Last month, telecommunications company Avaya filed for Chapter 11 bankruptcy. As a multinational technology company that has dominated the market for the past decade or so, this came as a shock to many in the tech world. One of the reasons that the company found themselves in this situation is due to their late arrival in the cloud space. Avaya’s decision to file for bankruptcy has many in the telecom world wondering, has the cloud won?
What Avaya’s Bankruptcy Reveals About Business Communications
Avaya’s story reveals an important challenge that many telecommunication companies face. In its transition from hardware to software and services, Avaya accumulated about $6.3 billion in debt. This is because their capital structure was put into place to support their older business model as a hardware-focused company. Now that they have filed for bankruptcy, this will allow them to reduce their debt load and reinvest their resources to accommodate for the big shift in the telecom industry that has taken companies from hardware to software and service-based business models.
Even though in 2016, Avaya made 75 percent of its revenue in software and services, the company was too slow in its transition to cloud-based solutions. Today, we are seeing more and more businesses move to cloud-based environments to meet their business communication needs. However, this does not mean that there is no place for on-premise systems. In fact, many large companies such as American Express still operate contact-center environments. What Avaya’s bankruptcy suggests is that telecom companies need to be more flexible in their solutions in order to accommodate a wide range of business communication needs.
Though the cloud may not have “won” yet, it is clear that the future of telecommunications is leaning toward cloud-based environments. The telecommunications companies who do not anticipate this shift and adjust their business model accordingly may very well find themselves in a similar situation as Avaya. It’s vital that business owners look for telecom companies that offer flexible solutions that can accommodate both their current and future business communication needs. Those telecom companies who fail to provide more flexible and cloud-based solutions are likely to get left behind as technology continues to advance.
Where Do We Go From Here?
With this recent bankruptcy decision, many Avaya customers may be wondering what the future will hold for them. In addition to concern about their current business communication services, some business owners may also take this as an opportunity to explore other telecommunications options that have the ability to meet their organization’s growing needs.
Toshiba provides an alternative for those who are seeking stability and a forward-thinking business model. Toshiba has always been on the forefront of technology and offers both on premise and cloud/hosted solutions. If you are an Avaya customer looking for new alternatives or just want to explore what Universal ComOne Louisiana can offer your business, give us a call today: (337) 205-9364.