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Transforming Enterprise Communications: Helping Customers Find the Value in Advanced Technologies
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Transcript of Transforming Enterprise Communications: Helping Customers Find the Value in Advanced Technologies
Transforming Enterprise Communications
Analyst Briefing
June 2010
Helping Customers Find the Value in Advanced Technologies
Elka Popova, Program DirectorMelanie Turek, Principal Analyst
2
Agenda
Key Customer Pain Points and Channel Concerns
From IP Telephony to UC: Where the Value Lies
Hosted UC and SIP Trunking: Cloud Nirvana?
Conclusions and Recommendations
About Frost & Sullivan
4
A Market Ripe for Infrastructure Consolidation and UC
Growth of UCGrowth of UC
CollaborationCollaboration
EconomyEconomy
Business ChangesBusiness Changes
Penetration of IPPenetration of IP
• Enterprises deploying IP networks, “when” not “if”• Growth in gateways
& network mgmt tools
• Growth of remote, virtual workers
• Focus on being “green”
•Increasingly global
business environment
• Convergence at the
desktop• Move from siloed to an integrated approach• Value is in information
sharing, not hoarding
•Companies forced to cut costs everywhere•Travel restricted
•ROI means everything
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Top Customer Pain Points
Return on Investment
Training
Supporting Employee-Driven Next-Gen Technology
Mobile Device Support
Change Management
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•Customers now including UC capabilities on their RFPs; in many cases, businesses are only upgrading a certain piece of their communications infrastructure (e.g. telephony).
•The challenges related to the integration process currently seem to outweigh the perceived benefits of UC, limiting proactive demand for multi-vendor solutions.
•Many businesses also continue to question the benefits of certain basic UC applications, including IM and videoconferencing.
•Over the next 5 to 6 years, UC will penetrate the market mostly by vendors’ “push”strategies, and less so due to customer “pull.” Free UC clients, attractive bundling and low-cost or no-cost pilot programs will help users experience UC and its benefits.
•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.
Demand Analysis
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Enable
Collaboration
• Presence
• Chat
• Conferencing
• Social Media
• CEBP
Firm Foundation
• Scalability
• Compliance
• Security
• Business Continuity
• Flexibility
• Open Standards
Hard Dollar Savings
• Reduce Communications Costs
• Reduce Facilities Costs
• Reduce Travel Costs
• Green IT
Unified Communications Market Evolution
Source: Frost & Sullivan
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The Channel Plays a Key Role
• The complexity of UC implementations,
especially in multi-vendor environments,
requires a significant vendor or channel partner
implementation and integration expertise.
• Intensifying competition and consolidation in
maturing communications markets are also
driving an increasing importance on the channel.
• The nature of channel partnerships is changing
as IT and telecom continue to converge with the
shift to software-centric solutions, and with
businesses increasingly virtualizing their data
centers and, going forward, their
communications infrastructures.
• To succeed, VARs and SIs must be able to
successfully deploy and manage converged
technologies—and that requires new skill sets,
education and training.
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Key Channel Objectives
Most Important or Somewhat Important Objective
0% 20% 40% 60% 80% 100% 120%
Expand product portfolio
Diversify vendor mix
Ramp up services skills through hiring
and/or training
Become a managed services provider
or enhance existing managed services
Become a hosted services provider or
enhance existing hosted services
Secure additional f inancing
Align strategies and resources more
closely w ith vendors' strategies and
Seek mergers or acquisitions to improve
competitive positioning
Work more closely (in a more
consultative fashion) w ith customers to
Stimulate demand through creative
packaging/bundling and/or
Ob
jecti
ve
Percentage of Respondents
76.9%
88.4%
73.1%
96.1%
76.9%
N=26
Q: What are your KEY OBJECTIVES over the next 12 to 18 months? Please rate each on a scale of: Most Important, Somewhat Importantand Least Important.
(Online survey, May 2010)
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TECHNOLOGIES IMPACTING THE CHANNEL
TECHNOLOGIES TO HAVE THE LARGEST IMPACT
0% 10% 20% 30% 40% 50% 60% 70%
Netw ork convergence and migration to IP
telephony
Application integration and Unif ied
Communications (UC) adoption
Server virtualization
Application virtualization
Cloud computing, SaaS and hosted
communications
Communications-enabled Business
Processes (CEBP)
Social netw orking
Tech
no
log
y
Percentage of Respondents
61.5%
57.7%
Q: Which technology trends do you expect to have the greatest impact onyour business over the next 12 to 18 months? Rate the options below on a scale of: Large Impact,Medium Impact, Low Impact.
(Online survey, May 2010)
N=26
Also suggested: mobility
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Convergence ROI: Evolution of the Business Case
Reduced Communication CostsToll Bypass, Remote Access, …
Reduced Cost of OwnershipOperational Efficiency, Resource Optimization
Productivity ImprovementConferencing, Collaboration, Presence
Competitive AdvantageIntegration with Business Processes
“H
AR
D”
“S
OF
T”
Tactical Strategic
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Market Engineering Measurements: Enterprise Telephony Platforms
Enterprise Telephony Platform Market: Market Engineering Measurements (World), 2009
Note: All figures are rounded; the base year in 2009. Source: Frost & Sullivan
Increasing40.0%Market Concentration (% shipment of base year
market controlled by top three competitors)
Increasing3.4%Compound Annual Growth Rate (2009-2016)
Decreasing(24.9%)Base-Year Market Growth Rate (revenue)
Increasing1.1%Compound Annual Growth Rate (2009-2016)
HighDegree of technical change
Increasing(20.4%)Base-Year Market Growth Rate (Shipments)
Increasing47.1 MillionPotential Market Shipments (2016 market size)
Increasing37.3 MillionBase-Year Unit Shipments (2009)
Increasing6.2 BillionPotential Revenues (2016)
Decreasing5.7 BillionBase-Year Revenues (2009)
Mature MarketMarket age
TrendMeasurementMeasurement Name
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Market Engineering Measurements: Enterprise IP Deskphones
Enterprise Telephony Endpoint Market: Market Engineering Measurements for IP Desktop Phones (World), 2009
Note: All figures are rounded; the base year in 2009. Source: Frost & Sullivan
Decreasing60.4%Market Concentration (% shipment of base-year
market controlled by top three competitors)
Increasing10.0%Compound Annual Growth Rate (2009-2016)
Decreasing-22.5%Base-Year Market Growth Rate (Shipments)
Decreasing(26.5%)Base-Year Market Growth Rate (revenue)
Increasing2.1%Compound Annual Growth Rate (2009-2016)
MediumDegree of technical change
Increasing24.5 MillionPotential Market Shipments (2016 market size)
Decreasing12.6 MillionBase-Year Unit Shipment (2009)
Decreasing$150Average vendor revenue per user
Increasing$2.19 BillionPotential Revenues (2016)
Increasing$1.89 BillionBase-Year Revenues (2009)
Mature MarketMarket age
TrendMeasurementMeasurement Name
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Market Engineering Measurements: Enterprise Desktop Clients
Enterprise Telephony Endpoint Market: Market Engineering Measurements for Desktop Clients (World), 2009
Note: All figures are rounded; the base year in 2009. Source: Frost & Sullivan
Decreasing92.1Market Concentration (% shipment of base-year
market controlled by top three competitors)
Decreasing9.1%Compound Annual Growth Rate (2009-2016)
Decreasing362.3%Base-Year Market Growth Rate (Shipments)
Decreasing64.2%Base-Year Market Growth Rate (revenue)
---Compound Annual Growth Rate (2009-2016)
HighDegree of technical change
Increasing22.2 MillionPotential Market Shipments (2016 market size)
Decreasing12.0 MillionBase-Year Unit Shipment (2009)
Decreasing$34.57Average vendor revenue per user
---Potential Revenues (2016)
Decreasing$157.8 MillionBase-Year Revenues (2009)
Growth StageMarket age
TrendMeasurementMeasurement Name
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Market Engineering Measurements: UC
Unified Communications Market: Market Engineering Measurements (World), 2009
Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan
Increasing2.1 millionUsers of Fully-integrated UC Solutions (2009)
Increasing49.5 millionPotential Fully-integrated UC Solutions (2015)
StableHighDegree of technical change
IncreasingApprox. 20Competitors (active market competitors in base year)
Decreasing10.2%UC Client Shipments Forecast-period Growth Rate (CAGR)
Decreasing197.6%UC Client Shipments Base-year Growth Rate (2009)
Increasing27.7 millionPotential UC Clients Shipped (2015)
Increasing15.5 millionUC Clients Shipped (2009)
GrowthMarket age
TrendMeasurementMeasurement Name
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Driving Forces: A Dynamic IT Environment
Multiple market forces are coming together to produce a Multiple market forces are coming together to produce a communications market ripe for changecommunications market ripe for change
Rapid convergence of IT Rapid convergence of IT
and communicationsand communications
Emergence of cloud Emergence of cloud
computing helps to enable computing helps to enable
more compelling servicesmore compelling services
Growth in VoIP and Growth in VoIP and
other IPother IP--based based
communicationscommunications
Virtualization and other Virtualization and other
enabling technologies become enabling technologies become
part of value proposition part of value proposition
Inflection Point for Hosted Services is Here
Consolidation occurs as Consolidation occurs as
IP telephony maturesIP telephony matures
Source: Frost & Sullivan
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Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan
Increasing$700 millionHosted IP Telephony Revenues (2009)
Increasing$3.8 billionHosted IP Telephony Potential Revenues (2015)
IncreasingHighDegree of technical change
DecreasingOver 50Competitors (active market competitors in base year)
Increasing7Degree of competition
IncreasingHighPrice sensitivity
Decreasing$20-$100Price range per month/seat/user
Decreasing$50Average price per month/seat/user
34%Hosted IP Telephony Forecast-period Revenue Growth Rate (CAGR)
33%Hosted IP Telephony Base-year Revenue Growth Rate (2009)
Increasing7.8 millionHosted IP Telephony Potential Seats/Users (2015)
Increasing1.4 millionHosted IP Telephony Seats/Users (2009)
GrowthMarket age
TrendMeasurementMeasurement Name
Market Engineering Measurements: Hosted IP Telephony
Hosted IP Telephony and UC Services Market: Market Engineering Measurements (North America), 2009
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Current State of the Hosted UC Market
Hosted UC is riding the wave
Up to 50,000 seats/users in 2009
A handful of service providers: Alteva, Apptix,
CallTower, Cypress Communications, Engage
Incorporated, LightEdge, USA.NET, Verizon
Two backgrounds:
• hosted/shared-tenant voice service providers
• hosted email/business application providers
Cisco, IBM, Microsoft, Siemens hosting or
planning to host some services in the cloud
themselves.
Two business models: fully hosted and hybrid
Also: private and public cloud
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Market Engineering Measurements: VoIP Access & SIP Trunking
Increasing8Degree of Competition
Increasing100+Number of Competitors in Base Year
56.3%
High
85.9% SMB : 14.1% Enterprise
42.8%
40.1%
46.4 million
3.8 million
27.3%
22.3%
$3.9 billion
$717.3 million
Early Growth
Measurement
Forecast-Period (2009 – 2016 CAGR) Growth Rate by Users
DecreasingShare of Revenues - SMBs Vs. Enterprises
IncreasingPrice Sensitivity
GrowingPotential VoIP Access Service Users (2016)
GrowingBase-Year (2009) Growth Rate by Users
IncreasingBase-Year (2009) Market Growth by Revenues
Decreasing
Growing
Increasing
Increasing
Growing
Trend
Forecast-Period (2009 – 2016 CAGR) Growth Rate by Revenues
% of Market Controlled by Top 3 Competitors
Base-Year (2009) VoIP Access Service Users
Potential Revenues (2016 Market Size)
Base-Year (2009) Revenues
Market Age
Measurement Name
VoIP Access & SIP Trunking Services Market: Market Engineering Measurements (North America), 2009
Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan
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SIP Trunking – The UC Context
Network
Convergence
VOIP
SIP Trunking & Multimode Networks
SIP Trunking & Web Technologies
- Network consolidation
- Packetized voice- Network QoS
- Long-distance cost savings- Lower TCO
Enabling Technology
Bu
sin
ess
Be
ne
fits
Unified
Communications
Service-oriented
Communications
Adoption Curve
- Streamlined business processes
- Greater productivity- Multimodal
communicationsacross different devices
- Lower TCO - Automation- Federation- Streamlined
businessprocesses
- Enhanced reach- Lower TCO
Source: Frost & Sullivan
VoIP Access & SIP Trunking Services Market: Evolution of IP-based
Communications in the Enterprise (North America), 2009
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Sales Strategies and Recommendations
Sell customers on IPT first, then upgrade them to other applications and fully integrated UC.
Open systems are a must to allow customers to future-proof their investments.
Involve more stakeholders than the usual IT or telecom buyers.
Develop the necessary skills to implement UC and advise customers on best practices.
Understand key business processes for your biggest customers or leading industries, and be prepared to help clients implement CEBP for maximum return.
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Next Steps
Request a proposal for a Growth Partnership Service to support you and your team to accelerate the growth of your company. ([email protected])1-877-GoFrost (1-877-463-7678)
Join us at our annual Growth, Innovation, and Leadership 2010: Silicone
Valley - A Frost & Sullivan Global Congress on Corporate Growth,
September 12-14 2010, Fairmont Hotel, San Jose, CA (www.gil-global.com)
Register for the next Chairman’s Series on Growth: The CEO’s Growth Partnership: Developing a comprehensive action-based strategy to reinvigorate yourself (Tuesday, July 6) (http://www.frost.com/growth)
Register for Frost & Sullivan’s Growth Opportunity Newsletter and keep abreast of innovative growth opportunities(www.frost.com/news)
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Your Feedback is Important to Us
Growth Forecasts?
Competitive Structure?
Emerging Trends?
Strategic Recommendations?
Other?Please inform us by taking our survey.
What would you like to see from Frost & Sullivan?
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For Additional Information
Jake Wengroff
Corporate Communications
(210) 247-3806
Elka Popova
Program Director
Unified Communications
(416) 792-0160
Melanie Turek
Principal Analyst
Unified Communications
(970) 871-6110