New Avaya pricing sparks cost concerns

15.05.2006
Avaya Inc.'s ongoing move to a user-based pricing model for its IP telephony software and other communications applications is raising concerns among some customers, who say that they face stiff cost increases under the scheme.

Avaya officials said last week that the company began rolling out the new pricing approach last year in order to simplify what had been a complex and inconsistent software licensing model that priced products in different ways.

But an Avaya user who asked not to be identified said he received a price quote in March for an upgrade to Avaya's Communication Manager 3.1 software that would increase his annual license costs almost fivefold, from US$60,000 to about $290,000. The customer, who uses the Avaya software to support 2,800 phones at two office sites, provided a written copy of the quote to Computerworld.

He said he is hopeful that Avaya will provide some relief on the proposed cost increase. If not, the user added, he will delay the software upgrade and consider switching to a rival vendor, such as Cisco Systems Inc. or Alcatel, within the next two years.

The pricing changes were the subject of two boisterous sessions at an independent Avaya user group's annual conference in Orlando two weeks ago, according to attendees and user group officials.

The new pricing scheme "was our most lively topic of discussion," said Renee Seay, CEO of the International Alliance of Avaya Users Inc. (InAAU) in Dedham, Mass. "Nobody used any four-letter words, but it was a pretty aggressive discussion."