Unified Communications: Where do we Go from Here?

Finally! It’s done!

After several  months of hard work, we have now completed the update of our World Unified Communications (UC) Markets study. The reason why I feel like celebrating (more so than after any other study) is because this market presents some unique challenges. Typically, we discuss and analyze markets by product or service category – e.g. the enterprise telephony platforms market, the enterprise media gateway market, the videoconferencing endpoint market, etc. But unified communications is all about … well, unification … that is, application integration. At the risk of repeating myself and stating what may be the obvious for some, here is how we define UC:

“Frost & Sullivan defines a unified communications application as an integrated set of voice, data and video communications, all of which leverage PC- and telephony-based presence information. UC applications are meant to simplify communications for the end user by making it easy to “click to communicate.” A unified communications application must contain the following:

  • PC-based presence (online or offline)
  • Telephony presence (on the phone or available for a call)
  • Point-to-point voice calling
  • Chat (i.e., instant messaging)
  • Audio conferencing
  • Web collaboration (application, file, and desktop sharing)
  • PC-based video
  • Find-me/Follow-me capabilities (for call routing)
  • Unified messaging

A unified communications application may include the following:

  • Mobile client
  • APIs for easy integration with other applications
  • Social networking capabilities
  • Wikis/blogs
  • Integration with room-based video conferencing
  • GPS or other location information”

The past couple of years were challenging for communications vendors as the recession forced many businesses to suspend or delay investments in communications technologies. Tighter budgets limited the penetration of most UC applications. The telephony market was one of the hardest hit, as most vendors experienced double-digit year-over-year revenue declines. Conferencing applications and services fared better, as they allowed businesses to reduce travel costs while enabling virtual workers to communicate and collaborate more efficiently. Even conferencing markets, however, experienced increased price pressures, with the impact of the recession being most severe in conferencing endpoint markets and in the more mature audio conferencing services markets.

In 2009, UC vendors focused primarily on penetrating the market with advanced UC clients. IM and email vendors aggressively upgraded their customers to UC-capable IM clients and architectures. Similarly, telephony vendors bundled advanced softphones capable of integrating with IM clients and conferencing platforms with the rest of their telephony solutions to encourage adoption. While these vendor strategies help increase user familiarity with software-centric communications and their benefits, they are not strongly correlated with investments in the rest of the infrastructure required for a complete UC implementation. Customers deploying softphones from their telephony vendors did not always purchase the conferencing and/or IM/presence servers. Similarly, many customers who purchased Microsoft’s OCS Enterprise CALs did not choose to use OCS voice or to integrate OCS with the corporate telephony system.

Overall, we do not believe UC will be a big revenue source for the vendors (which is great news for customers!) That said, we believe it is here to stay. Vendors will give away UC clients to drive adoption of various advanced communications solutions – conferencing, collaboration, mobility – as well as telephony and IM infrastructure refresh. As business users become increasingly used to the convenience of certain UC capabilities such as soft clients, conferencing capabilities that are only a click away, affordable video, and so on, it will be difficult to take those away from them.

But who should customers turn to for their UC capabilities? There is no single right answer, of course. Two distinct business models have emerged: on-stop shops and best-of-breed integrations.

For SMBs, all-in-one appliances or application stacks are probably most appealing. However, few vendors are capable of offering, on their own, all the required functionality and features in the UC stack. Either the telephony component is still missing critical elements (such as E911), or the IM clients are not very feature-rich, or some other capability is lacking.

Larger customers with multi-vendor environments are better off selecting the specific applications that best meet their needs and then engaging their own (typically more extensive) internal staff or outsourcing the professional services expertise to integrate those capabilities in an end-to-end UC environment. Limited vendor interoperability along with scarce UC expertise will present some serious challenges to this approach in the near term but will become less of a concern in the future.  Growing adoption of SIP and SOA and application enablement technologies, and vendor strategies focused on contextually-rich communications and communications-enabled business processes will have a major impact on vendor interoperability and will eliminate a great portion of the hassle and cost related to application integration and UC implementation.

Generally, UC adoption may remain limited to specific user groups (e.g. knowledge workers, marketing and sales people) for the next few years, until business models make it compelling for the average communications user to own a UC solution even if they are not using all of its capabilities and not benefiting as much as the early adopters.

Here are some recommendations to end users considering UC:

  • Businesses should leverage their communications investment to gain a competitive advantage and should make new technology acquisitions with their key strategic objectives in mind.
  • Vendors are engaged in a more fierce competition than ever before. Customers can exploit this opportunity to require exceptional value for their money.
  • Customers need to future-proof their investment. They should seek to deploy open and flexible standards-based technologies. Further, they should demand extensive education and training on features and integration capabilities to ensure that they can easily switch among or integrate multi-vendor solutions.
  • Customers should pay attention to their vendors’ and channel partners’ overall financial stability. The recession has weakened a lot of market participants and growing competition will further jeopardize their viability.
  • Customers need to restructure internally to ensure they gain maximum value from their IT and telecom investments. They must ensure cooperation between the telecom and IT teams so they can effectively coordinate new investments and ongoing infrastructure management.
  • Finally, customers should explore alternative delivery models (e.g. managed services, hosted solutions, etc.).

For more information on our study, please contact me at or review related material on our web site at

VoIP Network Monitor ‘SIPQOS’ Launches Beta

Many of us have struggled with VoIP Network Monitoring, keeping tabs on our network without having to manually review the health is always a hassle and concern. For every network my team erected we needed to erect a proper monitor. For smaller networks and even VoIP phone systems the traditional Network Monitors were far to expensive to implement and required port mirroring which meant servers had to be deployed in the VoIP network that required monitoring.

So, we created SIPQOS… SIPQOS is a service that allows VoIP network administrators to attach virtual SIP endpoints to their network which send calls to-and-fro and monitors those calls for interruption. It’s a simplistic approach to a complex problem, if the network drops a registration or if a call fails it’s likely (from personal experience at least) that the issue applies to the entire network and other endpoints are experiencing the same problem. SIPQOS won’t take the place of more expensive in-network solutions but it does a great job of providing redundant VoIP network monitoring and SIP-based VoIP phone system monitoring as well.

An excerpt from the announcement we made on the 10th…

VANCOUVER, February. 10SIPQOS (pronounced SIP-KWOSS), a new entrant in the VoIP network monitoring market has launched a beta of its remote VoIP network monitoring service today. SIPQOS released the first product to bring the power of remote VoIP network monitoring by combining embedded SIP (Session Initiation Protocol) User Agents, web services and some secret sauce. SIPQOS monitors VoIP networks remotely and alerts network administrators when a problem has been detected.

SIPQOS is doing a great job for us and provides redundant VoIP network monitoring on a production network we run today. It also fills a void where others solutions fell flat, SMS alerts are critical and SIPQOS delivers in spades on that front. Those interested should give it a whirl, it’s free to sign up and the plans after the 30 day trial are cheap by anyone’s standards.


Let me know what you think

Nortel’s bankruptcy and Avaya’s acquisition of its enterprise assets has caused uncertainty and fear among Avaya and Nortel customers and partners. Avaya recently presented its vision for the evolution of the combined product portfolio. I would like to hear from businesses, VARs, SIs, etc. about their specific concerns. Did Avaya’s roadmap alleviate some of these concerns or did it raise new ones? Which choices did you think were good? Which ones were wrong? Do you trust Avaya’s commitment to both installed bases and both channels? What would you wish to hear from Avaya? What strategy direction would best serve your needs?

As a Frost & Sullivan analyst I do not endorse any particular vendor. If you email me your opinions, I will protect your privacy and will only use your insight to develop an aggregate perspective on customer and partners sentiments.


Transformation: Key Element of Alcatel-Lucent’s Strategy for the Communications Market

I have just returned from an Analyst Event hosted by Alcatel-Lucent’s (ALU) Application Software Group – now comprising its enterprise applications development and sales team and the Genesys portfolio and organization. Besides being a highly entertaining event at a fabulous locale (Rosewood Sand Hill Hotel in Menlo Park), this gathering also provided analysts with a good perspective on ALU’s strategy for the UC and contact center spaces. ALU demonstrated its determination and ability to continue to lead in the communications markets with innovation, openness and strong financials.

The following are some of the takeaways from the event.

Transformation: For some time now, ALU has been sharing its vision for a necessary transformation in the enterprise, involving various technology and organizational changes. One of the aspects of this transformation process is the merger of enterprise and contact center technologies and business processes. With the merger of its enterprise and contact center teams into the ASG structure ALU is setting itself up for more targeted transformational product development and marketing. This organizational structure is unique (to my knowledge) and could enable ALU to more effectively develop and promote innovative capabilities creating new opportunities and expanding its addressable market.

For a long time, ALU has sought to leverage Genesys’ contact center success into the more general enterprise space, but has not been able to implement a powerful and coherent strategy to complement its vision. With the merger of the two teams and the prospects of cross-selling and up-selling customers across the enterprise and contact center markets, ALU may be on a path to finally bring its vision to fruition. Moreover, it may be able to set a trend in the communications market that will drive a transformation of vendor organizations leading to an accelerated convergence of enterprise and contact center infrastructures and decision making processes among customer organizations.

Some of the specific objectives pursued through its Transformation strategy include:

  • Delivering expanded solution offerings
  • Presenting one face to the customer
  • Leveraging a wider choice of models

Some of the specific steps in the merging of the two silos involve the extension of presence and UC into the contact center and the ability for customer service interactions to extend into the enterprise pool of experts. This notion is not entirely unique to ALU, but all vendors are at the initial stages of developing the technologies and strategies to implement this vision. If ALU is successful in leveraging its new organizational structure to more efficiently market these new capabilities, it may be able to develop a sustainable competitive advantage as “the walls of the contact center start coming down” (as prophesied by ALU’s executives).

Application Enablement: Another message that ALU has consistently tried to convey to its customers and partners over the past couple of years is that of its application enablement efforts and capabilities. Application enablement has become a key element in communications vendor strategies as they look to integrate with other vendors’ applications in order to deliver greater value to their end users. 

I need to take a step back before I discuss ALU’s application enablement strategy further. One of ALU’s perceived competitive advantages is the combination of carrier and enterprise product and service organizations. Since FMC has demonstrated little success to date and these continue to be two very distinct silos, I have wondered whether there were any true synergies between the two groups within ALU. As ALU revealed its vision for application enablement, it started to become more apparent about how the carrier and enterprise/contact center groups could leverage each other’s capabilities for greater success.

Here is how ALU defined its vision for application enablement bringing the carrier and enterprise application worlds together: “Consistent, Controlled, Open Access to Network Enablers in the Cloud”. For example, ALU’s idea of application enablement involves the integration of carrier applications with enterprise/contact center ones to enable capabilities such as enhanced caller profile (with presence, location, preferences from subscriber data, etc.) that can prompt an appropriate action by the respective business or organization – e.g. marketing and customer assistance at the right time and place. It also brings the mobile and enterprise experiences together by enabling mobile users to collaborate using multi-media capabilities on mobile devices. Overall, application enablement allows business users to participate in contextually rich, presence- and location-enhanced communications and collaboration.

ALU is working with partners to develop new applications and capabilities. It claims over 200 applications and about 10,000 developers in its Alliance and Application Partner Program.

Further, ALU’s vision for the convergence of the carrier and enterprise worlds is based on the anticipated growth in demand for hosted/cloud-based communications. It is readying its portfolio and service resources for a variety of scenarios – from fully premises-based to hybrid to fully hosted ones.

Main Technological and Strategic Tenets and Success Factors

ALU is looking to leverage a set of capabilities that can set it apart from other communications vendors. What end users and partners should take into consideration when evaluating ALU as a potential vendor or partner, include the following:

  • It boasts some of the most open technologies in the marketplace, both on the enterprise and Genesys sides. It can deliver advanced communications and collaboration capabilities in a multi-vendor telephony environment. It is set on a technological evolution path leading to increasingly more open, software-centric solutions based on SIP. These capabilities make ALU a viable option for existing Nortel customers wishing to avoid a drastic rip-and-replace scenario, but looking to overlay some advanced capabilities on top of existing platforms or to prepare themselves for a transition to a new infrastructure in the future. Further, the openness and modularity of ALU’s technologies counter-position it against Cisco and its over-arching strategy of locking customers into an end-to-end Cisco architecture.
  • In the UC market, Alcatel-Lucent (ALU) has positioned itself for competition both as a one-stop shop for a broad range of UC applications and a voice communication partner to the IM/presence vendors such as Microsoft and IBM. It provides the My Instant Communicator (MyIC) application (supported on its My Teamwork multimedia platform) that integrates telephony and online presence and can perform multiple functions. It can act as an IM client and a softphone interface to ALU’s voice communication and conferencing platforms; it can also invoke other IM clients such as IBM’s Sametime or Microsoft’s Office Communicator. ALU’s UC solution is modular and flexible allowing customers to deploy only the capabilities and respective servers (telephony, presence, conferencing, etc.) that they require with the ability to add applications and integrate them into the UC environment in the future. This architecture makes ALU a viable option for businesses with multi-vendor communication environments looking to deploy advanced conferencing and UC capabilities without replacing existing call control platforms. 
  • Further, ALU’s application enablement strategy and respective capabilities are likely to provide it with a competitive edge going forward as businesses look to integrate UC with mobile applications, contact center technologies, business processes and various Web 2.0 applications. Business decision makers will need to start evaluating communication technologies as a strategic investment in improving business processes and will, therefore, need to require their vendors to demonstrate an ability to integrate with other, existing or planned platforms and applications. ALU’s application enablement capabilities should be taken into consideration when selecting a communications vendor.
  •  With its carrier technologies and existing relationships, ALU is well positioned to drive carrier and enterprise convergence delivering similar or coherent applications across the two silos. In some scenarios, businesses may be able to derive significant benefits from hybrid cloud and premises-based communications infrastructure solutions. ALU will be well positioned to deliver both capabilities in a tightly integrated fashion.
  • ALU executives stated that they intend to create new market opportunities and expand ALU’s addressable market. I believe they have a powerful vision and their success will depend entirely on their ability to execute. For that purpose, organizational structure and business practices related to the convergence of enterprise and contact center, carrier and enterprise groups, will need to be tightened. Greater focus on solution selling and customized transformational engagements with business customers will be key to success. Last, but not least, financial performance will need to improve in order to provide the company with greater resources to fulfill its vision.

Open Standards, SIP and SOA: Summer of Love in the Communications Market?

Avaya-Nortel: SIP Architecture Becomes Foundation for New Product Roadmap
As I listened to Avaya’s new roadmap announcement on January 19th and wondered if they made all the right decisions, I couldn’t help thinking about the complexity of an M&A process and its implications for everyone involved. This article is not about the specific product choices Avaya made, although I thought they did a good job taking multiple factors into consideration including product features and capabilities, customer and partner investment protection concerns, and vision for the evolution of the total portfolio and architecture. Extending the life of most Nortel products for another 18 to 30 months and continued support for Nortel’s more advanced and unique products such as Nortel’s AS5300 were good calls. I was surprised to see so many end users inquire about the fate of the Call Pilot and I am glad Avaya had some good news for these customers. I also thought Avaya’s decision to keep and evolve ACE was the right one as I believe ACE and application enablement will be key for its competitive positioning going forward.

It is only natural that Avaya intends to eventually merge and integrate all products and solutions into the Aura architecture. Aura is a technological framework (and not just packaging or a marketing term) based on SIP and SOA, and it makes sense for Avaya to look to integrate its now extended product line into the same vision or framework. It will be critical for Avaya to continue evolving this framework with an eye on new technological developments and customer and partner needs.

Application Enablement and Openness Drive New Competitive Dynamics
I think we should, however, look at the Avaya-Nortel acquisition from another angle as well. It provides an example of portfolio integration challenges and possibilities in the context of current technology trends towards greater openness and interoperability.

The shift to open standards, SIP and SOA is now making such acquisitions less painful than they used to be in the past – for the merging vendors, the channel partners, and their business customers. It will take Avaya less time and effort to integrate the best-of-breed applications of both vendors into its Aura framework because of the greater openness and interoperability of both vendors’ advanced communications solutions. Customers can more cost-efficiently mix and match platforms and aplications, not only from these two vendors, but from other vendors as well, since communications are becoming more software-centric and standards-based. Overall, today, customer investments are better protected and less vulnerable in case of abrupt changes in competitive dynamics.

In Avaya’s case, SIP, Aura and ACE will play key roles in delivering a more flexible and cost-effective migration path to its customers. Other vendors have their own next-generation architectures and application enablement environments that allow them to integrate with competitors’ platforms and applications. The capabilities of each vendor’s application enablement technologies vary from a more limited set designed to integrate communications with messaging and presence platforms (e.g. Avaya’s AES) to a broad range of capabilities including integrations with messaging, presence, business process, Web 2.0, mobile, and contact center applications, TV and video broadcasting, etc (e.g. Nortel’s ACE).

As unified communications become further integrated with digital content, business process applications and other, non-communication technologies enabling “contextually-rich communications” and “communications-enabled business processes (CEBP)”, vendors will need to open their solutions and create tools for customers, partners or their professional services arms to develop custom solutions addressing specific customer needs. Such tools and application enablement environments can be made available to large communities in the cloud so that multiple parties can contribute to the process of creating new applications and mashups. Some of these new mashed-up applications that can be deployed out of the box can eventually become productized to provide a more cost-efficient alternative to SMBs and a new revenue stream for vendors.

Application enablement capabilities will be key for all communications vendors going forward, but they will be even more critical for vendors providing best-of-breed solutions designed to operate in multi-vendor environments.

Of course, vendors have a long way to go before standards become truly open and customers can seamlessly, quickly and easily integrate multi-vendor applications. SIP, though touted as the communications standard of the future, in its pure form offers only a limited set of features. Entirely or partially proprietary solutions still offer better features and capabilities than most open-standard ones. Therefore, although most vendors claim SIP support, the different versions of SIP used along with the proprietary enhancements are not entirely interoperable.

Most likely, the cloud and cloud-based communications will help push further the frontiers of openness and interoperability. Instead of connecting multi-vendor applications and platforms individually at each customer’s premises, vendors can integrate more economically and on a larger scale in the cloud, delivering choice and flexibility to their customers unmatched in the premises-based world. In the beginning, many of these cloud-based services will be simple and will only offer some lowest common-denominator capabilities, but will enable some integrations out of the box, sparing customers the hassle and the cost of complex integration processes taking place in premises-based installations.

Partnerships, Alliances and M&A in a More Open Communications World
Customer demand for application integration will drive vendor efforts towards greater interoperability and co-opetition. Improving standardization and openness in communications technologies, in turn, will enable vendors to more easily engage in partnerships and alliances in order to deliver greater value to their customers.

There are multiple reasons why companies wish to merge. Most often, they are looking for new revenues streams, but also – for opportunities to more tightly integrate their technologies and deliver a one-stop shop value proposition to customers. Will more open architectures reduce the appeal of complex M&A processes in favor of partnerships and alliances? Should we expect further market concentration or the proliferation of more innovative and nimble market participants providing business customers with a wide array of options?

Power in the top tier has become concentrated, but the SMB market remains quite fragmented. While it will become less appealing to go through an M&A for the purposes of ensuring technology integration, it will also become less challenging to integrate portfolios in case of an M&A. M&A will likely take place for the purposes of acquiring installed bases, skill sets and business models (e.g. professional/managed services), simply eliminating a competitor, or for geographic expansion. I believe both trends (consolidation and fragmentation) will persist, but the drivers behind vendors’ business model decisions will change. What do you think?

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