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Avaya starting to enjoy life on its own

Internet-phone sales helps Lucent offspring recover
Jeffry Bartash

Life isn't quite as tough anymore for 4-year-old Avaya Inc.

Once part of Lucent Technologies, which was itself a spinoff of AT&T, Avaya has emerged as a patch of green growth in the otherwise barren landscape of the communications-equipment industry.

It's back in the black. Sales are rising. And its stock (AV: news, chart, profile) is showing more than a little appreciation.

The reason? Sales of corporate phone systems based on Internet technology -- Avaya's new calling card -- are starting to take off. The technology promises to lower communications costs and, perhaps more important, transform how companies do business.

'Productivity nuts'

Take The company sells a variety of phone headsets and also offers Customer support. By installing Avaya's technology, employees can keep in constant contact, no matter where they are. Armed with a laptop or handheld device, they can access anything on the company network

The benefits also extend to Customers who want to place an order or ask for help. If the phone lines get backed up, callers are routed from one office or employee to another to quickly disperse the backlog. Customers don't have to wait long. CEO Mike Faith, a self-described "productivity nut," said the new technology has boosted revenue generated by each employee to a frothy $800,000 -- higher than the vaunted Cisco can claim.

"It was definitely more expensive, but it was such a slam dunk it was worth doing," he said. "I am a big believer. We wouldn't want to go back."

In other cases, Internet-based phone technology actually negates the need for expensive offices altogether. JetBlue Airways, the popular discount carrier, is one company that uses "virtual call centers."

"They don't have one single building where all the agents sit," McGuire said. "It's all work-at-home people."

Aside from lower real-estate costs, Internet-phone technology also enables JetBlue to save on labor costs by adding staff only during busy periods.

"With a virtual call center, you can bring on the number of agents for the amount of time you need to cover that peak and then have them go back off," McGuire noted. "You're not paying someone for an eight-hour day."

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