Advisory Report

Unified Communications Get 'Mixed' Reviews from European MNCs

By Dustin Kehoe, Principal Analyst, Telecom Services - Central Europe

Issue

The motivation for deploying IP telephony is more than strategic. Customers are moving beyond ‘cutting costs’ to enabling new applications that promise to transform how employees interact and communicate in the corporate environment. Enter unified communications. In this brave new world, the service provider does not control all aspects of the services end to end, but will have to work with an ‘ecosystem’ of partners at all levels to manage the delivery of an ever-expanding range of new services. Meanwhile, suppliers (both new and old) will have to become more accustomed to working together to deliver against customer expectations.

This Advisory Report is a synopsis of some of the themes discussed at the EVUA event, ‘IP Convergence and Unified Communications,’ held in Amsterdam, Netherlands between October 16 and 18, 2007. The EVUA is an end-user organisation of 70-plus MNC customers representing an ICT spend of EUR 3 billion.

Current Analysis Perspective

While the term ‘unified communications’ (UC) means many different things to different customer segments, most enterprise customers at the EVUA event are buying into UC, at least ‘conceptually.’ This is underscored by the trend that IP telephony is moving from a pure ‘cost-savings’ move to a ‘strategic path’ to enable so-called productivity applications.

While there was no shortage of ideas and possible approaches to UC, EVUA members are not clear on which services they would like to deploy and vendors they will support. They are also unsure how to integrate these new applications with existing platforms and systems, as well as the impact these new services would have on their underlying network infrastructure.

There is also a realization that making a corporate business case for UC could be very difficult. Equally, service providers also have strong visions on the types of services that they would like to deploy, but they need more feedback from customers and to see how various equipment vendors would work together to give the customers a more integrated experience.

Theme 1: Microsoft Threatens the IP PBX Market

Due to Microsoft’s announcement of the global availability of UC products (e.g., Office Communications Server 2007, Office Communicator 2007, Office Live Meeting 2007, Roundtable), there was a lot of discussion on how Microsoft would change the UC environment. The consensus is that Microsoft’s plans to enter into this space are very significant and that it will have a huge impact on the UC market. However, while most service providers will include the new Microsoft products in their respective UC product roadmaps, most enterprise customers have no firm plans to deploy any UC services from the company for the time being.

Yet, both service providers and enterprise customers are all very keen to hear what Microsoft has to say. More >>

Theme 2: SIP, Security and Interoperability

Another theme discussed was the development of SIP. While SIP is the protocol that will be used to deliver the multimedia applications that underpin the unified communications vision, it also raises a number of concerns. First, SIP is not fully standardized. As a result, there is reluctance to deploy SIP in the enterprise environment, especially when each vendor has their own proprietary extensions to give their products richness and differentiation.

While service providers have worked to deliver interoperability in a multi-vendor IP PBX environment, there is little sign of this extending down to desktop applications, such as OCS 2007 or Lotus Sametime. This will be a big focus in 2008, as customers will demand interoperability with their existing IP PBX real estates. They will also want BlackBerrys, which are prevalent in the corporate environment, to work in the OCS 2007 environment. This will be difficult, as they are based on separate operating systems. Without more work here, it could actually be an implementation nightmare for telecom and IT managers to deliver UC products. More >>

Theme 3: Making the Business Case

Some of the general concerns raised by enterprise customers include the fact that it is difficult to make a corporate business case for unified communications. While there is a promise of new applications, improvements in productivity and reductions in human latency times (through presence and IM), it is difficult to quantify any of these numbers in terms of savings or tangible customer benefits. However, it was also noted that there was never a business case for the BlackBerry, but the devise has become ubiquitous within the corporate environment. There was also never a business case for e-mail.

Due to the difficulties in developing a corporate business case for UC (and the general shortage of ideas from suppliers), customers may have to try to get it implemented from the top down. Some enterprise customers have noted that there is a lot of pressure from UC suppliers at the C-level of the organization. If executives are influenced by their suppliers, this could clear the way for UC without the business case. Some have alluded to this as a BROS syndrome (an acronym for “bright and shiny objects”).

It is clear that UC is at a standstill. Many customers need more help from their suppliers to get a high-level strategic buy-in in order to move UC into their network. It is also plausible that UC will be driven from IT departments (as opposed to telecom departments), where software vendors such as IBM and Microsoft tend to have more visibility than traditional carriers.

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