Software products are rarely long in gestation. There’s usually a rush to bring them to market before something competitive emerges. Oddly, this was not the case with Avaya’s Communications Enabled Business Processes (CEBP). (If you don’t know what CEBP is, read this.)

At the recent Avaya analyst conference, Ravi Sethi, the President of Avaya Labs, explained to me that the CEBP product built on research demos of CEBP in Avaya Labs, starting about 6 years ago. So, CEBP evolved at a leisurely pace - until it was put into use within Avaya and then into Beta test last year. There were probably reasons for this that had little to do with picking the right time to come to market.

Avaya is a communications hardware vendor that’s hell bent on transforming itself into a software vendor - a direction it announced at its analyst conference last year. Such a transformation is not an easy trick to pull off (can you think of a company that has done it?), but there are definite rewards for doing so. As I noted, in a recent comment on major IT vendors, software vendor stocks trade at higher multiples than hardware vendor stocks. It is possible that the decision by SilverLake Partners and TPG Capital to take Avaya private was related to this.

In any event, Avaya’s CEBP, launched in March of this year, is a “flagship product” which may indicate, one way or another, whether Avaya can make it as a software vendor.

CEBP: Now A Category

Avaya pulled off a coup - probably, more by luck than good judgment, but it did anyway. It chose CEBP to be the name of its product at the same time that the Gartner Group declared CEBP to be a software category. It thus came to market with what customers will now presume to be the “category defining product.” And indeed, it may be. All the other vendors in this nascent market are either recent start-ups or vendors with products that are “moving in a CEBP direction”. Avaya’s is the most mature product.

Still, it is too early to say much about this emerging market. According to Jim Hickey, the CEBP product manager, Avaya has “grown” a software salesforce, and is forging partnerships with the likes of IBM and SAP. It has a solid pipeline, has sold some direct licenses and is generating a good deal of interest - but it still has to educate while selling. “We had one customer in the Far East simply ring up and ask us to ship them the software. They didn’t want any consultancy other than the basic training and they just got straight to work” said Hickey, “Mind you - that’s the exception. The typical sales cycle is longer than we’d like.”

This must be encouraging for Avaya, but it hasn’t got a big competitor yet - no IBM or Microsoft. One will emerge eventually, probably from the Unified Communications market. If it doesn’t happen, then Avaya is likely to take this market by default.

This is a posting in the Telephony/Communications Integration series of Focus postings.

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