UCStrategies has a good post on the outlook for Unified Communications in 2009. Some experts are saying that Unified Communications (and Web 2.0) are causing serious security issues for enterprises so I find that UCStrategies’ analysis is very compelling. Here is the link to their outlook for 2009.
Jim Burton’s highlights on 2008
Industry consolidation started in 2007 but took shape in 2008. It takes time to integrate major acquisitions such as Cisco’s acquisition of WebEx and Mitel’s acquisition of Inter-Tel. It also takes time for companies that have changed their business model/ownership to reorganize, as has been the case with Avaya. By the end of this year, we have seen major changes and progress on the above examples. In 2008 we saw the Gores Group creating a joint venture/acquisition with Siemens’ Enterprise Communications group. As the market evolves, we will see more industry consolidation, which may include a few corporate failures. Nortel may be the first major casualty with a market cap under $150 million, as of this writing.
Vendor repositioning evolved in 2008, with vendors trying to differentiate their products and services earlier in the year. By year’s end many came to realize that this effort had confused customers and slowed down sales. And, along with the economic challenges, many have recognized that UC-U (integrating silos of communications) with its soft ROI was going to be more difficult to sell. They have started repositioning/promoting UC-B, (integrating communications into a business process) which often delivers a solid ROI in less than 12 months.
The success of several UC vendors during the past year is a good indication of which companies will become the market leaders. Cisco, IBM, and Microsoft all had good results in this emerging market in 2008. They are likely to become the industry leaders. But, there are others to watch. Avaya has gone through a major reorganization, and has repositioned its products and company. The new Siemens, which has always had a superior product, is now well-positioned after being acquired by the Gores group. NEC is another that should not be forgotten; the company has reorganized and placed an emphasis on providing end-user centric solutions
Biggest disappointments in 2008
Market confusion on the definition of UC is my single biggest disappointment. Vendors have tried to differentiate their offerings by using inappropriate definitions of UC. Many have rebranded existing products and added “UC” to the product description when they do not integrate with other UC components.
2. The industry has not focused on UC-Business Process - integrating communications into a business process. Vendors, the channel, and many consultants and analysts do not appear to have the knowledge to promote the most important part of UC - the part that provides the best ROI and can provide the enterprise with many other “hard” advantages, like improved customer service, competitive advantages and improved employee productivity.
3. The channel is slow to evolve from selling “boxes” to consultative selling. This is one of the biggest challenges for our industry and the vendors that can transition their channel first will become market leaders.
Outlook for 2009
I think it is important to look at what UC really is. It is a combination of integrating the silos of communications, and integrating communications into a business process (which of course is part of integrating silos of communications). With that in mind, it is easy to see that UC has a great future. All forms of communications may be changing, such as a shift from wired to wireless phones and voice messages to text messages, but they all still fall under the umbrella of what we now define as unified communications.
The overall outlook for UC is very good. UC can deliver great ROI. Even if you look at UC-U with a soft ROI, you can see that this may be an appropriate justification for investment in today’s troubled times. Historically a soft ROI showing a savings of 10 minutes per employee per week - that would equal a staff reduction of 10 people, has often been met with the question – so, who are the 10 people you’re going to lay off? Many companies made staff reductions - now we have a hard ROI, an opportunity to maintain productivity with less people. The big opportunity still lies with UC-B - a hard ROI plus an opportunity for companies to reform their business.
The secrets of UC success will come in several forms.
1. Enterprise and End-user education - the first key to success requires enterprise customers to understand unified communications. They need to know how to develop a UC strategy that looks at both UC-U and UC-B. They need to bring together telecom, IT and line of business managers to address the needs of various departments within the enterprise. They need to understand that UC is made up of many important communications components, and they need to look at all of them before they make a technology acquisition decision. They need to understand that while the PBX has historically been the center of corporate communications, it is now just one of the components.
2. Channel education - the channel is responsible for selling and installing and servicing UC solutions. Most are used to selling boxes and are now challenged by selling solutions. This may be the biggest challenge for the industry.
3. Vendor positioning - vendors need to be consistent in their definition of unified communications. Many have confused the market and slow down the industry by trying to differentiate their products and services by having a slightly different definition than their competitors. The market will grow much faster if vendors, the channel, consultants, and analysts would all support a common definition for unified communications.