Communications software maker Avaya Holdings Corp. has acquired CTIntegrations LLC to expand the capabilities of its OneCloud product suite, which stands at the center of the company’s plan to move to a cloud-centric business model.

Avaya announced the deal today in conjunction with the release of its third-quarter earnings report. The company slightly surpassed analyst expectations with $732 million in sales, of which $425 million was recurring revenue generated by the OneCloud suite. Compared with last year, OneCloud recurring revenues are up more than 275%, momentum that the acquisition of CTIntegrations is designed to accelerate. 

“The tremendous talent they bring along with their deep domain expertise in Avaya’s contact center platform will immediately add value to our innovation engine and super-charge our Avaya OneCloud CCaaS solution,” said David Austin, Avaya’s global vice president of corporate development.

Avaya makes software products that enterprises use to support business collaboration among employees, build communications features into applications and power their contact centers. The company also provides related analytics tools that help with tasks such as measuring customer support teams’ productivity. In recent years, Avaya has been moving away from selling on-premises software licenses and toward a business model that centers on selling cloud services. 

OneCloud, the product suite that Avaya is hoping to boost with the CTIntegrations deal, encompasses its core cloud services.

There is one offering from the suite in particular that the company is looking to enhance with the acquisition: the OneCloud CCaaS platform. The platform is used by companies to manage the day-to-day operations of their contact centers. CTIntegrations has developed a software tool, called CT Suite, that extends OneCloud CCaaS with complementary capabilities not included in its default feature set. 

The CT Suite can automatically direct users to the customer service agent who is best equipped to answer their question. For customer service agents, in turn, the product provides a centralized web-based dashboard through which they can manage all outstanding support requests. In the interest of improving contact center teams’ productivity, CT Suite also includes a chatbot that is capable of automatically answering frequently asked questions to free up time for employees.

“This acquisition also plays a key role in supporting our overall Avaya OneCloud platform beyond CCaaS, so customers can take full advantage of our composable cloud platform with additional building blocks for solutions optimized to address their specific needs,” Avaya’s Austin said.

Thanks partly to the more than 275% sales boost that OneCloud saw in the third quarter, Avaya managed to surpass both revenue and profit estimates. The company posted earnings of $0.75 per share, 7% more than what analysts polled for the Zacks Consensus Estimate were expecting. The company’s quarterly revenues of $732 million topped analysts’ expectations, though only by a margin of less than 1%.

For its full 2021 fiscal year, Avaya is forecasting revenues of $2.93 billion to $2.96 billion. OneCloud is expected to account for between $490 million and $500 million of that total. By the end of next year, Avaya expects that OneCloud’s share of total sales will more than double. 

“We are again raising our ARR guidance and now expect to cross the $1 billion mark by the end of calendar 2022, about a year ahead of schedule,” said Avaya Chief Executive Officer Jim Chirico.

Avaya detailed in its earnings report that 60% of the recurring revenue generated by OneCloud came from customers of the OneCloud CCaaS contact center management platform. This suggests that the OneCloud CCaaS will continue to be a key driver of growth for the company as it moves toward the $1 billion annual recurring revenue mark.

Avaya didn’t disclose the financial terms of the CTIntegrations acquisition. The transaction closed earlier this month.

Photo: Avaya