New Avaya CEO to Continue 'Innovation Without Disruption'

Incoming Avaya CEO Patrick Dennis expects the company will take a balanced approach between direct and indirect sales, telling Channel Futures as much in an interview Thursday.

We also learned more about Dennis' outlook on the channel, how he views indirect and direct sales, and more regarding his plans to continue retiring CEO Alan Masarek's vision of "innovation without disruption," while acknowledging that Avaya will look to pursue new business.

Today, Avaya has partnerships with vendors such as Verint, Zoom, RingCentral and Cognigy; yet, Dennis told us "there are still plenty of reasons to buy directly from Avaya" as opposed to its vendor partners. That said, he doesn't want to take away from the value vendor partners add to the Avaya tech stack.

He said Avaya's enterprise customers appreciate what the company's partnerships bring to the table.

"If you're going to sell enterprise software in any category, especially with communications software, your large customers are going to expect you to have a set of ecosystem partners that you integrate with since no two stacks look alike at large enterprises," Dennis maintained.

What enterprise-grade software buyers also want to know, according to Dennis, is that they can count the right service support and implementation globally, be it via the company's partners or more directly from Avaya.

Related:Avaya CEO Alan Masarek to Retire, Company Names Successor

"When you think about a lot of other companies in the segment, you can't get that, so there is an awful lot of value at the core of this business, and we extend that value to our partner ecosystem," the newly appointed Avaya CEO asserted.

Growth is a concept familiar to Avaya, but one that stalled leading up to its latest bankruptcy early in 2023. Turning a financial corner early this year, the company leans laboriously on its current base and hopes to migrate those enterprise customers to the cloud. It does not yet, however, seem to have a strategy to address new customers in the space.

We asked Dennis about how he plans to woo that new market opportunity.

"The strategy that Alan set out, which included innovation without disruption, is the same strategy to solve that problem now. It is the same premise: The largest companies in the world want access to innovation and new technology with some access to thoughtful artificial intelligence (AI) and digital capabilities. At the same time, none of those businesses will go to their CIO and say, "Let's rip it all out and redo it."

Dennis added that Masarek's method would be the strategy moving forward. He did, though, add that Avaya is at a point where it can again start to "get aggressive" about attracting new customers.

A 'Listen-First' Mindset Concerning Avaya's Channel

More than 70% of Avaya's business runs through the channel. That's an important data point for Dennis, who has led channel-focused organizations at various times in his 30-year career. For example, during his tenure with network intelligence platform provider ExtraHop, the company saw 98% of business come from the channel.

As such, he intends to work with Avaya's channel sales leader, Chris Dickson, on the sales front, noting that the one constant with the channel, regardless of the organization he's worked for, is that leadership has to "listen first."

As with any fresh position, especially one at this rank, there's a certain amount of emotion involved. Dennis said he is most excited about the market and the opportunity for spend that exists within it.

Artificial intelligence (AI) is another area piquing his interest because research enterprises are layering AI into their contact center solutions.

"And for the first time in a while, we are at an industry tailwind, along with an industry shake-up," he said.

Masarek Convinced New Avaya CEO Is Ready

With Dennis having sold his cybersecurity agency, he is in great standing to take over as Avaya CEO, said Masarek, who also sat down with Channel Futures on Thursday.

Avaya's Alan Masarek

Masarek seems convinced Dennis will tap into the progress made during his nearly two-year tenure with Avaya, marked by transformation on various fronts, including a financial restructuring as the company emerged from its second Chapter 11 bankruptcy in six years.

Masarek and his team also updated a critical partnership with RingCentral and established a new, more artificial intelligence (AI) rich deal with unified communications giant Zoom during his time with the UC firm.

"While there is more work to get done, the beauty of this handoff to Patrick is all about continuity, as we have been on the board together for 14 months and [he was] involved in all the hiring and strategy setting. And we went through a huge financial restructuring, resetting our strategy," Masarek told Channel Futures. "... We have a brand new senior team, which Patrick has stayed involved with ... down to the layer below the senior team, there is a lot of new blood there."

Masarek praised his successor as bringing even more skills to the company than he has in some areas.

"We are deep into the operational transformation, and I am good at those things, but Patrick is better, so this [handoff] just makes sense. And now he's available because he just sold his business," Masarek said.

With the company set to exceed revenue expectations this year, should stockholders and partners expect to see profit in coming quarters? Masarek stressed that Avaya has already restored operating free cash flow, which measures the cash generated by a company's business operations.

"If you go back to as recently as 2019, Avaya was very profitable, then a series of missteps from 2019-2022 unfortunately turned that on its head, and we lost operating cash flow, but now we've restored it," Masarek said.