The RTC WEB sessions in Prague made it pretty clear, to me at least, that everyone knows that SIP is broken and we also know that it’s not going away anytime soon. That being said it will likely not be the only protocol to be used in conjunction with RTC WEB.
I think it’s a consensus, at least of the IETF participants of the RTC WEB BOF, that we should not be discussing signaling protocols within RTCWEB at this early stage in the process of creating a WG (working Group) in the IETF.
It’s likely the correct approach. If we pigeon hole the community into using one protocol over another we are not really doing the future of communications any great service. In the same breath I also think it is important that we do not lose sight of the fact that the business world today runs on SIP and will continue to do so for some time to come.
The one thing that stuck out is the obvious gap that exists between what we have today and what we need in order to make RTCWEB a huge success, although I do know of a few companies that can move rather quickly when presented with a challenge as well so maybe it’s not such a big deal.
Prague was great, on many levels. It will be very interesting to see the progress we make between now and Quebec.
On February 10th, Avaya launched a new on-demand, cloud-based option of its immersive web collaboration platform Avaya web.alive. The platform is available both as a premises-based solution and a SaaS offering, the latter being the focus of the new announcement, along with some new features and capabilities.
This new solution presents a virtual reality, which, in some ways, resembles the virtual event platforms (such as those offered by ON24, InXpo and Unisfair) but uses avatars and game-like tools and experiences, more similar to Second Life. I’ve heard some define the “traditional” (only in the context of this fast-evolving space) virtual platforms as virtual events and the likes of Second Life – as virtual environments. The monikers don’t matter much, but there are some differences, which we intend to tackle in more detail in a forthcoming study.
It’s great that Avaya is offering a free web-based demo. Anyone can try the environment at http://avayalive.com/tryit. It will be beneficial for end users to experience this unique, advanced technology first-hand before considering a full-fledged deployment or even a serious pilot. As an analyst, I was privileged to have several sessions with the Avaya team, but I am hearing that there is almost always someone in there who can help random visitors find their way through the different tools and functionalities.
For me, who’s never (NEVER) played any computer games or experienced 3D, doesn’t like Sci-Fi (didn’t even fully appreciate Avatar or The Matrix),… (the list goes on, but you get the idea) … this was both a thrilling and somewhat distracting experience. I did not take the time to test the environment before the pre-launch and ventured into it with a male avatar. Of course, I heard little from the presentation in the first few minutes because I was busy changing my gender and choosing my facial features and clothes to wear.
The next challenge was finding my way around the environment and learning how to control my avatar using the mouse and keypad. Eventually, I found myself standing all by myself in front of the speaker with my head spinning in different directions trying to find the best viewpoint. Somehow, using a 3-rd person view, with my avatar still proudly standing in front of the whole crowd, I managed to get my eyesight so low that I was staring upwards into people’s … well, lower backs. Toward the end of the event, though, I was boldly strolling around the environment, magically walking through people and furniture. And shouting. Until I realized it was not a good idea, because others could hear me without me noticing they were there.
I’ll end the story here and just briefly summarize what I liked and what I would wish to see improved going forward.
The things I liked:
- Such virtual environments are fun! It makes you giddy to design your persona (without the help of cosmetic surgery) and watch yourself from a third person point of view (there must be a split-personality tendency in all of us).
- You do get the impression that you are “meeting” with people in a quasi-realistic social environment, unlike the sensation one gets using more “traditional” conferencing tools.
- I liked seeing the pictures of the people I was close by or talking to, in addition to their oversexed avatars.
- I really liked the presentation and collaboration capabilities. I was able to easily share my desktop and saw demonstrations of video feeds and slide presentations.
- I like the fact that there are private rooms and people can have meetings behind closed doors. Only authenticated users have access to these rooms, but they can authenticate others. Once you are inside the room and the door is closed, no one else can hear the conversation OR see into the room.
- Also, a group engaged in a more private conversation in the public area can use a whisper mode, which is not audible to those at a greater distance but does not degrade the quality of the conversation for the main parties.
- Regardless of my “mishaps” facetiously recounted above, the environment is fairly intuitive and does not take a whole lot of learning to be able to navigate through it.
- I have to give credit to the Avaya people, too – they offered help and were prepared to patiently address all kinds of questions.
- From a business point of view, this solution has tremendous advantages as a web-based, on-demand platform. It is easy to deploy and use, even for small businesses, and is quite cost-effective at $49/month for a single account holder and up to 8 people attending at any given time.
- The platform also offers analytics tools that can help businesses assess the value they are receiving from enhanced collaboration.
What I would want to see improved:
- These visual environments can be very distracting. I heard people saying the virtual experience helped them avoid multi-tasking. In fact, I noticed I was more focused on what was taking place on the screen, but was it really the RIGHT thing on the screen I was watching/doing? I found myself checking people out (some were wearing funky outfits), rather than watching the slides. Maybe there should be a way for the speaker or person managing the event to help/force attendees to focus on the presentation screens whenever appropriate? I would not propose a dress code – that would be taking it too far J
- There need to be some additional privacy options. I discussed the private rooms in the section above, but I believe there should be a way to “encapsulate” people who wish to have a more private conversation in the public area. I imagine, visually it could be something like the Avaya Flare spotlight. In a real-life environment, such as in a typical conference facility, people always complain there aren’t enough meeting rooms and end up looking for these two-armchairs-and-a-table isolated areas in the hotel corridors to have a private chat. At a cocktail party, people use facial expressions and body language to keep unwanted parties out of their private conversation. But the virtual environment needs different tools. I am told that users can see who’s within listening area by watching the number next to an ear icon at the bottom of the screen. But people tend to get distracted or too engaged in a conversation to pay attention. So they need to be able to take precautions.
- Changing your voice, gesturing and other functions are only a right-click away. But I would want to see them in a menu bar – similar to a browser or Microsoft Office experience. It’s all about familiar, user-friendly interfaces, right?
- There needs to be an option to mute everybody (for both the organizers and the attendees), except the speaker. It is distracting when people are chatting around you. Is it like real life? Yes, but we always try to improve real life, don’t we?
- You have to hit Escape to be able to use some of the Options and to do other things on your desktop. It becomes bothersome, if you still want to do some multi-tasking.
- If you have a slow DSL or cable connection, the audio can get garbled. (I had the rare luck to have my Internet service switched to a new provider right in the middle of the launch!)
- Training, training, training!! Yes, it is intuitive; yes, younger generations will figure it out quickly and enjoy it. But for effective business use across different generations and types of users, organizations adopting this tool will need to strongly encourage employees to attend demos and brief training sessions. I have been told that Avaya does offer training. I think customers should not underestimate the value of a proper introduction to the new tool and ensure employees become familiar with key features and functionalities to avoid disappointment and misuse.
Go ahead and try it and let me know what you think. But don’t forget to mute yourself (press M on your keyboard) as you enter the environment or else someone can overhear your business conversations, kids shouting or dogs barking.
Are there other similar platforms you like better? Why?
The Hosted IP Communications Market
I am currently updating Frost & Sullivan’s North American Hosted IP Telephony and UC Services study. This is one of my favorite enterprise communications markets and I have tracked it closely over the past nine years. To many that may sound unbelievable as hosted IP PBX and UC services have only recently gained popularity, boosted by the cloud hype.
Over the years, hosted communications services have evolved and matured – both on the platform/technology side and the business model side. BroadSoft has gobbled up two of its original competitors – VocalData (aka Tekelec, aka GenBand) and Sylantro; softswitch vendors such as Sonus and Metaswitch have more aggressively pursued feature-rich services; Nortel’s carrier group has been acquired by GenBand; and a host of PBX vendors have launched various hosted/cloud platforms. Fortunately for these vendors, service providers are becoming increasingly interested in hosted IP communications as traditional voice loses ground to mobile and consumer PC-based communications. On the demand side, economic factors coupled with greater awareness of the benefits of hosted communications are making enterprise decision makers more open to discussing outsourcing alternatives.
I will delve deeper into market trends, market size and competitive factors when I complete my research. In this article, I would like to focus on Mitel and its portfolio of hosted solutions. As always, Mitel is at the forefront of technology development, but this time also venturing with some new delivery models.
For about a year now, Mitel has been offering a multi-tenant platform – the Multi-Instance Communications Director (MICD). This solution is targeted at service providers looking to brand their own hosted IP communications services and provide all billing and management support. MICD is a high-density platform that competes directly with the more “traditional” hosted IP telephony platforms (such as BroadSoft’s) and appears best suited for SMBs looking for standard PBX functionality, along with voicemail, twinning and basic conferencing. Its architecture makes it more flexible than most other hosted platforms, however, enabling service providers to deliver more distinct sets of capabilities to each customer, resembling single-tenant hosted PBX implementations.
MICD has so far found appeal with CLECs, traditional VARs, as well as for in-building multi-tenant deployments. Service providers can purchase either perpetual licenses or a licensing subscription. Mitel claims about 15 service provider customers globally.
Mitel has been one of the first communications vendors to offer a virtualized solution – Virtual Mitel Communications Director (MCD). It is available to service providers looking to target a slightly different customer base – typically larger businesses with hybrid (hosted and premises-based) environments. Distributed organizations typically have different needs across their geographically dispersed sites. While larger locations favor premises-based implementations, smaller remote sites are more suited for hosted services. Virtual MCD allows service providers to deliver highly customized communications solutions to businesses that require integrations with premises-based platforms and databases. For service providers, the virtual MCD architecture is comparable to MICD in terms of implementation and management costs. It is less scalable, but delivers some superior features and functionalities, such as virtualized contact center, web conferencing and UC capabilities.
Virtual MCD has been commercially available for approximately one year and, to date, Mitel has mostly marketed it, directly and through its channel, to the traditional CPE base. More recently, it has enabled hosted providers to also take advantage of this cloud-based offering. Resellers can use this solution to generate additional revenues and differentiate, leveraging their existing customer relationships, knowledge of customer CPE infrastructure and close familiarity with Mitel’s portfolio.
For a little over two months now, Mitel has been offering yet another hosted alternative – Mitel Anywhere. With this solution, Mitel steps in as the communications service provider hosting the MICD platform in its own data center. Mitel recognizes that, while demand for hosted communications is growing, a lot of the service providers are not equipped to host advanced communications infrastructures. Mitel has identified the SMB customer segment up to 100 users as the sweet spot for Mitel Anywhere services. It can, however, meet the demand of larger, distributed organizations using Virtual MCD.
Mitel plans to add some advanced capabilities such as contact center ACD to its suite of messaging and audio and web conferencing apps currently available on the platform. Eventually, the full Unified Communicator Advanced capabilities are likely to become part of the offering.
Datacenter Accreditation for Cloud-based Communications Services
On February 7th, Mitel announced a new initiative. The Virtualized Datacenter Accreditation program is targeted at datacenters, and Platform-as-a-Service (PaaS), and Infrastructure-as-a-Service (IaaS) providers. The program is intended to certify partners’ infrastructure capabilities required to support Mitel voice and UC applications. Mitel announced three certified IaaS providers: Artisan Infrastructure, Host.net, and Hosting.com, who intend to support or offer hosted voice and UC solutions to the market in the coming months based on Mitel cloud-ready software.
Mitel acknowledges that there are many partners who wish to be between an agent and a service provider. They have the capabilities to interface directly with end users and design and market hosted communications to them, but are not well equipped to manage a datacenter or a sophisticated communications platform with the required billing and management infrastructure and processes. By enabling IaaS and PaaS providers to deliver the appropriate infrastructure to VARs and managed services providers (MSPs), Mitel effectively creates a new business model that leverages the specific skills and capabilities of different providers to extend the reach of advanced communications to a larger number of market participants.
The value chain in the communications marketplace is likely to disintegrate further as vendors and service providers choose whether to develop technologies, manage datacenter infrastructure and/or communications platforms (now increasingly part of virtual datacenter environments), or specialize in marketing, sales and customer relationship management. New business models will emerge and market participants will have to find the formula that best works for them.
Mitel has been fast to market with its hosted/cloud initiatives and is now offering some appealing deployment options to its partners and business customers. It is likely to face competition from other carrier and traditionally CPE vendors pursuing similar strategies. For example, BroadSoft has a cloud service delivered out of its own datacenter in beta trials and claims overwhelming interest from the service provider community. Microsoft is likley to launch a multi-tenant VoIP capability on its Lync platform in the future, even though it has so far declined to support service providers in customizing Lync for hosted voice. Alcatel-Lucent, Cisco and Siemens are developing technologies and strategies for the cloud market as well. As the market evolves, functionality, partner relationships and financial viability will represent key success factors.
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.
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:
- Reduce facilities costs (including real estate, utilities, equipment, furniture, etc.),
- Reduce employee commuting costs and improve employee satisfaction and retention (and possibly productivity),
- 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.”
Meanwhile, a 2008 report from Corporate Voices for Working Families 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.
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.
The counterpoint to what? Good question. I wanted to talk about some personal experiences with communications technologies. Since the sentiments in this article may appear to contradict ideas I have shared previously – taking more of an analyst, rather than a consumer point of view – I thought I would present them as a “counterpoint”.
Frequently, nascent technologies promise to improve the way we live and work. But at the early stages, both businesses and individuals tend to experience more challenges than benefits.
I work out of a home office, like many other professionals today. Organizations are becoming increasingly virtual and IT managers are struggling to deliver reliable, secure and cost-effective communications to their growing remote workforce. In fact, many technological advancements – such as enterprise mobility, unified communications and SaaS/cloud-based communications, to name a few – are touted as particularly appropriate for mobile and geographically dispersed users. But remote workers frequently face issues that negatively impact their ability to leverage the full potential of these advanced technologies.
Here follow some quick references to popular marketing pitches and my counterpoints as an end user:
UC and software-based communications provide a cost-effective and convenient communications solution for remote workers.
COUNTERPOINT: At home, I have a regular POTS line, as well as a Cisco IP Communicator client on my laptop. I am glad I have the Cisco client because it allows me to call home when travelling or call an international number from home – free of charge to me. However, the few times I have tried to use it to attend an audio conference or make a critical business call, the quality turned out to be so poor that I had to switch to the POTS line or my cell phone.
There are several “weak links” in this scenario and the soft client is just one. It may be the quality of my Internet connection. I have a DSL line (I believe 4 Mbps downstream and 1 Mbps upstream) and I frequently have quality problems (breaking voice or slow website upload) when using various web applications or soft clients. It may be my wireless router – which is integrated with the DSL modem. It may be my laptop RAM or processing power. It could also be an issue with my VPN, the size of my Lotus Notes mail box, or any other application I access on my laptop. It may be some cookies or software bugs on my home network.
So it could be anything! But my point is, I am not ready to dump my TDM line OR my desktop phone for a PC-based soft client any time soon. Though my experience is that of a home worker, I think business environments are not immune to such challenges. If you really believe PC-based clients are ready to replace desktop phones, maybe you need to make sure the money you save from eliminating desktop phones is properly invested in assessing and upgrading LAN and WAN connections, PC processing power, RAM and hard drivers, etc. In my opinion, soft clients make a great adjunct to desktop phones, but not a viable replacement alternative … yet.
SaaS and cloud-based communications enable convenient self service for SMBs and remote workers.
COUNTERPOINT: I strongly believe in the value of hosted/cloud-based communications for businesses with limited in-house resources. But I have an issue with the claims around self service. I suppose, self service makes sense at the very initial stages of service selection and provisioning. Certainly, IP telephony – hosted or premises-based – also enables self-service moves, adds and changes (MACs), which provides substantial cost savings. IP telephony also enables IT managers as well as end users to manipulate settings through software/Web-based interfaces – providing flexibility and cost efficiencies.
However, self service only goes so far. In fact, hosted IP telephony and other ASP services never gained much traction exactly because service providers were not able to provide sufficient network implementation and management support required for mission-critical, real-time communications.
Inevitably, hosted services involve some customer premises equipment (CPE). To begin with, LAN and WAN reliability and security are top concerns with both hosted and premises-based IP communications. Therefore, router and switch selection, proper configuration and management are critical. Further, telephony endpoints and the respective wiring still require someone to literally crawl under people’s desks. Small business and remote workers should not be left entirely on their own when implementing or managing hosted IP communications.
Most of the time, a remote worker, similar to a residential user, uses… well, “cloud” or hosted communications. The Internet service, the POTS line – it is all managed by a service provider. And remote workers frequently face some common challenges. For example, my intermittent Internet connection has been an issue for a while. Having to spend hours on the phone with a customer service rep and stick pins into the router to restart and reconfigure it could be immensely frustrating. My phone company, on the other hand, has so far left me without a phone service only once (for about 24 hours). But even that one time, the warning that if they come to my house and it turns out to be a problem with my internal wiring or phones, they’ll charge me whatever it is they charge, etc., etc. … well, it leaves a bitter after-taste.
So, my point is, small business, remote workers, even medium and large businesses – they all want to feel taken care of. They’ll expect someone to come in and install or fix things for them as part of the monthly service charges and will not be too thrilled about self service.
I hope my thoughts make sense. Let me know what you think.
Today, a group of hosted communications companies formed an alliance, which they named the Cloud Communications Alliance (refer to the press release here). The following summarizes the objectives of the Alliance and lists the founding members:
About Cloud Communications Alliance
The Cloud Communications Alliance brings together leading Cloud Communications providers Alteva, Broadcore, Callis Communications, Consolidated Technologies Inc., IPFone, SimpleSignal, Stage 2 Networks and Telesphere to promote development of the Cloud Communications category. The Alliance is aggressively pursuing new technical standards, capabilities and applications. The Alliance harnesses the power of each member’s individual networks and systems to create a seamless, nationwide HD voice network that delivers outstanding voice quality, apps, features and cost savings. For more information about the Cloud Communications Alliance, visit www.cloudcommunicationsalliance.com.
Why these eight companies? These service providers have several things in common: they all use BroadSoft’s BroadWorks platform for the delivery of hosted communications; they have all been recognized as being among the fastest growing BroadSoft customers; they are all relatively small (30 to 50 employees) with mostly local or regional focus and limited geographic reach; and they all face similar challenges.
When did it all start? About a couple of years ago, this group of eight decided to collaborate and pool their resources together in order to become more successful and accelerate growth. Since then, these companies have been having regular meetings, at which they would exchange knowledge and best practices and discuss opportunities to leverage each other’s strengths for mutual benefits.
Why does it make sense for hosted IP communications providers to join efforts? Interestingly enough, I recently heard about what seems to be a common practice among cable companies. They would get together and openly discuss challenges and best practices and try to help each other grow in their respective areas. The cable industry is more mature than hosted IP telephony, but similarities include somewhat clearly defined territories of influence and a fairly large market potential that offers opportunities for everybody. Oh, and a common enemy – the incumbent telcos!
As I have discussed in previous posts, the hosted IP telephony market is very fragmented, and small service providers (some LECs, some next-gens founded specifically for the delivery of VoIP services) have been among the most innovative and committed to advanced hosted communications, but have had limited resources to promote and support their services on a large scale. While hosted IP communications eliminate a significant portion of the CPE and the need to dispatch technicians to the customer’s site, frequently, service providers have to ensure that the LAN is properly configured and literally crawl under people’s desks to adjust the wiring. This kind of tasks require local support staff and small market participants can greatly benefit from an alliance that helps them more effective serve larger, multi-site businesses.
Further, market awareness for hosted communications is still fairly limited. Service providers with small marketing budgets typically count on online resources, word of mouth and personal contacts to promote their services. By pooling marketing resources together, Alliance members can more effectively use market intelligence, more confidently market the capabilities of a more powerful entity, and provide customers with a “disaster recovery” option – the ability to easily port the service to another service provider if the original one goes out of business.
I asked the Alliance members about some of the additional challenges they have been facing, and they mentioned the following:
- Backoffice operations: accounting and provisioning could be slow and complex; integration with other software platforms is challenging;
- Customer acquisition is costly and difficult to scale;
- Individual providers have limited ability to come up with new ideas for apps and new sources of revenue;
- They are all looking to make their services more cloud-like.
Since the new formation is being marketed as a “Cloud” Communications Alliance, I inquired about how members saw the difference between cloud and hosted. We did not get into all the details on the call and I have promised to tackle this issue separately, so I will just highlight a few key points:
- Some member organizations have already deployed some of their capabilities (such as voice messaging, for example) on Amazon’s and other public clouds for cost efficiencies and plan to move more infrastructure elements into the cloud (maybe storage first, call control much later).
- The members plan to enable integrations with a growing number of cloud applications (such as www.salesforce.com, for instance) to help facilitate specific business processes for their customers.
- As businesses increasingly adopt mobile communications, Alliance members plan to be able to manage the fixed-mobile integration from the Cloud.
- Finally, the Cloud offers a great sandbox and a fertile ground for more rapid and more prolific application development. As Alliance members and other parties increasingly develop Cloud applications, the ability to integrate those and properly package and position them to end users will be key for their success.
I believe the formation of the Cloud Communications Alliance is a positive development. It is part of a consolidation trend in the communications market that is likely to accelerate over the next couple of years and will impact fragmented markets more so than the more concentrated ones (such as the PBX market, for example). Consolidation at this stage is healthy; I have, in fact, been recommending co-opetition as a viable approach in hosted IP telephony for some time now.
This is the first post in a series of commentaries on the dichotomy of premises-based versus hosted/cloud communications.
Economic Realities Mandate a New Approach to Communications Investments
The global recession caused a lot of fear and uncertainty in all business sectors worldwide. As revenues declined, business customers had to curtail their spending, including communications and IT investments, in order to limit their losses. As a result of these actions, such businesses have not been able to benefit from recent advancements in UC, mobility, videoconferencing, and other next-generation communications technologies. Many customers are still holding onto outdated communications platforms that may still meet basic needs but can offer little in terms of productivity enhancement, greater customer satisfaction or competitive differentiation.
In the meantime, the competitive landscape in all industry sectors is constantly changing. The financially strong market participants are able to move ahead by re-enforcing their competitive advantage through technology investments and more aggressive marketing. The others should not wait until the economy reaches its peak again since, by then, it will be even more difficult to catch up with the market leaders. In fact, turbulent waters create favorable conditions for the more nimble and resourceful participants to advance more rapidly. As communications vendors and service providers struggle with the consequences of the recession, businesses can use their temporary weakness to negotiate better deals on pricing, features, and services.
Overall, the recent recession brought forward the need for a new approach to communications investments, also mandated by other economic realities such as the rapid technological evolution and the acceleration of business processes. It demonstrated that business customers should seek to deploy their next-generation communications infrastructure with the following factors in mind:
Flexibility: At times of crises, businesses recognize the value of greater flexibility in terms of access to resources, including communications capabilities. One of the biggest challenges during a recession is the need to downsize, which results in a lot of unused communications capacity in the case of premises-based implementations. Hosted services, on the other hand, offer businesses the possibility to discontinue lines and services as capacity needs change. Further, workforce reduction frequently impacts IT and telecom personnel as well, rendering the business unable to properly manage its infrastructure and avoid downtime, proactively update and upgrade capabilities, and so on. Alternatively, in a managed or hosted services scenario, a third party is compelled to provide adequate capabilities as part of its contractual obligation regardless of economic circumstances.
Speed to Market: As tough economic conditions force businesses to tighten their purses, they find themselves unable to quickly react to market opportunities. R&D activities slow down, marketing and sales staff shortages leave the door open for competitors to steal customers away, and communications infrastructure inefficiencies prevent overwhelmed employees from effectively collaborating internally and communicating with customers and partners. However, businesses that chose to leverage advanced communications to compensate for workforce reduction and macro-economic challenges are better able to maintain internal productivity and customer satisfaction levels. Outsourced communications and IT resources are more effective in providing access to required capabilities faster, with minimal or no initial cash outlay, and with the ability to adjust capacity on demand.
Risk Mitigation/ Risk Sharing: Businesses tend to become particularly risk-averse during an economic downturn. While suspending or postponing new communications investments help conserve cash, this is not a viable long-term strategy as obsolete technology cannot support evolving businesses processes and needs. A more sustainable approach would involve sharing the risk with a trusted partner. In a premises-based implementation, more flexible leasing and managed services offerings could help alleviate some concerns over excessive financial exposure. A hosted offering can, however, completely transfer the risk to a third party by eliminating most CAPEX and delivering capacity based on actual company performance and needs.
Risk mitigation is key in favorable economic conditions as well. In a booming economy, growing R&D investments drive even more accelerated technology advancements requiring more frequent upgrades and staff re-training in the case of premises-based implementations. Alternatively, the risks of technology obsolescence could be absorbed by a hosted provider in an outsourced communications scenario.
Focus on Core Competencies: Businesses and individuals are equally overwhelmed with the amount of information and expertise required to remain competitive today. Businesses are, therefore, finding they can grow more rapidly and improve their bottom line by focusing on their core competencies. As the complexity of communications technologies increases, it becomes even more compelling to partner with a trusted communications expert to ensure that the company’s infrastructure is properly deployed and efficiently managed without wasting valuable internal resources. A managed or hosted communication solution can enable customers to leverage advanced communications for a competitive advantage while focusing entirely on their core business.
Economies of Scale: As businesses grow and expand virtually through multiple remote sites and users, their communications infrastructure needs to evolve as well. Hardware-centric premises-based communications platforms are typically not very cost-effective for multiple small sites of less than 50 users. During periods of rapid growth, such solutions do not scale economically as they require new servers to be purchased, integrated and managed for additional capacity. A hosted service, on the other hand, allows a more gradual addition of incremental capacity based on the actual number of users. Also, it typically provides a uniform set of features, a common dial plan, a consistent customer interface (through a network-based auto attendant or IVR) and some other benefits to geographically dispersed organizations. Further, as businesses increasingly seek to connect with their customers, suppliers and partners, a hosted service can more effectively provide federation across disparate organizations.
Future-proofing Investments: The recession along with the accelerating pace of technology evolution are driving the need to future-proof investments in communications and IT infrastructure. Businesses need to ensure that their services and solutions are flexible and based on open standards so they can be integrated with other applications and platforms at deployment or in the future. Since SIP is becoming the de-facto industry standard, SIP-based, SOA platforms and SIP-based services offer a significant amount of flexibility and investment protection. Such solutions integrate with a wide range of endpoints and other SIP-based applications. Another important factor in future-proofing the communications infrastructure is to ensure greater redundancy and disaster recovery capabilities. Frequently, a hosted, SIP-based service can provide all these capabilities more economically than a premises-based platform.
As cloud computing and cloud services become a focal point of many a tech talk today, and we, at Frost & Sullivan, more and more frequently engage in debates over the future of communications apps in the cloud, we chose to take a look at enterprise email and its success in the hosted market to date, as well as its future potential as a cloud service.
Here follows a summary of Subha Rama’s findings in her North American Hosted Enterprise Email Markets study.
The hosted enterprise email market has finally taken off in earnest after several years of uncertainty. In the past, businesses tended to view email as mission-critical and were not comfortable with the email application residing outside the enterprise, hosted in a third-party data center. However, the entry of large cloud-based email service providers such as Google and on-premise vendors such as Microsoft (and more recently IBM) has validated the software as a service (SaaS) model. An increasing number of enterprises are looking at provisioning their email off the cloud to achieve lower costs. The growing cost and complexity of in-house email systems is exerting a lot of pressure on IT resources, forcing businesses to consider alternative deployment options. Despite widespread downsizing of IT budgets in 2008, the hosted email market saw its installed base grow by 20.5 percent to 14.9 million email boxes. Between 2009 and 2015, demand is expected to grow at a CAGR of 18.1 percent to 47.8 million email boxes.
Email is still one of the most critical communication tools available to business users. The technology is by no means new, however, the way email is delivered, stored and managed is evolving fast as various alternatives become available. One of the biggest drivers for this change is cost, closely followed by the growing complexity of email systems.
For smaller deployments, on-premise software translates into higher cost per mailbox as economies of scale are hard to achieve. Moreover, on-premise email platforms are complicated, expensive and demand a fair amount of expertise and investment capabilities. Increasing email sizes and larger storage requirements also result in escalating costs. Email archiving (online backup and recovery), compliance, and security (filtering, spam control etc.) add layers of complexity to the email environment. Compliance issues dictate that organizations archive their email over a period of time, forcing businesses to invest in expensive storage area network (SAN) architectures. Also, businesses need to closely monitor the rapidly evolving virus and spam threats, which is a major cause of distraction from their core business focus.
Over the last few years, there has been a dramatic shift in how end users look at email. It is no longer a standalone messaging platform but a pivot around which a number of collaboration applications such as instant messaging (IM), conferencing, social media and mobility are being developed and deployed. As vendors start to bundle different types of collaboration applications around the email platform, the cost and complexity of these platforms are on the rise.
A number of service delivery models are evolving to make email delivery, access and management a lot more cost-effective for enterprises. Also, the changing nature of enterprises demands that they look at multiple options for sourcing their email. Today, a number of enterprises have a significant percentage of boundary workers (shop-floor personnel, contract staff and ad-hoc employees) that may not require the full functionality of on-premise email platforms. Leaner software-as-a-service (SaaS) offerings are emerging as an attractive alternative with their promise of predictable cost, ease of management and scalability.
In 2008, the North American hosted email market saw a healthy revenue growth of 11.1 percent and reached $319.1 million. Between 2008 and 2015, the market is expected to experience a compound annual growth rate (CAGR) of 9.6 percent to reach $604.4 million. (Note: The revenue projections do not include collaboration applications bundled with email over the forecast period.)
Are you at VoiceCon? If you are, make sure you visit Siemens’ booth for a demo of a potential CaaS offering residing in Amazon’s EC2 environment. Unfortunately, I cannot make it to Orlando this year, but I can’t wait to hear/see more details. (And no, the picture above is not part of the demo :))
Not only does this eventual partnership bring Siemens to the forefront of UC innovation once again, but it can also give a boost to hosted UC and Communications as a Service (CaaS), as well as to UC, in general. Such a partnership marks a trend that will grow over the next few years and will be eagerly pursued by all leading communication and business application vendors. Time to market is a critical factor, though, and the trend-setters can both gain a competitive advantage and/or suffer the consequences of market immaturity. For the sake of Siemens, their customers and even their competitors, I hope they do it right from the start!
A potential OpenScape deployment in the Amazon cloud is significant, because it opens up a whole new growth opportunity for UC. As a hosted (CaaS, cloud) offering, it provides flexibility and a less risky entry point for customers that are willing to trial UC but have limited capital budgets. By leveraging a partner that already has an enormous brand recognition and marketing abilities, Siemens has just created a channel for its UC solution, that expands its addressable market well beyond the reach of its direct sales force.
It is too early to predict exactly how successful this partnership is going to be, but we can speculate. Although demand for CaaS and UC in general is growing, even a joint endeavor of this magnitude cannot overcome the numerous barriers to adoption including the general economic climate, availability of legacy infrastructure and customer hesitation about which vendors and platforms to choose. Further, while this partnership creates marketing and sales opportunities, how will services be handled? Which party will businesses turn to for CPE (phones, gateways, etc.) installation, maintenance and evolution/migration? If the entire premise-based infrastructure is up-to-date and all that’s needed is a hosted presence component, it may be a favorable scenario for this kind of solution. But if the CPE needs to be upgraded, will customers handle the migration and the new integration with the hosted service or will they call someone and who would that be?
There are a lot of further implications from that announcement. For example, this CaaS solution threatens hosted UC providers that are dependent upon their hosted telephony business to grow. Given the larger CPE base, a hosted UC platform that integrates with premise-based solutions has a greater potential than end-to-end hosted services. With Siemens’ superior OpenScape voice capabilities, a fully hosted package, if properly delivered (from sales to installation to management) can dramatically impact the hosted telephony and hosted UC markets, which are currently very fragmented and populated by multiple small providers with limited technology capabilities and sales resources.
Overall, a potential OpenScape UC in the cloud is good news for the industry and worth monitoring closely going forward. The concept is great, but let’s see how Siemens handles the execution.
Do you think soon we will be shopping for communication services like we do for books and CDs? Will we trust what we see on the Internet? Won’t businesses still look for a more direct touch, e.g. a call/visit by a knowledgeable consultant? Is the Amazon brand as popular with businesses for business solution shopping as it is with consumers? I have many questions. Let me know if you have the answers.