Avaya customers swear by the reliability and sophistication of its call-center software. But not everyone is eager to run an all-Avaya environment.


Fans of Avaya say the reliability and sophistication of its call-center products—vestiges of its roots as part of AT&T—make it the one to beat. "Avaya has been developing this stuff over several generations," says Rick Marlowe, telecommunications coordinator at ESL Federal Credit Union in Rochester, N.Y.

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UpSource, a provider of outsourced call-center services, installed an Avaya system in January 2003 after the Cisco Systems phone switch it was using with call-routing software from Interactive Intelligence failed at least once a month, says Michelle Steinmeyer, UpSource's vice president of operations. (Cisco says Interactive Intelligence had not invested enough in product development to work properly with Cisco's switch; Interactive Intelligence says it has 100 satisfied customers using Cisco's switch.) By contrast, Steinmeyer says, the Avaya call-routing software on Definity switches hasn't skipped a beat. "Everything just went so well with Avaya," she says. "I sleep well now."

One of Avaya's biggest downsides, though, is that its call-center offerings are designed to work with an all-Avaya telephony infrastructure. "We chose Genesys because it lets us be vendor-independent," says Scott Quartner, senior systems engineer at financial services firm T. Rowe Price.

The flip side of the argument is that one vendor's products should, ideally, play together better. "We like that Avaya is a single hardware platform," says Sherry Guzman, director of customer service at Medical Mutual of Ohio. The health insurance provider had been using an NEC phone switch and automatic call distributor; the two systems sometimes had problems communicating with each other, Guzman says.

Plus, customers say, adding new features to an all-Avaya network is relatively simple. In 2001, Canadian retailer Hudson's Bay replaced its old call-routing setup—which couldn't transfer calls among its centers in Montreal, Toronto and Vancouver—with Avaya's Best Service Routing. That software distributes calls based on agent skills (such as language) and other factors. "We'd already standardized on the Avaya phone switches," says Valerie Mills, director of contact center services for Hudson's Bay. "So integrating the skills-based routing software was definitely easier than if we'd used a third-party product."

Call-Center Software Avaya 211 Mount Airy Rd., Basking Ridge, NJ 07920 (908) 953-6000 www.avaya.com Ticker: AV (NYSE) Employees: 16,900 Eileen Rudden VP & GM, Communications Applications Previously CEO of FairMarket, an online auction site that posted heavy losses before it was acquired by eBay. Prior to that, she was general manager of IBM's Lotus Notes and Domino groupware division. Jim Smith VP, Product Management, Communications Applications Previously, he co-founded Vector Development, a venture-capital firm that invested in customer relationship management startups. Products Call Management System (CMS) manages the automatic call-distribution feature of Avaya Definity phone switches, providing both real-time and historical reports. Business Advocate software routes calls based on various criteria, including service level objectives, a customer's business value and agent skills. Contact Center Express provides call-routing and computer-telephony integration features for midsize contact centers. Reference Checks Medical Mutual of Ohio Sherry Guzman Dir., Customer Service sherry.guzman@mmoh.com Project: Health insurance company uses Business Advocate to route 13,300 calls per day to 250 agents at centers in Cleveland and Toledo. UpSource Michelle Steinmeyer VP, Operations msteinmeyer@upsource.ca Project: Uses CMS and Business Advocate in its 100-agent call center in Nova Scotia, Canada, which provides customer service for clients that include telecommunications company Working Assets. ESL Federal Credit Union Rick Marlowe Telecommunica-tions Coordinator rmarlowe@esl.org Project: Credit union in Rochester, N.Y., manages its 50-agent call center with CMS. American Diabetes Association Lee Barona Dir., Call Center lbarona@diabetes.org Project: Uses Business Advocate to route calls among 27 agents, cutting answer times from up to 90 seconds to 10 seconds. Hudson's Bay Valerie Mills Dir., Contact Center Services valerie.mills@hbc.com Project: Canadian retailer routes calls among three contact centers using CMS' Best Service Routing feature running on Definity phone switches. Pebble Beach Co. Dominic Van Nes VP, Information Services vannesd@pebblebeach.com Project: California golf resort operator uses Business Advocate to direct calls among 22 customer service reps based on expected wait time and agent skill. Executives listed here are all users of Avaya's products. Their willingness to talk has been confirmed by Baseline.

Avaya Operating Results*

2004fy 2003fy 2002fy Revenue $4.07B $3.80B $4.96B Gross margin 47.8% 43.2% 39.3% Operating income/loss $323M $63M -$348M Net income/loss $296M -$88M -$666M Net margin 7.3% -2.3% -13.4% Earnings per share $0.64 -$0.23 -$2.44 R&D expenditure $348M $336M $459M

* Fiscal year ends Sept. 30
Source: company reports

Other Financials**
Total assets $4.16B
Stockholders' equity $794M
Cash and equivalents $1.62B
Long-term debt $294M
Shares outstanding 488M
Market value, 12/3 $7.31B
**As of Sept. 30, 2004, except as noted

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