TELUS and Teletrips Focus on the Triple Bottom Line
On October 19, TELUS and Teletrips announced a unique business solution, promoted and delivered jointly by the two organizations. The Intelligent Enterprise QuickStart system, tools and related services help businesses design and implement more effective flexible-work programs.
Most telecom pundits know TELUS well; however, fewer people are familiar with Teletrips. It defines itself as “the leading provider of online tools that help organizations optimize their triple bottom line performance through Intelligent Workplace and Workforce Management”. It has developed the SaaS-based Teletrips Work Anywhere System and the Intelligent Enterprise QuickStart set of tools that enables businesses to identify specific characteristics of their workforce (mobile or deskbound, more or less collaborative roles, etc.) and develop effective flexible-work strategies and programs. This data-based approach helps organizations reduce costs, improve employee retention and satisfaction, and better protect the environment – hence the triple bottom line benefits: return on investment, return on employees, return on environment.
Teletrips boasts successful implementations with major organizations such as TIAA-CREF (The Teachers Insurance and Annuity Association – College Retirement Equities Fund) and TELUS itself. These organizations have been able to gain varying benefits from promoting more flexible work styles.
Many individuals today are consciously making a choice to work from home or various remote locations, and although their motivations may vary, the common objective is to improve their work-life balance. The time saved from lengthy commutes can be used to complete additional work tasks or handle house chores and family-related matters, or it can be invested in personal betterment (sports, entertainment, rest, etc.). While today many organizations readily support such programs, mostly in response to employee-expressed interest in working remotely, few are actively promoting flexible work styles. Many businesses are just not fully aware of the tremendous benefits a more flexible work approach could bring to the individuals, the organization and the environment.
TELUS is sharing the results of its At Home Agent Program (AHA), partly supported by Teletrips. The AHA program is aimed to improve the way TELUS’ call center agents work and live and to promote personal, community and environmental wellness. Of TELUS’ 6,500 call center team members, 1,000 are part of the AHA program and 20 percent of those use the Teletrips People and Places Reporting System (PPRS) tracking tool. This is a web-based interface used to log daily agent commute choices and assess their impact in terms of time savings, fuel and vehicle maintenance savings, and reduced emissions. At the end of the first 24 months since the program was launched, the following results were reported based on the regular entries of about 133 agents:
- Over $122,000 in total maintenance and fuel savings or approximately $900 per agent per year;
- Agents avoided driving a total of 903,827 km or about 6,665 km per agent per year;
- Reduced CO2 emissions by 204 metric tons
- Agents reported net savings in actual commute time of 14,000 hours or 104 hours per agent per year
TELUS reports savings in furniture, equipment and rent. Additionally, the AHA program has reduced team member absenteeism and attrition, which has also translated into hard-dollar savings from reduced hiring and training costs. Furthermore, AHA members have demonstrated higher engagement levels and greater productivity (estimated as being about 20% higher on average compared to that of the rest of the agents).
Sun Microsystems (which has implemented a flexible work program as well) and TIAA-CREF reported significant savings and benefits as well. Most savings seem to come from real-estate costs, but additional benefits include greater employee satisfaction and morale. Sun Microsystems managed to transition about 56% of its workforce to a flexible work program over a period of about two years. The transition was enabled through advanced technologies such as virtual desktop and thin clients, which helped gain additional savings – for example, the number of desktop support administrators was reduced from 1,100 to 7 (for the support of about 42,000 desktops)!
TELUS and Teletrips are now engaging in a partnership to jointly promote and implement the QuickStart System to help others gain similar benefits. Their approach is based on six key steps to launching a successful flexible-work program:
- Gather data and size the opportunity: data-based decision making can produce superior results
- Build a case for change and create a strategy
- Choose and deploy enabling technology
- Start a flexible work pilot
- Measure the impact to the triple bottom line
- Share your success and duplicate
Additionally, TELUS and Teletrips advise organizations to identify a clear end goal and commit to a planned investment. And even more importantly, acknowledge that this is all about people and that they have to be at the center of this process. TELUS, Sun Microsystems and TIAA-CREF also recommend that organizations pursuing the implementation of a flexible work program should appoint and empower a leader and ensure the cooperation of three key business units – HR, IT and real estate.
TELUS and Teletrips are looking to explore a significant opportunity in the North American market. In the U.S. only, they have estimated about 130 million knowledge workers, 58 million of which are able to work remotely.
I believe technology and changing life styles will drive a continued evolution of work styles as well. A growing number of people will work remotely or wish to do so and it will be important for organizations to ensure they have effective programs in place in order to gain maximum benefits.
Avaya Makes a Bold Move into the Video Collaboration Space
On September 15th, Avaya announced several new products that nicely round up its Unified Communications (UC) applications and endpoints portfolio. The product launch focused mostly on video conferencing and video collaboration. Unlike its arch rival Cisco, Avaya has been lacking strong video capabilities, though it has been working closely with partners such as Polycom to provide end-to-end UC solutions to its business customers.
With its new Avaya Desktop Video Device and enhanced video support through Avaya Aura 6.0, Avaya is now able to deliver more comprehensive video conferencing capabilities on its own. The new Android-based device features a small form factor, touch-screen technology, HD video and audio, bandwidth efficiency, mobility (using WiFi, Bluetooth or 3G/4G via a USB plug-in) and a competitive price in the range of $3,000 to $4,000.
One of the most fascinating aspects of the new video device is the Avaya Flare experience. Avaya Flare is a user-centric UC interface with a spotlight in the middle that highlights ongoing communications sessions (IM, audio or video calling, and so on); on the right hand side – a list of contacts arranged by source – corporate directory, Facebook, etc. – and searchable by name; and on the left-hand side – a list of applications (such as calendar, for example). The Flare interface allows users to conveniently drag contacts into the spotlight and choose a communication mode based on presence status and/or the user’s preference and purpose. With an easy click of a phone icon, for instance, all contacts in the spotlight are immediately joined into a conference call. Other possibilities include video, IM, email, social (networking) and slideshare. Web conferencing is built into Flare as well.
Avaya Flare
In essence, the Avaya Desktop Video Device is a high-end, SIP-based, multimedia endpoint that enables users to conveniently use a variety of communication modes to communicate and collaborate more effectively. While the price point is certainly high for the average phone user, for users looking for cost-effective video, the Avaya Desktop Video device offers a compelling alternative. Typical users of such videoconferencing endpoints can be found in the legal or healthcare sectors, for example. Dr. Alan Baratz demonstrated a scenario in a healthcare environment where a specialist doctor was contacted via video to properly diagnose a patient. For a busy, multi-tasking and typically mobile executive, this device can prove a highly effective communications and collaboration tool, competing with a Cisco CIUS or an iPad as well as emerging smart deskphones.
The good news for those looking for a smart interface, yet not crazy about video or unable to afford the premium price, is that Avaya plans to introduce the Flare experience on other devices as well. In the near term, Flare will be available on select Avaya 9600 series phones and eventually – on smartphones. Integration with Microsoft Outlook for contact management and ability to control voice, conferencing, IM and presence can turn the SIP deskphone into a smart device providing a single point of access to communication tools currently available on disparate endpoints (e.g. IM and presence on PCs and laptops, voice on phones, and so on).
Furthermore, Avaya one-X Communicator 6.0 will provide ad-hoc video conferencing capabilities to Aura customers looking to use their PC or laptop as their primary interface to multiple, integrated communication and collaboration tools. Presence and IM federation, tight integration with Outlook, Communicator, Microsoft Office, IBM Sametime and Lotus Notes, video interoperability across Avaya’s portfolio and third-party endpoints, and centralized management through Aura, make Avaya’s one-X Communicator UC solution an appealing option for desk-bound knowledge workers and other heavy communications users.
Avaya also announced its Avaya Aura Collaboration Server – a virtualized platform delivering all Avaya Aura 6.0 core capabilities, including the Session Manager, Presence Services, Communication Manager and System Manager, on a single server. This is a cost-effective (list priced at $27K) solution for up to 50 users that allows businesses to leverage Avaya Flare and Avaya videoconferencing while avoiding a large CAPEX commitment.
Avaya also highlighted its professional and managed video services capabilities, which will be key in complex environments and with businesses lacking sufficient in-house expertise to deploy and manage advanced video applications on their own.
Finally, Avaya launched the Avaya web.alive Experience – a cloud/SaaS-based collaboration solution featuring a 3D environment with avatars. Avaya web.alive enables users to collaborate using audio or video conferencing and sharing presentations and other content. Businesses can license a “space” within that environment and then customize it based on their needs. It is also available for on-premises implementations when security and control are key concerns (for instance, in government deployments). While the avatars create the illusion of an immersive experience, their movement on the screen may be distracting to some users. They may wish to use a 2D version and still leverage the full range of collaboration capabilities available on the platform. The web.alive Experience is being touted as particularly effective in marketing and sales scenarios (when presenting to customers and demonstrating the capabilities of specific products or solutions) and in e-learning environments. The platform provides interesting analytics tools that can be used to assess the effectiveness of collaboration and each participant’s contribution to the collaborative process.
Some customers inquired about the possibility of Avaya delivering certain advanced features such as video call park, hold, transfer, and so on in the future. Avaya confirmed that it can eventually enhance the video capabilities using Aura. Avaya was also asked to substantiate its claims of significant hardware cost reduction compared to competitors. It responded that it had benchmarked itself against Polycom and Cisco/Tandberg and came up at a 20% to 30% cost advantage vis-à-vis Polycom and up to 70% cost advantage vis-à-vis Cisco.
During Q&A, Avaya also provided some clarifications around the deployment options for the new video solutions. All new capabilities are available with Aura 6.0; however, previous Aura versions, as well as IP Office, can be front-ended with the Collaboration Server in order to leverage existing infrastructure and take advantage of the new capabilities. Additionally, through Aura, other vendors’ telephony platforms can also be integrated with Avaya’s video solutions. Furthermore, Aura provides bridges between Avaya’s new SIP-based solutions and existing H.323 video systems.
With the new announcements Avaya once again demonstrated its commitment to innovation and continuously enhancing the value of its products and solutions. It’s made some strong claims about the cost efficiencies and productivity benefits of its solutions and it remains to be seen how those become realized in individual customer scenarios. Also, Avaya has traditionally benefited from its more partner-centric approach (vis-à-vis Cisco’s one-stop shop approach), including in the area of video collaboration, and it will be important for Avaya to continue to function effectively in a broader eco-system. While the Aura architecture enables Avaya’s customers to leverage multi-vendor technologies for best results, it is possible some of its former partners may feel threatened by the new move. However, with the growing recognition of the value of videoconferencing in replacing costly travel and helping geographically dispersed teams collaborate more effectively, Avaya has rightfully sought to enhance its video capabilities. The new video solutions are likely to help it broaden its customer reach and add new sources of revenue.
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.
Hosted Communications Gaining Traction in North America
Vanessa Alvarez and I just completed the update of our North American Hosted IP Telephony and UC Services Markets study. Here is a summary of our findings:
In 2009, the economic crisis continued to plague enterprises, particularly in the small and medium business segment, which is the target market for hosted IP telephony. Many service providers suffered customer retention issues as SMBs downsized and some even went under and couldn’t pay their bills. Customer acquisition was even more difficult as many enterprises held back on making communications decisions or made other IT technology investments a priority.
Yet, 2009 was a relatively successful year for hosted IP telephony. The installed base grew by close to 30 percent with new adds compensating for losses due to workforce reduction in customer organizations.
Although the concept of unified communications continued to make inroads into enterprises, it did not gain as much traction as originally anticipated. As a result, although many hosted service providers took 2008 to retrench and include more UC offerings into their portfolio, the market segment targeted by hosted services was not ready for unified communications, and UC adoption rates and revenue impact were minimal.
Frost & Sullivan estimates about 1.4 million installed hosted IP telephony lines as of the end of 2009 and expects the installed base to reach between 7.5 and 8 million lines in 2015. Revenues, estimated based on an average bundle of features and capabilities, reached about $700 million in 2009 and are expected to reach $3.8 billion in 2015.
Many factors will contribute to growth going forward. The macroeconomic situation forces enterprises to reconsider maintaining their own infrastructure as opposed to using hosted services. Enterprises today want to focus on driving their business, not managing their IT environments.
Parallel to this, hosted IP telephony, and hosted services in general, have evolved in terms of features and functionality. Underlying technologies are also evolving, allowing service providers to upgrade and enhance their own networks and data centers, making the delivery of IP telephony easier and more cost-effective.
The market remained fragmented with over 50 providers, each offering varying bundles of communications applications typically including local and long-distance voice, voicemail or unified messaging, auto attendant, conferencing, contact center and CRM applications, frequently also packaged with an access line and an Internet service. Frost & Sullivan predicts that consolidation in this market will accelerate, as large IT service providers look to bundle communications services into their overall IT hosted services offerings. As cloud computing begins to evolve in service providers’ data centers, it will become easier to deliver compelling cloud-based communications services. Also, within the next two to three years, some PBX vendors will look to develop their own solutions, in the form of virtual appliances hosted in their own data centers or the public cloud, and deliver services more directly to end users, bypassing the traditional telcos.
Enterprises today must consider what delivers greater value to their business. Many are finding that managing their own IP telephony systems, or any IT for that matter, just doesn’t make economic sense. It is best to focus their IT and communications management resources on delivering superior products/services to their customers as quickly and efficiently as possible.
Counterpoint
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.
Unified Communications: Where do we Go from Here?
After several months of hard work, we have now completed the update of our World Unified Communications (UC) Markets study. The reason why I feel like celebrating (more so than after any other study) is because this market presents some unique challenges. Typically, we discuss and analyze markets by product or service category – e.g. the enterprise telephony platforms market, the enterprise media gateway market, the videoconferencing endpoint market, etc. But unified communications is all about … well, unification … that is, application integration. At the risk of repeating myself and stating what may be the obvious for some, here is how we define UC:
“Frost & Sullivan defines a unified communications application as an integrated set of voice, data and video communications, all of which leverage PC- and telephony-based presence information. UC applications are meant to simplify communications for the end user by making it easy to “click to communicate.” A unified communications application must contain the following:
- PC-based presence (online or offline)
- Telephony presence (on the phone or available for a call)
- Point-to-point voice calling
- Chat (i.e., instant messaging)
- Audio conferencing
- Web collaboration (application, file, and desktop sharing)
- PC-based video
- Find-me/Follow-me capabilities (for call routing)
- Unified messaging
A unified communications application may include the following:
- Mobile client
- APIs for easy integration with other applications
- Social networking capabilities
- Wikis/blogs
- Integration with room-based video conferencing
- GPS or other location information”
The past couple of years were challenging for communications vendors as the recession forced many businesses to suspend or delay investments in communications technologies. Tighter budgets limited the penetration of most UC applications. The telephony market was one of the hardest hit, as most vendors experienced double-digit year-over-year revenue declines. Conferencing applications and services fared better, as they allowed businesses to reduce travel costs while enabling virtual workers to communicate and collaborate more efficiently. Even conferencing markets, however, experienced increased price pressures, with the impact of the recession being most severe in conferencing endpoint markets and in the more mature audio conferencing services markets.
In 2009, UC vendors focused primarily on penetrating the market with advanced UC clients. IM and email vendors aggressively upgraded their customers to UC-capable IM clients and architectures. Similarly, telephony vendors bundled advanced softphones capable of integrating with IM clients and conferencing platforms with the rest of their telephony solutions to encourage adoption. While these vendor strategies help increase user familiarity with software-centric communications and their benefits, they are not strongly correlated with investments in the rest of the infrastructure required for a complete UC implementation. Customers deploying softphones from their telephony vendors did not always purchase the conferencing and/or IM/presence servers. Similarly, many customers who purchased Microsoft’s OCS Enterprise CALs did not choose to use OCS voice or to integrate OCS with the corporate telephony system.
Overall, we do not believe UC will be a big revenue source for the vendors (which is great news for customers!) That said, we believe it is here to stay. Vendors will give away UC clients to drive adoption of various advanced communications solutions – conferencing, collaboration, mobility – as well as telephony and IM infrastructure refresh. As business users become increasingly used to the convenience of certain UC capabilities such as soft clients, conferencing capabilities that are only a click away, affordable video, and so on, it will be difficult to take those away from them.
But who should customers turn to for their UC capabilities? There is no single right answer, of course. Two distinct business models have emerged: on-stop shops and best-of-breed integrations.
For SMBs, all-in-one appliances or application stacks are probably most appealing. However, few vendors are capable of offering, on their own, all the required functionality and features in the UC stack. Either the telephony component is still missing critical elements (such as E911), or the IM clients are not very feature-rich, or some other capability is lacking.
Larger customers with multi-vendor environments are better off selecting the specific applications that best meet their needs and then engaging their own (typically more extensive) internal staff or outsourcing the professional services expertise to integrate those capabilities in an end-to-end UC environment. Limited vendor interoperability along with scarce UC expertise will present some serious challenges to this approach in the near term but will become less of a concern in the future. Growing adoption of SIP and SOA and application enablement technologies, and vendor strategies focused on contextually-rich communications and communications-enabled business processes will have a major impact on vendor interoperability and will eliminate a great portion of the hassle and cost related to application integration and UC implementation.
Generally, UC adoption may remain limited to specific user groups (e.g. knowledge workers, marketing and sales people) for the next few years, until business models make it compelling for the average communications user to own a UC solution even if they are not using all of its capabilities and not benefiting as much as the early adopters.
Here are some recommendations to end users considering UC:
- Businesses should leverage their communications investment to gain a competitive advantage and should make new technology acquisitions with their key strategic objectives in mind.
- Vendors are engaged in a more fierce competition than ever before. Customers can exploit this opportunity to require exceptional value for their money.
- Customers need to future-proof their investment. They should seek to deploy open and flexible standards-based technologies. Further, they should demand extensive education and training on features and integration capabilities to ensure that they can easily switch among or integrate multi-vendor solutions.
- Customers should pay attention to their vendors’ and channel partners’ overall financial stability. The recession has weakened a lot of market participants and growing competition will further jeopardize their viability.
- Customers need to restructure internally to ensure they gain maximum value from their IT and telecom investments. They must ensure cooperation between the telecom and IT teams so they can effectively coordinate new investments and ongoing infrastructure management.
- Finally, customers should explore alternative delivery models (e.g. managed services, hosted solutions, etc.).
For more information on our study, please contact me at epopova@frost.com or review related material on our web site at http://www.frost.com/srch/content-search.do?srchid=194001017.
Transformation: Key Element of Alcatel-Lucent’s Strategy for the Communications Market
I have just returned from an Analyst Event hosted by Alcatel-Lucent’s (ALU) Application Software Group – now comprising its enterprise applications development and sales team and the Genesys portfolio and organization. Besides being a highly entertaining event at a fabulous locale (Rosewood Sand Hill Hotel in Menlo Park), this gathering also provided analysts with a good perspective on ALU’s strategy for the UC and contact center spaces. ALU demonstrated its determination and ability to continue to lead in the communications markets with innovation, openness and strong financials.
The following are some of the takeaways from the event.
Transformation: For some time now, ALU has been sharing its vision for a necessary transformation in the enterprise, involving various technology and organizational changes. One of the aspects of this transformation process is the merger of enterprise and contact center technologies and business processes. With the merger of its enterprise and contact center teams into the ASG structure ALU is setting itself up for more targeted transformational product development and marketing. This organizational structure is unique (to my knowledge) and could enable ALU to more effectively develop and promote innovative capabilities creating new opportunities and expanding its addressable market.
For a long time, ALU has sought to leverage Genesys’ contact center success into the more general enterprise space, but has not been able to implement a powerful and coherent strategy to complement its vision. With the merger of the two teams and the prospects of cross-selling and up-selling customers across the enterprise and contact center markets, ALU may be on a path to finally bring its vision to fruition. Moreover, it may be able to set a trend in the communications market that will drive a transformation of vendor organizations leading to an accelerated convergence of enterprise and contact center infrastructures and decision making processes among customer organizations.
Some of the specific objectives pursued through its Transformation strategy include:
- Delivering expanded solution offerings
- Presenting one face to the customer
- Leveraging a wider choice of models
Some of the specific steps in the merging of the two silos involve the extension of presence and UC into the contact center and the ability for customer service interactions to extend into the enterprise pool of experts. This notion is not entirely unique to ALU, but all vendors are at the initial stages of developing the technologies and strategies to implement this vision. If ALU is successful in leveraging its new organizational structure to more efficiently market these new capabilities, it may be able to develop a sustainable competitive advantage as “the walls of the contact center start coming down” (as prophesied by ALU’s executives).
Application Enablement: Another message that ALU has consistently tried to convey to its customers and partners over the past couple of years is that of its application enablement efforts and capabilities. Application enablement has become a key element in communications vendor strategies as they look to integrate with other vendors’ applications in order to deliver greater value to their end users.
I need to take a step back before I discuss ALU’s application enablement strategy further. One of ALU’s perceived competitive advantages is the combination of carrier and enterprise product and service organizations. Since FMC has demonstrated little success to date and these continue to be two very distinct silos, I have wondered whether there were any true synergies between the two groups within ALU. As ALU revealed its vision for application enablement, it started to become more apparent about how the carrier and enterprise/contact center groups could leverage each other’s capabilities for greater success.
Here is how ALU defined its vision for application enablement bringing the carrier and enterprise application worlds together: “Consistent, Controlled, Open Access to Network Enablers in the Cloud”. For example, ALU’s idea of application enablement involves the integration of carrier applications with enterprise/contact center ones to enable capabilities such as enhanced caller profile (with presence, location, preferences from subscriber data, etc.) that can prompt an appropriate action by the respective business or organization – e.g. marketing and customer assistance at the right time and place. It also brings the mobile and enterprise experiences together by enabling mobile users to collaborate using multi-media capabilities on mobile devices. Overall, application enablement allows business users to participate in contextually rich, presence- and location-enhanced communications and collaboration.
ALU is working with partners to develop new applications and capabilities. It claims over 200 applications and about 10,000 developers in its Alliance and Application Partner Program.
Further, ALU’s vision for the convergence of the carrier and enterprise worlds is based on the anticipated growth in demand for hosted/cloud-based communications. It is readying its portfolio and service resources for a variety of scenarios – from fully premises-based to hybrid to fully hosted ones.
Main Technological and Strategic Tenets and Success Factors
ALU is looking to leverage a set of capabilities that can set it apart from other communications vendors. What end users and partners should take into consideration when evaluating ALU as a potential vendor or partner, include the following:
- It boasts some of the most open technologies in the marketplace, both on the enterprise and Genesys sides. It can deliver advanced communications and collaboration capabilities in a multi-vendor telephony environment. It is set on a technological evolution path leading to increasingly more open, software-centric solutions based on SIP. These capabilities make ALU a viable option for existing Nortel customers wishing to avoid a drastic rip-and-replace scenario, but looking to overlay some advanced capabilities on top of existing platforms or to prepare themselves for a transition to a new infrastructure in the future. Further, the openness and modularity of ALU’s technologies counter-position it against Cisco and its over-arching strategy of locking customers into an end-to-end Cisco architecture.
- In the UC market, Alcatel-Lucent (ALU) has positioned itself for competition both as a one-stop shop for a broad range of UC applications and a voice communication partner to the IM/presence vendors such as Microsoft and IBM. It provides the My Instant Communicator (MyIC) application (supported on its My Teamwork multimedia platform) that integrates telephony and online presence and can perform multiple functions. It can act as an IM client and a softphone interface to ALU’s voice communication and conferencing platforms; it can also invoke other IM clients such as IBM’s Sametime or Microsoft’s Office Communicator. ALU’s UC solution is modular and flexible allowing customers to deploy only the capabilities and respective servers (telephony, presence, conferencing, etc.) that they require with the ability to add applications and integrate them into the UC environment in the future. This architecture makes ALU a viable option for businesses with multi-vendor communication environments looking to deploy advanced conferencing and UC capabilities without replacing existing call control platforms.
- Further, ALU’s application enablement strategy and respective capabilities are likely to provide it with a competitive edge going forward as businesses look to integrate UC with mobile applications, contact center technologies, business processes and various Web 2.0 applications. Business decision makers will need to start evaluating communication technologies as a strategic investment in improving business processes and will, therefore, need to require their vendors to demonstrate an ability to integrate with other, existing or planned platforms and applications. ALU’s application enablement capabilities should be taken into consideration when selecting a communications vendor.
- With its carrier technologies and existing relationships, ALU is well positioned to drive carrier and enterprise convergence delivering similar or coherent applications across the two silos. In some scenarios, businesses may be able to derive significant benefits from hybrid cloud and premises-based communications infrastructure solutions. ALU will be well positioned to deliver both capabilities in a tightly integrated fashion.
- ALU executives stated that they intend to create new market opportunities and expand ALU’s addressable market. I believe they have a powerful vision and their success will depend entirely on their ability to execute. For that purpose, organizational structure and business practices related to the convergence of enterprise and contact center, carrier and enterprise groups, will need to be tightened. Greater focus on solution selling and customized transformational engagements with business customers will be key to success. Last, but not least, financial performance will need to improve in order to provide the company with greater resources to fulfill its vision.
Sigmund Freud and Social Media
A couple of years ago, a friend, obsessed with conspiracy theories, sent me a video (here is episode 6 of a 1-hour documentary) about Sigmund Freud, his daughter Anna and his nephew Edward Bernays and the impact of their theories on modern marketing and public relations. My friend’s takeway from the video was that we are being constantly psychologically manipulated and deceived by those in power – politicians, corporations, media, aliens, etc. I do not subscribe to global or otherwise large-scale conspiracy theories (color me naïve), but I enjoyed the video because I take interest in Freud and Jung, and the way their theories have been applied in social studies and comparative mythologies and how they have impacted the works of great minds such as James Frazer and Joseph Campbell.
The premise of the documentary is that modern marketing and public relations pioneered by Edward Bernays reduced individuals to passive, brainless consumers with little ability to pass judgments or make decisions on their own. As social networking rapidly penetrates society and I keep pondering over how it will eventually impact individuals, businesses and the various aspects of social life, I remembered this video and watched it again.
I personally believe that social interactions are inherently “manipulative” in nature – aimed at influencing other people’s perception of ourselves, of others, of concepts and various natural and social phenomena. It is our personal responsibility, not that of others, to decide to what extent we will allow ourselves to be influenced. With the exception of blatant, inaccurate propaganda (e.g. smoking is good for your health) or brutal enforcement of ideas (e.g. the crusades, the inquisition, etc.), the rest, in my opinion, is perfectly normal, natural human behavior. In fact, people have engaged in “marketing” activities, “public relations” and various forms of propaganda since the early days of humanity, only the means have changed over the years. Myths, rituals and religions were created for the purposes of disseminating collective wisdom and promoting values, as well as for entertaining people. In today’s society, those have been replaced by books and magazines (printed media), television, and most recently – the Internet.
Have common individuals become less or more powerful participants in the process of exchanging ideas and impacting others in the way they think and behave? I believe that, in democratic societies at least, individuals are becoming increasingly better informed and empowered through improving literacy levels and growing availability of affordable means of communications. It is the Internet, however, that has truly democratized access to information and entertainment. Now social networking is making us even more powerful participants in creating social value by sharing ideas with a large number of people dispersed over vast geographic areas. In the distant past, people gathered around the shaman to hear prophecies, find cures for various illnesses or just for a relaxing time with songs and dances. Now we have Facebook, Twitter, Youtube …
This new social experience comes with certain implications that we might wish to consider prior to engaging in further activities.
Opportunities to influence our environment: It is obvious that the Internet and social media are creating opportunities for the common man to more freely (and arbitrarily, more effectively) voice his ideas and concerns. Even if one person alone cannot have a significant impact on a stock price, a movie rating or a company reputation, the collective voice of the masses can make a big difference. This has tremendous implications for how social media is and can be used for marketing and customer service. “Word of mouth” will acquire a completely new meaning in the era of social networking!
Creation of new myths, believes and rituals: We should realize the fact that we, as social media participants, will become the creators of new urban legends (myths) and social practices (rituals). We may not even realize that occasionally we will fall prey to self-fulfilling prophecies as we systematically and collectively enforce a belief. To bring this closer to home, let’s take the concept of Unified Communications (UC) as an example. While UC certainly has the promise of delivering cost efficiency and productivity benefits to business users, vendors, analysts and media are effectively contributing to its becoming a more immediate and tangible reality by keeping its definition fluid and continuously ascertaining it as a “de facto” trend, rather than just a vision or a theoretical construct.
Emergence of new fears and conspiracy theories: It will not be long until social networking creates a fertile ground for new fears and conspiracy theories to emerge. Some people are already worried about too much exposure, identity theft, etc. These fears will grow into more serious concerns over the possibility of increasing negative influences on children and young adults that will be ever harder to monitor and control. Today, parents typically make sure they know their children’s friends and their friends’ families, but how will they know who’s behind a social networking pseudonym? The fear of companies, sects, the government, aliens, etc. now being able to reach anyone in all kinds of new powerful ways is likely to cause people to alter their behavior, look for counter-measures and seek for certain policies to become implemented in order to ensure at least minimal identity and security protection. Therefore, businesses using social media for marketing purposes will need to be very careful in what information they disseminate and in what form to avoid possible backlash.
The need for greater responsibility: The sheer power of the Internet and social networking requires a new sense of responsibility from all contributors. While I stated earlier that it is everyone’s responsibility to control the extent to which they are impacted by new media, we should not forget that we are parents, employees and consumers. As such, we have a responsibility to protect our children, companies and other consumers like us from the spread of erroneous information and unhealthy believes.
In debates over the role of art, I have always claimed that it does not need to be educational or elevating – after all, it is just an expression of the artist’s vision. I suppose that same theory applies to social media, but even if we don’t want to control the content (that would be somewhat undemocratic), we still need some basic rules of engagement to be in place or else – this may be the beginning of chaos. As Jean-Jacque Rousseau discovered many years ago, man is inherently greedy, jealous, violent, etc. – i.e. evil in all kinds of ways, but he finds it necessary to sign a “social contract” (i.e. behave in certain socially appropriate ways) in order to be able to peacefully co-habit the Earth with his brethren and benefit from some of the advantages of social (vs primitive, isolated) life. I will end this post with one of his quotes to give us all some further food for thought.
“The first man who, having fenced in a piece of land, said “This is mine,” and found people naive enough to believe him, that man was the true founder of civil society. From how many crimes, wars, and murders, from how many horrors and misfortunes might not any one have saved mankind, by pulling up the stakes, or filling up the ditch, and crying to his fellows: Beware of listening to this impostor; you are undone if you once forget that the fruits of the earth belong to us all, and the earth itself to nobody.”
Virtualization to Transform Enterprise Communications Infrastructure
Virtualization is the process of ‘decoupling’ users and applications from the hardware characteristics of the system that performs the computational tasks. Virtualization enhances the ability to manage and change the physical environment of the hardware and software without disrupting the performance of the enterprise. The benefits of virtualization have never been disputed. While the growing demand for Windows and Linux-based servers has led to the popularity of server virtualization, the need to eliminate incompatibilities among the several applications deployed by enterprises today has spawned a market for applications virtualization. Though server virtualization accounts for the bulk of the virtualization services market today, there are other critical ones such as virtualization of desktops, storage, networks and services.
Who's Who in Virtualization
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The prevailing server-to-virtual desktop concurrent user ratio makes this technology the most attractive for mid-tier companies. We believe that the technology has issues when it is scaled up to really large deployments (more than 5,000 users).
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The application and deployment needs of medium enterprises are less diverse. There are fewer exceptions in terms of user profile when compared to large enterprises.
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qThe higher volume and diversity of applications deployed by large enterprises today make it difficult to deploy them over a virtual desktop-application streaming model.
- Target Market
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Innovation Drives Adoption: The market for server virtualization is fast approaching maturity. However, VDI and application streaming are still evolving. These technologies address a major pain point of enterprises – delivering communication solutions irrespective of location, device and time. Coupled with this, is the ability of organizations to scale application deployment without incurring large-scale investments. Frost & Sullivan expects that these factors will drive accelerated adoption in the next few years. By 2012, we expect at least 10% – 15% of large enterprises to have implemented application virtualization in one form or the other.
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The UC Factor:Virtualization will gain new impetus from the growing need for organizations to deploy unified communications (UC) suites. Cost of implementation is the single biggest deterrent for large-scale UC adoption by enterprises. Enterprises that cannot afford the switch-over to IP-based communication networks that support ubiquitous enterprise collaboration can leverage virtualization and the public cloud infrastructure offered by a number of virtualization providers today. Though these services are attractive to mid-tier organizations, large organizations that find it difficult to keep pace with the rapid technology flux happening across the UC space may find virtualization a better option.
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New Market Entrants Endorse Technology, Add to Market Confidence: Entry of large networking and communications vendors into the virtualization market has sent strong positive signals to end-users and instilled confidence in the technology. Communication vendors are partnering with virtualization technology providers to diversify solution delivery and offer advantages of virtualization to existing customers. This strategy also allows them to target new vertical and horizontal markets.
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Lower IT Budgets in Times of Poor Economy Open Up New Opportunities: Gloomy economic conditions is exerting pressure on enterprise IT budgets. However, there are some sweet-spots that open up opportunities for vendors. One such opportunity is UC on mobile devices. While UC vendors innovate on the mobile application front, virtualization offers an attractive deployment option.
Mitel Enhances its UC and Collaboration Portfolio
Today, September 23, 2009, Mitel announced significant enhancements to its Unified Communicator Advanced (its core UC application) and TeleCollaboration solutions (see press release here).
Unified Communicator Advanced (UC Advanced) release 3.0 features capabilities such as dynamic status, integration flexibility, a launchpad for Web and applications access, knowledge management and context-driven communications, among other new or enhanced functionalities.
The dynamic status capability allows users to dynamically manage their extension in terms of specifying a user’s status with regard to various messages, presence and call routing. It also enables users to treat certain communications preferentially based on user-selected criteria. Finally, it allows users to remotely manage their status.
Further, Mitel’s UC Advanced solution now integrates with Microsoft Office, IBM Lotus Notes and UCA APIs. Calls can be launched from Internet Explorer, Word, Outlook, IBM Lotus Notes or the user’s calendar.
The knowledge management capability provides call recipients with information about callers such as recent emails, contact entries and exchanged documents.
The launchpad allows users to launch Mitel applications from a single access point. Individual contacts can be called with a single mouse click, including creating speed dials that navigate voicemail and conference service menus.
Context-driven communications is another valuable addition. It enables screen pops providing the called party with information about the subject and call priority. It also displays a picture of the caller and allows the user to respond via IM.
Mitel Series X Context-driven Communications
Source: Mitel
Some other UC Advanced enhancements include visual voicemail, secure instant messaging, RSS feeds, easy audio and web conference initiation through the desktop, etc.
The UC Advanced solution scales from small to very large enterprise and can support up to 5,000 users on a single server.
Mitel’s TeleCollaboration solution release 1.5 features integrated video and collaboration capabilities, low bandwidth requirements and high tolerance, and greater simplicity compared to competitor solutions. It offers browser-based collaboration and the ability to participate from anywhere, as well as session and snapshot recording.
Mitel TeleCollaboration
Source: Mitel
With these technology enhancements Mitel is seeking to address some current business challenges such as the increasingly diverse, geographically dispersed and mobile enterprise workforce and the need to manage multiple communication media for greater productivity and efficiency. A plethora of advanced UC and collaboration solutions offered by communication vendors are looking to address the same business needs and challenges. Yet, Mitel has remained at the forefront of technology innovation. While most of the new capabilities are not entirely unique, they are very much in line with industry trends and match or exceed those offered by its competitors. My personal favorites are the knowledge management and context-driven communications capabilities. We frequently go through multiple emails and documents in order to prepare ourselves for a call with a colleague, customer or partner. The tighter integration of such resources into the communication process seems to have the potential to greatly enhance user convenience and productivity. I also believe that the integration of video conferencing with collaboration (file sharing, etc.) is a valuable feature that provides users with a more comprehensive collaborative experience.
What also makes Mitel unique is its consistent focus on the SMB market and its relatively strong competitive position in this space. When combined with the rest of its communication portfolio, these solutions can provide SMBs with capabilities typically available to large businesses only. Given Mitel’s efforts to gain greater penetration into the larger business space, the scalability of these solutions along with the rich functionality provide Mitel with an opportunity to more successfully move upstream as well.
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