Avaya Introduces New IP Telephony Products

25 Feb 2002
Communications equipment maker Avaya Inc. introduced 10 new products on Monday in an effort to accelerate wider adoption of Internet Protocol (IP) telephony by businesses, a market expected to surge in the next four years. 
 
The new products - servers, gateways and software - will make it easier and more cost-effective for businesses, or enterprise customers, to integrate voice onto a single packet-based network, and will enable migration from existing networks to IP telephony by allowing retention of existing telephones, equipment and infrastructure, Avaya said. 
 
The total worldwide enterprise telephony market for new equipment will rise slightly to $14 billion by 2005 from just over $12 billion last year, Avaya said, citing industry sources. However, the IP telephony part of that segment is expected to jump to almost $6 billion in 2005 from $1 billion last year. 
 
The products do not tie the businesses to any one system, allowing ease of operations in a network made up of equipment from a variety of vendors, the Basking Ridge, New Jersey-based Avaya said. 
 
"IP is the underlying technology of the future of telephony," Avaya Chairman and Chief Executive Don Peterson said in a telephone interview. "The question is not whether to go to IP telephony, but when and how. 
 
"This is where the growth is for sure," he added. "This is a must-win market for us." 
 
Avaya's stock was off 8 cents, or 1.6 percent, at $4.82 in late-afternoon trading on the New York Stock Exchange. 
 
Peterson said growth will take off as the reliability of the industry's technology improves. 
 
Avaya's IP telephony revenues were relatively small last year but are expected to grow rapidly, he said. The company's communications solution business, of which IP telephony is a part, accounted for $663 million of Avaya's overall revenues of $1.3 billion in its fiscal first quarter. 
 
Avaya, a provider of voice and data networks, said the software and hardware products will for instance give employees working remotely the same capabilities they have in the office. 
 
The products will be available starting in May and prices will start at about $600 per user, Avaya said. 
 
Avaya, spun off from Lucent Technologies Inc. in 2000, said it ships more than 6.2 million telephony lines annually to small, medium-sized and large enterprises. Its customers include 90 percent of the Fortune 500. 
 
Among the products' new capabilities are increasing at least fivefold the number of extensions a business can connect on its network and tripling the number of calls a customer call center can handle during its busiest seasons.