Avaya CEO Steps Down For Health Reasons, VARs Wish Him Well

Lou D'Ambrosio, the dynamic chief executive of Avaya, announced Tuesday that he'll be stepping down from his post "to address a serious medical issue." His departure will be effective immediately.

In D'Ambrosio's absence, former Cisco Systems stalwart Charles "Charlie" Giancarlo will assume D'Ambrosio's duties until a successor is found. Avaya said its board will immediately launch a search to find a full-time replacement for D'Ambrosio using executive search firm HeidrickStruggles.

"It has been a true privilege to serve the customers and team of Avaya," D'Ambrosio said in a statement. "I have been blessed to lead a company that has clear technological leadership, a wonderful customer franchise, and the most dedicated team in the industry. I will be passionately rooting for Avaya and proudly watching the company thrive."

D'Ambrosio served as Avaya's president and CEO for two of his six years with the company and was responsible for Avaya's overall strategy, direction and operations. He was instrumental in Avaya's move to become a private company in October 2007 in an $8.3 billion deal with technology investment firms Silver Lake and TPG.

Before taking over as CEO, D'Ambrosio was president of global sales and marketing for Avaya, overseeing the communications company's $5 billion revenue stream. Prior to that, D'Ambrosio led the P&L for Avaya's $2 billion Global Services business unit, comprising 7,000 professionals across the full life cycle of services, including network consulting, integration, maintenance and managed services.

"For almost six years I've had the opportunity to be part of a remarkable company and team," D'Ambrosio wrote in a letter to Avaya employees dated Tuesday. "Avaya has become such a large part of who I am-"it's in my heart; it's in my bones. So it is with a very heavy heart that I tell you that I need to step down as CEO to address a serious medical issue. I will fight it with everything I have and I intend to beat it."

D'Ambrosio's exit and illness sent shock waves through the industry, with solution providers and industry analysts calling his stepping down a surprise and the circumstances surrounding it jarring.

"For me, it's more of a personal thing," said Neil Stanton, president and CEO of ConsultEdge, a Whippany, N.J.-based solution provider and Avaya partner. "You never want to see someone step down like that."

Stanton said D'Ambrosio took the bull by the horns and helped transform Avaya into a strong contender in the communications and VoIP market while also strengthening its channel.

"He's done a great job, everybody thought so," Stanton said. "It's a shame, but I don't think it's going to change our business."

Stanton said D'Ambrosio "looked tired" the last few times he saw him and noted that D'Ambrosio stepping down was the right move, considering his health problems.

Stanton credited D'Ambrosio for taking the channel in a new direction.

"His getting Avaya direct and the channel to work as a single unit really worked toward simplifying how Avaya does business and makes it easy for our clients."

Scott Davis, executive director of Xeta Technologies, a Broken Arrow, Okla.-based solution provider and Avaya partner, said he and his team have "a great deal of respect for Lou and Avaya and wish him well. Our thoughts and well wishes go out to Lou."

Davis said he's been pleased with his relationship with Basking Ridge, N.J.-based Avaya and the direction D'Ambrosio took the company in.

"We have a real respect for Avaya's landscape and their go-to-market strategy," Davis said. "We're consistently impressed with Avaya. Their go-to-market strategy is sound for unified communications and their contact center initiative is strong."

Industry analyst and Yankee Group Senior Vice President Zeus Kerravala called D'Ambrosio "an outstanding CEO" for Avaya.

"He brought a level of competitiveness to Avaya that it never had before," Kerravala said. "He helped Avaya shed the image that it was a stodgy old telecom vendor. He was much more aggressive with marketing and made it a global brand."

NEXT: Giancarlo to take the helm at Avaya.

And despite D'Ambrosio stepping down, solution providers said Avaya's move to have Giancarlo fill the position in the interim shows that the company can triumph over adversity and illustrates its ability to adapt when unexpected situations arise.

"This is about as good as you can do under the circumstances," Davis said. "We're really impressed with the way they're handling it. To have someone of Charlie's capacity able to fill in, that speaks volumes to their preparation. Charlie's resume speaks for itself. He single-handedly reconstructed Ethernet switching and Cisco's channel. I can't imagine they'd find someone better than that."

Stanton agreed, noting that putting someone like Giancarlo in place to take the helm at Avaya in the interim is a solid move.

"Avaya needs someone like Lou or Charlie. I liked Lou's salesmanship and strategic thinking. They need someone who's going to continue that," he said. "I would have no issue with [Giancarlo] taking over full time; coming from Cisco he really knows the industry. If he was in line to be CEO of Cisco, he's doing something right."

Giancarlo, who was picked by many to succeed John Chambers as CEO of Cisco, resigned from his post as executive vice president and chief development officer for the San Jose, Calif.-based networking powerhouse in December and took a managing director position at Silver Lake, a Silicon Valley technology investment firm and one of the two firms that partnered to acquire Avaya in 2007. Giancarlo had been with Cisco for 14 years and, at the time of his departure, was seen as second in command to Chambers.

Kerravala said Giancarlo and D'Ambrosio's permanent replacement will be charged with keeping alive the aggressive culture that D'Ambrosio started.

"That aggressiveness starts at the CEO, so Lou's aggressive presence there will be missed," he said. "But Charlie certainly knows the space. If you're going to replace Lou, it's going to be hard to find a better replacement than Charlie."

In the letter to employees, D'Ambrosio wrote: "Charlie Giancarlo will serve full time as Avaya's CEO until a successor is named. Charlie, who was recently executive vice president and chief development officer at Cisco, is a gifted executive and knows our space well. During his 14-year Cisco career, Charlie led many of the company's key business and technology initiatives. His customer focus, development savvy and sharp business instincts will be great assets to our company."

Avaya would not comment further on D'Ambrosio's departure or his illness. In a statement, Dave Roux, Silver Lake co-founder and non-executive chairman of Avaya, thanked D'Ambrosio for his work and said D'Ambrosio plans to stay aboard in an advisory role.

"Lou has been a guiding force at Avaya during his six-year tenure, the last two as CEO," said Roux. "He has shaped a compelling strategy, built a strong team, and led the company through important technology transitions to market-share leadership. We cannot thank Lou enough for his tireless leadership and inspiration, and we know he will attack this personal challenge with the same winning spirit and determination he has brought to the toughest business challenges."

Xeta's Davis said as upsetting as D'Ambrosio stepping down is, D'Ambrosio has to look out for his health and focus on getting well. He said he's confident Avaya will continue to make strides.

"We're very excited about Avaya," he said. "It's been a good year for us with Avaya, and we expect that to continue."