Lucent spinoff Avaya plays to its strengths

Lucent Technologies Inc.’s enterprise spinoff company last month gave itself a new name and a product direction for its core call centre and unified-messaging products, but conceded it is still working out details for its LAN/WAN data product strategy.

The company will be called Avaya Inc. It is headquartered in Basking Ridge, N.J., where Lucent’s core voice-switching business is located.

With Avaya beginning as the U.S. leader in call centre equipment but battling Nortel Networks in a tight market-share race, Avaya President and CEO Don Peterson announced a strengthening of the company’s partnership with customer relationship management software vendor Siebel Systems.

The goal is to integrate Siebel Systems Inc.’s eBusiness Applications — which enables a customer-contact center to respond to Web, e-mail and 800-telephony inquiries in a unified manner — with Avaya’s call centre hardware and call-routing software into a turnkey package.

During the next year, Avaya and Siebel will embark on an intensive program of joint advertising and customer events. Avaya will also promote its line of unified-messaging software, which Avaya board chairman Henry Schacht says he expects to show a 72 per cent annual growth rate.

Avaya will also take over Lucent’s Cajun line of Ethernet and ATM campus and workgroup switches. But Lucent is retaining all of the VPN firewalls and routers it has picked up in recent acquisitions. How Avaya will integrate the Cajun line with the VPN and other WAN products it initially lacks “is a question that will probably continue to be on the table,” Peterson said. Avaya will sell on an OEM basis some of Lucent’s VPN products, he said, though a spokesman later clarified that negotiations are ongoing.

Karyn Mashima, a Lucent executive who last month was named Avaya’s vice-president of global strategy and technology, said Avaya and Lucent officials likewise are still negotiating how to divide a part of Lucent’s NetworkCare unit in Tampa, Fla., that offers managed data networks to companies.

Peterson and Mashima said Avaya will consider making its own acquisitions after the company officially launches Oct. 1. They hinted such acquisitions are more likely to be in the e-commerce software arena than in network hardware.

Teresa Bracco, an analyst with Current Analysis, said in a report that such a plan would constitute a “product strategy that sells running water rather than lengths of pipe and fittings.”

Regarding the new company’s name, Peterson said the word Avaya is made up. He said the sound of the word is meant to connect an agile, open and energetic organization with “spirit and fun.” Addressing concerns that an enterprise-only vendor may be tied to a slow-growth market, Peterson said Avaya believes the combined market for its products will grow from US$113.8 billion in 1999 to US$176.6 billion in 2003.

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