Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Working from home is a boost for a...desktop phone company?

Working from home is a boost for a...desktop phone company?

With many people working from home for the foreseeable future -- and perhaps forever -- you wouldn't expect a company that still makes desktop phones to be thriving.

But Avaya (AVYA), a communications services firm that caters to businesses, is doing just fine, thank you. That's because Avaya has made a transformational shift to focus more on the lucrative business of cloud software and less on clunky hardware.

The company reported sales for its fiscal fourth quarter Wednesday that rose nearly 5%, topping forecasts. The stock fell 7% Wednesday though and was down another 5% Thursday as earnings were below Wall Street estimates.

Yet Avaya shares, even after this week's slide, are still up nearly 30% this year. Not bad for a company that filed for a bankruptcy reorganization just three years ago.

Avaya used to be part of the AT&T empire. (AT&T (T) is now the owner of CNN parent WarnerMedia.) Ma Bell spun off networking subsidiary Lucent in 1995 which in turn spun off the newly-named Avaya in 2000. The company was subsequently bought by private equity firms in 2007, loaded up with debt and emerged from Chapter 11 protection in 2017.

Newly public and with a restructured business model that focuses on the burgeoning demand for cloud-based telecom services, Avaya still makes desktop phones -- and has even added video conferencing abilities and other features to them -- but hardware is now a small part of its business.

CNN Business spoke to Avaya CEO Jim Chirico Wednesday about how the company has restructured to focus on the burgeoning demand for cloud-based telecom services.

"We're more of a software as a services company now and less of a hardware firm," Chirico said. Following that shift, software and services revenue now make up 88% of total sales - with the rest of the revenue coming from phones and other hardware products.

Work from home...or anywhere


And nearly two-thirds (63%) of Avaya's sales now come from recurring revenue deals -- longer-term contracts with firms such as Apple, American Express, Citigroup and Walmart, which are all Avaya customers.

"As bad as Covid-19 has been, it has increased demand for Avaya. The shift to working from anywhere is a multi-year cycle," Chirico said. "Growth is being fueled by offering people the capability to have more solutions for remote work. Voice is now secondary to video and the cloud."

Avaya has also partnered with red hot cloud-based telecom services company RingCentral (RNG) for its Avaya Cloud Office product, which lets customers manage meetings and messages from any device.

This is a key reason why Chirico prefers to talk about the post-Covid landscape as work from anywhere as opposed to work from home.

In some respects, Avaya is benefiting from the same trends that have boosted video conferencing giant Zoom (ZM) and cloud call center company Five9 (FIVN) this year.

Avaya even has its own video conferencing tool, called Avaya Spaces, that competes with the likes of Zoom, Cisco's (CSCO) WebEx and Microsoft's (MSFT) Teams.

These are all formidable -- and much larger -- competitors. Still, Chirico is hopeful that businesses will eventually return to normal -- and that Avaya will continue to win deals as companies will still need more cloud-based video capabilities to manage meetings.

"This is a multiyear investment cycle," Chirico said. "People will eventually start moving back to the office."

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
Western Europe Records Hottest June on Record
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
China’s Central Bank Consults European Peers on Low-Rate Strategies
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
Poland Implements Border Checks Amid Growing Migration Tensions
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Massive Anti-Government Protests Erupt in Belgrade
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Hungary's Prime Minister Criticizes NATO's Role in Ukraine
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Hungarian Scientist to Conduct 30 Research Experiments on the International Space Station
NATO Members Agree to 5% Defense Spending Target by 2035
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
International Astronaut Team Launched to Space Station
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Iran Intensifies Crackdown on Alleged Mossad Operatives After Sabotage Claims
Trump Praises Iran’s ‘Very Weak’ Response After U.S. Strikes and Presses Israel to Pursue Peace
Oil Prices Set to Surge After US Strikes Iran
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Telegram Founder: I Will Leave My Fortune to Over 100 of My Children
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
×