The Dawn of Enterprise FMC
Type: Advisory Report
Analyst: B. Riggs
Report Date: April 13, 2007
Module: Enterprise Communications
ID: CIR24459 |
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Summary
Issue
Over the next few months enterprise FMC solutions will be available from a surprising number of suppliers. These will sport varying feature sets, but in common will be their independence of dual-mode services from cellular operators. What impact will this influx of enterprise FMC solutions have on enterprise buyers and the competitive landscape for enterprise communications products?
Perspective
Current Perspective
2007 is shaping up as the year that fixed-mobile convergence solutions become relatively widely available to enterprises. Alcatel, Cisco, Ericsson, NEC, Nortel and Siemens all have solutions in the pipeline that bridge cellular and WiFi networks and are expected to be released in the second half of this year.
What the solutions will hold in common will be the ability to use Nokia E61, E65 and E70 handsets to place calls over both corporate WiFi networks and/or cellular operators' GSM networks. They will also not require cellular operators to actually be involved in their deployment, monitoring or in any way helping facilitate the handoff between one network and the other. Instead, these solutions will be based on systems deployed solely at the enterprise and on client software running on the mobile devices. In some cases these solutions will facilitate calls that can be handed off from one network to the other while in progress, in other cases such 'hot' handoffs will remain roadmap items.
The general availability of several premises-based FMC solutions will have a number of repercussions on the enterprise communications market. First, developers of enterprise systems will be pitted against cellular operators more than they have in the past. Until recently operators have been perceived more as partners who would help the developers of FMC gateways go to market with their dual-mode solutions. Systems would be developed that would be fully integrated into operators' billing systems, allowing them to track precisely when their cellular networks were used and when calls were instead running over the WiFi. This level of integration has been very complicated and operators have been unable to roll out the long-promised commercial services.
This being said, European cellular operators have continued to develop network-based FMC services, often based on UMA, and are in varying states of rolling out FMC services to consumers and business users, while U.S. carriers are still largely waiting for something else (perhaps IMS solutions) before daring to launch enterprise services. Enterprise systems developers' production of FMC solutions that do not require much in the way of cellular operators' involvement in the delivery of their enterprise-based dual-mode telephony solutions creates more of a competitive environment that could sour relationships between developers and operators. For example, T-Mobile launched a dual-mode service in the United States. It is offered only in the Seattle area and is targeted toward consumers, though this does not preclude its expansion both in terms of geography and target markets. And later this year BT is planning to role out Corporate Fusion, an FMC service that will provide a single number, single voice mail store, email and calendar access, PBX extension services, and the ability to send voice calls either over the cellular or corporate WiFi network. It will be available initially in the UK, with plans of expanding into other European counties later in the year.
Second, the possession of premises-based FMC solutions within vendors' respective product lines will not be competitive differentiators since by the end of the year so many will possess them. Differentiation will need to come in a form other than simple inclusion in one's product portfolio. This will need to come in the form of unique feature sets, seamless handoffs between networks for calls in process, support for a broad breadth of mobile devices (not simply the Nokia Series E60 and E70 handsets that all solutions have in common), least-cost routing software that determines the use of which network will result in greater cost savings on the part of the company deploying the solutions, or the ability to connect to different WiFi networks, such as the corporate WLAN, home office access points and public Internet hotspots.
Third, developers of premises-based FMC solutions cannot completely write cellular operators out of the equation when it comes to delivering dual-mode telephony solutions. Operators have direct control over the handsets that are essential to the overall solution. They determine whether software can be downloaded to mobile devices and how the WiFi radio can be used. Enterprise systems suppliers will need to establish and maintain long-term working relationships with operators as they deploy their premises-based FMC solutions to enterprises.
Finally, despite what will apparently be widespread availability of this new class of FMC solution, it is not at this time clear that wireless LANs as presently deployed at enterprises are at this time prepared to take advantage of them. Wireless LAN systems will need to be upgraded with QoS and other mechanisms capable of supporting real-time communications traffic, as well as software that tracks dual-mode handsets across campus networks and facilitates the handoffs from one WiFi access point to another without disruption of call quality. Should FMC solutions catch the interest of enterprise buyers their deployment will result in additional investments in wireless LAN upgrades.
Recommended Actions
Vendor Actions
. Developers of premises-based FMC solutions should produce case studies that demonstrate the cost savings of their dual-mode telephony solutions. It is hard savings in monthly cellular phone subscriptions rather than soft productivity benefits that will most likely appeal to most enterprises considering the deployment of FMC solutions. So having clear-cut examples of customers realizing these benefits will be a valuable sales tool.
. Suppliers should develop professional services that help enterprises make upgrades to their wireless LAN networks that will be necessary in the deployment of real-time voice traffic in the near term and enterprise FMC solutions a bit later. Alternately, suppliers should identify third-party partners who can do the same.
. Suppliers should ensure that the differentiating features of their respective FMC solutions are clearly communicated to potential customers and business partners helping sell and support the solutions.
. All suppliers need to market their FMC solutions aggressively so as to build out the market for them. At present there is limited awareness and limited demand for dual-mode telephony, so the onus is on suppliers to communicate FMC's benefits to the widest range of enterprises and SMBs effectively.
. Developers of premises-based FMC solutions cannot completely write cellular operators out of the equation when it comes to delivering dual-mode telephony solutions. Operators control the handsets that are essential to the overall solution, and determine whether software can be downloaded to mobile devices and how the WiFi radio can be used. Enterprise systems suppliers will need to establish and maintain long-term working relationships with operators as they deploy their premises-based FMC solutions to enterprises.
User Actions
. Enterprises considering the deployment of FMC solutions should develop a comprehensive wireless plan that not only includes dual-mode telephony but also addresses QoS, security, E911 and other issues.
. Enterprises considering the deployment of FMC solutions should carefully examine the TCO of implementing dual-mode telephony. A number of solution marketers make it sound like little needs to be done outside of downloading FMC clients to smart phones.
. Enterprises considering FMC should be wary of solutions that only support a single vendor's voice and/or wireless LAN infrastructure. Dual-mode telephony solutions should be agnostic when it comes to supporting PBX environments and standards-based WiFi networks, and business buyers should demand this of their suppliers.
. North American enterprises seeking the benefits of dual-mode telephony should consider the deployment of a premises-based solution from a systems vendor. Cellular operators in the region have been dragging their heels in deploying FMC services to businesses, so a premises-based solution would be the most effective way of reaping the benefits of FMC in the near term.
. Enterprises in Europe should consider premises-based dual-mode telephony solutions, but at the same time contact BT, Orange, and other cellular operators in the process or on the cusp of offering network-based FMC services in the region. Enterprise should make sure that these services are targeted at business use and integrate fairly well with existing PBX systems.
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