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Avaya Soars to Leadership Positions In IP Telephony Market

  • Avaya gains number one position in U.S., second worldwideaccording to two industry reports; new advertising campaign focuseson company's strength in IP telephony

Avaya Inc. (NYSE:AV) a leading global provider of communicationsnetworks and services for businesses, today announced it hasgarnered leadership positions in the Internet Protocol (IP)telephony market, a status it achieved through significantincreases in market share, and rapid growth that outpacedcompetitors in this emerging technology market.

Avaya Inc. (NYSE:AV) a leading global provider of communicationsnetworks and services for businesses, today announced it hasgarnered leadership positions in the Internet Protocol (IP)telephony market, a status it achieved through significantincreases in market share, and rapid growth that outpacedcompetitors in this emerging technology market.

The statistics, which measured growth in enterprise IP telephonyfor the third calendar quarter of 2002, reflect Avaya's commitmentto delivering leadership in voice communications in the IP arena.Avaya now ranks number two worldwide — with 22 percent of theoverall IP telephony market — according to global figures providedby Synergy Research Group's report on Enterprise Voice over IP(VoIP). The report also notes that Avaya grew faster than itscompetitors, increasing its total IP telephony lines shippedworldwide by 83 percent, from the second quarter of 2002 to thethird quarter of 2002.

Statistics measuring the United States IP telephony marketconfirmed that Avaya emerged as the number one vendor in IPtelephony, capturing 25 percent of the entire market. The figures —supplied by InfoTech's recent InfoTrack for EnterpriseCommunications Report for the third quarter of 2002 — showed thatAvaya took the leadership position in the U.S. overall IP-PBXmarket, with total shipments up by 169 percent from the thirdquarter of 2001 to the third quarter of 2002. InfoTech'sInfoTrack provides quarterly updates on total shipments ofIP-based products, a significant indicator of leadership in the IPtelephony sector.

"Businesses around the world are increasingly making thedecision to strategically deploy IP telephony to drive greatervalue from their communications networks," said Don Peterson,chairman and chief executive officer, Avaya. "Clearly, when thedecision is made to take the path to IP telephony, more enterprisesare choosing Avaya. By bringing our vast experience in voicecommunications systems, applications and services to the world ofIP, businesses of all sizes can begin to experience the benefits ofconvergence — for about the cost of a standard PBX upgrade."

By combining disparate voice and data networks, IP telephonybrings businesses to a new level of communications, enablingenterprises to collaborate using audio, video and data, wired andwireless voice — all over a single IP packet network. ThroughAvaya's IP telephony solutions, businesses can gain access to anarray of benefits, including reduced network management costs,increased organizational productivity and enhanced mobilecommunications capabilities. Mobility tools made possible byAvaya's vast portfolio of voice applications — such as 6-partyconferencing, single-mailbox access to voice mail, email and faxmessages via PC or telephone, speech-enabled access to desktoptools like calendars, tasks and directories, andextension-to-cellular — enable an entire workforce to gaincontinuous communications, expanding employees' desktops beyondoffice walls to wherever they happen to be working.

The increase in Avaya's IP telephony market share in the thirdquarter of 2002 was fueled by a range of businesses, including asignificant number of small organizations that adopted Avaya's IPtelephony products and solutions at a rapid pace. The introductionof Avaya™ IP Office — which provides small-medium sized businesseswith an "all in one" converged system — helped contribute toAvaya's leadership position in U.S. IP telephony. Since its launchin early 2002, more than 9,000 Avaya IP Office systems have beenshipped.

"These results show that Avaya continues to build on itsleadership position in IP Telephony, producing significant marketshare gains in the quarter," said Jeremy Duke, founder andprincipal analyst, Synergy Research Group. "In the third quarter,Avaya effectively executed on its strategy to provide a wide rangeof next generation communications solutions addressing the needs oforganizations — from small startups to large corporations andeducational institutions — through its MultiVantage software and IPOffice products."

Companies and organizations implementing Avaya's convergedcommunications and IP telephony solutions over the past yearrepresented a range of industries and sizes. They include theglobal accounting, tax and business advisory firm Grant Thornton;full-service financial institution OmniAmerican Credit Union; TheSeattle Times, one of the largest daily newspapers in the U.S.;Australia National University, a premier institution in Australia;the Federation Internationale de Football Association (FIFA) forthe 2002 FIFA World Cup™ tournament in Korea and Japan;international rock star Rod Stewart's management team; Jenny CraigWeight Loss Centers; the Boston Celtics of the National BasketballAssociation; and HomeNet, Inc., which provides comprehensivecomputer and network services as well as web site design andhosting.

"Our customers look to us to deliver the solutions that meettheir business needs, and Avaya's IP telephony solutions play animportant role in fulfilling that demand," said John Charters,chief executive officer, Expanets. "As Avaya's largest businesspartner, Expanets is proud of their accomplishment and willcontinue to support the rollout of this new and exciting technologyfor our mid market customers." Expanets, which offers a wide rangeof IP voice and data solutions, is the nation's largestcommunications solutions provider to the mid market.

Avaya's strategy for continued IP telephonyLeadership
The overall market for enterprise IP telephony is predicted togrow to $4.4 billion in 2006 from $849 million in 2002,representing a compound annual growth rate of 50.5 percent,according to Synergy.

Central to Avaya's strategy in the IP telephony market is itssupport of an architecture that is based on open standardstechnologies and that embraces a multi-vendor, service creationenvironment. This enables IT managers to develop and integratebest-in-breed IP telephony applications utilizing AvayaMultiVantage™ software, a reliable, scalable voice application thatenables enterprises to take a strategic path to convergedcommunications based on choice — either through the evolution of anexisting network to IP telephony, or through the implementation ofnew communications technology and equipment.

Supporting its open standards strategy and architecture, Avayaalso provides converged applications that help enterprisesintegrate communications for superior customer responsiveness andefficient decision-making. During 2002, Avaya deliveredaward-winning software for contact centers and unifiedcommunication. These solutions include the Avaya InteractionCenter, which enables businesses to manage multi-mediacommunications with customers through channels that include voice,email, fax and web, across multi-site, multi-vendor, multi-protocolcontact center networks. The company also introduced Avaya UnifiedCommunication Center, which enhances employee productivity throughspeech-enabled, web or wireless access to critical communicationstools, such as email, messages, calendars and directories from anyphone, personal computers or personal digital assistants.

Before businesses implement IP telephony, Avaya Global Servicesengineers can determine the readiness of the customer's network forVoIP using the company's patented ExpertNet™ assessment tool, partof Avaya's Enterprise LAN/WAN Consulting Service. ExpertNet sendssimulated VoIP calls over a network and collects data on jitter,delay and loss that can cause poor voice quality-of-service on thenetwork.

To address network security issues surrounding IP telephonyapplications, the Avaya Enterprise Security Practice can providecustomers with a comprehensive internal/external approach tonetwork security with assessment, policy development and design.Security experts analyze operating system/applicationvulnerabilities or misconfigurations and look for poorauthentication systems and passwords and will also analyze externalperimeters such as firewalls and other access points that commonlyhave been the focus of network security.

The ExpertNet assessment tool and Enterprise Security Practicewere announced last year as part of an ongoing expansion ofServices capabilities to address customers' needs to maximizeexisting and future investments in IP telephony and convergedenterprise networks.

Last week, the company's new advertisements began appearing inleading trade and business publications throughout North America.The ads encourage customers to "reach Avaya — a higher plane ofcommunication," inviting organizations to use Avaya solutions andservices to reach a "higher plane" or "business nirvana" — a worldwhere companies realize the full potential of their communicationsnetworks to achieve superior business results.

For more details on the strategic approach Avaya recommends forbusinesses evolving to IP Telephony, readers can access Avaya's newreport: "Converged Communications: Meeting IT Objectives ThroughIP Telephony." The report can be accessed by visiting:

Avaya IP Telephony Statistics
Avaya leadership in worldwide IP telephony market:

Source: Synergy Research Group's report on Enterprise Voiceover IP for the third quarter of 2002. In this quarter, Avayaincreased its total IP Telephony lines shipped across the globe,increasing its share in IP Telephony to 22 percent of the worldwideIP telephony market. In its quarterly report, Synergy ResearchGroup provides updates on total enterprise IP Telephony lines/portsshipped — a metric used to measure vendor market share in the IPTelephony arena.

Avaya leadership in U.S. IP telephony:
Source: InfoTech's recent InfoTrack for EnterpriseCommunications Third Quarter 2002 Report, stated that Avaya'sconverged systems and applications group, and small to mid-sizebusiness solutions group, together took over the number oneposition in the U.S. IP telephony market with 25 percent of lineshipments in Q3 2002.

Avaya leadership in US enterprise telephony market
Source: According to the latest information from InfoTech(third calendar quarter 2002), Avaya is the number one vendor inthe U.S. enterprise telephony market, which includes IP-PBX,IP-enabled PBX, PBX and key/hybrid systems as measured by totalport shipments. Avaya's 27 percent share of the overall U.S.enterprise telephony market is a full six percentage points morethan its next competitor.

Market growth
Avaya worldwide market growth in IP telephony:

Source: Synergy Research Group's report on Enterprise Voiceover IP for the third quarter of 2002. In this quarter, Avayaoutpaced the growth of its competitors, increasing its total IPtelephony lines shipped across the globe by 83 percent from thesecond quarter of 2002 to the third quarter of 2002.

Avaya U.S. market growth in IP telephony:
Source: According to InfoTech's recent InfoTrack forEnterprise Communications Third Quarter 2002 Report, Avaya took theleadership position in the U.S. overall IP-PBX market in the thirdquarter, with total shipments up 169 percent from the third quarterof 2001 to the third quarter of 2002. InfoTech's InfoTrack providesquarterly updates on total shipments of IP-based products — a keyindicator of leadership in the IP telephony market.

About Avaya
Avaya Inc. designs, builds and manages communications networks formore than 1 million businesses worldwide, including 90 percent ofthe FORTUNE 500®. Focused on businesses large to small, Avaya is aworld leader in secure and reliable Internet Protocol (IP)telephony systems and communications software applications andservices.

Driving the convergence of voice and data communications withbusiness applications — and distinguished by comprehensiveworldwide services — Avaya helps customers leverage existing andnew networks to achieve superior business results. For moreinformation visit the Avaya Web site:

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