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End Users Reveal Investment Priorities for 2011 and Beyond

As we eagerly anticipate the New Year, we are all wondering what it holds in stock for us. Will the global economy continue on a growth path or will there be more turbulence in certain geographic regions or industry sectors? Where will the next natural disasters strike and how will we be able to cope with them? What role will technology play in the economic recovery and man’s continued strive for power over nature?

From a more pragmatic point of view, we also wish to know if businesses are looking to invest in communications and collaboration technologies in 2011 and beyond. Are technology budgets increasing and where are telecom and IT decision makers looking to spend their money?

Frost & Sullivan recently completed its 2010 communications & collaboration technologies end-user survey, which targeted 200 North American C-level executives and identifies their investment priorities and adoption drivers for advanced technologies including IM/presence, UC, audio, web and video conferencing, telepresence and collaboration. The survey revealed that the majority of decision makers seek to increase or maintain their investments in advanced IT and communications technologies over the coming year. An impressive 50% of respondents expect their communications and collaboration budgets to increase over the next 12 months, while 47% say their budgets are likely to remain the same. Respondents explain budget increases with the need to improve productivity and to take advantage of technology advancements.

Approximately half of surveyed companies allocate up to 30 percent of total expenditure to IT. Sixty percent allocate up to 30 percent of total expenditure to communications and collaboration technologies. The largest share of the surveyed companies allocate up to 15 percent of their communications budget to new technologies, such as unified communications and collaboration. CEOs, CIOs, and CTOs have the most influence at the final budget approval stage.

Generally, respondents evaluate all communications and collaboration technologies as similarly important. Improving collaboration and productivity across geographically dispersed teams prove to be the primary benefits among the majority of tools. It is also worth noting that most surveyed technologies satisfy or even exceed C-level executives’ expectations. Yet, current and future demand for specific communication and collaboration tools varies based on perceived value to the organization.

Similarly, demand for advanced communication and collaboration technologies varies by industry (vertical).

As businesses look for operational efficiencies and revenue growth in 2011 and beyond they will seek to invest in technologies that deliver a competitive advantage. For detailed industry forecasts by product segment and geographic region, please visit www.frost.com.

Happy New Year!

WebRTC

Bill Vass, Former CIO of Sun Microsystems, on Technology Trends in 2011 and Beyond

I recently had the opportunity to speak with Bill Vass, former CIO of Sun Microsystems, about some technology trends such as virtualization, cloud and mobility.

With more than 30 years of technical and IT management experience, Bill Vass is an industry leader in the field of information technology. Prior to its acquisition by Oracle in January 2010, Sun Microsystems Inc. was a global fortune 100 company with a 26-year history of providing networking computing infrastructure solutions. For 15 years, Sun had a highly flexible work policy that allowed 19,000 employees to work away from the office at least one day per week. Bill Vass and his team selected and implemented the technology to support this highly effective virtual organization.

Elka Popova (EP): Hi Bill. You have a tremendous amount of experience in deploying advanced technologies to support Sun Microsystems’ transition to a more flexible work environment. I would like to hear your perspective on future technology trends.

In view of some key demographic shifts – growth of the virtual organization, consumerization of the enterprise, mobility, etc., what technology trends do you think will shape the market in 2011?

Bill Vass (BV): I think SaaS is going to continue to grow. I think there will be a lot of challenges in integrating SaaS, though. Consumerization will continue to grow as consumer devices penetrate the workplace. I think that will drive organizations to virtual desktops. So the idea would be – we don’t buy you clothing to come to work; we don’t buy you a car to come to work; why do we buy you a PC? I think that is the way it is going to move; and you just choose anything you want; we don’t care; when you are ready to work, we will give you a virtual desktop. That way we will keep our corporate data safe in the corporate cloud; and you can work on any device you want – you can work on your iPhone, or your Android phone, or your iPad, or your Mac, or your Dell Ubuntu box, or your HP Windows box, we don’t care.

Virtual desktop and understanding that environment is going to grow significantly. What you see happening with SaaS is very interesting. I was at a CIO conference with Fortune 100 CIOs. I asked them “How many of you are using SaaS today?” And 60% of them raised their hand. And then I asked them “How many of you, CIOs, selected those SaaS apps?” And no one raised their hand. And the reason is – just like with consumerization, where people are using their own devices, business leaders and users are selecting their own applications.

Picture this scenario. The business leader goes to the CIO and says ”I need this CRM system.” And the CIO says “Well, there are probably 1,100 interfaces on our CRM system. We will have to run it in a SAS70 data center; we will have to go through Sarbanes-Oxley; we will have to buy these additional products and install them and integrate them, and so on. Give me $13 million and 18 months and I will have it for you.” And the guy rolls his eyes and goes back to his office.

But then the salesforce.com sales person comes in and says “I can give you CRM right now, just give me your credit card. It’s only $25 an employee!” And the business leader gives them a credit card, and next thing you know, he’s got 5,000 people on salesforce.com. And then the same thing happens in HR; so then the HR system is on Workday. And then it happens in all these other places.

But then you have to manually type all this stuff people typed in salesforce.com into the Workday program, and into the ERP system, and the Order Management system. And the next thing you know, the business ends up hiring this huge staff to do this – for instance, type a new sales person’s information into all the systems, because these things are not integrated. And then the business leaders go back to the CIO and say “Hey can you automate this for me, just like it used to be?” And the CIO scratches his head and says “Oh, God, there are still 1,100 interfaces; you didn’t make these go away; you didn’t make the Sarbanes-Oxley requirement go away; you didn’t make the integration testing go away.”

I think there is going to be this time of chaos – SaaS chaos and revelation; immense growth of SaaS and immense growth of consumerization, and then a rationalization to virtual desktops, and a managed SaaS environment with integrations for SaaS.

You will also see lots and lots of companies putting up what I call private clouds, which is nothing more than continuing to do desktop virtualization and server virtualization, but with more automated provisioning.

I think you will see people waking up about closed wireless systems, and wondering why they are running these closed wireless systems, while they already have environments where people are working on unsecured wireless systems. And they will get the idea of having a wireless provider run it for them instead of them trying to run it themselves.

I think you will see pico cells being installed and replacing the desk phone altogether. Maybe you will see some more complicated phones at the receptionist’s desk, but for everybody else, who already has a cell phone, you will see pico cells which will improve reception and, now that you are not paying for wireless minutes while in their corporate buildings, you can also do it more economically than you did before. It becomes a very compelling option to give everyone a cell phone. And then you have the added advantage of letting everyone use their device, as long as you have a Web service environment, virtual desktop, and you can deliver an edge mail service.

You will start to see networks being turned inside out. But you will also see tons of companies doing it the old-fashioned way. There are companies still using mainframes, right? It’s not going to change overnight. You will have banks and governments who are very slow to change. And for good reasons around security and all those other things. But the real dichotomy you will run into is the competition between virtual enterprises and physical enterprises. It’s going to be staggering over the next few years.

In the end, the virtual enterprises will be so fast and flexible, and they will be able to run competitive rings around the “old fashioned” companies.  Not only will the virtual enterprises be more fast and flexible, they will have a much lower overhead of operation than the traditional way of providing IT services in big companies.  They will be able to expand and contract faster, get into new markets faster, and get the best talent from all over the world, without geographic limits. 

EP: Bill, how strongly do you believe in cloud architectures? Do you think businesses will increasingly leverage external clouds? Which applications do you believe are best suited for the cloud?

BV: A lot of companies will be deploying private clouds, mostly virtualization with automated provisioning.  However, it’s important to note that these concepts are not new, IBM invented virtualization back in the late 60s and what we call cloud computing in the early 70s.  What we are seeing is just another cycle of centralization from decentralization but now on top of more open platforms.

The thing that will slow the movement to public and even private clouds will be the normal politics between different parts within large companies, but newer / smaller companies will not have these issues.

If I started a company today, I wouldn’t install any servers, I wouldn’t install any phone systems, I wouldn’t install any wireless systems. I would go to 802.11 service provider and have them run wireless APs in my office. I will have pico cells installed on the wireless  network and give everyone cell phones. I would go to Workday for my HR, and salesforce.com for CRM, and I’d build an IT environment that costs maybe about $2K a year per employee. The old-fashioned way, it cost about $17K a year per employee (business systems, plus network and hardware, and data-centers). So you will have a company with an overhead of $2K a year per employee competing with a company that has an overhead of $17K a year per employee. You have a company that can double its size in a day because of its virtual environment; it doesn’t have offices. And then you have a company that has this real-estate portfolio that’s slow to change. You are going to start to see these battles.

And the other thing that you are going to start to see is anxiety among the IT organizations about their jobs, and their place among all this. In a virtual company, the CIO is the same person who does real estate and who does purchasing. That’s a scary thing for CIOs; that’s a scary thing for the whole environment. That is also going to slow change and the adoption in the big companies.

The virtual companies will put everything in the cloud. They don’t have a legacy. Companies with a legacy will try to gradually move everything in the cloud, except their ERP systems. Mail, calendar, that will go faster – nobody is going to run those on the premises, that’s the dumbest thing in the world. Your web sites – why would you run that; just go to Amazon and have them run them for you.

I think desktop virtualization is going to go to the cloud; but most companies are going to run this internally, at first. I think you are going to see custom apps stay inside the premises, but commercial apps move to a more SaaS environments. I think the easiest stuff to move is the stuff that you don’t have to deal with Sarbanes-Oxley about. There are companies that legitimately have custom requirements, and companies that legitimately have security requirements that will prevent them from moving to SaaS. Those would be banks and governments, and other similar organizations. But even they should be delineating what they can take advantage of in the cloud. But they should also be careful about what they put in the cloud and make sure they don’t get locked in with a SaaS provider, and have an exit clause in contracts, and make sure they understand the SLAs properly.

EP: How about voice, Bill, corporate telephony? When will it get moved to SaaS on a large scale?

 You know, the way I see things going, people would just put pico cells in their offices and use mobile phones. I think VoIP, beyond using it for Skype or something like that, might start to become one of those things where you ask yourself “Why did we even bother to develop something like that? We all have cell phones any way.” Why would you go and put in a bunch of Cisco VoIP phones in your company if you all have cell phones? What if you could reduce the cost and improve the quality by just putting in a bunch of pico cells?

EP: I think one big question on many customer and vendor minds is whether all-in-one solutions will eventually become more dominant. Currently, most businesses deploy best-of-breed architectures and this approach has both its advantages and disadvantages. Some vendors are making concerted efforts to become the one-stop shop for their customers’ communications needs. Where do you see the potential for this approach, especially in view of the SaaS and mobility trends you just talked about?

That’s what I referred to earlier as the chaos of SaaS that’s coming. What I described about the business users going and selecting SaaS on their own, outside of the organization, is going to continue and they will do it on the principle of best of breed. And then this giant chaos is going to occur, maybe 4 or 5 years from now, when we try to figure out how to integrate all the SaaS apps together into a best-of-breed environment.

The trouble with the all-in-one systems – old companies that have all-in-one systems are going to resist moving to SaaS. New companies, that don’t have anything, are going to move to SaaS right away.

I don’t think that any single SaaS provider is qualified to provide everything to a company. Certainly it’s simpler to get everything from the same company; but everyone who has had the experience knows how unpleasant it is when you are negotiating your next year’s support costs and there is no competition.

EP: When do you believe IT and telecom will fully merge – technologically, organizationally and in all other related aspects?

BV: One of the areas where I worked with Mitel a lot was this combination of the desktop and the phone. The challenge is that those two groups – the people who manage the desktop and the people who manage the phone – don’t talk to each other. And they are both threatened by each other. It is a people problem, not a technology problem. I think it is still going to be a long time before they merge, because they are two different camps internally and two different sets of vendors. I think what will cause them to merge is the younger generation coming in. They are already using Skype on their desktop, they are used to SIP-compliant VoIP on a desktop, and used to working on a cell phone. And those are the things that will drive the change; I don’t think organizations on their own are going to change.

EP: Bill, thank you very much for your insights. I think many CIOs as well as vendors and SaaS providers will appreciate your perspective on technology evolution.

gdpr, WebRTC

Organizational Transformation Calls for a New Communications Infrastructure

Rise of the Virtual Organization

Today, we are witnessing a powerful transformation in the business space. The very nature of the workplace is changing, as more and more people are working in locations that are different from those of their colleagues, managers and direct reports. It’s no longer the case that road warriors—sales people, service personnel and executive management—are the only people who routinely work outside the office. These days, everyone from contact-center agents to HR managers to general knowledge workers are likely to spend at least some of their time working from a remote or home-based location, and as the lines between home life and work life continue to blur, many employee find themselves “on the job” even as they watch their kids’ soccer games or commute on the train to the work.

One key factor driving organizational sprawl is the globalization of business. As businesses tap into new markets looking to expand customer reach and grow revenues, they also acquire local talent and maintain local presence through a growing number of branch offices and remote sites. As a result, functional teams increasingly span multiple, geographically dispersed locations.

But there is also a growing tendency to offer employees a better, more balanced life style. Many businesses today are creating flexible work programs – with flexibility extending to both employee workplace and working hours. Such programs enable businesses to accomplish three key objectives:

  1. Reduce facilities costs (including real estate, utilities, equipment, furniture, etc.),
  2. Reduce employee commuting costs and improve employee satisfaction and retention (and possibly productivity),
  3. Spare the environment by reducing fuel emissions.

Some refer to these benefits as the Triple Bottom Line. There’s no doubt that the virtual workplace offers significant advantages to companies and their employees. Myriad third-party research supports the benefits. For instance, in a 2009 study, the Institute for Corporate Productivity (i4cp) reports that 84% of companies believe that flexible work arrangements in their organization boost employee morale. That’s up from 76% over 2008. And 78% of polled companies say flexwork options bolster retention rates, up from 64% the previous year.”[1]

Meanwhile, a 2008 report from Corporate Voices for Working Families[2] notes that in a 2007 survey of senior-level executives at large corporations, respondents reported an overwhelmingly positive experience with flexible work strategies. By a ratio of 9-to-1, respondents reported that flexible work strategies have a positive effect on helping organizations reach business goals.


[1] http://www.i4cp.com/news/2009/08/17/i4cp-study-flexible-work-arrangements-gaining-more-attention-in-the-workplace

[2] http://www.cvworkingfamilies.org/system/files/FlexibleWorkStrategiesExecutiveSummary.pdf

Mobility and Mobile Communications Drive a Paradigm Shift

Mobile communications have brought down the walls of the confined business space and the physical establishment. Individuals can now communicate and do business from their homes, cars, airports and hotel rooms, virtually anywhere.

Today’s employees are much more tech-savvy than they have ever been before. They have access to various high-end communications and collaboration tools as consumers and they demand the same tools and capabilities in the workplace as well. We acknowledge a growing trend of “consumerization” in the enterprise, which manifests itself in the increasing use of consumer devices, applications and tools for business purposes, with or without the official support of the IT department. This trend is most evident in the use of mobile devices – smart phones, tablets, and so on. A 2010 Frost & Sullivan survey of 200 North America-based C-level executives and IT managers revealed that 70% of the respondents used mobile devices for business purposes, and 49% claimed that mobile devices represented the primary communications endpoints used by the majority of users in the organization.

Consumerization is having a significant impact on technology investment decisions in the enterprise. Business IT and telecom managers have been somewhat reluctant to support all these consumer devices and applications, mostly due to cost, interoperability and security concerns. In fact, only 50% of the respondents in our survey reported that their mobile devices were integrated with the corporate communications systems and applications. Yet, 91% of those respondents reported that mobile extensions of corporate communications were either very important (61%) or somewhat important (30%) to their daily operations.

Discussions with CTO and CIO professionals reveal that technology investment decisions now involve a variety of stakeholders. Line-of-business (LOB) managers and even end users are forcing IT to take into account their preferences and needs when deploying new technologies and solutions. In fact, end users are the primary driving force behind the adoption of advanced mobile devices in the workplace. Going forward, as the workforce becomes increasingly mobile, IT will need to support the right set of mobile communications tools to enable employees to communicate and collaborate more effectively.

So What Can you Do? Gain a Competitive Advantage through Advanced Communications Solutions

The changing nature of today’s dispersed and diverse workforce demands employees be able to access a wide array of collaborative communications tools, regardless of the de-vices they’re using, or where they’re using them. Mobile workers, teleworkers, “corridor” warriors and the so-called “digital generation” have varied needs, but they all share several things in common:

  • They require an “in-office” communications experience regardless of where they are based;
  • They use a diverse set of software tools and devices to communicate (ranging from, but not limited to, instant messaging, web and video conferencing, soft and hard phones, social media, Blackberries, Android phones, iPads and iPhones, and even lowly PCs.).
  • Users and business managers wish to be able to present a uniform public identity – a single number and a single mail box where users can be reached by customers, partners and co-workers.

Companies must embrace the virtual workplace, but as they do so, they must deploy technology that supports this new way of working. Communications solutions must conform to the needs of individuals and to specific job functions, not the other way around.

How do you Chose the Right Solution for your Organization?

I was recently on a panel with Jim Davies, Mitel’s CTO, discussing evolving business needs and changing requirements for communications solutions. Jim talked about the founding principles of Mitel’s Freedom Architecture and I found those in line with key market trends. Mitel’s next-generation architecture is based on the following building blocks:

  • Flexible, software-based solutions that allow integration with other vendors’ best-of-breed technologies,
  • Support for a broad range of endpoints, including UC application support on a variety of mobile devices such as Nokia, Windows Mobile, Blackberry, Android and iPhone smartphones,
  • Alternative deployment models including on-premises virtualization, Mitel-hosted cloud (Mitel AnyWare) or carrier-hosted solutions (Multi-instance MCD).

Fred Crespo, VP of Information Technologies at Rosewood Hotels and Resorts, who was also on the panel, affirmed, that the walled-garden approach is no longer acceptable to end users. He also gave examples of employees demanding support for the mobile devices of their choice and the resulting need for proper integration with the rest of the company’s communications infrastructure.

Businesses looking to future-proof their investments need to develop their next-generation architectures taking the above factors into consideration. A business’ communications infrastructure must support a single user identity and integrated access to a variety of communications software and devices for a user without adding cost and complexity. That technology should be open and flexible, software-based, and be able to run on any device and accessed from anywhere.

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