Avaya Brazil eyes SME growth

The company is looking at new revenue generation opportunities - including partnerships with the competition.

Enterprise communications systems firm Avaya is looking to grow its presence in the small and medium enterprise (SME) sector in Brazil as local organizations look at increasing IT budgets.

According to the company's Brazil president, Marcio Rodrigues, clients are now resuming conversations that had been left in the back burner for the last couple of years due to the recession, but the focus areas are rather different.

"In a growth scenario the main focus tends to be expansion, whereas now Brazilian companies are looking to spend again, but on projects that generate business efficiency and optimization," Rodrigues told ZDNet.

Rodrigues says that Avaya is currently approaching these clients willing to spend again - key verticals for the firm are healthcare, financial services, telecom and utilities - and assessing the state of their technology portfolios in order to pitch total refreshes or progressive renovations with integration to existing systems.

In that context of spending growth at user organizations, Avaya will be giving special attention to SMEs. Currently, the segment represents 15-20 percent of the firm's business in Brazil and has been growing between 37-40 percent year on years since 2015.

Avaya's cloud offering for unified communications and contact centers will be heavily promoted to these smaller businesses this year, continuing a strategy the company has been driving since 2016, which has started to bear fruit since late 2017.

"Our IP Office [unified communications] product, which is geared towards SMEs, has been around globally for about 10 years, but many Brazilian companies didn't know about it - we then started a big push to get the word out across the entire country," Rodrigues says.

"We had traditionally been operating at the top of the [user] pyramid, so we sought to change that perception to let SMEs know we were also here for them," he adds.

According to Rodrigues, the increased focus on the SME segment also meant a mindset change internally, as Avaya's sales team was mainly prepared to cater for larger clients. This required some changes including the creation of a specific team.

"The SME segment has a totally different traction, tickets are different, it's a different dynamic overall, so creating a dedicated team for these clients was absolutely key," Rodrigues says.

Technically, the fact that Avaya's SME products don't require too much integration work also means that the channel partners can sell and implement systems more easily - today, channel sales represent 70 percent of Avaya's business in Brazil while 30 percent are generated by the firm's own team.

The economic crisis has also driven some changes in the way Avaya interacts with its channel partners, says Rodrigues. Given that clients had tight budgets for new projects, the firm had to be more creative in its new business development.

"We want to identify new players outside the ecosystem we are used to operating," says Rodrigues. An example of this novel approach to business generation is Avaya Brazil's partnership with local managed services provider Energy Telecom. The company focuses on the North and Northeast of Brazil, away from the main business hubs of Rio de Janeiro and São Paulo.

The partnership with Energy Telecom, not a usual partner for a company like Avaya, ended up delivering good results: the new partner provided white-labeled cloud services as part of a large Avaya deal renewed this year with Brazilian utilities giant Eletropaulo.

According to Rodrigues, the idea is to extend that mindset to include competitors - an example here would be a partnership with Netglobe, a Brazil-based communications systems provider who offered cloud-based videoconferencing jointly with Avaya in 2013.

"The crisis is never a good situation but we have focused on the upsides and opportunities - one of them being partnerships with competitors, with whom we can learn, develop new models and approaches as well as, most importantly, generate business," Rodrigues says.

"Obviously, there are factors like politics and macroeconomic developments that we cannot control, but what we can control is the extent to which we are in tune with market trends and what our customers need. In Brazil, we have always pioneered in our innovative approaches and will continue to do so," the executive concludes.