This content is part of the Conference Coverage: Enterprise Connect 2017 conference coverage

Avaya bankruptcy leaves customers in backup planning mode

Avaya UC customers are in limbo with the vendor in bankruptcy. Consultants at Enterprise Connect offer Avaya bankruptcy contingency plan steps to prepare for the worst.

ORLANDO, FLA. -- Avaya customers concerned for their unified communications environments as the vendor undergoes Chapter 11 bankruptcy proceedings don't need to look for a new provider just yet. But they should create a backup plan to prepare for the worst, according to industry consultants.

Avaya filed for Chapter 11 bankruptcy protection in January to restructure its $6 billion debt and its portfolio of services following years of declining revenue as demand for unified communications (UC) hardware declines.

Filing for Chapter 11 bankruptcy protection gives Avaya some breathing room to reorganize its debt balance sheet, said Joseph Schmidt, project director of TechCaliber Consulting.

Customers should proceed with caution and carefully review their contracts to determine what obligations must be fulfilled.
Joseph Schmidt, TechCaliber Consulting

"The problem is that we don't know what Avaya is going to look like when it comes out of bankruptcy," he said at an Enterprise Connect 2017 panel on Avaya's bankruptcy status.

The Avaya bankruptcy filing has four possible outcomes, according to Stephen Leaden, president of consulting firm Leaden Associates.

  • The first outcome would be a better, more profitable Avaya that remains whole following its restructure. This outcome would be the best case scenario for customers, he said.
  • The second outcome would be another company purchasing Avaya outright and supporting its services until folding them into the buyer's own services.
  • The third outcome would be a smaller Avaya that has sold off some assets, which is a possibility as Avaya looks to sell its networking business.
  • The fourth and least likely outcome would be a complete liquidation of Avaya, he said.

While facing the uncertainty of which outcome will come to fruition, Avaya customers shouldn't immediately jump ship, Schmidt said. Customers should proceed with caution and carefully review their contracts to determine what obligations must be fulfilled.

"Bankruptcy doesn't cause contract provisions to go away," he said. Customers should meet with their Avaya account holder and any third-party provider they use for Avaya services to learn more about Avaya's bankruptcy roadmap and how channel partner relationships are affected.

Building an Avaya bankruptcy backup plan

Customers should have a contingency plan in place to protect their organizations from any potential negative outcomes of the Avaya bankruptcy filing.

"You can't control what the vendor does, but you can control what happens in your own environment," Leaden said .

"Let's hope for the best but be prepared for the worst," Leaden said. "If you do nothing, you do a disservice to your organization," Adding that the goal of the contingency plan should be to maintain an organization's stability by minimizing economic loss, reduce the disruption of operations and provide an orderly recovery.

He offered the following seven-step contingency plan to prepare for the worst case scenario.

1. Create a baseline and inventory your current UC and data infrastructure. This includes an inventory of endpoints, gateways and software licenses. Identify possible areas of risk like manufacturer discontinuance or the possibility of multi-day outages. Organizations should document their wide area network (WAN) infrastructure, data network components and the components that support their UC environments.

2. Review corporate and IT strategic plans. These plans should address possible growth or change in an organization, such as mergers and acquisitions, the expansion or reduction of locations, and the sale of business units.

Organizations should review plans for UC enhancements, such as the deployment of SIP trunking, collaboration services, and new technology trends that include communications platform as a service, SD-WAN and the internet of things.

3. Determine the level of risk. The level of risk depends on which outcome Avaya will see as it emerges from the bankruptcy process. The longer the process takes, the higher the risk for an organization, Leaden said. Organizations should include key questions to determine risk, such as how service level agreements will continue and how to sustain capacity issues from mergers and acquisitions.

4. Develop and execute a request for information (RFI) for budgetary purposes. An RFI should help organizations to determine a budget if they must replace their Avaya UC system. The RFI should include high-level specifications for the components required for a replacement, general incentives, and managed services or cloud models as possible alternatives, Leaden said.

5. Create a return on investment (ROI) assessment. This will help organizations manage capital investments through cost savings and cost avoidance opportunities. Leaden said it's difficult to approve a project like replacing a UC system without having a hard ROI attached.

6. Develop a budget for the project. Once ROI is established, a budget is can be created for pricing key UC and contact center components. The budget should cover everything from data switch update or replacement costs to the cost benefits of virtualization.

7. Document and execute the contingency plan. Organizations should create a Plan A and a Plan B for their contingency plans. Plan A would cover the maintenance of their existing system over the next one to three years. Plan B would cover the migration to an entirely new platform. The contingency plan should include an overall project schedule.

Next Steps

Check out an overview of Avaya cloud UC products

How much Avaya debt is too much to survive Chapter 11?

How Avaya's fate fell with drop in UC hardware demand

Dig Deeper on Developing a UC Strategy