‘Avaya on the Hunt for Startups in India’
I’ve been coming to India for the past 15 years and I think this is the most positive outlook of industrial clients that we have
US telecommunication solutions provider Avaya is upbeat on the emerging opportunities in the Indian startups space and looking at startups for acquisitions that could help it strengthen its product portfolio, says chief executive officer Kevin J Kennedy. Currently, serving US President Barack Obama as a member of the President’s National Security Telecommunications Advisory Committee, he said their radar was out for opportunities that make Avaya’s core products better. In an interview with CR Sukumar, Kennedy, who is on a short visit to India to interact with CXOs at a global meeting in Hyderabad, talks about the emerging opportunities in India, both for augmenting the business and acquisitions. Edited excerpts.
Tell us how your business in India is progressing and about the opportunities? I have been coming to India for the past 15 years and I think this is the most positive outlook of the industrial clients that we have. Our aim is to reach out to the people in any country, particularly in India given its investments in digitisation, which is what we do really well. It’s great to come to a place where customers are asking you about products and security technologies, and those products and their intellectual property are built in Bengaluru. So from a customer perspective, the digitisation sort of maps our product portfolio. We have several thousand R&D and services folks here and we will be continuing to adding to that. We had acquired our first company— KnoahSoft — in India, last year. You can see us continuing to invest and we feel that it is a great place to come and talk to the clients.
Tell us about kind of R&D activity you are taking up in India and its contribution to your global operations? Our IP office, which is a mid-market product, is wholly developed here, which is hundreds of millions of dollars today. India is one of the largest mid-market segments, so we have to get our sales people here to sell a little bit more. It is a great opportunity. Avaya is one of the founding technologists in the BPO industry, which has a very large presence here in India. A lot of that work, especially workflow automation programme, which is the next big thing, is developed here in India.
But India is still a miniscule percentage in terms of Avaya’s global revenues. I think it is going to grow. We have been observing a double-digit growth for the past three years. India is one of the areas where we see the most growth. Our vision for the next three years is to double revenues in India through digitisation.
The startup space in India is exploding. What is your take? The Contact Center is the area which we are constantly wanting to make it the best place. While looking at India, we have our radar out for companies that are good in analytics, companies that could help in cloud and sometimes very specific functions in the contact centres and also orchestration for our networking technologies. It’s almost all software and those things that make our core products better is what we are looking for. We have not stopped after KnoahSoft and are continuing to look for more such acquisitions. We do about four technology company purchases in a year, may be even six, and this is certainly one of the areas that which we keep focus on.
The BPO business is a key customer segment for Avaya. How is that market doing? The BPO segment is going through a big change. The US and call centres in general have several phenomena. One is that the technology is old. Second, it is mostly voice. And now increasingly we have to be an omni-channel — voice, messaging and video. I think right now the BPOs are beginning to move from being voice only to omni-channel. And if we can help people with that, then this will be a revival of once pretty strong market.
There seems to be some action on the M&A front in the mid-space IT services space in India. What is your take on this? I think the slowdown of the industrial world, the slower ascension of India and China and more competition is going to force consolidation. This has been happening for the last two years and it will continue for 3-5 years.
What is your idea about tech spending in the US in 2016? I think that tech spending is increasing but it is increasing more in the venture capital world and the financial markets as opposed to just companies. I think the companies are dealing with capex to opex transition.