Beautiful Virgin Islands

Monday, Jul 14, 2025

Working from home is a boost for a...desktop phone company?

Working from home is a boost for a...desktop phone company?

With many people working from home for the foreseeable future -- and perhaps forever -- you wouldn't expect a company that still makes desktop phones to be thriving.

But Avaya (AVYA), a communications services firm that caters to businesses, is doing just fine, thank you. That's because Avaya has made a transformational shift to focus more on the lucrative business of cloud software and less on clunky hardware.

The company reported sales for its fiscal fourth quarter Wednesday that rose nearly 5%, topping forecasts. The stock fell 7% Wednesday though and was down another 5% Thursday as earnings were below Wall Street estimates.

Yet Avaya shares, even after this week's slide, are still up nearly 30% this year. Not bad for a company that filed for a bankruptcy reorganization just three years ago.

Avaya used to be part of the AT&T empire. (AT&T (T) is now the owner of CNN parent WarnerMedia.) Ma Bell spun off networking subsidiary Lucent in 1995 which in turn spun off the newly-named Avaya in 2000. The company was subsequently bought by private equity firms in 2007, loaded up with debt and emerged from Chapter 11 protection in 2017.

Newly public and with a restructured business model that focuses on the burgeoning demand for cloud-based telecom services, Avaya still makes desktop phones -- and has even added video conferencing abilities and other features to them -- but hardware is now a small part of its business.

CNN Business spoke to Avaya CEO Jim Chirico Wednesday about how the company has restructured to focus on the burgeoning demand for cloud-based telecom services.

"We're more of a software as a services company now and less of a hardware firm," Chirico said. Following that shift, software and services revenue now make up 88% of total sales - with the rest of the revenue coming from phones and other hardware products.

Work from home...or anywhere


And nearly two-thirds (63%) of Avaya's sales now come from recurring revenue deals -- longer-term contracts with firms such as Apple, American Express, Citigroup and Walmart, which are all Avaya customers.

"As bad as Covid-19 has been, it has increased demand for Avaya. The shift to working from anywhere is a multi-year cycle," Chirico said. "Growth is being fueled by offering people the capability to have more solutions for remote work. Voice is now secondary to video and the cloud."

Avaya has also partnered with red hot cloud-based telecom services company RingCentral (RNG) for its Avaya Cloud Office product, which lets customers manage meetings and messages from any device.

This is a key reason why Chirico prefers to talk about the post-Covid landscape as work from anywhere as opposed to work from home.

In some respects, Avaya is benefiting from the same trends that have boosted video conferencing giant Zoom (ZM) and cloud call center company Five9 (FIVN) this year.

Avaya even has its own video conferencing tool, called Avaya Spaces, that competes with the likes of Zoom, Cisco's (CSCO) WebEx and Microsoft's (MSFT) Teams.

These are all formidable -- and much larger -- competitors. Still, Chirico is hopeful that businesses will eventually return to normal -- and that Avaya will continue to win deals as companies will still need more cloud-based video capabilities to manage meetings.

"This is a multiyear investment cycle," Chirico said. "People will eventually start moving back to the office."

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Air India Pilot’s Mental Health Records Under Scrutiny
Google Secures Windsurf AI Coding Team in $2.4 Billion Licence Deal
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
South African Police Minister Suspended Amid Organised Crime Allegations
Nvidia CEO Claims Chinese Military Reluctance to Use US AI Technology
Hong Kong Advances Digital Asset Strategy to Address Economic Challenges
Australia Rules Out Pre‑commitment of Troops, Reinforces Defence Posture Amid US‑China Tensions
Martha Wells Says Humanity Still Far from True Artificial Intelligence
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
U.S. Resumes Deportations to Third Countries After Supreme Court Ruling
Excavation Begins at Site of Mass Grave for Children at Former Irish Institution
Iranian President Reportedly Injured During Israeli Strike on Secret Facility
EU Delays Retaliatory Tariffs Amid New U.S. Threats on Imports
Trump Defends Attorney General Pam Bondi Amid Epstein Memo Backlash
Renault Shares Drop as CEO Luca de Meo Announces Departure Amid Reports of Move to Kering
Senior Aides for King Charles and Prince Harry Hold Secret Peace Summit
Anti‑Semitism ‘Normalised’ in Middle‑Class Britain, Says Commission Co‑Chair
King Charles Meets David Beckham at Chelsea Flower Show
If the Department is Really About Justice: Ghislaine Maxwell Should Be Freed Now
NYC Candidate Zohran Mamdani’s ‘Antifada’ Remarks Spark National Debate on Political Language and Economic Policy
President Trump Visits Flood-Ravaged Texas, Praises Community Strength and First Responders
From Mystery to Meltdown, Crisis Within the Trump Administration: Epstein Files Ignite A Deepening Rift at the Highest Levels of Government Reveals Chaos, Leaks, and Growing MAGA Backlash
Trump Slams Putin Over War Death Toll, Teases Major Russia Announcement
Reparations argument crushed
Rainmaker CEO Says Cloud Seeding Paused Before Deadly Texas Floods
A 92-year-old woman, who felt she doesn't belong in a nursing home, escaped the death-camp by climbing a gate nearly 8 ft tall
French Journalist Acquitted in Controversial Case Involving Brigitte Macron
Elon Musk’s xAI Targets $200 Billion Valuation in New Fundraising Round
Kraft Heinz Considers Splitting Off Grocery Division Amid Strategic Review
Trump Proposes Supplying Arms to Ukraine Through NATO Allies
EU Proposes New Tax on Large Companies to Boost Budget
Trump Imposes 35% Tariffs on Canadian Imports Amid Trade Tensions
Junior Doctors in the UK Prepare for Five-Day Strike Over Pay Disputes
US Opens First Rare Earth Mine in Over 70 Years in Wyoming
Kurdistan Workers Party Takes Symbolic Step Towards Peace in Northern Iraq
Bitcoin Reaches New Milestone of $116,000
Biden’s Doctor Pleads the Fifth to Avoid Self-Incrimination on President’s Medical Fitness
Grok Chatbot Faces International Backlash for Antisemitic Content
Severe Heatwave Claims 2,300 Lives Across Europe
NVIDIA Achieves Historic Milestone as First Company Valued at $4 Trillion
Declining Beer Consumption Signals Cultural Shift in Germany
Linda Yaccarino Steps Down as CEO of X After Two Years
US Imposes New Tariffs on Brazilian Exports Amid Political Tensions
Azerbaijan and Armenia are on the brink of a historic peace deal.
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Weinstein Victim’s Lawyer Says MeToo Movement Still Strong
U.S. Enacts Sweeping Tax and Spending Legislation Amid Trade Policy Shifts
Football Mourns as Diogo Jota and Brother André Silva Laid to Rest in Portugal
×