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What’s on your desktop? Now there’s an app for that, thanks to the Mac App Store.

The new Mac App Store is launching today it would seem, although one needs to install the new 10.6.6 OSX to get it. Will the new Mac App Store have the same profound effect on our desktop that the existing app store had on mobile apps? Likely not. iPhones, iPod Touches, iPads are mobile devices and usually accompany their users on every outing, not so with laptops and desktops.

With that being said we will likely see a great number of apps from the existing App Store make it into the Mac App Store.

First thoughts around this are positive for me. I like apps that update themselves, as a developer it would also be helpful not having to build up an ecomm system as I suspect in-app purchases will accompany the new SDK for apps in the Mac App Store as well. Of course, Apple will take a healthy chunk of the revenue from the app.

At any rate, apps on iPhones, iPods, iPads will now be ubiquitous across (nearly) all Mac devices.

What do you think? Will this revolutionize the app distribution methodology for desktop apps? Or is this just another cash grab from Apple?

WebRTC

How to Find a Managed Services Partner

We recently completed our Frost & Sullivan 2010 North American Enterprise Telephony Equipment and Implementation and Management Services Markets update. The study found out that, in 2009, that market generated about $4.35 Billion in revenues from the delivery of telephony customer premises equipment (CPE) services, which represented a decline of about 10.7% from 2008. The global recession was the single most powerful factor causing the revenue decline.

While implementation services, closely correlated with telephony equipment shipments, were severely impacted by CAPEX reduction policies, budget constraints were, in fact, one of factors driving demand for managed services. Alaa Saayed, the lead analyst on this project, observed: “Some of the main drivers for managed CPE services adoption include the ability to select the management of specific ongoing administrative tasks (modularity) rather than outsourcing the entire operation, the advantage of cost savings and profitability because of performance optimization, the benefits of problem prevention through the use of proactive remote management tools, and the ability to monitor and manage different systems and networks throughout a multi-vendor, multi-site environment.”

An increasing number of enterprises report utilization of managed services. A 2009 Frost & Sullivan survey, that interviewed 102 U.S. C-Level executives, revealed that companies had either maintained or increased their use of managed services within the previous 12 months.

The same survey reported that only 7 percent of the respondents were planning to decrease the usage of managed services within the following 12 months. Overall, C-Level executives were planning to continue their current use of hosted or managed services, or even increase their utilization within the next 12 months. This is not too surprising since managed services play an important role in addressing the IT and telecom management needs of an organization in the time of a recession. As organizations cut costs to stay afloat or improve their competitive positioning, they typically seek to compensate for reduced internal resources and improve network and overall organizational efficiency by partnering with an experienced managed services provider.

Demand for managed services varies by the size and type of business. Small enterprises are more likely to utilize contractual maintenance, hosted solutions or economical managed CPE alternatives. Medium enterprises, on the other hand, are more likely to employ a piecemeal approach to network management outsourcing, whereby large companies may either opt to manage their telecom and IT infrastructure in-house, or outsource management to ensure a more uniform approach to their multi-vendor, multi-sited environment.

Similar factors seem to trigger the acquisition of managed services across different company sizes and verticals. As managed services are primarily adopted by those looking to reduce labor costs, customers tend to first resort to the lowest-common-denominator package – some remote monitoring and alarms, backup & restore, limited help desk, basic software updates (no major upgrades), a package of MACs, and so on. They could, eventually, move up the ladder based on their individual needs and demands.

The CPE services market is becoming more fragmented over time – with few service providers possessing all the required skills to manage all aspects of a customer’s ICT infrastructure. In fact, Alaa states that there is some confusion about who’s offering what: “Customers are finding it hard to understand where to look for CPE telephony services. They find the relationships among telcos, value-added resellers, system integrators, manufacturers and their channel partners confusing. When searching for managed or professional services, they often run into an overlap of solutions and responsibilities. Single point of contact is becoming key to avoid these multiple and confusing relationships.”

Here is what the competitive structure in this market looks like:

In terms of revenue, traditional equipment manufacturers have the largest market shares with stable or flat growth prospects. Telecom operators and system integrators are experiencing an increasing demand for services as they can offer economies of scale and competitive managed services packages. VARs, on the other hand, seem to serve specific markets where either local presence or some technical specialization is required.

In terms of brand name recognition, the leaders of the pack include established vendors market participants such as Avaya, Cisco, Mitel, NEC and Siemens among telecom equipment manufacturers; Black Box, Shared Technologies and Dimension Data among telecom VARs; major systems integrators such as IBM and HP; and AT&T, Verizon, Bell Canada and Telus among telcos.

While some traditional equipment vendors directly compete with their channel partners, others prefer to delegate most telephony CPE services to channel partners. Channel-centric vendors acknowledge the fact that dealers and other partners are turned off when vendors compete against them and take away the best deals. Therefore, such vendors choose to ensure the support of their channel partners in growing product revenues at the expense of services revenues, which they leave entirely to the partners.

We asked the channel what they expected from their vendors and here is what they told us:

Also, the channel commented on the overall level of support they received from their vendors over the past couple of years:

For businesses looking to outsource SPE services and managed services more specifically, we recommend they select their partners based on:

  • Financial viability
  • Product and services roadmap (including SIP expertise and ability to support next-gen SIP and SOA-based architectures)
  • Multi-vendor technology support capabilities and ability to consolidate multiple vendor relationships through a single contract
  • Customer service and attention to specific customer requirements
  • Flexibility to provide modular capabilities and price services based on application complexity rather than total number of users
  • SLAs covering resolution and not just response times. One of the biggest pitfalls in managed services is the inability of certain vendors to guarantee the latter in spite of their commitments to the former.
  • Managed services vendor staff training and experience. Staff turnover is one of the industry’s major challenges and service providers that invest heavily in staff training and job satisfaction can deliver the greatest value to their customers.
  • Find your best match! For a global organization, a large, global SI may be best, but for a small business, a local partner is more likely to provide greater attention and a customized approach.
WebRTC

TELUS and Teletrips Focus on the Triple Bottom Line

On October 19, TELUS and Teletrips announced a unique business solution, promoted and delivered jointly by the two organizations. The Intelligent Enterprise QuickStart system, tools and related services help businesses design and implement more effective flexible-work programs.

Most telecom pundits know TELUS well; however, fewer people are familiar with Teletrips. It defines itself as “the leading provider of online tools that help organizations optimize their triple bottom line performance through Intelligent Workplace and Workforce Management”.  It has developed the SaaS-based Teletrips Work Anywhere System and the Intelligent Enterprise QuickStart set of tools that enables businesses to identify specific characteristics of their workforce (mobile or deskbound, more or less collaborative roles, etc.) and develop effective flexible-work strategies and programs. This data-based approach helps organizations reduce costs, improve employee retention and satisfaction, and better protect the environment – hence the triple bottom line benefits:  return on investment, return on employees, return on environment.

Teletrips boasts successful implementations with major organizations such as TIAA-CREF (The Teachers Insurance and Annuity Association – College Retirement Equities Fund) and TELUS itself. These organizations have been able to gain varying benefits from promoting more flexible work styles.

Many individuals today are consciously making a choice to work from home or various remote locations, and although their motivations may vary, the common objective is to improve their work-life balance. The time saved from lengthy commutes can be used to complete additional work tasks or handle house chores and family-related matters, or it can be invested in personal betterment (sports, entertainment, rest, etc.). While today many organizations readily support such programs, mostly in response to employee-expressed interest in working remotely, few are actively promoting flexible work styles. Many businesses are just not fully aware of the tremendous benefits a more flexible work approach could bring to the individuals, the organization and the environment.

TELUS is sharing the results of its At Home Agent Program (AHA), partly supported by Teletrips. The AHA program is aimed to improve the way TELUS’ call center agents work and live and to promote personal, community and environmental wellness. Of TELUS’ 6,500 call center team members, 1,000 are part of the AHA program and 20 percent of those use the Teletrips People and Places Reporting System (PPRS) tracking tool. This is a web-based interface used to log daily agent commute choices and assess their impact in terms of time savings, fuel and vehicle maintenance savings, and reduced emissions. At the end of the first 24 months since the program was launched, the following results were reported based on the regular entries of about 133 agents:

  • Over $122,000 in total maintenance and fuel savings or approximately $900 per agent per year;
  • Agents avoided driving a total of 903,827 km or about 6,665 km per agent per year;
  • Reduced CO2 emissions by 204 metric tons
  • Agents reported net savings in actual commute time of 14,000 hours or 104 hours per agent per year

TELUS reports savings in furniture, equipment and rent. Additionally, the AHA program has reduced team member absenteeism and attrition, which has also translated into hard-dollar savings from reduced hiring and training costs. Furthermore, AHA members have demonstrated higher engagement levels and greater productivity (estimated as being about 20% higher on average compared to that of the rest of the agents).

Sun Microsystems (which has implemented a flexible work program as well) and TIAA-CREF reported significant savings and benefits as well. Most savings seem to come from real-estate costs, but additional benefits include greater employee satisfaction and morale. Sun Microsystems managed to transition about 56% of its workforce to a flexible work program over a period of about two years. The transition was enabled through advanced technologies such as virtual desktop and thin clients, which helped gain additional savings – for example, the number of desktop support administrators was reduced from 1,100 to 7 (for the support of about 42,000 desktops)!

TELUS and Teletrips are now engaging in a partnership to jointly promote and implement the QuickStart System to help others gain similar benefits. Their approach is based on six key steps to launching a successful flexible-work program:

  • Gather data and size the opportunity: data-based decision making can produce superior results
  • Build a case for change and create a strategy
  • Choose and deploy enabling technology
  • Start a flexible work pilot
  • Measure the impact to the triple bottom line
  • Share your success and duplicate

Additionally, TELUS and Teletrips advise organizations to identify a clear end goal and commit to a planned investment. And even more importantly, acknowledge that this is all about people and that they have to be at the center of this process. TELUS, Sun Microsystems and TIAA-CREF also recommend that organizations pursuing the implementation of a flexible work program should appoint and empower a leader and ensure the cooperation of three key business units – HR, IT and real estate.

TELUS and Teletrips are looking to explore a significant opportunity in the North American market. In the U.S. only, they have estimated about 130 million knowledge workers, 58 million of which are able to work remotely.

I believe technology and changing life styles will drive a continued evolution of work styles as well. A growing number of people will work remotely or wish to do so and it will be important for organizations to ensure they have effective programs in place in order to gain maximum benefits.

Science, WebRTC

Google to Drive Business Migration into the Cloud

Google has become a powerful force in the lives of many people. It certainly is my window to the World today as I land on the Google search page as soon as I open my eyes in the morning and before I go to bed at night.  It has become a symbol and an icon, our “virtual home”, almost synonymous with the Internet, Internet browsing, and … the Cloud! With its presence already established in the consumer world, Google is also making an aggressive foray into the business market with a set of cloud applications.

source: Frost & Sullivan

Since I promised to post several articles on the raging battle between premises-based and hosted/cloud communications, I will dedicate this one to Google. So much has been written about it, that it seems there is nothing left to say. However, two of my colleagues – Subha Rama and Alaa Saayed – put together two very different pieces on Google that provide some unique value. Subha chose to look deeply into Google’s corporate culture and identified several major factors that have driven and will likely continue to drive Google’s success going forward. Alaa, on the other hand, managed to get a hold of Rajen Sheth, Senior Product Manager for Google Apps, and received some first-hand insight into Google’s vision for the enterprise market.

My key takeaway from the two articles is that Google’s success is largely due to the fact that it’s built on the tenets of the Internet and the Internet age. Its product portfolio benefits from the advantages of the web and the cloud; its culture and internal organization also derive their efficiency from applying the innovative spirit and democratic principles of the new age in IT and communications technologies.

Here I provide excerpts from both articles, as well as links to the complete versions on our website.

Subha Rama’s piece is titled: “Google: the IT Iconoclast ”, and it can be found here. According to Subha, Google’s success story is based on two simple tenets: “question established ways and have a healthy disregard for the impossible”. She writes: “As Google grandly outlined in its first SEC filing, its mission was “to organize the world’s information …. and make it universally accessible and useful”. Google believed that the most effective, and ultimately the most profitable, way to accomplish this mission was to put the needs of their users first. This has become more or less the governing principle behind almost all its product innovations.”

Then Subha goes on to ask “What makes Google, well… Google?” She believes that, at Google, “crazy definitely triumphs comfy”. She points to the fact that Google strives to hire only the best talent out there, people who are academically exceptional and are capable of thinking out of the box. You can find neurosurgeons and rocket scientists, in addition to nerdy computer engineers, among Google’s employees. Also, it continues to adhere to its Stanford culture, allowing employees to dedicate 20 percent of their time to work on their pet ideas. This is how products such as Google News, Orkut and Google Images came into being. Subha recognizes that Google employees are constantly challenged to think in new directions and come out with defining ideas. She further notes, however, that Google also focuses on productivity and enforcing deadlines so that it is not drowned in chaos, which can be so typical of highly creative environments.

Further, Subha discusses “the long-tail model”, which forms the foundation of Google’s strategy: “Google strongly believes in the long-tail model, that as the costs of online production and distribution fall, niche products and services can become as economic as mainstream ones. This theory forms the core of a cloud-based service delivery model, which while accommodating a wide variety of applications is not subject to the lowest-common-denominator principle that we apply in a physical environment.” According to Subha, this business model focuses on a large number of products, each targeted at a relatively small audience, thus addressing niche segments, and building customer communities in the process. Further she concludes that the Google business model is in fact based on openness, interoperability, decentralization and accessibility, the pivots around which cloud-based services are built.

Alaa Saayed tackled similar issues of corporate culture and success factors in his recent interview with Rajen Sheth, Senior Product Manager, Google Apps, posted unabridged here. In this interview, Rajen Sheth identified some of Google’s strategic directions as well as some of the key factors impacting Google’s success.

When Alaa asked Sheth if they were finding it difficult to migrate customers to Google Apps, Rajen admitted that it used to be very difficult, but things are rapidly changing. He stated: “Almost every CIO that I talk to is planning a cloud strategy and the value proposition of the cloud is very widely known at this point. For most corporations, now, it seems, it’s a matter of WHEN rather than IF they are going to move to the cloud for a lot of their core services…We are a serious player in most of the conversations we are having about messaging out there.”

Then Alaa asked Rajen about innovation at Google: “Google is well-known for its unwavering commitment to innovation…How is the process of innovation managed at Google”?

Sheth responded as follows: “Having worked in different companies, I could say that Google really operates in a very different way than a lot of organizations out there. It really operates in a way that spurs this innovation. I think there are a few elements to it. The first thing is that we are not afraid to look beyond what an existing space is all about right now, and so if you think about it, in many of the cases where Google has been successful, we’ve reinvented existing spaces … We take an existing space, not thinking about it in terms of how it is today, but what it should be, and how do we make it a brand-new experience”.

“Another big element to it is the notion of cloud computing, and that is actually one of the things that spur innovation. In many cases where you have to build packaged software, you are forced into a stream where you are releasing major updates every two, three or four years. The problem with that is that you have to think three, four-plus years in advance what is going to be the innovation that you want to push, whereas in reality, innovation happens all the time. With the cloud computing paradigm, we have it such that all our applications are centralized and we can update them incrementally, and that actually increases our innovation rate quite dramatically.

Finally, the Google culture definitely spurs innovation. The structure is very, very flat and people are encouraged to think, and to take risks, and think in brand-new areas. In fact, we have this philosophy that we call 70-20-10 and basically what it means, we put 70 percent of our effort in the core of our business, but we put 20 percent of our effort in new areas that are beyond the core business that we think might be fruitful. So we think beyond what is making money right now. Then we put 10 percent of our effort in completely off-the-wall things that may or may not see the light of day, may or may not be a great technology. There are definitely some great examples of technologies that have started out in that bucket and that have become some major areas for Google”.

I believe the discussion above clearly highlights the factors that will make cloud computing and cloud communications successful and will drive continued growth for Google itself. I will still caution, though, that the cloud is not for everyone – both on the supply and the demand side, but that is the topic of another post.

WebRTC

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 epopova@frost.com or review related material on our web site at http://www.frost.com/srch/content-search.do?srchid=194001017.

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