Niru Mehta, Vice Chairman, MD, Avaya GlobalConnect Limited

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Niru Mehta, Vice Chairman, MD, Avaya GlobalConnect Limited

March 15, 2008

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With enterprises increasingly investing in services such as customer relationship management (CRM), customer responsiveness (CR) and intelligent communications (IC) solutions, enterprise solutions providers are gearing up to meet these needs and deliver greater value. Avaya GlobalConnect Limited (AGCL) is a key player in this segment. Niru Mehta, vice chairman and managing director, AGCL as well as managing director and vice-president, Avaya India, discusses the challenges before the company and its future plans in India. Excerpts...

What are the key international trends in the enterprise segment?

The trend over the past few months has been favourably inclined towards providers of technology solutions. A major wave of IT and telecom investments is taking place with enterprises increasing their IT and telecom expenditure every year, across all industry verticals such as banking, financial services and insurance; telecom; manufacturing and retail; etc.

Global IT consulting firm IDC estimated the worldwide IT spending by companies at 6.5 per cent in 2007, backed primarily by a strong demand for PCs during the first quarter of the year. The enterprise segment, meanwhile, is expected to step up its deployment of ERP and CRM solutions, according to leading market analysts. According to Forrester Research, the CRM market alone stood at nearly $74 billion in sales in 2007. CRM applications represent about $21 billion of that market, with services making up the rest.

Clearly, enterprises are focusing on CRM deployments in order to enhance the service experience and deliver long-term customer value. Enterprise trends show that technology providers are developing new approaches for streamlining customer interactions in order to make each customer contact, whether assisted or otherwise, more effective.

On a global level, enterprises are also investing in products that enhance the customer experience by impacting areas such as quality monitoring, skills-based routing and enhanced voice self-service. Recent reports also suggest that spending on software as a service (SaaS) implementations will also increase, particularly among small and medium enterprises (SMEs), which are on track to spend $2.44 billion on hosted/SaaS CRM and ERP/SCM in 2007, up 17 per cent over 2006 levels.

Apart from enterprise spending, rising affordability is also resulting in consumers purchasing more ICT products and services. PCs, mobile phones, printers, digital cameras and broadband services are all gaining increasing penetration in this rapidly expanding market.

What has been the major trend defining the Indian ICT market?

IT spending in India in 2007 has been driven by factors such as increased investments in infrastructure by enterprises; a jump in the purchase of IT devices by consumers with growing disposable income levels; the availability of broadband services and IT products at more affordable prices; greater awareness of IT benefits, particularly in the rural markets; and the rise of medium-scale enterprises, which will require more strategic IT implementation.

The good news is that enterprises in India have matured to the extent of consolidating the IT infrastructure acquired over the years. At the same time, cost pressures are forcing large enterprises to evaluate and re-evaluate the utilisation and productivity of their IT assets. Since organisations have become more dependent on IT, their business goals have started to get linked to their IT roadmaps.

In future, Indian enterprises should graduate to the second level of dynamic IT and telecom infrastructure, where their IT infrastructure will be able to effect changes quickly and dynamically in response to changing business scenarios.The key components would be virtualisation and application integration.

The years to come will mark the beginning of an aggressive focus from all major vendors to broaden and deepen their coverage of the SME sector. We have already witnessed the launch of SME-specific products and micro-verticalised solutions for SMEs with delivery through specialised partners. SME offerings will witness further micro-vertical customisation.

Application vendors have worked closely with telecom service providers to drive this trend. In India, SMEs contributed almost 50 per cent to the enterprise applications market in 2007. SMEs have experimented with different paths towards adopting the applications on offer, starting with standard packages for pay-roll, human resource and CRM.

In your opinion, where does Avaya stand vis-a-vis its competitors?

AGCL has a heritage of over a hundred years-with a background of association with AT&T, Bell Labs and Lucent Technologies. On the Indian side, the company has inherited the legacy of the legendary Tata Group, known for its focus on quality, process, operational excellence and customer responsiveness. All these relationships and years of experience have given us an edge over our competitors.

Furthermore, AGCL is focused on the enterprise-related communications needs of customers and all our business decisions are made around these requirements, unlike some of our competitors who are focused on different aspects of the business. Since 2003, we have been investing in making CR a core strength and differentiator of our business. By making CR a measurable business goal, we have ensured that we remain a step ahead of our contemporaries in terms of delighting our users.

Finally, what sets us apart from other companies is our heritage, focus, the investments we have made in our people, and our loyal base of customers with whom we share long relationships.

What are Avaya's key offerings for the enterprise market in India?

We are a leading enterprise-converged communications solutions provider in India. AGCL has positioned itself as a company with a robust IC strategy and a strong portfolio of solutions that support it. The way we see it, an IC solution is the convergence of real-time and non-real-time business communication applications such as telephony, conferencing, e-mail, voice mail, etc., and a collaboration across a variety of interfaces, be it PC-or web-based clients, telephones and mobile devices, or speech. Today, we are offering our customers IC solutions, which are being used by them to know more about their business processes as well as to leverage their existing knowledge for better decision-making. For our enterprise clients, we are creating intelligent business processes by embedding communications capabilities into these processes-into supply chain management, customer service or corporate decision-making-and converting them into communications-enabled business processes.

What are the company's thrust areas in the near future and in the long run?

AGCL's primary long-term goal is to provide IC solutions to enterprises, using which the latter can integrate their business operations and processes into the global economy and play a much larger role. As far as short-term objectives are concerned, the company is clearly a leader in the markets it is focused on. We are now looking at growing this market share and still remaining a strong player. We have a worldwide lead in the enterprise IP telephony market and the contact centre market.

The unified communications market is seeing tremendous growth in India with India Inc. increasing its IT spending by almost 27 per cent. Organisations are adopting unified communications solutions for better efficiency, productivity and consistent connectivity. Avaya's unified communications solutions are built on open industry standards. This makes it easier for users to integrate the solution with the desktop/business applications or add strategic value. We will boost our unified communications business in India and deliver a competitive edge to customers.

We believe in creating more value for our customers, so that they can, in turn, offer a better experience to their customers.

What are some of the challenges facing large companies and SMEs today?

Enterprises today face the challenge of achieving profitable growth with limited resources and increased domestic and international competition. Thus, handling multiple vendors for complex IT needs is an added challenge. Enterprise solution providers play an important role in combating this challenge as well as helping companies achieve their business objectives.

Small units, in particular, face many challenges like not having adequate and timely access to funds from banks and financial institutions, and delays in the implementation of projects with limited access to external finance. Therefore, they depend more on internally generated funds for expansion and modernisation. The other major challenges faced by small enterprises are global competition, lack of infrastructure, obsolete technology, and retention of skilled manpower.

How important is the Indian market vis-a-vis global markets?

The growth in IT and telecom spending by top Indian enterprises is expected to touch 26 per cent in 2007-08, taking the combined spend to Rs 89.74 billion. Thus, the Indian market offers ample opportunities for growth. It is on the priority list of all big IT firms that are looking at expanding their business and contributing to the growth of the Indian economy.

What are the company's major strengths in emerging areas such as VoIP?

Communications lie at the heart of every business and Avaya Intelligent Communications help in migrating to the next generation of communications solutions. Our strengths lie in our four pillars of IC solutions: IP telephony, contact centre, unified communications and CEBP.

We widened our lead in worldwide enterprise IP telephony revenues, according to Synergy Research Group's second quarter 2007 enterprise voice market shares report. With this, Avaya has marked another quarter of leadership in this market, as more businesses around the globe evolve their voice networks to IP telephony. The report shows Avaya as the top vendor in IP telephony revenues (as defined by Synergy), with 25.4 per cent share of the global market for the second quarter of 2007.