Small and Medium Enterprise Communications Product Strategy

Small and Medium Enterprise Communications Product Strategy & Roadmap Joe Scotto Director, Product and Solutions Marketing

Key Topics: Small and Medium Enterprise Communications Leadership Vision Portfolio Strategy Roadmap Source: Canalys, Calendar 2008 (Line size: 20 -99) Avaya is now the #1 WW Leader in small business communications To be recognized by SME markets and channels as the provider of choice for delivering the best plug and play communications experience in the industry. The strategy is to apply the key principles of simplicity, customer service and user experience in all of our portfolio and go-to-market activities. The roadmap is about investment protection for all of the combined company’s products, innovation for the future, and a view of how we’ll get there. HIGHLY CONFIDENTIAL UNTIL RELEASED IN JANUARY 2010 © Avaya 2009. All rights reserved.

SME Markets: The Power of Avaya. N SIP Software technology For SME Markets Expert in SME: Proven Track Records Focus: One of 3 Business Units Trusted Innovation and Investment Protection Strong Service Provider and Reseller Relationships Simplified Packaging For SME Markets Strong Reseller Base WW & Avaya Connect Program Solid Track Record for Converging Platforms Known Reputation for “Evergreen” 1 # Small Business Communications WW 1 1 Source: Canalys, Calendar 2008 (Line size: 20 -99) HIGHLY CONFIDENTIAL UNTIL RELEASED IN JANUARY 2010 © Avaya 2009. All rights reserved. 3

Global SME Market Leadership Global SME Telephony Market Share Nortel 7. 4% Worldwide SME Unified Communications Product Market Opportunity ($End-User) Avaya + Nortel 17. 7% Avaya 10. 3% $4+ Billion NEC 11. 8% Others 45. 9% (Just Product) Cisco 10. 1% Siemens 7. 0% Alcatel-Lucent 7. 5% Source: Canalys, Calendar 2008 (Line size: 20 -99) 2009 2010 2011 2012 2013 Source: Avaya analysis based on multiple industry reports (6/09); SME= firms with <250 employees UC Applications include Contact Center, Messaging, Audio/Video/Web Conferencing NOTE: Nortel results from industry analysts include results for LG-Nortel and other shipment activity that will be restated in developing a true baseline for combined Avaya-Nortel performance; Historical market shares may change. © 2009 Avaya Inc. All rights reserved.

Avaya Strategic Priorities For SME Markets Simplicity Customer Benefit Channel Benefit Customer Service User Experience Easy to understand, to buy and finance Solutions that help SMEs retain and acquire customers Applications that are intuitive to use Simple and profitable for channels to learn, sell, install, support Differentiated value propositions and services that save time Seamless integrations, EZ quote tools, roadmap influence (GRIP) © 2009 Avaya Inc. All rights reserved. HIGHLY CONFIDENTIAL UNTIL RELEASED IN JANUARY 2010 © Avaya 2009. All rights reserved. 5

Investment Focus: Coverage Of Where Market Is Buying TDM/Key Systems Hybrid IP PBX 443% decline in 4 Double Digit 2009 (Dell'Oro) 4 Market nearly disappears by 2013 (Dell'Oro) 4 NEC and Samsung are leading players (T 3 i Group) Declining Transition growth in volumes returning in 2011 (Dell'Oro) 424% percent of SMBs say that they already have or are currently implementing a UC solution. (Forrester) Growing SIP Software 4 Significant growth projected through 2012 (Gartner) 4 SIP continues to gain strength as the dominant protocol used by all of the vendors playing in the Vo. IP market (IDC) Projected Growth © 2009 Avaya Inc. All rights reserved. 6

Day One Portfolio: SME Communications TDM/Key Systems Hybrid IP PBX Avaya PARTNER® Declining Avaya Integral 5 Avaya Norstar Avaya IP Office Growing Avaya BCM SIP Software Projected Avaya SCS Growth © 2009 Avaya Inc. All rights reserved. 7

The SMEC Roadmap Will Streamline for Simplicity, Focus On Innovation For Sale Today 2010 2011 PLATFORMS CONVERGE Investment Protection: Products Will Converge with IP Office into best of breed solution *Note: In addition, support policy includes 3 years of manufacturer support beyond any effective end of sale date, as well as 3 years of Avaya service support beyond end of manufacturer support. All products remain for sale* © 2009 Avaya Inc. All rights reserved. HIGHLY CONFIDENTIAL UNTIL RELEASED IN JANUARY 2010 © Avaya 2009. All rights reserved.

BCM & Norstar Convergence With IP Office What you like about BCM and Norstar stays Nortel Partners Nortel Installed Phones Nortel Interface Nortel Features © 2009 Avaya Inc. All rights reserved. HIGHLY CONFIDENTIAL UNTIL RELEASED IN JANUARY 2010 © Avaya 2009. All rights reserved. 9

BCM & Norstar Convergence With IP Office What you like about BCM and Norstar stays IP Office Dev. Connect Eco-Systems Avaya New & Installed phones Nortel Partners Nortel Installed phones IP Office Management Nortel Interface IP Office Features (Resiliency, Mobility, etc. ) Nortel Features IP Office Platform You benefit from what is unique to IP Office © 2009 Avaya Inc. All rights reserved. HIGHLY CONFIDENTIAL UNTIL RELEASED IN JANUARY 2010 © Avaya 2009. All rights reserved. 10

Avaya IP Office Ideal for Converging Portfolio and for SME Markets 5. 0 IP Office 500 Single, Modular Platform Scales to 384 users per system, 32 sites Simple, role-based solutions 3. 0 Merlin Integration 4. 0 PARTNER® Integration Integral Integration 6. 0 POWER USER AGENT MOBILE WORKER 7. 0 BCM, Norstar Integration Avaya Aura. TM Integration © 2009 Avaya Inc. All rights reserved.

Avaya Product Lifecycle Policies 4 All current SMEC products are available for sale throughout FY 2010 4 No end-of-sale to be announced in FY 2010 for any SMEC Nortel products 4 Major heritage Nortel products will have at least 9 months notice 4 Products have up to 6 total years of support following any end-of-sale date End of Sale Announcement minimum 9 months 2 3 4 5 6 End of Product Orderability 1 Years End of Manufacturers Support (Software) End of Manufacturers Extended Hardware Support (optional, for purchase) Support (Hardware) End of Extended Support © 2009 Avaya Inc. All rights reserved.

Investment Focus: IP Office and SCS Overview IP Office Software Communication System (SCS) Hybrid IP PBX Single, Modular UC Platform SIP Software Open, Native UC Application Launched 2002 6, 000 users WW Launched 2008 Current deployment: <15, 000 users Managed on premise Managed in the data center Telephony-centric buyers IT-centric buyers Voice Resellers Service Providers Data Resellers Regional SIs © 2009 Avaya Inc. All rights reserved. 13

Evolutionary Path: SME Communications Portfolio Protect Extend 4 Support of Nortel Phones 4 Nortel data management on IP Office for migration 4 Nortel management 4 E. g. call log, PBX interface emulation on IP configuration Office 4 Feature Parity 4 Eco-system of technology partner migration Grow 4 Increased R&D investment to focus on new features 4 New talent, greater resources to focus on fewer products 4 Innovation and market differentiation HIGHLY CONFIDENTIAL UNTIL RELEASED IN JANUARY 2010 © Avaya 2009. All rights reserved. 14

Evolutionary Path: For Partners Protect Extend Grow 4 Protects installed base & 4 Extend their Expertise: 4 Become an IP Office Expert: Services revenue 4 Add or expand IP office 4 Leverage Dev. Connect to 4 Customers Can Stay deliver solutions 4 Get field sales teams Where They Are authorized to sell 4 Expand to new markets – 4 Continue to Sell / Upsell very small, mid market or 4 Get technicians Fast -Track trained verticals 4 Add SCS 4 Add Avaya Aura. TM © 2009 Avaya Inc. All rights reserved. 15

How We'll Get You There: Helping Partners Achieve Business Value 4 Embrace all Channel Partners with Avaya Connect 4 Rapidly train Partners on the full Avaya portfolio to Extend and Grow all current systems 4 Accelerate SME partner services ote Pr Avaya and Partner Services Grow d ten Ex ct offers with Avaya technical expertise 4 New offer launches in Q 1 2010 4 Backbone support 4 Extended warranty and advanced parts replacement © 2009 Avaya Inc. All rights reserved.

Key Recommendations What It Means For Your Clients Keep Recommending What You’re Recommending BCM and Norstar: For Sale Future Path For All Products Convergence to the IP Office platform Become An IP Office Expert Sales, Design, Install, Maintain © 2009 Avaya Inc. All rights reserved. HIGHLY CONFIDENTIAL UNTIL RELEASED IN JANUARY 2010 © Avaya 2009. All rights reserved.

Summary and Next Steps 4 New Avaya is #1 WW in Small Business 4 Strong portfolio, experience, innovation and reach 4 Buy today or tomorrow: You have a Summary secured path to the future 4 All products are investment protected 4 BCM and Norstar features will converge with IP Office 4 Note: Combined manufacturer and service support policy is six years beyond end of sale of any product 4 Migration of BCM and Norstar Experience Next Steps to the IP Office platform 4 Education and training 4 New promotions and programs

thank you For More Information: Contact your Consultant Relations Manager © 2009 Avaya Inc. All rights reserved. 19