communication Center • No support of third party SIP end points • Limited customer benefit in current form – more of a proof of concept

OmniPCX Enterprise versus Avaya MultiVantage • Customer Interaction • Avaya Definity-based offer • No integrated softphone, no middleware • Call vectoring (to define distribution) is complex, script-based and optional • Avaya Interaction Center (from Quintus) • Disparate collection of components from various acquisitions, not efficiently integrated in a common framework like Genesys • Is expensive for the small contact center • Requires higher level of professional services • Gartner evaluation, November 7, 2002: • “Successful implementation of Avaya’s highly sophisticated range of contact center solutions is dependent not only on technical but also organizational issues.”

Pricing • Avaya’s price-positioning is generally higher than the OmniPCX Enterprise • In general, we do not lose to Avaya on price • Avaya’s pricing strategy (from Gartner, February 2003): • Aggressively price voice products (TDM and IP) with heavy discounts • No discounts for service, maintenance or professional services • Focus is on lifecycle cost, with services as the primary source of profit • Pricing references: • From Current Analysis, August 2003: • Communication Manager with the S8700/G600 hardware option, costs approximately $190,000 for 250 users (not including handsets) • Avaya estimates that a base configuration for the S8300/G700 costs $83,000, a price that excludes end stations • Prices for a fully-configured S8300/G700 system run from $600 to $800 per station, a price that includes end stations • From Voicecon 2004 RFP: • Discounted system price: $860 per user for 1550 full IP users w/ terminals (S8700/G650)

How to attack Avaya (1/2) • Architectural Flexibility • Avaya has a complex, disjointed and confusing portfolio • Going with Avaya for a customer means: • Software and hardware components are not mix and match • Difficult upgrade of existing Avaya network (Linux on external server only) • Intelligent Networking • Avaya is migrating from proprietary DCS to QSIG • Going with Avaya for a customer means: • Lack of feature transparency with DCS / QSIG compared to Alcatel’s ABC • Highest Reliability • Avaya Multivantage survivability is expensive and complex to manage • Going with Avaya for a customer means: • Limited spatial redundancy: servers duplicated through fiber • No low-cost/easy to manage branch survivability solution

How to attack Avaya (2/2) • Simplified Management • VisAbility is a collection of separate management tools • Going with Avaya for a customer means: • Higher TCO: G350/G700 MG requires separate tool to administer • Weak network management (no database synchronization) • Agile Workspace • Avaya’s communication suite offer is based on old technology • Going with Avaya for a customer means: • Increased integration costs: no openness to Web services without XML • Not future-proof: Weak and non-native support for SIP and proprietary unified communications suite • Customer interaction • Avaya’s contact center solutions are complex and costly to implement • Going with Avaya for a customer means: • Costly Professional Services to implement: low-end solution is so basic that small CC are driven to Avaya’s more complex solutions • High TCO: high-end solution is an umbrella of disparate products without common management / framework

Thank you

Attack / Defense Against Avaya