This issue of VoiceCon Enews is sponsored by Aastra:
Aastra is a global leader in IP communications products including IP-PBX systems, standards based telephones, unified communications and contact center applications. With 29 years experience delivering integrated voice and data communications services to some of the most demanding companies in the world, Aastra Intecom has developed deep industry expertise in solving the telecommunications challenges faced by large enterprises. Our unique perspective allows us to deliver highly reliable, scalable systems, deployed on time and professionally supported.
In the past two VoiceCon Webinars that I’ve moderated, we received a question that was repeated almost identically, with only very minor variations in wording, from a different attendee in each session. Essentially, each person said: Folks in my enterprise want to know why, as our Mobile Unified Communications strategy, we can’t just give everyone Blackberries and call it a day?
Sounds simple, doesn’t it?
And indeed, several of the leading Unified Communications vendors, including Microsoft and IBM, have clients for the Blackberry. But the question in these webinars was more along the lines of, Isn’t the Blackberry, all by itself, Mobile UC–or at least close enough?
On our most recent webinar, Mike Berlin of AVST explained why he believes the answer is no: “The key to us…is to also give them the next step–whether that’s a mobile client that gives them backend access to customer data, which means they can make a decision very quickly to say, Yes that product shipped and it will be delivered on your doorstep on X date, without having to make 15 inquiries to do so. Then that is a useful deployment of that technology.”
In other words, your Blackberry-enabled users are seeing what these devices in their present form can do for them, while UC says Blackberries can be even more. Implicit in the audience questions has been the idea that if you buy everyone Blackberries, you don’t need to spend any more money on that fancy UC stuff. Just give us the devices and don’t bother us with more stuff to learn.
Most of us can see the sizeable gap between that notion and the explanation that Mike Berlin gave about the potential to do more. But in bad economic times, I wonder if the business units will go for it.
The approach that makes sense, for IT, is to disabuse any such Blackberry-only proponents of the notion that such service is kinda sorta basically free once you pay for the devices. You, on the other hand, know that if you throw Blackberries to the masses and turn them loose, they’ll get a lot of work done on the road–while running up rather enormous bills.
Any enterprise that goes with a cellular service as its primary communications strategy for some or all of its users must come to grips with the reality that wireless costs are exploding in the enterprise. At VoiceCon San Francisco next month, two great consultants, Steve Leaden and Robert Harris, will be running a session on “Managing Your Cellular Spend.” Steve opens up his presentation with these sobering data points:
Wireless voice and data services now represent 25 percent of U.S. enterprises’ total telecom spend, according to the Yankee Group.
Another report, from Insight Research, pegs this figure at one-third of the corporate bill for telecommunication services in 2006
U.S. corporate spending on wireless voice and mobile data services will exceed business spending on all wireline voice and data services by 2010, according to InStat.
Wireless is the way of the future, and spending is going that way. This fact remains hidden, most likely, in enterprises where individual employees’ cellular bills are expensed, rather than the enterprise having a corporate-liable contract. But as Robert Harris points out, corporate-liable contracts have their own challenges, in that if you don’t structure your contracts and per-minute rates correctly, you could wind up paying a lot more than you think.
Enterprise users are going to be needing more mobility, not less. IT/communications managers can help by understanding the real costs of this functionality, and then helping your users to understand this as well.
What do you think? Drop me a note here in the VoiceCon Enews Forum or directly at ekrapf@cmp.com
Eric H. Krapf
Editor & Lead Blogger, NoJitter.com
VoiceCon Program Chair
This issue of VoiceCon Enews is sponsored by Empirix:
Free Benchmarking Study: Disaster Recovery
According to a recent Empirix-sponsored DMG Consulting research study, 20% of participating contact centers have no emergency response plan in place. And there are more worrisome statistics demonstrating a lack of preparedness that is putting enterprises at risk. To read more about the findings and learn how you can get your contact center ready to handle a disaster, request a copy of the study now.
As I write this, the $700 billion Wall Street bailout bill has gone down, and financial institutions around the world appear to be contracting the U.S.’s disease. Everyone expects dislocations ahead, and Bloomberg is out with an article that predicts damage to the tech sector, estimating that Microsoft and Cisco could lose $4.3 billion in orders from the financial sector next year, and featuring this quote from a Gartner analyst:
“This is game-changing,” said Joanne Correia, an analyst at Stamford, Connecticut-based Gartner. “People are going to stop new software deployments. They’ll cut in the applications space. In PCs and servers, everyone will stop putting in new hardware.”
Note that we’re talking here about IT as a whole, and we’re talking about just the financial services sector; as Tom Nolle wrote last week on No Jitter, history tells us that IT spending overall won’t necessarily decline along with the economy. And yet, when such a large IT-using sector as financial services experiences the dislocations we’re seeing, it’s hard to imagine the overall effect won’t be considerable.
Indeed, the firms we’ve seen go down or get acquired over the last few weeks are companies that have been headliners at VoiceCon because of their tendency to be early adopters and creative users of communications technology. Merrill Lynch, for example, was one of the highest-profile early adopters of IP-telephony–they were so cutting-edge that they wound up having to replace early-generation Cisco gear with Avaya’s.
And in any event the unprecedented scale of mergers and acquisitions in the financial sector is bound to create lots of work for IT managers forced to integrate systems–but may also slow investment if those mergers come with cost-cutting, job-eliminating moves. Furthermore, companies will also be on the lookout for technology duplication; the Bloomberg article quotes one financial services CIO as saying, “The more consolidation that you have, the more I would see potentially a reduction in the overall budget that you would need to do the same things.”
There’s another level of uncertainty when we look at how the situation plays out for IT/communications at financial services firms. No one has really pushed for comprehensive regulatory reform as part of the emergency response to the financial crisis, but there will certainly be pressure next year in the new Congress and on the new President to overhaul regulation of financial services. I’ve seen no indications at this point of what that might entail, but considering how much the financial industry relies on technology and advanced communications, it’s hard to imagine there won’t be an impact on IT/communications when new demands for transparency and accountability get written into law.
The optimist will say that financial services firms’ need to cut costs will turn them toward the quick wins you can derive from IP telephony, be it in maintenance, home-based contact center agents, bringing conference calls in-house, etc. And yet, as the folks at Nemertes Research have pointed out, opex typically goes up in the first two years of an IP telephony deployment, and only falls as the enterprise becomes more familiar with the technology and how to support it. Of course, that’s a general statement, and there is lots of anecdotal evidence of quick payback, especially on things like international calling and conferencing. But the overall budget situation makes execution critical on even “simple” deployments–if you hit a snag that delays you or costs more money, you can wipe out the expected savings for some time to come.
That issue of execution is really about the only aspect of this situation that’s within IT’s control–but it could make a real difference for the enterprise.
What do you think? Drop me a note here in the VoiceCon Enews Forum or directly at ekrapf@cmp.com
Eric H. Krapf
Editor & Lead Blogger, NoJitter.com
VoiceCon Program Chair
This issue of VoiceCon Enews is sponsored by Cisco.
Connect. Communicate. Collaborate.
Cisco® Unified Communications Solutions enable collaboration so you can quickly adapt to market changes while increasing productivity, improving competitive advantage through speed and innovation, delivering a rich-media experience across any workspace, securely and with quality. Available both on-premises and on demand, you have the choice and flexibility to enable powerful new ways to collaborate within and outside of the organization.
Join our MAJOR PRODUCT ANNOUNCEMENT Webcast on September 24.
Ever since Microsoft got into the enterprise voice market, there’s been speculation that it might buy one of the major players–Siemens or, more likely, Nortel, given the partnership that Microsoft and Nortel have established. It never made that much sense before, because Microsoft didn’t want to be in the PBX business, and still doesn’t want to be. But with Nortel stock trading near historic lows and the Canadian vendor already announcing plans to divest its Metro Ethernet unit, is it time for Microsoft to revisit the idea of acquiring Nortel’s enterprise business?
Let’s be clear about one thing: The only real reason for Microsoft to buy Nortel’s PBX line is account control, and the issue isn’t so much about immediate enterprise purchases, but about long-term strategy.
Unfortunately, it’s realistic to expect that the market for IP-PBXs will slow down or worse as the economy as a whole slows down or worse. In his most recent No Jitter article, Allan Sulkin wrote that the enterprise voice market is already down 5% in 1H08 versus a year ago. So you might think that maybe Microsoft’s existing strategy of overhanging the PBX market with Office Communications Server will in fact become redundant–there are a lot more ominous things overhanging the market these days.
But at the same time, Allan demonstrates that Cisco continues to gain market share. In the overall market (all size systems, key/hybrid through enterprise), Cisco went from 20% share of port station shipments to 26% just in the first half of this year. That’s a pretty stunning gain in six months, and even if the market slows down, there’s no reason to believe Cisco won’t continue to perform strongly among enterprises that are continuing to invest in IP telephony.
What’s interesting is that Cisco’s gains in market share haven’t really come at the expense of either Avaya or Nortel. Allan’s figures on large systems tend to obscure this fact, because Avaya and Cisco combine all their systems into one number, while the comparable Nortel figure doesn’t include the small-system Nortel BCM, making Nortel look worse off than it might otherwise seem. So we’re using Sulkin’s market numbers for all size installations. And there, Avaya actually picked up a percentage point in the first half, while Nortel was flat. Cisco’s gain mostly came across the board among the rest of the universe.
The question is, how long will this state of affairs last, especially in the case of Nortel, with its well-publicized challenges continuing? And what are the odds that, if a certain amount of the Nortel installed base moves, the lion’s share won’t go to Cisco?
Microsoft needs to lock customers, not into the Nortel platform as such, but into a premises strategy that features Nortel today and OCS in the future. The most significant thing about Cisco’s recent acquisitions of PostPath and Jabber aren’t that Cisco bought an email and IM company, respectively, but that their public statements have emphasized plans to integrate the acquisitions with the network-based Cisco WebEx platform. I still think PostPath in particular gives Cisco a strong premises play against Exchange and OCS, but Cisco has said virtually nothing about this possibility, stressing WebEx instead.
Everyone, including Microsoft, is paying homage to the concept of Software as a Service or Cloud Computing, but as the vendor that generates real revenue when people build bigger networks, Cisco stands to be one of the big winners if SaaS/Cloud really happen. Microsoft would much rather keep real-time communications as an on-premises service for the enterprise. I tend to think, given their historic tendencies, that enterprise managers would much prefer this as well, so that gives Microsoft a big edge.
Buying Nortel could help them leverage that edge.
What do you think? Drop me a note here in the VoiceCon Enews Forum or directly at ekrapf@cmp.com
Eric H. Krapf
Editor & Lead Blogger, NoJitter.com
VoiceCon Program Chair
This issue of VoiceCon Enews is sponsored by Cisco.
Connect. Communicate. Collaborate.
Cisco® Unified Communications Solutions enable collaboration so you can quickly adapt to market changes while increasing productivity, improving competitive advantage through speed and innovation, delivering a rich-media experience across any workspace, securely and with quality. Available both on-premises and on demand, you have the choice and flexibility to enable powerful new ways to collaborate within and outside of the organization. Click here to join our MAJOR PRODUCT ANNOUNCEMENT Webcast on September 24.
One of the many good questions that Wainhouse Research asked enterprises in its most recent survey was: How broadly will you deploy Unified Communications capabilities? The choices were basically:
All capabilities to all employees
All capabilities to a subset of employees
Some capabilities to select employees
It didn’t surprise me that the majority of respondents–55%–chose the last-named option. This has been the conventional wisdom about UC for some time now: Not every worker needs every UC application or function.
What did surprise me was the significant size–22%–of the sample that said they’d deploy all capabilities to everyone. Almost a quarter of the enterprises in the Wainhouse survey expect to do a blanket UC rollout, in spite of the fact that they are statistically unlikely to have even completed a blanket IP telephony rollout yet. Those are some mighty forward-thinking people.
In his article analyzing the survey results, Brent Kelly of Wainhouse calls attention to the fact that, “the vendors would like organizations to roll out UC to everyone in the company,” which at first suggested to me that this was more of a “mindshare” answer than one that reflects actual plans. It’s easy to say you expect to deploy a technology ubiquitously, only to adjust later to the realities that you uncover when you really embark on the process–realities that may include cost, need, ROI and the like.
Except that in another of Brent’s findings, at least some companies aren’t bothering with those needs assessment/ROI stumbling blocks. Brent describes the “stunning results” of another section of the survey which revealed that “while only 15% of the companies have done a needs assessment and only 8% have a formal UC strategy, 20% of respondents have already selected vendors and another 26% have vendor selection underway. In addition, 22% have already done a pilot.”
Brent continues: “Another interesting result is that very few companies have performed any kind of ROI analysis, and few RFPs been issued. For those that have moved forward with UC in this fashion, it appears to be done in a sort of ‘Ready-Fire-Aim’ fashion.
“These results indicate that UC is being implemented without a strategy and without a financial justification in a significant number of companies,” Brent concludes. “Clearly, many companies anticipate gaining value from UC based on the promises found in the marketing messages by the leading vendors, and/or they just believe UC is the “next wave”–and thus implementation is inevitable.”
Keep in mind, we’re still talking about a small market of actual products sold: Blair Pleasant of COMMfusion and UCStrategies.com has estimated the UC market’s size at just $200 million for 2007, projected to grow to just under $2.5 billion by 2012. That’s a high growth rate but still a relatively small market four years from now. So it’s not like enterprises are going on a wild UC spending spree.
Furthermore, it’s possible to roll out UC products in a non-UC way. For example, if you purchase and deploy Unified Messaging, you’re deploying a UC product. If you do this because you finally had to give in and scrap your old voice mail system, and you’re using the new UM as a fancy replacement, you’re probably not doing UC the way much of the industry thinks of UC today.
The “UC Way” would be to start by figuring out which of your workers were mobile (e.g., your sales force), then decide that UM would help them close sales faster, then calculate how much more revenue you’d generate with UM-enabled salespeople, and weigh that against the cost of the UM system. I’d wager that this scenario is much less common than the previous one.
To the extent that the vendors are out there trying to sell UC gear, any sale equals UC success, regardless of the buyers’ larger vision or lack thereof. But if the pitch is that UC is a decision the enterprise will make as part of some larger overhaul of its communications environment–that’s probably not happening, nor will it happen for awhile.
What do you think? Drop me a note here in the VoiceCon Enews Forum or directly at ekrapf@cmp.com
Eric H. Krapf
Editor & Lead Blogger, NoJitter.com
VoiceCon Program Chair
This issue of VoiceCon Enews is sponsored by AVST:
Click here to view the VoiceCon Webinar: “Unified Messaging, Productivity Payoff Today“.
In this webinar, a leading analyst and technology provider will explain how Unified Messaging can provide a payoff in end user productivity, along with administrative and compliance benefits. Our speakers will help you understand how to select a Unified Messaging solution that provides the needed functionality within an architecture that meets the requirements of your network–and your budget
How should you plan for investments in Unified Communications, and how will that planning be affected by the current difficult economy?
That’s shaping up as one of the key issues for us to discuss as we move toward VoiceCon San Francisco, and obviously one of the key issues for you to grapple with in your daily life. Even in the midst of a tough economy, is it time to start investing in UC? And if you do, how should you go about it–where do you start within the enterprise, what do you deploy, how do you justify what you do (or don’t do)? In short, how do you build a business case for UC (and also, still, for IP-telephony)?
For VoiceCon San Francisco, Robin Gareiss of Nemertes Research is putting together a new tutorial that will help you understand some of these issues, and Robin will be giving a sneak peek at some of these ideas this coming Friday (September 12), when she will be featured as the sole speaker at our next VoiceCon Webinar.
With budgets tight, the expectation might be that wallets will be closing, legacy PBXs will be nursed through at least another year that they weren’t expected to see, and UC investments will be deferred. At the same time, however, costs are rising in other areas of the business–most obviously, energy–in ways that demand, or at least might benefit from, decisive action to update communications technology.
The obvious example is collaboration, particularly with the new emphasis that we’re seeing on video. You hear a lot of things said about telepresence, but few people quibble with the proposition that it’s cheaper than sending people halfway around the world for meetings. Less obvious examples could include the potential for adding communications to any number of business process applications. Usually this is expressed in terms of gaining time to market or time to sale, but incorporating communications into various workflow and logistics applications could conceivably streamline business processes that are big consumers of energy, saving time and money.
But to get to the point where you can understand and document this next level of savings, IT has to work closely with business units, and we have some information to suggest that just the opposite is occurring. In a feature article I just posted on No Jitter, Brent Kelly of Wainhouse Research reports on the results of a survey on enterprise UC attitudes that he just completed. Among other things, Brent found that UC buying decisions were being made tactically, with less involvement from the CXO level and more from IT. He also found that companies weren’t necessarily doing a lot of homework–in the form of needs analyses, ROIs and RFPs–before purchasing UC gear. This suggests that, far from knowing how communications can improve business processes, some enterprises are investing in UC without really even knowing why they’re doing it at all.
It’s hard to believe that companies can really buy UC without a clear strategic idea of how it will be used, or specific plans for how to cost-justify it. As companies and departments start locking in their 2009 budgets, technology that looks interesting and nice to have isn’t likely to make the cut, absent a convincing plan for how it will help the business.
What do you think? Drop me a note here in the VoiceCon Enews Forum or directly at ekrapf@cmp.com
Eric H. Krapf
Editor & Lead Blogger, NoJitter.com
VoiceCon Program Chair
