The new software development kit comes integrated with Avaya Interaction Center and easily incorporates new technologies such as Web services to help simplify the design and development of agent desktops. Organizations have virtually unlimited options for designing screens that provide agents consolidated access to all of their business applications.

One company with a first-hand look at how Avaya Interaction Center 7.1 can transform contact center operations is Viecore Inc. As an industry-leading contact center consulting and systems integration firm, and member of Avaya's BusinessPartner program, Viecore helps many of the world's largest businesses deliver fast and efficient customer service, improved customer relations, and a quick return on their investment.

Viecore discovered that a leading issue impacting contact center productivity is the proliferation of databases, systems and applications that agents must access in order to respond to customer inquiries and complete transactions.

"Today's businesses are looking for a more efficient way for their contact center agents to pull information from disparate backend systems and applications -- from mainframes and data warehouses to CRM applications and third-party platforms," said Tom Chisholm, CEO and president of Viecore Inc. "The new version of Avaya Interaction Center and its software development kit enables the design of a single screen to integrate all of these resources. This reduces the time agents spend looking for information, and helps improve contact center efficiency and customer service."

Customized Tools, Web Services Yield More Intelligent Customer Communications

With Avaya Interaction Center's advancements, administrators can customize tools that agents rely on to do their job -- such as context-based toolbars, communication controls, contact history and other informational displays -- and embed them within existing enterprise applications, such as customer relationship management (CRM) and customer database applications. Doing so can speed access to the information required to complete a transaction. Since Avaya Interaction Center easily integrates with existing Web Services-based applications, the need for new code development is minimal.

The software development kit for Interaction Center is based on familiar, industry-standard Microsoft and JAVA tools, which further simplifies the development and maintenance of contact center applications.

According to Eileen Rudden, vice president and general manager, communications applications division for Avaya, the Interaction Center software helps businesses give their customer service agents a better way to quickly access the information they require to handle customer interactions.

"By making it easier to incorporate Web services and customize context- sensitive screen designs, Avaya helps companies provide agents with more intelligent access to the information and applications they need to do their job, so they can deliver the best possible customer service," said Rudden.

In addition to the customization options, Interaction Center 7.1 can also be used "out of the box" without customization using the Avaya Agent desktop. Avaya offers pre-built, pre-tested adapters for incorporating Interaction Center functionality into CRM applications from leading vendors such as Siebel, PeopleSoft and now SAP.

Avaya Interaction Center 7.1, part of the Avaya Customer Interaction Suite of contact center applications, is now generally available globally. For more information, please visit: http://www.avaya.com/gcm/master-usa/en-us/products/offers/interaction_center_release71.htm

About Avaya

Avaya Inc. designs, builds and manages communications networks for more than 1 million businesses worldwide, including 90 percent of the FORTUNE 500®. Focused on businesses large to small, Avaya is a world leader in secure and reliable Internet Protocol (IP) telephony systems and communications software applications and services.

Driving the convergence of voice and data communications with business applications -- and distinguished by comprehensive worldwide services -- Avaya helps customers leverage existing and new networks to achieve superior business results. For more information visit the Avaya website: http://www.avaya.com.

About Viecore

Viecore is a leading consulting and systems integration firm delivering end-to-end automated customer interaction solutions. Since 1989, Viecore has been a trusted advisor to enterprise-level corporations, providing leadership and guidance in defining contact center strategies. Our integration services bring together CTI (computer telephony integration), IVR (integrated voice response), speech, and web technologies-to deliver comprehensive customer interaction management solutions for a wide range of industry segments. Our customer interaction solutions are deployed in thousands of enterprises worldwide, helping millions of callers every day, access information and perform self-service transactions. Viecore is headquartered in Mahwah, NJ. For more information, please go to http://www.viecore.com or call 201-252-9100.

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Source: Avaya Inc.

The arrangement announced Monday promises to introduce “click-to-call” Web site technology to a broader audience and potentially speed its adoption as a means of more quickly connecting online consumers with advertisers. It will allow potential buyers to call eBay merchants or Google advertisers by clicking a link on a Web page.

“We have a chance to create a whole new way for buyers and sellers to connect online and to create what we hope will be a significant revenue stream for both eBay and Google,” eBay Inc. Chief Executive Meg Whitman said in an interview Sunday night.

Aug. 28 (Bloomberg) -- Like the title character of ``Waiting for Godot,'' the U.S. business spending spree many economists have been expecting just might not show up.

Forecasts of a moderate slowdown for the U.S. economy this year assume that businesses will accelerate their spending on equipment, helping compensate for any weakening in consumer demand. Now, some are questioning that scenario. If the business investment binge is a no-show, they say, a contraction in the economy becomes more likely.

``Most of the people forecasting a soft landing are counting on a boost from capital expenditures,'' says Liz Ann Sonders, chief investment strategist at Charles Schwab & Co. in New York. ``I would be careful about that.'' She puts the odds of a recession at more than 50-50, ``and it could happen relatively quickly.''

Business investment in new equipment and software fell in the second quarter for the first time in more than three years, according to government figures. Along with slower consumer spending, that helped hold U.S. economic growth during the period to an annual rate of 2.5 percent, less than half the pace of the prior three months, the Commerce Department reported on July 28. A revised report this week may show second-quarter growth was 3 percent, according to the median forecast in a Bloomberg survey.

Many economists say U.S. executives simply can't ignore the slowdown in spending by American consumers, who account for two- thirds of the U.S. economy. Personal spending in the U.S. rose just 0.4 percent in June, the smallest gain this year, while the University of Michigan's index of consumer confidence dropped in August to its lowest level since October.

`Little Sense'

``It makes little sense for businesses to accelerate their capital-spending plans at a time when final consumer demand, the largest source of demand, is decelerating,'' says Jan Hatzius, chief U.S. economist with Goldman Sachs in New York. ``We have long been skeptical about the `handoff' concept.''

New skeptics are being made too. Donald Straszheim, vice chairman of Roth Capital Partners LLC in Newport Beach, California, says he's reconsidered the prediction he made in December of a business spending binge.

``A business decision-maker would have to be blind not to see what's going on and be rethinking whether they ought to be a little more cautious over the next 24 months,'' says Straszheim.

Picking Up the Baton

James Paulsen, chief investment strategist at Wells Capital Management in Minneapolis, which manages $125 billion, says business may yet pick up the baton from the consumer. Rising stock prices, good earnings growth and a healthy European economy ``will bring forth chief executives' animal spirits,'' he says. ``If you look at the figures around capital spending, I think there's still a pretty good story.''

Support for that view came in the latest government report on durable-goods orders. The Aug. 24 report from the Commerce Department showed bookings for capital goods excluding aircraft and defense, a proxy for future business investment, rose 1.5 percent in July after increasing 1.4 percent in June.

Exports, which rose to a record in June, are a potential bright spot. Corporate investment in Europe is booming, fanning growth in the dozen-nation euro region as companies including Volkswagen AG, Europe's largest carmaker, step up spending on plants and machinery. Frankfurt-based Commerzbank AG, Germany's second-largest bank, forecasts investment spending will rise 4.1 percent this year, compared with last year's 2.5 percent rate.

Japan's Acceleration

In Japan, business investment and consumer spending accelerated in the second quarter, and companies such as Toshiba Corp., Japan's biggest maker of semiconductors, plan to build new factories and replace equipment at the fastest pace in 16 years.

Parsing the recent durable-goods report, ``the numbers are reasonably good for near-term capital expenditures,'' says Andrew Tilton, an economist with Goldman Sachs Group Inc. in New York. Even so, he says, the report also showed an increase in the ratio of durable-goods inventories to shipments, ``leading us to believe much stronger growth in business investment is still highly unlikely.''

Some companies that rely on business demand are already feeling a chill. Islandia, New York-based CA Inc., the world's second-largest maker of software for mainframe computers, is being hurt by ``a more challenging spending environment,'' Chief Executive Officer John Swainson said Aug. 14 after the company reported a 64 percent drop in first-quarter net income. ``Customer spending is becoming more difficult.''

Capital Spending

Only 21 percent of the firms in the Federal Reserve Bank of Philadelphia's August survey said they expect to increase capital spending over the next six months, the lowest percentage since January 2003. Among small businesses, fewer than a third plan to invest in the next three to six months, according to an August survey by the National Federation of Independent Business in Washington.

``Capital spending among small businesses is pretty flat,'' says William Dunkelberg, chief economist at NFIB. ``There's nothing really exciting happening there, either in terms of buildings or software and equipment.''

The anemic investment growth comes even with corporate profits at their strongest in decades. U.S. companies' earnings rose by an average of 19 percent in the second quarter; Commerce Department figures show U.S. corporate profits grew more than 10 percent in 15 of the last 16 quarters, better than in any comparable period going back to at least 1960.

With oil prices still about 60 percent above two years ago, ``maybe we're spending all that extra cash on energy,'' says Dunkelberg. And corporate profits won't stay that high forever: Morgan Stanley predicts S&P 500 earnings growth will slow to about 5 percent in 2007 from a projected 11.4 percent in 2006.

Paul Kasriel, director of economic research at Northern Trust Securities in Chicago, says that has persuaded him to stop waiting for managers to get out their checkbooks.

``If companies weren't on a spending boom earlier in the cycle, when consumer demand was soaring and their balance sheets were running over with cash, why would they suddenly go on a spending boom now?'' he says.

To contact the reporter on this story: Matthew Benjamin in Washington at mbenjamin2@bloomberg.net

Aug. 28 (Bloomberg) -- What you know can help you -- unless you ignore it, which appears to be how investors are treating growing risks of war, terrorism and political unrest.

Between July 11 and Aug. 10, a terrorist attack killed 182 people in Mumbai, India; Israel invaded Lebanon; two unexploded bombs were discovered on German trains; the United Nations Security Council gave Iran, which has the world's second-biggest oil reserves, until Aug. 31 to suspend its uranium-enrichment program or face economic sanctions; and British police foiled an alleged plot to blow up airliners bound for the U.S.

During that period, the Dow Jones Stoxx 600 Index in Europe rose 0.5 percent and the price of oil edged up 0.5 percent to $74 a barrel. Gold, traditionally a haven in times of turmoil, rose only 3.2 percent to $646 an ounce. To Bob McKee, those price changes show that investors are failing to account for the risks of a more dangerous world.

``Markets are not taking the dangers of energy-based political flashpoints seriously,'' said McKee, chief economist at London-based Independent Strategy, which advises more than 100 institutions, hedge funds, corporations and governments on investments and asset allocation. ``Institutional investors are often too short-term to cover themselves for geopolitical shocks, while individual investors with their retirement accounts are often too passive and long-term.''

The result may be a more severe reaction in stock, commodity, currency and bond prices when a truly catastrophic event occurs, according to McKee.

Greatest Risk

Tensions in the Middle East -- such as Iran's nuclear ambitions and the fighting between Israel and Hezbollah, a Lebanon-based Shiite Muslim militia sponsored by Iran and Syria -- pose the greatest risks to markets, according to George Magnus, senior economic adviser to UBS AG in London. Israel and the U.S. have designated Hezbollah as a terrorist organization.

``While financial markets are quite accustomed to periodic conflict between Israel and the Palestinians, the recent fighting in Lebanon, the bigger political goals of other countries in the region, the widening of ethnic tensions and the repercussions of the manner in which America extricates itself from Iraq all represent an escalation of those risks,'' he said.

Other hotspots include North Korea, whose nuclear ambitions may accelerate an Asian arms race, and Latin America, where Venezuela, Bolivia and Ecuador are tightening control over their oil and gas industries.

`Geopolitical Risk'

A cease-fire took effect in Lebanon Aug. 14. The standoff between Israel and Hezbollah leaves Iran emboldened to pursue its nuclear program and champion Shiite Muslims throughout the Middle East, especially in Iraq, McKee said. Iran also is in a stronger position to threaten non-Shiite regimes in Saudi Arabia, Kuwait and the Gulf states, which account for 51 percent of the Organization of Petroleum Exporting Countries' oil output.

Meanwhile, the confrontation over Iran's nuclear program may lead to a military strike on the country next year, McKee said. That may push oil well above $100 a barrel, he said. ``Geopolitical risk will return with a vengeance,'' he said.

Oil for October delivery today fell $1.36 to $71.15 a barrel in electronic trading on the New York Mercantile Exchange at 1:18 p.m. in Paris.

Iran said last week it's ready to hold ``serious negotiations'' on its nuclear efforts. The U.S. and France said the offer fell short of the requirement that it halt uranium enrichment.

Market's View

Even so, financial-market prices don't reflect anything close to an apocalyptic scenario. Take the Chicago Board Options Exchange's Volatility Index, which measures the expectations for volatility that are built into the prices of options on the S&P 500. It closed last week at 12.31 -- 9.4 percent below its average for the year and roughly half its 23.81 yearly high on June 13, the day stock markets bottomed after a monthlong drop.

It's not that investors are unaware. While they might discuss geopolitical risks in bars, restaurants and homes, those worries don't make it to the office, said Magnus.

Investors have difficulty pricing risks with which they have little experience, such as war, he said. ``And most economists can't see much further than next quarter's gross domestic product or the central bank's next monetary-policy decision.''

`Worst Fears'

Translating geopolitical risk into an investment strategy can be so tricky that most investors don't try. The most-feared events may not happen, or may happen at a different time than predicted, Magnus said. On the other hand, a small bet may do little to stem losses if the worst occurs, he said.

``It makes no difference if you own 3 percent or 6 percent more bonds or equities than your benchmark,'' said Magnus. ``If your worst fears are realized, the portfolio would still drop in value like a stone. It's almost an all-or-nothing portfolio decision.''

That said, investors could buy oil futures if they thought Iran would trigger a global crisis, said Eoin Treacy, a strategist at Stockcube Research Ltd. in London. In an extreme case, though, ``the only hedge is precious metals,'' he said. Other options include holding cash or loading up on Swiss francs, another traditional political hedge.

The world has been here before. Despite obvious signs that all was not well, financial markets were ``pretty much priced for perfection'' in the months leading up to World War I, said Magnus.

Even so, noted Harvard historian Niall Ferguson in the February 2006 issue of The Economic History Review, for decades prior there had been speculation about the potential financial consequences of a war between European powers.

`Bolt From Blue'

Still, it wasn't until more than three weeks after the assassination of Austrian Archduke Franz Ferdinand on June 28, 1914, that the Times newspaper in London made the first mention of the possibility that a European political crisis could be a source of financial instability. Less than two weeks later World War I erupted, and European financial markets closed for the year.

``To investors, the First World War truly came as a bolt from the blue,'' wrote Ferguson.

Complacency's price proved steep. British government-bond prices fell 44 percent between 1914 and 1920. French bonds lost 40 percent. Russia defaulted on its debts, while the value of German and Austrian bonds was dissipated in hyperinflation.

The lesson, according to Magnus: ``This might simply tell us that markets don't price worst-case outcomes until such time as they actually happen.''

To contact the reporter on this story: Michael Sesit in Paris at msesit@bloomberg.net

Analysts, including my colleague Jim Jubak, speculated that Katrina could tip our economy into recession, impacting everything from gas prices to grain shipments along the Mississippi. I noted that roughly 15% of all U.S. exports ship through the Port of South Louisiana, the nation's largest.

Cynical investors, meanwhile, salivated at the prospect of billions in rebuilding spending, because it suggested profits would descend from the skies upon companies charged with rebuilding the region. But it really hasn't worked out that way.

Both the doomsayers and the speculators were disappointed. Our economy proved surprisingly resilient, so much so that the Federal Reserve had to continue jacking up interest rates for nearly a year after Katrina to control economic growth and inflation.

Sure, there were signs of trouble. Corporate profits fell by 4% in last year's third quarter and GDP growth slipped to 1.8% in the fourth quarter, thanks in part to Katrina's impact. But the economy quickly got back on track. GDP growth hit 5.6% in the first quarter of this year, the fastest rate since 2003. Corporate profits are again growing at double-digit rates. All that even as crude prices have stayed above $70.
Mobile homes not moving
The money has rained down, if not quite in the amounts envisioned. Claims related to the storm ended up costing the insurance industry around $41 billion, and lawmakers kicked in another $20 billion in taxpayer funds.

Even so, few of the companies that appeared likely to benefit from a rebuilding boom actually have, as claims and repairs have dragged on for a year in bureaucratic wrangling and waste. Particularly waste.

Did I mention waste? Combine a dysfunctional Homeland Security department with seat-of-the-pants decision-making, sprinkle in some political pressure and you have a recipe for truly spectacular squandering. The most dismal example is manufactured housing, which was supposed to be a cornerstone of the government's compassionate response to the catastrophe.

According to a congressional oversight committee, the Federal Emergency Management Administration purchased nearly 25,000 manufactured homes at a cost of $863 million, as well as 1,755 modular homes at a cost of $52 million and 114,341 travel trailers at a cost of $1.7 billion.

A windfall for the mobile-home industry? Au contraire. About 60% of the manufactured homes purchased by FEMA were never actually deployed to the Gulf of Mexico, and never will be. Thousands are in staging areas as far removed as New Jersey -- in part because Gulf towns did not want flimsy, unseemly Femavilles cluttering up their communities, and in part because they were inappropriate for floodplains.

Now you can guess the problem for the industry. With thousands of unused homes piled up like cordwood, they have flooded the market and driven down prices. And you can forget about a new surge of interest in the companies if the hurricane season ever perks up this year. In a face-saving move, FEMA has designated its excess inventory of manufactured homes as a "strategic reserve." BB&T Capital markets analyst John H. Diffendal noted in a report to clients that the obvious conclusion for this debacle is that one should not count on any FEMA purchases from any hurricanes that might hit the U.S. this season, given the current stockpiles.

In contrast to initial expectations, therefore, the manufactured home industry has been ravaged in the year since Katrina hit. Champion Enterprises (CHB, news, msgs), Cavalier Homes (CAV, news, msgs) and Fleetwood Enterprises (FLE, news, msgs) are all down 25% to 45% in the past 12 months.
Lessons for the next storm
So which companies did win? The only industrial ones that appear to have made out fairly well in the wake of Katrina were giant public infrastructure concerns such as Fluor (FLR, news, msgs) and Jacobs Engineering Group (JEC, news, msgs); oil and gas refiners such as Valero Energy (VLO, news, msgs) and Holly (HOC, news, msgs); regional banks such as Iberiabank (IBKC, news, msgs) of Louisiana, Hancock Holding (HBHC, news, msgs) and BancorpSouth (BXS, news, msgs) of Mississippi; and regional insurance broker Brown & Brown (BRO, news, msgs).

Among these, successes were not evenly distributed. Shares of refiners, construction companies and insurers took off like rockets the day after the hurricane and never looked back. Savvy investors appeared to quickly understand that refiners would benefit from constrained supply, large construction companies would earn the bulk of the rebuilding business at lucrative emergency rates and insurers would be able to jack up their premiums.

The banks, on the other hand, declined for a month amid fears that they'd be on the hook for busted mortgages after customers walked away from ruined homes. But government guarantees brought investors back in short order, and local banks benefited from being able to write new commercial and residential loans at higher interest rates.

The lesson for investors and speculators who want to take advantage of the next big storm is pretty clear: Smaller manufacturing and construction companies may appear on the surface to offer the greatest opportunity at time of crisis as their order books are filled. But their size works against them, as they are typically unable to meet demand quickly enough and implode under the weight of government foot-dragging and bungling.

Unfortunately for the region, but luckily for investors, the post-Katrina rebuild in Louisiana and Mississippi will drag on for some time. Let's take a quick look at some of the companies that should continue to benefit.

* Fluor, up 50% since Hurricane Katrina hit (vs. +7% for the S&P 500 Index ($INX)) is not cheap at its current perch around $88 -- but it can still be bought by long-term investors on dips to around $82.50. The company reported a blowout quarter in June, with record new orders of $5.8 billion on the strength of its Katrina projects, as well as work for the petroleum and electrical power industries. At a generous price-earnings multiple of 22, even on dips you will be paying up for a premium brand. It's probably still worth it.

* Valero Energy, up 41% post-Katrina, is also a great long-term way to take advantage of constraints in the nation's supply of refined gasoline. Valero is the largest U.S. refiner and has several major plants along the Gulf Coast that were able to offset a decline in production with higher profit margins. In the second quarter, Valero earned a record $1.9 billion, up 95% from a year ago and 26% more than the first quarter. In the next six months, supply is expected to tighten and margins to swell as new low-sulfur diesel rules, which benefit Valero, go into effect. As refinery capacity continues to lag demand, buy Valero on dips to the $60.50 area.

* Brown & Brown, up 33% post-Katrina, presents a way to get back at one of the perverse facts of life when it comes to disasters: It seems logical that insurance company shares should get slammed as they pay out claims, but they almost always make out like bandits by raising premiums. Brown & Brown is actually a network of insurance brokers, rather than an insurer, so it makes more money on activity -- and there's been plenty of that. Internal growth was very strong in the last quarter as price conditions improved, and brokerages have all raised estimates for the remainder of the year. Buy these shares at $27.50 to $29 for immediate appreciation if you think that hurricane season will emerge from its slumber this year, or for long-term growth if you like a company that has simply figured out how to mint money.

* Whitney Holding (WTNY, news, msgs) is the largest bank based in New Orleans, so it was smacked around pretty thoroughly immediately after Katrina hit. Its shares hit bottom after a month, then rose 35% through this week as it became clear that its loan officer has done a prudent job of extending credit. The company blew past earnings estimates in the past quarter, and intimated that results should be even better over the remainder of the year as additional disaster relief funds, in the form of block grants to homeowners who lacked flood insurance, will reach the Gulf Coast in the third and fourth quarters this year. It's a buy from $33.50 to $35 as a bet on the long-term rebuild of the entire Gulf Coast region. Whitney pays a dividend-yielding 3%.

As citizens, we can always hope that there will never be another chance to take advantage of lessons learned in the wake of Hurricane Katrina. But as investors, we are now forewarned and forearmed.
Fine Print
To learn more about Fluor, visit its Web site. The company described its employees' charitable efforts on this page. ... To learn about Valero Energy, click here. The company made a $1 million contribution to relief efforts, as detailed here. ... To learn more about Whitney Holding, read here. ... Brown & Brown has one of the more unusual corporate Web sites as it is obsessed with a zoo animal theme and features bizarre quotes such as, "No egg-sucking dogs."

Jon D. Markman is editor of the independent investment newsletters Strategic Advantage and Trader's Advantage. While he cannot provide personalized investment advice or recommendations, he welcomes column critiques and comments at jon.markman@gmail.com; put COMMENT in the subject line.

Source: Jon Markman

He knew when to bring in professional managers, older than he, to manage years of explosive growth in the late 1990s. They built Dell (DELL, news, msgs) into a behemoth with the largest PC market share in America, currently hovering around 32%. And therein lies the key problem facing Dell today.

Michael Dell, still chairman and barely past the age of 40, also knew when to pass the CEO buck to Kevin Rollins. It is Rollins who now must bear the brunt of the reality that Dell is no longer a high-growth company. It is Rollins who must stand before the investing public in repeating quarters of earnings disappointments and offer up his apologies and excuses.

Now the Securities and Exchange Commission has taken an interest in some unclear aspects of how Dell reports its revenue in an "informal investigation." (I guess that means the investigators will not show up wearing tuxedos.)

What the SEC is after must be clear to someone, but it wasn't made clear to investors on the earnings call on Aug. 17, even though the inquiry is not a recent development. Of course, the announcement was news to investors and the financial community. Management announced the news on its conference call last Thursday, infuriating analysts who follow the company and who hadn't previously been told.

Running in place
If you are a short-term investor, often you only see the bark on any quarter's earnings tree. You lose focus and don't even see the long-term picture that is the forest surrounding that tree.

Dell has had a serious problem for many years that even Michael Dell couldn't solve if he resumed the role of CEO: technology price deflation. If PC prices dropped by say, a third, then you would have to sell 33% more machines or accessories just to run in place and match last year's revenue. (The average Dell PC sold for $3,000 several years ago; according to my latest Dell catalog, it's less than half that now. The customization factor makes it tough to nail down exact figures, but even with charges for add-ons, average selling prices are lower than they were when Dell sported higher growth.)

Avaya plans set up shop in New Zealand and appoint a country manager, although there is no set time-frame for this, says Patricia Hume, Avaya’s vice president of SMB solutions.

The company’s Asia-South Pacific managing director, Carlton Taya, told Computerworld in May that a local office should have been set up long ago, so as to better service local enterprise customers, such as Vodafone and government customers.

Avaya competes with Cisco, Nortel and Alcatel in the Asia-Pacific region. In New Zealand, Telecom partners with Cisco and Nortel, and also enjoys an active technology relationship with Alcatel for its fixed-network services.

In May, Taya said Avaya had been in talks with Telecom for the past 11 months and that getting traction in the New Zealand market without a presence with the dominant incumbent would be difficult. Hume says Avaya is still having discussions with Telecom but there is nothing to announce as yet.

Avaya reported a significant drop in profits for the third quarter, which resulted in a management reshuffle. Former CEO Donald Peterson has been replaced by Louis D’Ambrosio, who was previously vice president and president of global sales and marketing. Net income for the third quarter was US$44 million (NZ$70 million), compared with US$194 million for the comparable period in 2005.

However, Avaya has had a successful year in the Asia-Pacific SMB (small and medium-sized businesses) space, says Jean Mauck, Avaya’s sales vice president for the Americas and Asia Pacific region. The company’s South Pacific market share is 14% and the last financial quarter in New Zealand was strong, says Mauck.

Mauck says one reason for Avaya’s growth in the SMB space is the company’s recent decision to “separate the sheep from the goats” among its resellers, so as to provide better customer service.

“We have de-authorised around 400 resellers,” says Mauck. “We are now focusing on resellers that are committed to Avaya.”

The company has clear requirements around certification and education for resellers.

Hume says she sees Avaya’s resellers as an extension of Avaya and the company doesn't want to have partners that are just in it for fast money.

Avaya is transforming itself from a traditional telecommunications provider, using IP networks, into a business communication solutions provider, according to Hume.

She says the future will bring a convergence of fixed and mobile networks, as well as integration of web services, mobility, data and telephony. She also thinks the SMB market is going to help drive that process because SMBs are mobile, are out and about and don’t necessarily have somebody taking calls and messages for them. They are also often not technologists, she says.

Hume believes that new integration, interaction and convergence technologies will evolve, through an ecosystem of technology and web companies.

“In the future, we are going to learn how to use these emerging technologies to be more productive,” she says. “And more productivity will lead to economic growth.” Avaya has sold 2,000 systems in New Zealand so far.