Published: January 28th, 2015

CANCUN, MEX. – Avaya announced at its 2015 Avaya Executive Partner Forum a bold initiative to double its mid-market business in the next two years.

Currently Avaya does not measure revenue by market nor can they public disclose the revenue figure. The company reports revenue from product lines and the mid-market segment is approximately 25 per cent of overall revenue for Santa Clara, Calif.-based networking and collaboration vendor.

A big piece of the strategy behind this goal is to push channel partners up-market and focus on customers with 500 seats and more, according to Chris Jones, vice president worldwide mid-market sales for Avaya.

Jones added that this does not mean the “S” in SMB but by doing so partners can see an increase in the deal size and margin opportunity. The sub 2,000 seat customers is roughly the mid-market segment for the company.

“You can triple your revenues with the full mid-market stack. This is where the Avaya investments are going backed by MDF funds,” Jones said.

Patti Moran, senior director of worldwide channel development and activation at Avaya, told CDN that the majority of channel business in the mid-market rests in the 250 seat area and below. The sweet spot, however is very attainable at 350 seats.

“We want to get into that space with the full stack of IP Office, Contact Center, video, mobility and Session Border Control products,” she said.

The margin opportunity for partners at the 350 to 500 seat level would net them $6 additional dollars of revenue with the full stack for every $1 dollar they earned before, Moran added.

In terms of the double revenue goal, Moran said that if current channel partners could do 20 per cent more business the company would attain its goal.

In Canada, Avaya is well on its way to meeting this mid-market goal under the Miles Davis, the Canadian channel chief.

“Doubling of the mid-market business is going to be easier for us in Canada than other theatres. It boils down to a number of things but essentially Canada is the model for mid-market segmentation for rest of the world,” he said.

Davis said that Petrina Wong, SMB director at Avaya Canada was task to run a subset of IP Office and offered it to the current install base and has seeded IP Office kits to each engagement teams at Avaya Canada. “That puts the technology in the hands of the sales people,” Davis said.

Another developed was Davis’ move to tie compensation directly to mid-market reps. “Now you got a team that relies heavily on each other. It’s a three-way relationship between the channel partner, the account manager and the territory manager and each party knows their position very well. I am very bullish on doubling the business in the mid-market for Canada,” Davis said.

In terms of the 500 seat and above challenge from Jones, Davis said for Canada he sees it at 300 to 400 seats.

Chad Wiesner, vice president of Cabco Communications Group of Dartmouth, N.S., said the 500 seat and higher challenge would be hard to get to in his market.

“We are isolated and in the no man’s land of Canada where the world stops at Montreal. What has changed is Avaya has ramped up the level of support for the channel with TAMs (territory account managers) and extra support in the field. They have stepped up behind us to help us grow our business,” Wiesner said.

Randy Bergeron, the president of CDN Top 100 Solution Provider Unity Connected Solutions, a full service communications company based in Newmarket, Ont., and the mid-market business can be very subjective but in Canada the sweet spot would be from 100 seats to 800 endpoints.

“The bottom line is we have business in the sweet spot and we consider them on the large side. If the solution is priced right we have them (500 seats and up customers) here too. We just don’t have as many,” Bergeron said.

Another aspect Bergeron point out of the mid-market is that customers who do have between 100 employees to 500 would have a better chance of having a call centre, multi-office environment, a data network, and security concerns where a channel partner can up-size the solution and deal overall.

However, a 50 user organization most likely would not have a call centre or multiple locations, he added.

According to Avaya, the worldwide mid-market opportunity looks like this:

  • 34 million companies worldwide are in the mid-market space;
  • 3.5 million potential mid-market customers are currently served by channel partners;
  • $53 billion mid-market IT spend in 2015; and
  • 80 per cent of mid-market customers can be services with IP office.