A Fresh Look at UC
A few days ago, I had the pleasure to visit Aastra’s Concord, ON, headquarters and to meet again with Tony Shen, Aastra’s Co-CEO, President and COO. I must admit, he is quite different from other executives I interact with! His practical, down-to-Earth talk is in complete contrast with the inflated marketing bravado of most other high-ranking individuals in the industry.
I also enjoyed listening to Jason Andersson, Head of Aastra’s Center of Excellence for Applications, brief me about Aastra’s current UC strategy and portfolio using Aastra’s ViPr videoconferencing technology. Thank you, Jason, for going back to the office at 9 pm Swedish time to do this video call for me! I have to say video really adds to the quality of the conversation. It helps establish a rapport with the other participants and be more productive. Although I found the ViPr quite good, the Aastra folks hinted at the upcoming launch of a next-gen product that will help bring better and much more affordable video to the mass market.
So where does Aastra stand today in the global communications market? According to our recent research, in 2009, Aastra was among the top 6 market participants in terms of total PBX and IP PBX line shipments and revenues and IP desktop phone shipments. It has a large installed base it can leverage for future growth. It is also on track to gradually consolidate and synchronize its multiple product lines over the next couple of years. But how does it differentiate? What does it do better than its competitors?
It is tempting to quote Shen who addressed the above questions by saying “We all sell sugar,” referring to the fact that communications have become a commodity, adding “we are just easier to do business with.” He strongly believes that Aastra’s main competitive advantage is in delivering technologies tailored to local customer needs and its ability to use local resources who speak the language and best understand the peculiarities of the specific market. “The French buy French”, Shen elaborated, pointing to one reason why Aastra is doing so well in France, whereas Ericsson before couldn’t (and where U.S. vendors are struggling, too).
Aastra has also adopted a very pragmatic approach to UC. While the rest of the market has gotten a little carried away with the desktop-centric approach spearheaded by Microsoft (as it best serves its purposes), Shen and his team see little demand for soft clients. As I have indicated in other blog posts and presentations, I also think it will take a few years for soft clients to populate the marketplace and become a more commonly used interface. It will not be until customers deploy a larger number of advanced communications and collaboration applications such as IM, presence and conferencing, that they will see the value in the unified desktop client. For most users, a basic softphone provides little more than a convenient alternative when travelling. Yet, Aastra is looking to keep up with its competitors and potential customer demand and will soon be launching InTouch Plus, an advanced client that can be used both for voice and IM. So, if you are looking for an OCS-like experience and you believe in convergence at the desktop – Aastra will have a solution for you later this year.
Aastra sees greater potential in mobility. In fact, according to Shen’s definition, UC is more about integrating corporate and mobile voice communications, than it is about the desktop client. Aastra offers both mobile PBX extensions and a solid portfolio of VoWLAN and DECT capabilities, which can meet both outdoor and indoor mobility requirements. Although Frost & Sullivan’s definition of UC is quite client-centric as well, I have to agree that mobile smartphones have a greater potential than desktop clients in replacing the desktop phone as a primary communications device.
Aastra is also one of the few telephony vendors heavily promoting the voice interface. I thought voice navigation remained somewhat confined to the IVR and auto attendant space. Shen, however, gave me some interesting examples of his vision for speech, which included voice navigation of calendars and folders. When I think of the time I waste looking for documents, this sounds like a life-saver to me. Also, the ability to schedule a meeting over the phone, speaking commands such as “book me a meeting with Joe at 2 pm on July 3rd” may be where the market is going next.
Aastra is also offering some interesting collaboration capabilities with its recently launched InReach social networking software. It enables employees to create various interest or project groups where they can post comments (“micro-blogs”) and share files and ideas. This software will eventually become integrated with InTouch Plus, the advanced UC client, so users can IM each other, see status updates and pictures, etc.
Although it feels like Aastra is lacking that single defining characteristic that will differentiate it in the marketplace – such as Microsoft’s message around software-based communications or Cisco’s one-stop-shop approach, for example – it may very well be that Shen and his team have identified a successful growth formula that is not based so much on marketing, but on practical, customer-centric strategies. In the SMB market especially, its local approach is far more important than technology superiority or marketing clout. Of course, this is not to say that Aastra’s technologies are not competitive, it is just to reinforce Shen’s pragmatic view of the commoditization of communications.
Shen stated that Aastra seeks to evolve its portfolio around four main tenets: the voice interface, mobility, video and security. Although I believe these have a very different value for different users, they seem like potential growth opportunities and differentiators for Aastra.
In my opinion, Aastra’s open, standards-based approach and ability to integrate its endpoints and applications with other vendors’ technologies could be its ultimate key to success. Going forward, an accelerated portfolio harmonization roadmap and a stronger message around the benefits it can deliver to larger businesses with disparate, multi-vendor environments could help it maintain and grow its market share in the communications marketplace.
Are the Days of Single-mode VoWLAN and DECT Phones Numbered?
With the growing hype around FMC and the continued integration of mobile phones with corporate communication networks, one would think that onsite mobility solutions are becoming an extinct species. I, personally, don’t think so. Single-mode VoWLAN and DECT devices provide productivity-enhancing mobility to individuals that do not fit the profile of potential smartphone users, and, therefore, do not compete with mobile phones for the exact same opportunity.
In the carpeted office, we expect professionals to increasingly use mobile phones connected to corporate PBX systems leveraging advanced UC clients. Such individuals are most likely users of cell phones subsidized by the company as they are expected to be able to make or receive calls anywhere, any time, in order to better serve customers, partners or internal stakeholders. Those are typically sales or marketing people or top executives. Beyond the carpeted office, maybe doctors, real-estate brokers, lawyers, technical support, and a few other professions requiring immediate and around-the-clock contact represent possible target customers for FMC solutions providing corporate communication applications on mobile devices.
Onsite mobility solutions, on the other hand, will continue to provide valuable capabilities to verticals where individuals need to communicate efficiently while on the premises, but do not need to be available for business purposes after working hours. Healthcare, retail and manufacturing continue to account for the majority of VoWLAN implementations (41%, 13% and 7%, respectively, of 2008 new users) with hospitality, education and government offering some growing opportunities. The carpeted office accounted for about 19% of all VoWLAN single-mode new users in 2008. DECT has been more successful in the carpeted office with over 40% of new users in 2008 being in this market segment.
Frost & Sullivan recently published a study, authored by my colleague Alaa Saayed, that provides an in-depth analysis of this market space. Here follows a summary of the findings:
As in the case of many other technology markets, the world enterprise DECT and VoWLAN single-mode phone market has been considerably impacted by the economic crisis. With market growth rates already showing some signs of deceleration in 2008, economic conditions in 2009 seem to be presenting even greater challenges as business customers seek to cut costs by extending the life of their existing wireless devices, curtail investment in new technologies and select the product or vendor based on pricing rather than strategic value.
Moreover, DECT and VoWLAN single-mode technologies have started to feel the pressures of other types of carpeted-office mobile devices, such as advanced smartphones with built-in enterprise FMC solutions, that, in some cases, present a compelling value proposition to IT departments seeking to provide employees with a single device offering multiple capabilities.
Despite this challenging landscape, the world enterprise DECT and VoWLAN single-mode market is expected to gradually return to its healthy growth rates in 2011 – as more vertical industries across the world recognize the various benefits and capabilities granted by these types of on-site mobility solutions. Moreover, the potential short-term slowdown in this market may be attenuated by the fact that enterprise FMC solutions are still viewed as very nascent technologies, and enterprises wishing to avoid any possible hurdles would, in most cases, prefer the reliability of DECT devices or the maturity of single-mode handsets. It should be noted, however, that any growth may be much slower than what it could have been in a healthier economy.
In terms of handset evolution, many of the major DECT phone manufacturers have launched new advanced DECT handsets into the market. Some examples include Aastra’s new series of next-generation SIP DECT handsets (the 610d entry-level handset, the 620d business version handset, and the 630d industrial handset), Ascom’s new generation d41 and d62 IP DECT handsets and NEC-Philips’s I755 phone and advanced M155 watch phone.
On the other hand, some of the technological advancements that new DECT solutions have introduced to the market include advanced messaging and alarming systems, centralized management capabilities, location detection capabilities and central directory and presence information. Today many DECT market participants affirm that the new capabilities offered by DECT technologies equal or even surpass those offered by VoWLAN single-mode devices. Cat-iq is said to further increase the value proposition of future enterprise DECT in terms of better voice quality, Web access to applications, and lower power consumption.
In terms of VoWLAN single-mode market evolution, most of the basic VoWLAN challenges, such as reliability, voice quality and security, have been resolved through continuous improvements and advancements in handset capabilities, adoption of wireless standards, and partnerships among device vendors, IP telephony providers and WLAN infrastructure companies.
New handsets capabilities include enhanced interfaces, additional software functions, new form factors (smartphone looking devices), improved device durability, and integration with advanced messaging, push-to-talk, and location-based features and applications – among others. Evolving wireless standards that are either being implemented or considered for future implementation include 802.11n, 802.11r, 802.11e and WPA2 security certifications. Finally, the market has witnessed the partnership of two of the major VoWLAN single-mode participants: Motorola and Vocera – that is expected to further increase the adoption and implementation of VoWLAN single-mode devices in the healthcare and retail industry.
Growth Rate Comparison
Update on Aastra's Strategic Roadmap
Last week, I had the opportunity to meet with Tony Shen, Aastra’s co-CEO, President and COO. Since I won’t be able to make it to Aastra’s analyst event in Stockholm this fall, this meeting was intended to provide me with an update on Aastra’s performance and a perspective on Aastra’s strategy for the communications marketplace.
This was my first meeting with Tony Shen and I was really impressed by his practical, down-to-Earth approach to business matters. His answers and comments were straight to the point and appeared unembellished and sincere.
Some of the issues I raised included Aastra’s continued portfolio consolidation and adjustment since the multiple acquisitions including the most recent one of Ericsson’s enterprise business, Aastra’s vision for its position in the unified communications technology paradigm, and its strategy for an increasingly consolidating marketplace. Here follow some of the takeaways from the discussion with Aastra’s co-CEO (please note this is myinterpretation of the messages conveyed by Tony Shen):
- Portfolio consolidation: Tony Shen believes that, even as they stand today, the merged portfolios are more complementary than redundant. While, overall, the perception that Ericsson’s enterprise portfolio acquisition helped enhance Aastra’s large-business portfolio is fairly accurate, the major advantage from the acquisition was Aastra’s ability to rapidly (though inorganically) expand in several new markets including the Nordics and the U.S.A.Also, the different products in Aastra’s portfolio have different strengths and positioning in the different countries. For example, Aastra seems to have a strong #2 position in France(according to Shen), including the large business market, whereas Ericsson has been more successful among French SMBs. Ericsson is, however, strong among U.S. very large businesses including university campuses (note: Aastra is in this space with the Intecom acquisition as well). The former Ericsson large systems are also dominant in Sweden, Australia, New Zealand and Spain. Nevertheless, Aastra intends to further consolidate its portfolio to ensure maximum efficiency and will most likely share its vision and the details of a 3-year portfolio evolution plan at the analyst event later this year.
- Localization: In Tony Shen’s opinion, a key element of Aastra’s strategy and a major differentiator is its focus on localization, rather than globalization. He firmly believes that in Europe(where Aastra has the strongest presence), each country has different requirements with regard to communications infrastructure and one size does not fit all. He also pointed out some peculiarities of European business practices vis-à-vis American practices such as the general preference to avoid leaving messages in favor of communicating directly or through receptionists and secretaries. Going forward, Tony Shen believes the company will continue to develop local strategies and individual approaches for the more than 20 countries in which it operates.
- Unified Communications positioning: It seems that Aastra does not aspire to become a one-stop-shop vendor for the various UC applications. It is developing partnerships with others (e.g. Microsoft) in order to be able to provide certain components of the UC stack (telephony platforms, endpoints, etc.) where it has a competitive advantage.
- Growth strategy: Aastra’s focus seems to be on rejuvenating its existing installed base. Tony Shen sees a large opportunity in upgrading and modernizing the multiple legacy (Ericsson, DAMOVO, etc.) systems deployed around the world. It also intends to focus on maintaining and growing its market share in the countries where it has presence today. Aastra is looking at some emerging markets such as Brazil, Asia Pacific and Russia for new growth opportunities.
- Financial prudence: A key element of Tony Shen’s leadership approach seems to be his focus on financial prudence. He stressed the fact that Aastra has weathered the economic recession better than most other market participants due to its more conservative business practices. Aastra’s recent financial results seem to indicate that its leadership has a strategy in place that makes it more resilient in a tough economy. It reported record revenue for the year ended in December 2008, and Q2 2009 marked its 45th consecutive profitable quarter.
- Innovative business models through partnerships: Tony Shen pointed out that Aastra’s performance in Spain, one of the most hardly hit economies, actually improved over the past year due to the success of Telefonica’s “rental” go-to-market model, which helped drive sales in an unfavorable economic climate.
According to our most recent World Enterprise Telephony Platform Market study, Aastra held close to 9% market share in EMEA and ranked 6th in terms of revenues generated in the region in 2008. It ranked 7th in terms of global enterprise telephony revenues with close to 5% market share in the same year.
Given Aastra’s recent financial performance and Tony Shen’s focus on financial prudence, I have no doubt the company is likely to remain a viable competitor in the near term. However, with the massive technology evolution, market consolidation and considerable vendor repositioning in the enterprise communications marketplace, I have some concerns about its growth strategy for the long term. If Avaya’s acquisition of Nortel’s Enterprise Solutions business is successfully completed by the end of this year, market concentration will increase with the top four vendors (Avaya+Nortel, Cisco, Siemens, ALU) holding over 60% market share of world enterprise telephony revenues.
While customers are still likely to appreciate having more choices and to continue to purchase products from multiple vendors, growing market concentration is likely to effectively create a barrier to growth and entry to smaller players unless they have some very distinct competitive advantages. Those advantages may revolve around technology or specific geographic markets or both. Aastra’s country-by-country approach may, therefore, give it a certain advantage in the countries where it has presence. However, I do believe that it will be necessary for it to also seek to expand in new ones in order to be successful in the long term.
During my conversation with Tony Shen, I got the sense that Aastra does not have a strong plan in place for organic growth in North America(other than in terminals). While I agree with Tony Shen that this is a mature, fairly concentrated market with several very powerful participants and, therefore, a difficult place for Aastra to grow organically, I believe it needs to find a competitive spot in this market that offers some growth opportunities even if that involves yet another acquisition. In fact, the SMB vendor market in the U.S.may be due for some further consolidation with the large vendors (Avaya, Cisco, etc.) making a concerted push in this market segment, Mitel facing some credit issues, NEC and Toshiba having limited presence, open-source telephony vendors gaining traction, ShoreTel growing, yet being very small to be able to successfully compete against the established vendors, etc. If the SMB market remains so fragmented, it will be increasingly more vulnerable as the technology paradigm shifts and the market consolidates at the top.
Aastra may need to grow its indirect sales in order to expand its reach both geographically and across customer segments. Its localization strategy seems to warrant a more indirect approach to help gain efficiencies and economies of scale. Further, channel partnerships are becoming critical as the complexity of communications infrastructures increases, on one hand, and vendors compete for market share in a maturing marketplace, on the other.
Aastra will also need to send a more compelling message to the market about its vision for UC. The trend in the SMB market seems to be around the introduction of single-box solutions comprising all or most of the UC applications and offering an economical option for budget-constrained customers. IBM’s Lotus Foundations Reach with an integrated ShoreTel PBX functionality represents a recent example of how vendors are approaching the SMB space. While I believe that customers will continue to deploy best-of-breed technologies (versus all-in-one solutions) on many occasions, Aastra may need to develop some go-to-market partnerships for more effective marketing and implementation of complex, integrated UC environments.
There is a good chance my concerns will be addressed at the analyst event later this year. I look forward to updates from Aastra.
How much bandwidth do I need for Response Point? G.711 vs. G.729
G.711 is the default audio CODEC for most Response Point phones and requires approximately 90Kbps bandwidth upstream (your voice going out) and 90Kbps bandwidth downstream (your caller’s voice coming in).
To calculate peak usage take the peak concurrent callers x 90Kbps. For example: 5 concurrent calls x 90Kbps = 450Kbps is the required bandwidth for each direction. Keep in mind, this does not account for VPN usage for remote users or voice mail to email etc.
As an example, if you have a 1Mbps ADSL connection from your service provider, you might have an upstream bandwidth of approximately 700 Kbps. A conservative approach is to estimate just over half of the upstream bandwidth is available, ISPs generally over-sell their bandwidth. In this case, you could safely support 4 simultaneous G.711 calls if you were not doing anything else (e.g. downloading email, listening to online radio, downloading large files, etc.) on that connection.
The SMB Digital Voice network also supports G.729, which uses approximately 20Kbps bandwidth upstream (your voice going out) and 20Kbps bandwidth downstream (your caller’s voice coming in) for each call. G.729 provides very good call quality while minimizing bandwidth usage. The only noticeable difference would likely arise during on-net calls (calling other users on the SMB Phone network). G.711 offers a higher quality on-net call because G.711 does not compress audio, but as soon as the the call is handed off to the PSTN the call quality between G.711 and G.729 is hardly noticeable.
G.729 offers some real benefits, the most obvious is the 400% decrease in bandwidth capacity requirements. G.729 also handles Jitter more efficiency during times where low bandwidth / high congestion would likely render a similar call using G.711 unintelligible.
You can force your phone to use G.729 on Response Point handsets but some are harder to configure than others. For example, on Aastra 675x phones the global SIP settings are grayed out out via Javascript on page load making it tough to set the codec.
As a general rule of thumb, we like to recommend an independent broadband connection that you can use for Response Point. You may want to acquire a router that has dual WAN link failover, VPN Server (for remote sites) and some QOS traffic shaping functionality.
Response Point Service Pack 2 – Get Ready!
I am loving the updates to Response Point on Service Pack 2. I can’t wait to see it released, our customers are going to love these new features. Some bits are a gimme, other improvements simply make me giddy.
Innovative Phone System Benefits Local Company
As our little telecommunications company continues to grow Microsoft continues to take notice. Most recently our partners in Redmond have completed and published a case study on one of our customers “True North Drafting” (TND) a specialist in creating the detailed shop drawings that guide the fabrication and on-site installation of commercial-grade glass and aluminum structures.
TND has been a long time customer of ours and before purchasing their Response Point small business phone system they were using the Lypp conference call services.
This marks the second Lypp case study by Microsoft. The first was on Lypp itself, as a value added reseller for Response Point.
Thanks goes out to Rex and his team at Microsoft for the mention and to our customer of the month, “True North Drafting”, for their ongoing support.
Small Business IP Phones Now Cordless
Aastra recently launched it’s AastraLink RP™ platform in support of the Microsoft® Response Point™ phone system software. Let me say, the Aastra IP Phones kick butt!
Aastra really went the distance on the IP Phones for their initial roll out of AastraLink RP™. They incorporated some features you are not going to find on any other Response Point handset, namely the cordless version (6757i CT RP) seen above.
Microsoft® Response Point™ is now available in 3 flavors; D-Link, Syspine and now Aastra. They each have their strong points and all will certainly be contenders in the rebirth of this market. They can all be bought online at SMBPhoneSystems.ca
I will be doing a full review of the AastraLink RP system once I have find time to write it up.
Response Point Phone Systems for Canadian Small Business
I thought it was time I chimed in on the new service pack [SP1] that has just been released to the Response Point manufacturers and what it means to Canadian small businesses that might take some interest in buying a Response Point PBX.
Response Point Service Pack 1 is mostly about the VoIP Gateway (SIP Trunking) capabilities with some extras like Click to Call and Call Presence.
The software based VoIP Gateway will allow the Response Point systems to connect to a SIP Trunk provider for PSTN connectivity. So now we can add capacity not just by plugging in telephones lines to the system but we can also connect virtual phone lines provided by a SIP Trunk service vendor over the Internet.
First question is, do we want to connect our phone system in our office to a virtual phone line over the Internet? Hmm, good question.
If you are like me and need to have your phone system working 100% of the time you might think that using SIP trunks for your telephone connectivity via the open Internet could be risky. If the Internet in your office drops so does your phone system. That means not only can you not work online but now you can’t receive or make phone calls either. Yikes!
It might not be as bad as it first would seem. The SIP Trunk provider or ITSP (Internet Telephony Service Provider) can facilitate some interesting features that could help alleviate this problem. Most SIP Trunk service providers are capable of delivering services like simultaneous ring or twinning that can ring your primary line and your cell phone at the same time. If your main system goes down for whatever reason your business is not completely out of business. Although, this theory doesn’t really hold up when you have multiple lines in a hunt group with a primary line and a few over-lines.
Something else to consider is 911. 911 can be a bit of headache when dealing with SIP trunks. If you rely on SIP trunks for all of your telephone connectivity you will have to fill out some paperwork that ties the VoIP telephone service you are getting from your ITSP to your address.
LNP (Local Number Portability) is also a major headache. As an existing business you likely have had your existing telephone number for quite some time and are not really all that interested in changing it now. LNP laws in Canada say that the telephone company you are dealing with for that number must comply with your wishes when you ask to have that number ported to another provider, an ITSP in this case. Well, yes, they must comply but that doesn’t mean they will make it easy. It’s not abnormal in Canada for a number porting request to take upwards of a few months to complete. Yes, months!
In my mind I don’t think I would ask my customers to endure that kind of headache. I would likely use the SIP Trunks for additional capacity on outbound dialing which does not require any number porting and is not likely mission critical to the daily operations of the business. Since most of the traffic generated on most small office telephone systems is outbound, SIP Trunks could fill a potential requirement there.
I have been beating the Response Point Phone System drum pretty hard lately and for good reason, it’s a great SMB phone system. We have decided to start carrying the phone systems through Lypp as well. I also posted a quick summary on a Response Point installation I did for one of my customers on the Innovedia blog a few weeks back, the customer is loving that system.
SMB Communications VARs, Interconnects, Integrators – Great Timing!
Communications VARs & Interconnect Businesses in Canada
Canadian businesses are seemingly leaning on VARs and Integrators more than they ever have. Canadian SMBs are swamped with choices and need help in choosing and managing the right phone system, email solutions et al. With IP communications on the rise in a big way, VARs and next-gen interconnects are cleaning house.
One such company is Innovedia. Lead by Trent Johnsen (ex-CEO of Shift Networks), Innovedia is taking Western Canada by storm. Trent's new venture is focused on providing small, medium and large business communications solutions. The product mix is made up of VoIP PBXs (Sutus, Microsoft Response Point), IP Phones (Polycom, D-Link, Aastra), Hosted Exchange, Electronic Fax, DNS, some Hosting services, consulting and more.
It isn’t anything that Trent isn’t used to, he has built a few SMB communications companies in the past and has a real passion for business communications.
I know the business is already exceeding expectations because I am helping Trent on a few fronts and it's pretty impressive to see how quickly that business is growing. If anyone is need of Small, Medium or Large Business communications solution you should give innovedia a look.
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