Transcript for Gartner Magic Quadrant for Unified Communications - Part 1

Jim Burton: Welcome to UCStrategies Industry Buzz. This is Jim Burton, and I'm here as usual with the UCStrategies team. We are going to do two podcasts on the same topic, but with a little bit different slant. We're going to talk about Gartner's seventh annual Magic Quadrant for Unified Communications, which was released on July 28th of 2010. It was written by Bern Elliot and Steve Blood, and as I said, as their seventh one, we're certainly seeing progress being made in the whole area of Unified Communications, as they depict. One of the things that I thought was pretty fascinating is the similarities between how UCStrategies and Gartner are looking at unified communications. The definition is very, very similar: our definition being communications integrated to optimize business processes; a recommendation for developing a roadmap of UC, in our case, it’s developing UC strategy; the comment that it is a multi-vendor environment, and that it really is a best-of-breed that it takes to make a successful UC implementation today, since no vendor does at all. And I also thought it was kind of interesting the way they’ve dealt with their magic quadrant. They’ve defined six different areas of unified communications, and you had to be in three of those areas to get into the magic quadrant. And they actually singled out both Polycom and AVST as best-of-breed vendors in their particular areas of interest. Another thing that I thought was also interesting, last year there were six companies in the leader's quadrant; we're down to three. This is the subject of how some of these changes have taken place, and how Gartner goes about this, that we're going to have in our next podcast. We won't touch that today. Today's podcast is going to be very specifically on what they really announced in the current release.

One of the other areas that I also found of interest is their approach to ROI. And that most of it today is soft dollar ROI as opposed to some hard ROI that would come if you were doing, as they call it, CEBP and as we would call it, UC-B. We may disagree with that, and that can be a part of our next podcast. So without any further ado, let me turn it over to you, Marty. You've written a couple of great articles on this. I know you've read in depth the article. Give us your thoughts, please.

Marty Parker: You've already highlighted that the leader’s quadrant this year has three vendors, Microsoft, Cisco, and Avaya—essentially in that order on the diagonal. Microsoft has the highest rank this year as they did last, with the highest ranking on “ability to execute” as well as on “completeness of vision” dimensions. There were no new vendors added this year, which is important to note, because it indicates that unified communication is becoming much more of a mainstream play. It's not something that a company is likely to break into at this point. Only Nortel was removed of course, due to their acquisition by Avaya. All the vendors were continuing to enhance their UC portfolios, and Gartner brings that out and this matches what we say at VoiceCon in our “UC options--Who's Offering What?”: fairly complete kit by each vendor. Each vendor has a core competency. I thought that was important that Gartner noted each one is coming from a core base of telephony, emails/productivity apps, or IP networking, or business implications (SAP is in the Magic Quadrant). And these vendors use unified communications to “expand their footprint within the enterprise.” And this matches the kind of options that customers see when they look at moving ahead to UC on our “What to Buy” page on UCStrategies.com. You see these three options, moving from telephony, moving to expand your desktop and productivity suite, or moving to expand your applications layer or your applications capability. So we see this pattern. The bundling of UC is marked and noted by Gartner. We saw that in our pricing trends, articles and pages on UCStrategies.com, even a couple years ago, which tends to make UC/Unified Communications not look like a separate unique marketplace, but the punch line is that the people now won’t buy a PBX, without UC, so maybe it's the PBX that is getting bundled in, is my observation.

But finally, the vendors who are not in the leaders' quadrant—that is they were over in one of the other three categories—are critiqued almost uniformly for their breadth of market coverage, whether it's the breadth in terms of small-to-large size enterprises, or the breadth in terms of geographic coverage, or the breadth in terms of the extent of their channel coverage. It's one of the things, Jim, you know, that we address in the UC Summit. So those are the highlights. I'd say continued growth of the market, and kind of solidification of the positioning in the Magic Quadrant. With that, Jim, let me pass it to anyone else would like to comment. I'd like to come back on our following podcast and talk about this whole question about ROI and organization change, and some of those issues that Gartner raises.

Dave Michels: It's actually a very impressive report and I can't imagine all the work that they had to go through to pull this off as comprehensively as they did. But, nonetheless, I do have a couple of issues with some of the points they raised. It comes across to me that it is clearly in some places contradictory and I get the impression that this was written by a committee that didn’t necessarily have full agreement within the committee. Starting off with just the list of vendors they included, which as Marty pointed out was pretty much the same as it was last year. But SAP, TeleWare, even Toshiba, who invited these guys? I don't get that. I think that a lot of it has to do with the inclusion criteria, which we'll talk about in the other podcast. But I think that there are some faults definitely with this approach. They are trying to simplify everything into these two axis of “ability to execute,” the “completeness of vision,” which is force-fitting a number of criteria, but it's creating, I think, a confusing message. So to some of the specific points, mostly with the cautions that I flagged, for example under Cisco, they talk about interdependencies between network infrastructure components and communication application software. These dependencies can restrict options. Well, that's legitimate, but they don't mention that with the other vendors. Microsoft, for example, is using Exchange. A number of the vendors are doing this and I thought it was interesting that Cisco got flagged for that caution. Another one with Cisco and IBM, both got penalized in the caution sections for “hybrid premise and cloud services,” described as promising both times, but Interactive Intelligence gets a kudo because it “seamlessly blends on-premise and on-demand and hybrids.” It's pretty inconsistent there. And their take on UC services versus UC products is very strict. And I think that clouds the issue—no pun intended.

Another one was IBM - they get a caution for the “perception that SameTime and Notes are intertwined. IBM must change this perception in order to increase its market share.” So they get a negative caution on that. But I compare that again with Microsoft; their solution actually requires Exchange, and there is no caution about their client components or inoperability limitations. Lastly on the Microsoft connection, they get a kudo for historic strength and collaboration. And I am not sure which Microsoft they are referring to, unless they are defining collaboration as one person at time working on something. But I just found some of those comments a little strange and out of context and a little bit inconsistent.  

Jim Burton: Well Dave, I think that Marty and I had some comments that I think fit in with your thoughts. And that was that if you read the document, you'll see that there is clearly influence from vendors on what was being said in the Gartner report. You would also see clearly that there were other places that a vendor obviously had no influence on what Gartner had said.

Dave Michels: Yeah, and I imagine that they are balancing a number of different factors as they put this together. And I imagine it's quite difficult. Last year they made it pretty clear about their disclaimer, which didn’t seem to be in this one, I was kind of surprised...that Avaya, Skype, and Gartner are all under Silverlake ownership now, or control. I imagine there is a significant amount of contention in putting this report together in such a visible report. And I sympathize with that. I was just surprised at some of the inconsistencies.  

Jim Burton: My personal opinion is that based on the way they commented, based on their criteria; they did a pretty good job. I don't necessarily agree that some of vendors shouldn't have been in different spots. But I think overall they did a very good job. But I think that that’s the purpose of our next podcast is to kind of go into our opinions about how they made some decisions and how maybe they've left some people out or moved some people into different spots where maybe we at UCStrategies, if we were doing it, would be quite different. And by the way Dave, if you think about we as UCStrategies working as a committee to come up with a report like this, I'm sure we would have enormously different opinions about that, as I'm sure will come out in our next podcast. Before we wrap this podcast up, Marty, have you got any comments that you'd like to make?

Marty Parker: The only comment I'll make to add to this is that there's kind of a debate going on about how to interpret Gartner's views about the challenges being faced in unified communications. Eric Krapf made a post on NoJitter.com saying, “well these are major problems that are going to have to be overcome, and this is going to cause things to go slowly, so we'll be addressing these at Enterprise Connect.”

I view the Gartner report quite differently. You know, they say many leading enterprises are developing UC roadmaps and plans. And some have trial or phase developments underway. This means that the future of UC is already being defined. When those trials and phase deployments go enterprise live, the game is over. So the trials are the seeds of the future. There's comment that there's organizational change required to adopt UC, and in fact, our observation as consultants is the organizations are already changing. Not in the way some people thought—telecom is not ending up in the lead in many cases, but it is already happening.

And the final observation that UC investments are often soft dollars, which you pointed out earlier, Jim, is just not accurate. But I'll save that for the following conversation. So that's all I'd say. Thanks.

Jim Burton: Thanks, Marty. Thanks, Dave. I appreciate your input. We will have another podcast to kind of get into the details and what everyone thinks about this, which will be pretty lively is my estimate. So please listen for our next podcast on the Magic Quadrant for Unified Communications by Gartner. Thanks, everybody.