Avaya Pricing Raises Customer Concerns
I've heard several distressing stories from folks I've spoken with in person and comments online about a shift in pricing and strategy from Avaya. Here's one more example of a strategy that may backfire.
The last comment is especially telling. The cusomer in question is contemplating delaying an upgrade to consider rival Cisco Systems, yet in a post earlier today, I noted that Cisco is notably the highest price solution in many regards.New Avaya Pricing Sparks Cost Concerns
Vendor says goal is to simplify licensing, but some users see big price increasesMatt HamblenMay 15, 2006 (Computerworld) -- Avaya Inc.'s ongoing move to a user-based pricing model for its IP telephony software and other communications applications is raising concerns among some customers, who say that they face stiff cost increases under the scheme.
Avaya officials said last week that the company began rolling out the new pricing approach last year in order to simplify what had been a complex and inconsistent software licensing model that priced products in different ways.
But an Avaya user who asked not to be identified said he received a price quote in March for an upgrade to Avaya's Communication Manager 3.1 software that would increase his annual license costs almost fivefold, from $60,000 to about $290,000. The customer, who uses the Avaya software to support 2,800 phones at two office sites, provided a written copy of the quote to Computerworld.
He said he is hopeful that Avaya will provide some relief on the proposed cost increase. If not, the user added, he will delay the software upgrade and consider switching to a rival vendor, such as Cisco Systems Inc. or Alcatel, within the next two years.
Technorati Tags: Avaya, pricing concerns, VoIP
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Comments
I believe the root cause of this issue is a lack of clear communications between the vendor and their customer base (and in turn, elvated to the trade press). I see no reason to think that simplication of pricing is such a major negative and in fact is often something customers are seeking from their vendors - and commented on by industry experts is past Voicecon events. The same ComputerWorld article goes on to say that with Avaya's new pricing, "Prices 'may' increase at large customer sites, affecting perhaps 10% of Avaya's installed base, Griffin said. But he noted that the company is willing to consider making adjustments for such users." So, the vendor is open to working with customer to address any inequities this new pricing stucture causes.
Posted by: Alan Klein | May 15, 2006 8:13 PM
I tend to agree with you Alan, for the most part. But on the flip side, I know of an organization with nearly 100 Avaya PBXs deployed that's now looking to dump the lot because of the new pricing coupled with dropped support for existing systems.
I think the real issue is indeed much deeper than price.
Posted by: Ken Camp | May 15, 2006 8:23 PM