Small and Medium Enterprise Communications Product Strategy & Roadmap Joe Scotto Director, Product and Solutions Marketing

Small and Medium Enterprise Communications

Product Strategy& Roadmap

Joe ScottoDirector, Product and Solutions Marketing

HIGHLY CONFIDENTIAL UNTIL RELEASED IN JANUARY 2010 © Avaya 2009. All rights reserved.

Key Topics: Small and Medium Enterprise Communications

Avaya is now the #1 WW Leader in small business communications

To be recognized by SME markets and channels as the provider of choice for delivering the best plug and play communications experience in the industry.

The strategy is to apply the key principles of simplicity, customer service and user experience in all of our portfolio and go-to-market activities.

Leadership

Vision

Portfolio Strategy

RoadmapThe roadmap is about investment protection for all of the combined company’s products, innovation for the future, and a view of how we’ll get there.

Source: Canalys, Calendar 2008 (Line size: 20-99)Source: Canalys, Calendar 2008 (Line size: 20-99)


SIP Software technologyFor SME Markets

Strong Service Provider and Reseller Relationships

3

SME Markets:

The Power of AvayaN

1 Source: Canalys, Calendar 2008 (Line size: 20-99)1 Source: Canalys, Calendar 2008 (Line size: 20-99)

##11Small Business

Communications WW1

Expert in SME: Proven Track Records

Focus: One of 3 Business Units

Trusted Innovation and Investment Protection

Known Reputation for“Evergreen”

Simplified PackagingFor SME Markets

Strong Reseller Base WW & Avaya Connect Program

Solid Track Record for Converging Platforms

© 2009 Avaya Inc. All rights reserved.© 2009 Avaya Inc. All rights reserved.

Global SME Market Leadership

Avaya10.3%Avaya10.3%

Nortel7.4%

Nortel7.4%

Others45.9%Others45.9%

Siemens7.0%

Siemens7.0%

Alcatel-Lucent7.5%

Alcatel-Lucent7.5%

Cisco10.1%Cisco10.1%

Avaya + Nortel17.7%

Avaya + Nortel17.7%

Global SME Telephony Market ShareGlobal SME Telephony Market Share

Source: Canalys, Calendar 2008 (Line size: 20-99)Source: Canalys, Calendar 2008 (Line size: 20-99)

NEC11.8%NEC

11.8%

NOTE: Nortel results from industry analysts include results for LG-Nortel and other shipment activity that will be restated in developing a true baseline for combined Avaya-Nortel performance; Historical market shares may change.

Worldwide SME Unified Communications Product Market Opportunity ($End-User)

Worldwide SME Unified Communications Product Market Opportunity ($End-User)

Source: Avaya analysis based on multiple industry reports (6/09); SME= firms with <250 employees UC Applications include Contact Center, Messaging, Audio/Video/Web ConferencingSource: Avaya analysis based on multiple industry reports (6/09); SME= firms with <250 employees UC Applications include Contact Center, Messaging, Audio/Video/Web Conferencing

$4+ Billion(Just Product)

$4+ Billion(Just Product)

2009 2010 2011 2012 2013

© 2009 Avaya Inc. All rights reserved.© 2009 Avaya Inc. All rights reserved.HIGHLY CONFIDENTIAL UNTIL RELEASED IN JANUARY 2010 © Avaya 2009. All rights reserved.

Avaya Strategic Priorities For SME Markets

5

Customer Benefit

Easy to understand, to buy and finance

Solutions that help SMEs retain and acquire

customers

Applications that are intuitive to use

Channel Benefit

Simple and profitable for channels to learn, sell,

install, support

Differentiated value propositions and

services that save time

Seamless integrations, EZ quote tools,

roadmap influence (GRIP)

Simplicity Customer Service

User Experience


Investment Focus:

Coverage Of Where Market Is Buying

6

43% decline in 2009 (Dell'Oro)

Market nearly disappears by 2013 (Dell'Oro)

NEC and Samsung are leading players (T3i Group)

Double Digit growth in volumes returning in 2011 (Dell'Oro)

24% percent of SMBs say that they already have or are currently implementing a UC solution. (Forrester)

Significant growth projected through 2012 (Gartner)

SIP continues to gain strength as the dominant protocol used by all of the vendors playing in the VoIP market (IDC)

TDM/Key Systems

Hybrid IP PBX SIP Software

Transition

Declining Growing Projected Growth


Day One Portfolio:

SME Communications

7

TDM/Key Systems

Hybrid IP PBX SIP Software

Declining Growing Projected Growth

Avaya PARTNER®Avaya Integral 5Avaya Norstar

Avaya IP OfficeAvaya BCM

Avaya SCS


The SMEC RoadmapWill Streamline for Simplicity, Focus On Innovation

For Sale Today2010 2011

*Note: In addition, support policy includes 3 years of manufacturer support beyond any effective end of sale date, as well as 3 years of Avaya service support beyond end of manufacturer support. *Note: In addition, support policy includes 3 years of manufacturer support beyond any effective end of sale date, as well as 3 years of Avaya service support beyond end of manufacturer support.

PLATFORMS CONVERGE

All products All products remain for saleremain for sale**

All products All products remain for saleremain for sale**

Investment ProtectionInvestment Protection::Products Will Converge with IP Products Will Converge with IP

Office into best of breed solutionOffice into best of breed solution

Investment ProtectionInvestment Protection::Products Will Converge with IP Products Will Converge with IP

Office into best of breed solutionOffice into best of breed solution


BCM & Norstar ConvergenceWith IP Office

9

Nortel Partners

Nortel Installed Phones

Nortel Interface

Nortel Features

What you likeabout BCM and Norstar stays


BCM & Norstar ConvergenceWith IP Office

10

IP Office DevConnect Eco-Systems Nortel Partners

What you like about BCM and Norstar stays

IP Office Management

IP Office Features (Resiliency, Mobility, etc.)

IP Office Platform

Avaya New & Installed phonesAvaya New & Installed phones

Nortel Interface

Nortel Features

You benefit from what is unique to IP You benefit from what is unique to IP OfficeOffice

Nortel Installed phonesNortel Installed phones


Avaya IP OfficeIdeal for Converging Portfolio and for SME Markets

IP Office 500Single, Modular PlatformScales to 384 users per system, 32 sitesSimple, role-based solutions

Integral Integration

PARTNER® Integration

Avaya AuraTM Integration

BCM, Norstar Integration

4.0 6.0 7.0

5.0

MOBILE WORKER

AGENT POWERUSER

Merlin Integration

3.0


Avaya Product Lifecycle Policies

All current SMEC products are available for sale throughout FY2010

No end-of-sale to be announced in FY2010 for any SMEC Nortel products

Major heritage Nortel products will have at least 9 months notice

Products have up to 6 total years of support following any end-of-sale date

Years 1 2 3 4 5 6

End of Sale

Announcementminimum 9 months

End of Product Orderability

End of Manufacturers

Support (Software)

End of Manufacturers

Support (Hardware)

Extended Hardware Support(optional, for purchase)

End of Extended Support


Investment Focus: IP Office and SCS Overview

13

IP Office Software Communication System (SCS)

Hybrid IP PBXSingle, Modular UC Platform

Launched 20026,000,000 users WW

Managed on premise

Telephony-centric buyers

Voice ResellersService Providers

SIP SoftwareOpen, Native UC Application

Launched 2008Current deployment: <15,000 users

Managed in the data center

IT-centric buyers

Data ResellersRegional SIs


Evolutionary Path: SME Communications Portfolio

Support of Nortel Phones on IP Office

Nortel management interface emulation on IP Office

Eco-system of technology partner migration

Protect Nortel data management

for migration E.g. call log, PBX

configuration Feature Parity

Extend Increased R&D investment

to focus on new features New talent, greater

resources to focus on fewer products

Innovation and market differentiation

Grow

14


Evolutionary Path: For Partners

Protects installed base & Services revenue

Customers Can Stay Where They Are

Continue to Sell / Upsell

Protect Extend their Expertise:

Add or expand IP office Get field sales teams

authorized to sell Get technicians

Fast-Track trained

Extend Become an IP Office Expert:

Leverage DevConnect to deliver solutions

Expand to new markets – very small, mid market or verticals

Add SCS Add Avaya AuraTM

Grow

15


How We'll Get You There:

Helping Partners Achieve Business Value

Embrace all Channel Partners with Avaya Connect

Rapidly train Partners on the full Avaya portfolio to Extend and Grow all current systems

Accelerate SME partner services offers with Avaya technical expertise

New offer launches in Q1 2010

Backbone support

Extended warranty and advanced parts replacement

Extend

Grow

Pro

tect

Avaya and Partner

Services


Key Recommendations What It Means For Your Clients

Keep Recommending What You’re Keep Recommending What You’re RecommendingRecommending

BCM and Norstar: For Sale

Keep Recommending What You’re Keep Recommending What You’re RecommendingRecommending

BCM and Norstar: For Sale

Become An IP Office ExpertBecome An IP Office ExpertSales, Design, Install, MaintainBecome An IP Office ExpertBecome An IP Office ExpertSales, Design, Install, Maintain

Future Path For All ProductsFuture Path For All ProductsConvergence to the IP Office platform

Future Path For All ProductsFuture Path For All ProductsConvergence to the IP Office platform

Summary and Next Steps

Summary

Next Steps

New Avaya is #1 WW in Small Business Strong portfolio, experience, innovation and reach

Buy today or tomorrow: You have a secured path to the future

All products are investment protected BCM and Norstar features will converge with IP Office Note: Combined manufacturer and service support policy

is six years beyond end of sale of any product

Migration of BCM and Norstar Experience to the IP Office platform

Education and training New promotions and programs

© 2009 Avaya Inc. All rights reserved.© 2009 Avaya Inc. All rights reserved. 19

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Small and Medium Enterprise Communications Product Strategy & Roadmap Joe Scotto Director, Product and Solutions Marketing