Circuit City, Radio Shack, BlockBuster, Borders, Brookstone….
What did all these companies have in common? They all were high flying billion dollar plus companies (Brookstone was only $407M in assets) that ended with bankruptcy. In virtually all cases there was one company that accelerated all these company’s demise… Amazon. Indeed, all of these companies were born from the cloth of brick and mortar storefronts and working capital intensive store-specific inventories. This formula, along with great marketing, propelled each of these companies to the top of their markets. Unfortunately, all too often with size comes product and corporate innovation stagnation. Inertia tends to blunt the real assessment of innovation and status quo becomes the default rationalized outcome for many decisions.
Of course, this phenomenon is the very essence of market evolutionary capitalism. Smaller, more agile and innovative companies tend to grow and displace the larger, older, less innovative companies. “Survival of the fittest” becomes “Survival of the most agile and innovative.” In the case of these companies, Amazon was the little company with the BIG transcending idea which was so different that none of these companies could truly evaluate the impact of such a breakthrough way of doing business, let alone, re-invent themselves as an effective online presence. No matter how much money and financial where withal they had, nothing could stop Amazon’s ability to out innovate and out maneuver these “old generation” slumbering giants.
This brings me to Avaya, its recent filing for Chapter 11 Bankruptcy, and its press release with statements aimed at its customer-base stating that they were focused on “minimizing disruption to our customers, partners, and employees and do not expect to experience any material disruptions during the chapter 11 cases.” I’m confident that, if you dug up the press releases of all the other chapter 11 companies discussed here, they would have a similar “comfort” statement. Unfortunately, history has a way of bringing back reality and the reality is that recovering from a chapter 11 filing with no impact to services and products is very hard to accomplish. Experienced employees churn, whole functional groups get decimated, knowledge gets lost, processes and procedures aren’t followed, things get dropped in the cracks and, in general, customers are greatly impacted. And when the products and services you provide are business-critical, waiting out a chapter 11 filing can be disastrous for your company.
Finally, the question most Avaya customers will be asking once they come to grips with the fact that nothing is going to be business-as-usual with Avaya, is, “Where do we go from here.” The clear answer that has solidified over the past 5 years is they should be looking to the cloud. Of course, if one thinks that they should be looking for the biggest cloud provider, once again (like Avaya once was), they might want to re-evaluate their selection criteria. Biggest is not always the best and in fact biggest can sometimes create increased probability of disaster in the near-term future. Innovation and agility are the key metrics one should be focused on when searching out a cloud vendor. Innovation in security, reliable operation, seamless integration and interoperability into your existing eco-system and the agility to leverage new technologies and new services to allow your IT infrastructure to be “futureproof.” Cloud vendors, like PanTerra, that maintain their agility while driving innovation are the cloud companies that will stand and deliver both today and tomorrow.