Avaya’s big bet in vritualization seems to be paying off for its channel partners.

Since the company announced at its annual partner conference in November that it would be making all of its products available in a virtualized version, its channel partners are now seeing traction with those technologies, said Tom Mitchell, Avaya senior vice president of global sales.

“Virtualization is everywhere—it’s driving financial reconstructions to optimize costs,” he said. “Before people were used to having dedicated servers for our technology but now we’re seeing traction [in the other direction].”

Cloud also seems to be driving more customer conversations—especially at the top end of the market—as more companies look to shift from a capex to an opex structure. “We have seen 70 percent growth in this space year over year,” Mitchell said. “There is a lot of activity.”

While both plays tend to be migratory rather than “a single big bang,” Mitchell said the market is definitely on an upswing.

“The numbers are bearing this out. I think over the past year the economy was more cautious and there were a lot of people studying the options in the space and that stalled decisions,” he said. “Now people have come to the realization that maybe Microsoft isn’t free [for companies] to do Lync—it’s fairly complicated and there is a difference between proof of concept and a real network.”

Another bright area for channel partners, Mitchell noted, is the midmarket. It’s an area just about every vendor has tapped as rich in opportunity; however, Mitchell pointed out the successes Avaya’s partners have had in the space so far prove that it’s not just hype.

“We’ve had many partners investing in specific practices around the midmarket, and those businesses are growing 20 percent to 30 percent year over year. Partners are getting great returns,” he said, and Avaya has realigned its sales force to accommodate the growth and help its partners more. Also helping prime the pump is an expanded technology palette, which not only includes the virtualized versions of its communications products but also an IP communications solution—IP Office—which supports up to 1,000 users at a single location and addresses 80 percent of the total available market, he noted.

“I’ve seen partners do set-asides for different manufacturers, but never for segments of the business like this,” Mitchell said.

Driving much of the movement up and down the customer stack is a growing realization that companies have pushed their current technologies to the breaking point, Mitchell said. “There is a lot of old equipment out there because of the economy and companies taking a step back and waiting to see what direction technology is going to take. Not a lot of decisions were made. But now there are infrastructures out there that are 10 to 14 years old, and they work, but they weren’t designed to last that long. People understand they do have to remodel the house.”

Now, he said, conversations are moving past the “theoretical to commerce.”

“The consistent theme we are seeing is people want a migration path and the ability to refresh three and four years out,”—a much different tune from the one customers were singing even a year ago, he said. “I’m glad to see those conversations are actually happening.”