Avaya in talks to buy Indian start-ups

As it comes out of bankruptcy after nearly one year, communications technology major Avaya says the new financial restructuring will allow it to have at least $300 million in cash flow, which it will use to invest into new technology and acquiring technology start-ups in India could just be the first step forward.

“We have met a few start-ups (in India) who are doing fairly unique things,” Laurent Philonenko, Global CTO at Avaya, told BusinessLine . “We are looking for start-ups with strong intellectual property and strong differentiation in areas such as AI, IoT, digital channel, cloud, machine learning and voice.”

Avaya, which was struggling with a massive debt, has been able to reduce its prior debt burden by approximately $3 billion, and now already has $300 million in cash in its balance sheet. The reduction of debt and certain other long-term obligations will also improve annual cash flow by approximately $300 million compared to fiscal 2016, the company said.

But debt restructuring is only one part of the story. Avaya is trying to regain its position in the market by taking several other measures, which include bringing sales and R&D teams closer together.

“We’ve reduced our management from 13 to just 7 people reporting to the CEO, which has brought in integrated communications in the company. The smaller management team means decisions are made quicker,” Philonenko said.

Improving its R&D and innovation is now a key priority for Avaya, which is trying to focus its R&D on projects that can be quickly turned into commercial products.

And India is playing a key role in that. The company has 700 R&D engineers and scientists in India of the overall 2,000 employees here. And that number, according to Philonenko, is expected to grow rapidly.

“India is a global innovation platform for us,” Philonenko said. “We've built a sizeable R&D team here and we'll continue to expand that.”

The company expects to grow at least 15-20 per cent year-on-year in India in the next few years. With that, India’s revenue share for Avaya is expected to grow as well.

In his trip to India, Philonenko met several Indian start-ups, which he feels could add unique capabilities to Avaya’s portfolio. This, however, won’t be the first acquisition for Avaya in India. The company bought Hyderabad-based KnoahSoft two years ago, which has worked out very well for Avaya, giving the company more confidence in the Indian start-ups.

“We already bought a Hyderabad-based company KnoahSoft two years ago. That's been very helpful to us and that team is performing very well. Indian start-up scene is very vibrant.

As a result, there's a lot of innovation in areas that are interesting to us.

“There are a lot of interesting companies here working in the fields of artificial intelligence, machine learning. There are also a lot of companies here in IoT space who are world class from innovation point of view,” Pihlonenko said.

India is also a large market for Avaya. To cater to the needs for government clients and start-ups here, the company will be launching new products specifically targeted for India.

Avaya sees huge opportunities in smart cities, emergency services and digital banking in India with the help of cloud, artificial intelligence and Internet of Things technologies.

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