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 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. Source: Canalys, Calendar 2008 (Line size: 20-99)

SME Markets: The Power of AvayaN 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 Avaya + Nortel = 17.7% share in SME Next largest player is NEC with 11.8% share Known Reputation for “Evergreen” Strong Reseller Base WW & Avaya Connect Program # 1 Small Business Communications WW1 Solid Track Record for Converging Platforms 1 Source: Canalys, Calendar 2008 (Line size: 20-99)

Global SME Market Leadership Worldwide SME Unified Communications Product Market Opportunity ($End-User) Global SME Telephony Market Share Avaya + Nortel 17.7% Nortel 7.4% Avaya 10.3% $4+ Billion (Just Product) Avaya Inc. and Gartner, Inc. are both owned in part by Silver Lake, a leading financial investment firm. Gartner research is produced independently by Gartner analysts, without influence, review or approval of their outside investors or shareholders. For further information on the independence and integrity of Gartner research, see Guiding Principles On Independence and Objectivity on Gartner’s website, http://www.gartner.com/it/about/omb_guide.jsp NOTE: Analyst estimates for Nortel results include LG-Nortel; Calendar 2008 reported results may be restated to exclude that (relatively small) portion of Nortel share NEC 11.8% Others 45.9% Cisco 10.1% 2009 2010 2011 2012 2013 Alcatel-Lucent 7.5% Siemens 7.0% Source: Canalys, Calendar 2008 (Line size: 20-99) 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. 4

Avaya Strategic Priorities For SME Markets Simplicity Customer Service User Experience Customer Benefit Easy to understand, to buy and finance Solutions that help SMEs retain and acquire customers Applications that are intuitive to use Channel Benefit 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)

Investment Focus: Coverage Of Where Market Is Buying TDM/Key Systems Hybrid IP PBX SIP Software 43% decline in 2009 (Dell'Oro) Market nearly disappears by 2013 (Dell'Oro) NEC and Samsung are leading players (T3i Group) Double Digit growth in volumes returning in 2011 (Dell'Oro) 24% percent of SMBs say that they already have or are currently implementing a UC solution. (Forrester) Significant growth projected through 2012 (Gartner) SIP continues to gain strength as the dominant protocol used by all of the vendors playing in the VoIP market (IDC) Transition Declining Growing Projected Growth

Day One Portfolio: SME Communications TDM/Key Systems Hybrid IP PBX SIP Software Avaya PARTNER® Avaya Integral 5 Avaya Norstar Declining Avaya IP Office Avaya BCM Growing Avaya SCS Projected Growth

The SMEC Roadmap Will Streamline for Simplicity, Focus On Innovation Avaya Integral 5 Avaya Norstar Avaya BCM Avaya PARTNER® For Sale Today Avaya SCS Avaya IP Office 2010 2011 PLATFORMS CONVERGE All products remain for sale* 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.

BCM & Norstar Convergence With IP Office Nortel Partners What you like about BCM and Norstar stays Nortel Installed Phones Nortel Interface Nortel Features

BCM & Norstar Convergence With IP Office What you like about BCM and Norstar stays IP Office DevConnect Eco-Systems Nortel Partners Avaya New & Installed phones 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

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 AGENT POWER USER MOBILE WORKER 3.0 4.0 6.0 7.0 Merlin Integration PARTNER® Integration BCM, Norstar Integration Avaya AuraTM Integration Integral Integration

Avaya Product Lifecycle Policies All current SMEC products are available for sale throughout FY2010 No end-of-sale to be announced in FY2010 for any SMEC Nortel products Major heritage Nortel products will have at least 9 months notice Products have up to 6 total years of support following any end-of-sale date   Years 1 2 3 4 5 6 End of Sale Announcement minimum 9 months End of Product Orderability End of Manufacturers Support (Software) End of Manufacturers Support (Hardware) Extended Hardware Support (optional, for purchase) End of Extended Support 12

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

Evolutionary Path: SME Communications Portfolio Protect Extend Grow Support of Nortel Phones on IP Office Nortel management interface emulation on IP Office Eco-system of technology partner migration Nortel data management for migration E.g. call log, PBX configuration Feature Parity Increased R&D investment to focus on new features New talent, greater resources to focus on fewer products Innovation and market differentiation

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

How We'll Get You There: Helping Partners Achieve Business Value Embrace all Channel Partners with Avaya Connect Rapidly train Partners on the full Avaya portfolio to Extend and Grow all current systems Extend Grow Protect Accelerate SME partner services offers with Avaya technical expertise New offer launches in Q1 2010 Backbone support Extended warranty and advanced parts replacement Avaya and Partner Services

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

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

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