Tag Archive | Siemens

Siemens (Finally) Launches a Cloud UC Service

 Siemens Enterprise Communications has launched a new cloud communications solution. Leveraging SIP, open standards and its highly scalable softswitch-based OpenScape suite, it is looking to provide partners and customers with more flexible deployment options. The cloud solution includes virtualized, multi-tenant versions of Siemens’ OpenScape Voice, OpenScape UC and OpenScape Web Collaboration software, hosted in four geo-redundant data centers. The service features top-notch availability, survivability, governance and data privacy features, including:

  • Highest availability, TIA-942 class data center, voice redundancy, secure endpoints
  • Edge survivability option, local trunking, IPSec VPN, local firewalls, SBC and media server
  • Multi-tier role-based access management, automated management and provisioning, application-level data center protection
  • End-to-end encryption in the cloud, local country data storage, multitenant capability, data protection audits

Cloud-based voice and UC services will be available only through partners, who will handle customer needs assessment, CPE installation, billing, 1st and 2nd level tech support and ongoing equipment maintenance. The service will be first launched in the U.S., Germany and the Netherlands. Initial partners include Black Box in the U.S., mr.net and Telefonbau Schneider in Germany, and Televersal, ICT Trends Group and onecentral in the Netherlands.

The cloud solution is considered optimal for organizations with about 350 to 1,000 users, with a need for highly packaged, tightly integrated solutions. Users can choose from a variety of features and capabilities grouped in Base Packs and Booster Packs. The estimated end-user list pricing ranges between $5 and $30 per seat per month, based on required functionality.

What I like about this announcement:

Siemens has finally launched a cloud solution – something it started exploring about two years ago by demonstrating a proof of concept with Amazon’s EC infrastructure. With the incredible (I think, almost unreasonable) amount of hype surrounding cloud technologies and the cloud business model, it was about time for Siemens to finally bring this effort to fruition. I have to agree that there is a group of customers out there that would indeed appreciate the opportunity to outsource its communications infrastructure to avoid CAPEX, focus on core competencies or gain access to superior technologies and expertise. This customer segment would remain out of reach for Siemens, unless it finds an appropriate role for itself in the hosted/cloud-based communications marketplace.

It should be noted that Siemens has had a multi-tenant voice platform for years and some service providers such as Postrack and Engage have been using it to deliver services to end users just like others use BroadSoft’s or Metaswitch’s platforms. Other vendors such as Alcatel-Lucent, Cisco and Mitel have also deployed multi-tenant communication managers with service provider partners.

The new approach has significant advantages, however. It gives Siemens continued control over the platform and its capabilities. But more importantly, it empowers partners that cannot or do not wish to manage their own data centers to deliver services using Siemens’ feature-rich and highly scalable platform. Siemens allows partners to use its brand, co-market or white label their cloud services. This is an opportunity for them to gain differentiation as well as new recurring revenue streams. This model provides a fast and economical entry point for small MSPs and VARs to become hosted service providers. It is noteworthy that Siemens announces the new solution along with six partners already lined up.

Issues that Siemens will need to address:

Siemens is not alone in this market. Other telephony vendors are experimenting with new delivery models as well. For example, Mitel offers the Mitel Anywhere service, which it sells directly to business customers. Now it is exploring opportunities with data center providers such as Host.net and Hosting.com, which can host the platform on behalf of small MSPs and VARs. Siemens and other vendors will need to find ways to differentiate or be fast to market with the right partnerships while the market is still nascent and untapped.

 More importantly, this new delivery model is still unproven and it is not clear how all market participants in the value chain will reposition themselves for competition in the evolving marketplace. Will the MSPs and VARs be successful in penetrating the CPE customer base? Will the vendors be able to successfully manage their channels to ensure customer satisfaction and optimal benefits from the cloud services? How will carriers be involved to ensure proper bandwidth and QoS management – critical elements for real-time communications services delivered over the WAN? Who will manage the carrier relationship? How will the hosted IP PBX and UC solutions be aligned with SIP trunking and IP VPN services to provide superior benefits to multi-site organizations?

Overwhelmed? Maybe it's Time to Share or Delegate

There is no denying IT and communications technologies are evolving at a head-spinning rate, requiring continued investments in infrastructure refresh, staff training and organizational restructuring. Managed and hosted services can help relief the burden on overwhelmed IT staff and provide access to superior expertise at predictable monthly costs. But are businesses seriously considering managed services?

Frost & Sullivan’s 2010 communications & collaboration technologies end-user survey, which targeted 200 North American C-level executives, reveals that 62% of respondents’ organizations currently use managed services. Of those current users, 63% plan to increase usage over the next 12 months, and an impressive 42% of non-users intend to implement managed services within the near term. The main reason (stated by 36% of respondents) why businesses choose to pursue managed services is the need to consolidate multi-vendor relationships and solutions management, followed by limited expertise in new/specific products and technologies (34% of respondents).

Here is how respondents ranked the drivers for using managed services:

Businesses can use managed services from a variety of market participants, including vendors, VARs, systems integrators and telcos. The following chart shows that most of our respondents choose to outsource managed services from their vendors:

No surprise there – no one know Avaya better than Avaya, and no one knows Siemens better than Siemens. Also, most vendors are better equipped with remote technologies and NOC facilities to provide QoS and performance management than their smaller resellers.

But almost a quarter (23%) of respondents indicate they use several different managed services providers. While this scenario presents the advantages mentioned above, it is not very cost-effective. Frequently, each vendor relationship is managed by a separate group of people adding a significant overhead. Each contract needs to be negotiated separately and it’s hard to leverage any significant discounts or economies of scale.  Businesses find themselves in this situation because they typically manage disparate, multi-vendor infrastructures as a result of  M&A or due to varying technology requirements by site or remote location.

As businesses look to consolidate their infrastructure and develop a more coherent roadmap for the evolution of their IT environment, a strategic partnership with a single managed services provider can offer the greatest benefits in the long term.

A recent announcement by Siemens Enterprise Communications about enhancements to its OpenScale services portfolio point to vendor efforts in the following key areas:

  • Portfolio standardization and simplification (3 standard options based on degree of support required)
  • Flexibility for potential customization (site-selectable SLAs, custom reports, ability to add modular components to the main package – e.g. MACs, proactive software updates)
  • Channel benefits (active monitoring exclusive for channel partners, possibility for e-bonding with partner billing and management systems; sell-through and sell-to options available)
  • Multi-vendor managed services (across Siemens and non-Siemens data networking and call control platforms and applications)
  • Comprehensive package of application, server and network management
  • Global delivery

Other communications vendors, VARs and systems integrators are ramping up their managed services capabilities as well. I put together a table comparing the different types of managed services providers based on a set of criteria, which I believe are important for end users looking to select a managed services partner:

Each customer case is different, but a systematic approach to selecting a managed services provider could ensure that all enterprise requirements are properly addressed in the contract:

Siemens Strikes a Partnership with Netlink

On September 2, 2009, Siemens Enterprise Communications Group (SEN Group) announced a partnership with Netlink, one of the fastest growing U.S.-based providers of IT solutions. As part of the arrangement, Netlink will acquire SEN Group’s product and service portfolio in 27 countries around the world.  The agreement is valued at €204 million ($308 million) and includes Netlink’s acquisition of SEN Group’s local assets in the following countries:  Estonia, Latvia, Lithuania, Finland, Sweden, Ukraine, Greece, Switzerland, Turkey, Ireland, Hungary, Bosnia, Bulgaria, Croatia, Slovakia, Slovenia, Serbia, Romania, Singapore, Malaysia, Thailand, Ecuador, Peru, Portugal, Venezuela, Chile and Canada.  

According to the press release “customers will enjoy full continuity of service while benefiting from the broader portfolio of capabilities that the relationship delivers”. The understanding is that SEN products will still be offered under the SEN brand, but Netlink will acquire any local SEN legal entities as well as all inventory, staff and other assets, and will take over the delivery of services for SEN’s products under its own (Netlink) brand. 

According to Ross Sedgewick, Director of Global Marketing for Siemens Enterprise Communications, the partnership is part of SEN’s global strategy of improving SEN’s market reach via channel partnerships and driving revenue growth while ensuring customers are served effectively.  

Most likely, SEN’s penetration in some of these markets has been less than satisfactory. Netlink’s market positioning and global structure are expected to enable it to more successfully market and support SEN’s products in these countries. Netlink’s existing product and service skills will be complemented by those of local SEN staff, thus ensuring a certain degree of business continuity. By partnering with a single entity, rather than multiple resellers, SEN expects to more cost-efficiently transfer the assets and also ensure that the selected partner will be more engaged and can fully develop the operations without worrying about competition. 

Ever since the Gores Group acquired 51% stake in SEN, the new entity has been committed to growth. Many analysts, including myself, believe that for Siemens to be able to get on a faster growth path, it needs to make some changes to its services strategy and grow its indirect channels. From that point of view, this partnership seems like a move in the right direction. As is seen from the list of countries included in this partnership, these are mostly emerging markets, many of them small countries. For a global vendor such markets typically present a challenge. Building local presence takes time and investment; yet, the return is limited and it’s difficult to gain economies of scale.  

For a vendor such as SEN seeking to grow in a down economy and in a consolidating market, it seems prudent to find a partner that can take over parts of the business that are not run as efficiently as desired. In the event that Netlink is indeed successful in growing the business in these 27 countries, SEN can expect to realize some benefits as follows: 

  • Grow its brand awareness and installed base in a number of currently under-penetrated countries
  • Grow product revenues
  • Retain some control over product and service delivery through a master partnership with a single, more engaged entity
  • Focus on primary target markets such as Germany (mature, yet key for SEN), USA (maybe its top growth objective), Brazil, China and some countries in Central Europe and APAC

The biggest disadvantage to SEN is the foregone opportunity to develop these operations on its own and generate greater revenues and margins, while retaining full control over its brand. Obviously, the worst outcome would involve Netlink failing completely in all these markets, which is somewhat unlikely since Netlink will have a vested interest to generate return on its investment. Further, Netlink is a fast-growing company with a structure and processes in place that make it a suitable master partner for a communications vendor such as SEN.

What should customers expect? There may be some bumps during the transition, but SEN products and related services will continue to be offered in these countries and, most likely, they will be marketed with renewed vigor and maybe even more consistency than before. There is always a chance that, in some countries, Netlink may be less successful than in others and maybe even less effective than SEN used to be. But I believe that Netlink is more likely to commit efforts and resources to develop the business. 

What could make Netlink more successful? Thorough knowledge of SEN’s product portfolio and a deep understanding of its overall market positioning in view of evolving market trends will be critical for its success. Marketing SEN’s solutions will have to take into account the communication vendor’ shifting focus towards delivering applications and services for comprehensive, end-to-end unified communications (UC) environments. Proper training of all local resources will be key in ensuring that they are prepared to address customer concerns both throughout the transition and going forward. Given its product portfolio (IT, business applications, etc.) and specific expertise, could Netlink be well positioned to develop CEBP solutions for business customers leveraging SEN communications technology? That could make a compelling value proposition if the technologies are in place and a strong marketing message is sent to the market.

Siemens Demos A Potential Cloud-Based UC Offering

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.

Watch out for Sharks in Turbulent Water


It has certainly been anticipated that the recession would force telecommunication markets (not unlike other industry sectors) into further consolidation. The enterprise telephony space, for example, has long been struggling with slowing revenue growth, limited differentiation opportunities and rising competition from non-traditional vendors such as open-source telephony providers, Microsoft, Skype, mobile carriers (somewhat indirectly, through increasing usage of mobile phones for business purposes), you name it.


Although we have no sufficient evidence on what is going to happen with Nortel, we can speculate based on recent news about M&A negotiations taking place and some general marketplace analysis.


At this stage, it just does not seem likely that Nortel is going to make it through bankruptcy protection intact. Rumors that Avaya and Siemens (probably among several others) are in acquisition talks with Nortel for its enterprise business unit should not be surprising. In tough economic times, as demand shrinks, there is no space for too many similar vendors. Also, acquisition costs are at an all-time low, so if anyone is striving for market share growth, this is the time to leapfrog ahead of the competition with an acquisition rather than waiting for slower organic growth.


Nortel’s enterprise business is attractive for several reasons. Nortel has some great telephony, messaging and UC technologies, leading contact center solutions, a large installed base and a loyal channel. Yet, the value of this business to its different competitors will not be the same.


With Siemens Enterprise now financially more stable with the Siemens AG and Gores Group joint venture, it is focused on growth and market expansion. A potential acquisition of Nortel’s enterprise unit could provide it with an immediate access to a North American channel and customer base. Further, from a UC point of view, there are opportunities for eventual synergies. For example, both vendors have partnerships with Microsoft for the delivery of unified communications solutions to business customers. A potential merger will position the new entity very competitively in the enterprise communications marketplace.


Some industry pundits claim Siemens and Nortel have similar technologies; yet, in my opinion, there will be major redundancies as well (e.g. MCS vs OpenScape, large-business telephony platforms, etc.). One of the most significant advantages is Siemens’ open standards approach which allows it to integrate with multi-vendor IM/UC and telephony environments. Finally, both vendors have been on track to become “services” companies for some time now, which could help the new entity more easily align resources under a common vision and consolidate business operations.


Avaya could also benefit from a potential acquisition of Nortel’s enterprise unit as it will emerge as the undisputed North American telephony leader, with a compelling global market share and a significant advantage in the SMB space. The two companies are believed to have a similar customer base described as fairly “risk-averse”, i.e. inclined to work with incumbent vendors with a proven track record of delivering reliable enterprise telephony solutions. Also, Avaya has committed to expanding its channel partnerships and further shifting sales towards a more indirect model, and access to Nortel’s partner base can help accelerate this trend. Finally, Avaya can thus get a hold of some of Nortel’s more advanced UC technologies such as MCS and other solutions already interoperable with Microsoft’s UC portfolio, which will position it even more competitively in the evolving UC space. Needless to say, there will be various portfolio integration challenges and redundancies as well.


Although Alcatel-Lucent is not mentioned to be in any active acquisition talks with Nortel, no doubt, it could also benefit from the opportunity to grow its North American presence leveraging Nortel’s customer base and channels. It could also use Nortel’s technologies to enhance its UC portfolio, which at present, is somewhat less complete than those of its telephony competitors.


Cisco, on the other hand, as stated in other commentaries in the press, may really consider a potential acquisition less beneficial given its proprietary technology approach and anticipated greater difficulty in integrating Nortel’s technologies into its portfolio. It should be noted, however, that Nortel’s contact center solutions could greatly enhance Cisco’s enterprise portfolio as it is somewhat behind its competitors in that market segment.


There are others that could perceive benefits in acquiring Nortel’s enterprise business: Aastra, Microsoft, NEC, etc. Yet, with no evidence of actual activity taking place, I would hate to go into pure speculation at this point.


I will postpone the discussion of other potential advantages and disadvantages of the above scenarios until an acquisition actually takes place. We should not exclude the possibility of a non-telephony vendor acquiring Nortel’s enterprise business. Let’s not forget, however, that there is no vendor or financial institution that is not experiencing some difficulties today. Therefore, a potential acquisition will have to be very carefully considered and tightly aligned with the vision and strategy of the acquiring entity.

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