TechDigits

Tech news
Thursday, Mar 28, 2024

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."

Newsletter

Related Articles

TechDigits
0:00
0:00
Close
FTX's Bankman-Fried headed for jail after judge revokes bail
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Musk announces Twitter name and logo change to X.com
The future of sports
TikTok Takes On Spotify And Apple, Launches Own Music Service
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Poor Man With Money, Mark Zuckerberg, Unveils Twitter Replica with Heavy-Handed Censorship: A New Low in Innovation?
The Double-Edged Sword of AI: AI is linked to layoffs in industry that created it
US Sanctions on China's Chip Industry Backfire, Prompting Self-Inflicted Blowback
Meta Copy Twitter with New App, Threads
BlackRock Bitcoin ETF Application Refiled, Naming Coinbase as ‘Surveillance-Sharing’ Partner
UK Crypto and Stablecoin Regulations Become Law as Royal Assent is Granted
A Delaware city wants to let businesses vote in its elections
Alef Aeronautics Achieves Historic Milestone with Flight Certification for World's First Flying Car
Google Blocked Access to Canadian News in Response to New Legislation
French Politicians Advocate for Pan-European Regulation on Social Media Influencers
Melinda French Gates Advocates for Increased Female Representation in AI to Prevent Bias
Snapchat+ gains 4 million paying subscribers in its first year
Apple Makes History as the First Public Company Valued at $3 Trillion
Elon Musk Implements Twitter Limits to Tackle Data Scraping, but Faces Criticism for Technical Misunderstanding
EU and UK's Slow Electric Vehicle Adoption Raises Questions About the Transition to Green Mobility
Top Companies Express Concerns Over Europe's Proposed AI Law, Citing Competitiveness and Investment Risks
Meta Unveils Insights on AI Usage in Facebook and Instagram, Amid Growing Calls for Transparency
Crypto Scams Against Seniors Soar by 78% in 2022, Experts Urge Vigilance
The End of an Era: National Geographic Dismisses Last of Its Staff Writers
Shield Your Wallet: The Perils of Wireless Credit Card Theft
Harvard Scientist Who Studies Honesty Accused Of Data Fraud, Put On Leave
Putting an End to the Subscription Snare: The Battle Against Unwitting Commitments
The Legal Perils of AI: Lawyer Faces Sanctions for Relying on Fictional Cases Generated by Chatbot
ChatGPT’s "Grandma Exploit": Ingenious Hack Exposes Loophole in AI, Generates Free Software Codes
The Disney Downturn: A Near Billion-Dollar Box Office Blow for the House of Mouse
A Digital Showdown: Canada Challenges Tech Giants with The Online News Act, Meta Strikes Back
Distress in the Depths: Submersible and Passengers Missing in Titanic Wreckage Expedition
Mark Zuckerberg stealing another idea: Twitter
European Union's AI Regulations Risk Self-Sabotage, Cautions smart and brave Venture Capitalist Joe Lonsdale
Nvidia GPUs are so hard to get that rich venture capitalists are buying them for the startups they invest in
Chinese car exports surge
Reddit Blackout: Thousands of Communities Protest "Ludicrous" Pricing Changes
Nvidia Joins Tech Giants as First Chipmaker to Reach $1 Trillion Valuation
AI ‘extinction’ should be same priority as nuclear war – experts
×