Transcript for Future Prospects of Mobile UC

Michael Finneran: Good day, everyone. This is Michael Finneran. I will be chairing our podcast today. And since I'm the chair, the topic is going to head in the direction of mobility, and certainly a big topic in the aftermath of Apple's “AntennaGate,” which reminded us all once again of the overall interest of the general public in all topics mobile. Of course, the fracas is essentially over with an offer of a free $1 bumper for everyone's iPhone, along with an unappreciated dig at their competitor's cell phone products. The position that “everyone shares this difficulty,” was not shared at all by RIM, or Motorola, or anyone else who Mr. Jobs was good enough to tar with his same brush. But our topic in terms of mobility is going be a lot bigger and more far reaching. Specifically, what is going to be the future of mobile UC? What will be the driving forces that shape that market? And also hopefully handicapping some of the key players that are going to be participating in that market.

Now of course, two (key players) that pop immediately to mind are Microsoft and Apple—two completely different companies with completely different focuses. Microsoft’s viewpoint is enterprise software. Microsoft dominates the market for enterprise software. Of course, one of their weak suits in this always has been their ongoing mobility nightmare.

Now, on Apple's side, Apple clearly does not focus on the enterprise. Their focus has been the user interface and the user experience. A tact that they got onto back in 1984 with the Macintosh, but have been on an unbelievable jag in the past 10 years, as they moved from the iPod, to the iPhone, now to the iPad...and really expanding their scope of coverage from the desktop to the smart phone, and with the iPad, now to the tablet. And of course, with each one of these, even if Apple doesn't invent it, when Apple touches it, the game changes. They're completely different models as well. In Microsoft's case, it's a pure software play with the assumption of cheap, interchangeable hardware. Where Apple's view has always been to package the hardware and software together and deliver an enhanced user experience. Of course, those views aim at different markets. In Microsoft's case, clearly aiming toward the enterprise market, which focuses on support, standards, security, manageability. Apple is clearly consumer focused. And definitely blasé about the enterprise and whether or not enterprise users even buy in.

When you look at the players moving toward mobility, we do have a few big names on the table. Apple certainly. While the smartphone may have been invented by Palm and RIM, clearly Apple reinvented the smartphone with the iPhone. And now have expanded that franchise into the tablet, based on elegant design, high tech, high touch, but always a closed model. They still manage to pull in the developers, but certainly they deliver a unique experience and one that is highly valued. Certainly whether it's the best or not, that's a matter of personal preference. But the combination of the iPhone device in conjunction with the mobile network has done something we've never seen in the mobile marketplace before.

While Microsoft has a major grab on the enterprise and the desktop, one area where they've clearly fallen down is mobility. Hopefully, they can get that back with Windows Mobile 7. What's interesting with Windows Mobile 7, Microsoft is also changing direction. They're going more in the direction of Microsoft with that controlled model. What we've found with the earlier versions of Windows Mobile up to Windows Mobile 6.5 is the idea of an open device doesn't work very well with smartphones. It's a different platform, and one with way too many connections between the operating system and the hardware. The question going forward then is what is going to be the driver in what enterprises adopt? Will it be the user device where Apple clearly has dominated? Or will it be the infrastructure itself? Particularly the UC engine, wherein Microsoft is going to be a much bigger player? Of course, while we focus initially on Apple and Microsoft, there are a couple other big players in this as well, and clearly RIM is one of those. RIM, the Blackberry folks, are the only company that really has focused primarily on enterprise mobility. Even with that focus on enterprise mobility, most people are surprised to learn that better than fifty percent of RIM sales today are to consumers. They take great pride in their “stodgy” view... also controlled environment, a closed model, but extremely successful in terms of enterprise market share. RIM is standing at about 70% today of the enterprise smartphone market.

The big dark horse in this is Android; they’ve gleaned the developer market. They say now there are a hundred thousand applications for the Android. And a true open model, but nobody's ever made an open model work in smartphones. Will Android be able to pull this off to have one operating system that supports qwerty-based devices, touch-screen devices, tablet devices? Then the big question is who ties this into UC? So as we open up the floor to questions, some of the big ones I have is can Apple sustain their momentum? They keep coming out year after year with earth-shattering new developments. Can they really keep this going? And can they gain enterprise market share without really trying?

For RIM's position: although certainly in the cat bird's seat today, but are they in a position of strength or weakness? Microsoft: is it really too late for them to get into the mobility game? Everyone seems to have written them off, but possibly with Microsoft it's just that they'll never get into the consumer mobility game, but can they parlay their grasp in the enterprise and in Windows Mobile to redefine the mobility market, and really establish a second place for enterprise mobility?

And lastly of course, is Android, and can they make their plan work? Also along the way, is there anyone else here that's worth talking about? We've got Palm that has been acquired by HP. Certainly we see a lot of interest among this from Cisco, Avaya, Siemens, Mitel, NEC, ShoreTel. Are those guys really going to have a play in this at all? So one on the table for enterprise mobility. Now we'll open this up to my UCStrategies colleagues to see what they have to add in.

Jay Brandstadter: I'm going start with a quote by one of the famous philosophers of the 20th century, Willie Sutton, the bank robber. And they asked him, “why do you rob banks?” He simply replied, “because that's where the money is.” It's a very famous quote. And it applies to any market place of interest, particularly the one we're talking about now. It seems to me that Apple was and is a consumer company as Michael mentioned. There's no reason to expect otherwise. They could've made plays for enterprise opportunities along the way. They never have. There's no reason to assume that they, with the tremendous success that they’ve had, would change from that. What puzzles me is that the smartphone, kick started by iPhone of course, has become the device of choice as telephone for all purposes. Where does it stand in UC scenarios? Do we really have to go back to notions of fixed mobile convergence? Mobility in general has been talked about a lot in UC. But I have trouble understanding what's actually out there. And I'd like some folks to address that.

Art Rosenberg: This is something I’ve made comments on over the years. Because from my perspective, when you talk about enterprise communications, you can't leave out consumers who are customers. And the contact center is case in point. And as consumers become mobile, what do you think is going to happen with the contact center? It's not going to remain the same. It's going to be multi-modal for one thing, which means there's a role for UC at both ends—the agents, the experts, as well as customers themselves. And I think that the tendency of mobility on personalization means that you cannot lock up all the applications. Because every individual is going to say, “here's what I need, and give me a device that'll handle it all, and you enterprise businesses, you come to me and what I’ve got. I'm not going to go to you anymore.”

So that's where I'm coming from—that we've got to look at what the consumers are going to use, which is the device and the operating systems. And then on top of that, the various applications. Now I know it's a little difficult when you have multiple operating systems and so on, but dammit, when are we going to get the standards?

Michael Finneran: Andy Zmolek, you had blogged about the potential for mobility in UC or the lack thereof. How do you see this shaping up?

Andy Zmolek: What I see happening is, first of all, the quote “where the money is,” is apt here. Because frankly, apart from RIM, and I wouldn't say that RIM has even fully figured out what the long-term business model is, nobody had a clear idea of how to make money in the enterprise mobility space. We've got unified communications that needs that connectivity to the mobile devices, needs the presence information that comes out of the carrier networks, but right now there's no clear market set up that allows for the enterprises that need this feature functionality to provide any kind of means for either on the phone, the handsets. If I'm a handset vendor, how do I reap the value from an enterprise that might be interested in selling something? Right now I'm completely oriented towards fulfilling the needs of carriers who ultimately are looking at consumers. How is that going to change in the UC world? Or are we always going to be destined to a UC market where UC really needs the enterprise-centric side of things. And once you go outside of that with a mobile device, you're really not going to get the unified experience.

Michael Finneran: Does anyone think that the carriers are really going to step in?

Dave Michaels: I think the carriers are going to step in. And it's interesting listening, and I’ve been processing what everyone's saying. Michael, you set it up at the beginning with your opinions, but I think I disagree with a couple of them that you had mentioned. I'll get to the carriers in just a second. But you had specifically said that Apple's not interested in the enterprise. I don't think that's true at all. I think the very first version of the iPhone did not support Exchange, and had some other limitations that were pretty quickly repaired in the next release of the iPhone. You also said the open systems don't seem to be working. Android I think is—its growth is absolutely phenomenal. Now I was off. I mean, in my year-end predictions in the end of 2008, I predicted Android would be totally significant in 2009. And I went back in March and published a correction. I'm off by at least a year. And sure enough it seemed to be 2010 that it took off. And at the recent Google conference, they announced that just after 18 months that the Android phones are now available. They had 60 devices made by 21 OEMs available in 48 countries and 59 carriers. And that's in 18 months. I think they're proving very quickly that the openness is working. And those phones are available in a variety of platforms and price points. Everything from the Nook eBook reader to entry level phones, to pretty soon a number of tablet-type devices. I think that the Android position is going to become pretty strong.

You asked about the carriers. I think that the carriers are suspiciously quiet. And what I'm kind of waiting to happen is we're already seeing the mobile phones in some cases complimenting, and in some cases replacing enterprise end point devices. But those are in conjunction with the enterprise UC solution that has basically some sort of virtual extension capability to the mobile phone. I'm still waiting for the mobile carriers to come out with hosted voice offerings that will allow people to directly transfer calls, have IVRs, a number of features that we associate with PBX’s. Hosted PBX offerings are becoming quite mature. And I'm kind of surprised that the wireless carriers haven't offered that yet. And I suspect that's gonna be the next foot to drop. I think that particularly with Microsoft trying to figure out how to regain relevance in the world of mobility, I think that OCS or Microsoft somehow pairing with an advanced carrier offering like that could indeed shake things up fairly sufficiently.

One of the thoughts there on Palm and HP, that's gonna be an interesting run...I think HP paid too much for Palm. But obviously, they wanted to do something with it. And they're not interested in Android. They're not interested in...they already withdrew their own tablet from the Microsoft platform. They've got a fairly strong offering with the Palm OS, with Web OS. They've got the capability to work with a lot of carriers. They've got a fairly robust and mature multi-tasking capability. They've obviously got some big plans. They wouldn't have paid so much otherwise. And I think that is going to be the next big thing to shake up the mobile space when HP releases that.

Marty Parker: The question was asked by Jay whether we had any visibility to the unified communications applications for mobile devices. And the answer is absolutely yes. As we've been saying on our posts on the website, and talking about architecture recently; it's really driven by the use cases. And so Don Van Doren and I at UniComm Consulting, for example are dealing with a major law firm right now. And they are already entirely committed to Blackberry, entirely committed to the Blackberry enterprise server model. And so they look at their Unified Communications choices, which can provide a lot of nice services to the mobile attorneys and links between the attorneys and the clients. That is going to happen on the Blackberry. Just no interest in making a shift. On the other hand, we have a healthcare client who is looking at inpatient care teams. And that's a world that's been limited to text pagers or numeric pagers. Not even text, numeric two-way pagers, which is a pretty limited interface, you'd have to admit. So they're very intrigued by what the larger screen image on an iPhone, an iTouch, or an iPad in relative sizes can provide for them. There are a lot of questions coming up as we work on this with the client as to form factor, and what kind of holders are going to be necessary to be able to use the device in the care giving environment and so forth. But it's still a very attractive device in that environment. So when you get to the specific use cases, that's the sort of pattern we're seeing. It's based on what the needs are, what the existing environment is, and then the customer makes the decision.

If you look at the mobile applications of a UPS or a FedEx route driver, you can see that answer already exists. They had a specialized device made. The same with your rental car check-in agent. These people have such specific needs, they don't need to have a 4G or 3G phone to do it. They can just use a specialized local wireless device. So you're seeing a lot of variation. The driver is use cases linked to the improvements in business process, in my opinion.

Don Van Doren: Let me add something to what Marty said. What I find is that the key issue for integrating mobility into business applications has often been I/O, input and output. And as we see advances in that, and as we see devices that are emerging which can more effectively handle those kinds of issues, we're going to see a lot more opportunities to really expand into the business world. Already we're making great advances in speech recognition capabilities, which sort of solves some of the input areas. The output display, I mean Marty's talked before of everything from heads-up displays to other things. And as Marty just mentioned, some applications of course have now created specialized devices like a FedEx driver, that works extremely well within that environment. So I think that's one of the key issues. One of Microsoft's opportunities, conceivably, you know, might be as they start to figure out how they get traction again in this marketplace is to look at partnering with companies that can provide specialized devices that will appeal to certain kinds of use case environments. Again, as Marty said, use cases are the key to making this whole thing happen.

Michael Finneran: What you hit on, Don, is one of the most important things we've always found in mobility. It's not a world where we want a general purpose device. The things that seem to work best in the mobile space are devices that do a few things very, very well. And clearly, the route drivers for UPS and FedEx, the check-in guys at Avis, those have been single use devices. But across the board, what we typically see is in terms of deploying an application, a web browser's often the worst way to do it in a mobile device because there are too many steps involved in doing a repetitive task.

One question I had for Marty though. When you mentioned the law firm that is standardizing on Blackberry, are they using the Blackberry client that communicates directly with UC? Or are they using one of the clients from the IP PBX's on that Blackberry device?

Marty Parker: That's the question that's on the table right now. Currently they use Blackberry for access to their email. So we're working with them on the best solution and comparing. It's pretty much just become a mobile client bake-off. Who has the best client for this use case on the Blackberry?

Michael Finneran: Well, when they make their decision I hope you write it up for us. Because that's something a lot of our clients are wrestling with right now.

Dave Michels: The question I think Marty is introducing is, what is the killer app? And historically, at least for RIM, the killer app has been Exchange integration. And they've done really well with that. With Apple, the killer app is the app store. They’ve basically said we've got all kinds—a platform for all kinds of applications. What's going to drive the enterprise is indeed the killer app and how specialized it may be. I think the killer app that appears to be emerging, although very immature still, is the location awareness applications. And there are the consumer ones like the Foursquare type of stuff. But more sophisticated ones...if you look at what's happening in UC, both Cisco and Microsoft have made a fairly significant deal about being able to automatically update your location when you log into the systems. The cell phones have a one-up on that because they're not tied to static databases, on routers and switches. I've noticed with the Google Android, it's now reporting your regional information. It won't report your address, but it'll report your city, where you happen to be automatically. Applications like Locale on Android will do things like turn off your ringer when you're in church, and set up calling rules based on your location, filter calls with the, “I don't want to receive customer calls when I'm at home”.... things like that. I think the location awareness is going be fairly significant. And I think that the platform that puts together the strongest offerings is going have a significant advantage on the killer app.

Michael Finneran: Well, I'm glad to be able to turn off your ringer when you're in church. I'm just hoping you'll be able to switch on somebody's manners when you're in the movies and they decide to take a cell phone call. Does anyone else have anything to add to our conversation today?

Steve Leaden: Just a couple of quick points. There were some announcements made in early June by Mr. Steve Jobs of Apple that stated that PCs will become less important over time. Of course that was challenged by Microsoft. And I think although that was targeted mainly at the iPad product, the newly announced iPad, I think the mobility element definitely adds into this as well. We have a client right now who's in the healthcare space who is looking to migrate close to 2,500 cell phones as the main appliance to replace the desktop device within the next just under 24 months. So we're seeing things like that. We're seeing in this particular space they're looking at patient check-in and check-out. They're looking for pager notification. They're looking for Blackberry NVS server integration and follow-me features for one published number. They don't want the patient to know specific cell phone number. But they will allow their DID kind of main number to be out there. I think we're seeing a huge migration to that.

And from a personal experience, I can tell you that my Blackberry last week died on a boat at Lake George while I was taking some vacation time. And interestingly for that six-hour period where I had no device, I realized that I had no ability at all to connect real-time via phone, email, internet, and social media for that six- to seven-hour period. And so even though that sounds like a very short period of time, I think culturally we've become totally attached to the mobile device. And therefore I think slowly that's going to become our main, kind of entry point to how we're gonna connect anywhere as we go forward.

Michael Finneran: Well, I this is certainly a challenging topic. We've got a few very interesting observations here about Apple and the enterprise, about the Blackberry clients. And the big question still is, is UC going to be the killer application for the mobile device in the enterprise? But certainly Dave's observation on location capability is one that I share with him very much. Certainly if we can start linking that location knowledge about the device to the presence engine, and make meaningful use of that information, of course without at the same time violating people's privacy. But that privacy issue I think is going to have to be a topic for another webinar. But in the meantime, I'd like to thank our correspondents at UCStrategies for their thoughts and their comments on this topic. And we hopefully will be talking to you again next week. Take care.