Transcript for Gartner Magic Quadrant for Unified Communications - Part 2

Jim Burton: Welcome to UCStrategies Industry Buzz. This is Jim Burton, and I'm here as usual with the UCStrategies expert team. This is podcast #2 in our discussion about Gartner's Magic Quadrant for Unified Communications. Our last podcast was background about what was in this particular report, and now we're going to have a podcast that is going to let all of the UCStrategies experts weigh in with their opinions about that report.

Every time Gartner comes out with a Magic Quadrant, whether it's Unified Communications or other, there are always a number of people who say “it wasn't fair,” “it doesn't include me,” “it's only the customers or clients of Gartner that get all the attention.” And so there are always a lot of people who will complain about what happened. As I commented in the last podcast, I think Gartner did a pretty good job of outlining what the industry is doing, where it’s at, and the phase we're in within this evolution of the market. I would have to say however, what I find it a little bit strange is that a couple of vendors that I think most of agree have really very outstanding products, were not in the upper right-hand corner. Those companies being IBM, Siemens, and Interactive Intelligence. In fact, what I find really strange (both IBM and Interactive as examples), but Interactive was touching the edge of the next quadrant and got moved a little bit down and a little bit to the left, which I don't quite understand. Because quite frankly, a lot of the things that Gartner said they were interested in, it seemed like they were making progress there. So those are my comments, and of course I could go on for hours, but I’ve got a number of people sitting here just waiting to jump into the discussion. David Yedwab, I think you had some things you would like to start us off with.

David Yedwab: Yes, I believe Gartner has done an excellent job looking at the vendor landscape in the UC industry. But I believe the key thing that's missing in the analysis is that, as Gartner themselves say, “solutions that enterprises buy are going to be multi-vendor in nature.” And as we all know, most of the vendors don't do a good job of selling other people's product. It's up to the channel, the systems integrators, the service providers, to provide integrated solutions for the customers. And that's my biggest hole in a vendor-only view of the Magic Quadrant of UC as a whole. Certainly we've got major systems integrators that are implementing the solutions, and consultants who are recommending solutions to the industry. Another piece, an area where I have a little bit of concern, is the separation of the on-prem UC Magic Quadrant, which this magic quadrant describes separate from the UC as a service or cloud service Magic Quadrant that Gartner segments. But again, everybody needs to segment the market the way they want to go about it, and this is Gartner's choice.

Nancy Jamison: This is Nancy. I wanted to kind of chime in a little bit on yours, and what Jim said. I looked at this and I also have issues with some of the vendors like Interactive and Siemens and such not being up higher. And I'm a little bit confused because on one hand for example they ding Microsoft for some technical issues, and then the only thing they bad they had to say about Interactive was they didn’t have a broad distribution channel, or they weren't as well known. It's the same thing with Siemens that we hear about all the time, that they don't have a broad North American presence. And if I were a company trying to choose product, I’d want the product to work, I’d want a full suite, or I'd want it integrated with other players' products. And I didn’t see them dinging those players, on those things, just mostly distribution. So I'm a little concerned that some of those players should have been up higher.

Steve Leaden: Hi. So Nancy, to a couple of your points. I really like the way Gartner divides UC into six broad categories: IP telephony, conferencing, messaging, presence and IM, clients, and then the applications, I think that's a nice way to distinguish things down to categories. And yet, we being consultants in the enterprise space, there is other criteria that we use in terms of evaluating the vendor community, including market share, their ability to deliver on service in specific geographies, their financial strength, and really their ability to execute. In our world it's about...”Can you deliver with no issues?” “Are your VARs totally certified?” “Do they have success histories in terms of implementing the most current project?” “Do they have the current patches?” So again, a fully executable model. And I know that some of the vendors, the way they’re lined up in the quadrant I wouldn't necessarily agree with. But it's an interesting market. And I think again, I applaud Gartner for taking a stand. I applaud how they really attract the user community, and how the Gartner Magic Quadrant really over the last seven years has become a household item with every client on the enterprise level that we deal with.  

Pam Avila: I'm going to pick up some of David’s comments, and Nancy’s, too., because I think that ignoring the whole distribution and channel issue is short-sighted. Right now we're at a point where everyone knows what UC can do. No one asks what it is anymore. Now we're talking more about the benefits that it brings. But we're still having an issue with who is going to actually get it implemented, especially given that it's very often a multi-vendor solution. So distribution plays such a key role. Right now distribution is lagging way behind the vendors. The products are there, but where are the integrators and the dealers that can actually implement those solutions? They are still few and far between.

Art Rosenberg: One of the things that bothered me is -- is when you talk about integration, it's at a level that's much deeper than the basic kind of communication application, because you've got to bring in the business process applications as well, and the different functionality that each might be bringing. So it's not like a bare bones thing where everybody may be bringing the same thing to the table. This one can do this a little bit different; this one a little different; then when you start taking these pieces and "integrating” them you’ve got a different combination that the end user sees, and that, to me, is the bottom line in the first place.

Don Van Doren: The only thing guys, is that I think Gartner is focused on the products. And they're focused on the vendors that are producing the underlying systems that go into this. And I think all of your comments are accurate. In fact, we as consultants can see this, because what we're seeing is how enterprises are taking these capabilities, working with systems integrators or VARs combining things to really get some excellent benefit. And frankly, that benefit, contrary to what Gartner points out, is not only in some of the productivity issues, but actual hard benefits that are coming from really integrating communications into business processes. But again isn’t about integration, this isn’t what the report tends to be focused on. Steve, you made the point that they have these sort of six broad categories of product areas. I think our point has always been that’s great, those are the tools that you need, but that really isn't how it's being implemented with the most effectiveness. I echo Jim’s comments. I think Gartner is doing an excellent job by and large for what they're attempting to do to look at the printer products, and how they’re done. What goes beyond that then, is how to best implement it. Of course that takes into, not only things like CEBP, but also how does it fit in a cloud or hybrid sort of environment.

Dave Michels: I think that the magic quadrant has really grown into something that is very meaningful to many people. But realistically, it’s the guidepost for the uninformed, the non-experts. This causes some trouble for those of who of us who really understand this market. To me, one of the big parts of the problem with this magic quadrant is its inclusion criteria. They're requiring “on-premis products,” and that’s a big problem, and it’s compounded further by requiring those on-premise products to meet three or more UC capabilities. Now they have a separate report for services, but Unified Communications really is a solution. It's not a matter of distinguishing between products and services. The on-premise requirement weakens the report. The world is flat, VoIP eliminates distance barriers, and the UC has to be solutions focused.

Another problem I’ve got is the recurring theme within the document starting on the first page, “a best of breed approach remains the surest way of ensuring adequate functionality, and planners should require vendor products be interoperable.” There are two problems with that—“best of breed,” and “completeness of vision” are at odds with each other. The three magic quadrant companies, Microsoft, Avaya, and Cisco, are not typically described as best-of-breed plays. Even worse, on page three they exclude vendors that were best-of-breed. They mention specifically AVST and Polycom. AVST offers a best-of-breed UM solution and they’re promptly removed from the report.

Secondly, what becomes critical in a best-of-breed solution, as they recommend, is interoperability, and this two-axis approach does not effectively evaluate inoperability. Gartner is trying to force their Magic Quadrant template into a sector that they acknowledge is a bad fit for it. And they state throughout the document the importance of an experienced systems solutions integrator. This is particularly important because of the best-of- breed requirements. But they don’t clearly evaluate the effectiveness of each vendors’ channels, which has been brought up, or they don’t really score their interoperability. Of the magic quadrant companies, Avaya and Cisco won't even join the UCIF, and Microsoft only embraces interoperability through its Open program, which requires vendors to be individually approved by Microsoft. So I just think the template isn’t working for what they are trying to accomplish in this sector.  

Art Rosenbert: I agree with that. I also think that they kind of missed the boat when people are not starting off as a Greenfield situation, where “okay we want to get all these new things.” They’ve got a migration challenge to face, which is not the same as best-of-breed either. So I think they missed the target.

Don Van Doren: I think it depends on what target you’re aiming at; I think Gartner's been pretty clear about what it is trying to do with this and clearly it is not encompassing the entire range of issues that have to be addressed by enterprises when they are thinking about some of these things. I do agree, by the way, that the more emphasis on how well do these products interoperate, because as you stated, Dave, this is clearly one of the issues, they think, and acknowledge as important. And yet they don’t dive into that one. That, they could have done, I think, a better job. Again, this report is designed to be focused on the products that are out there. There’s probably other reports that need to be written or actually that they have written on some of those other topics.

Steve Leaden: So one of the missing pieces I see, too, is regarding the layering technologies. Our colleagues over at Avaya branded Aura with that kind of nomenclature and eventually within a short period of time we had at least six of the major manufacturers also playing to that end. That obviously plays to the interoperability aspect of the higher industry, with huge levels of infrastructure which Gartner does allude to.  

Jim Burton: Marty, in our last podcast you had mentioned that you'd like to jump in and talk about the comment that Gartner made about most of the savings are only shown in soft dollars, and you believe that there are hard dollar savings. Can you comment on that?

Marty Parker: Yes, actually Gartner didn’t quite say they are only soft dollars, what they said is—they commented on the barriers to adoption. They said many business cases those are based on soft dollars. I think that readers of the report should take that advice very cautiously because it may well be that Gartner has been told that the business cases are based on soft dollars or strategic or soft ROI or strategic investment by the vendors whose UC businesses aren’t growing. But the vendors whose UC businesses are growing are posting case studies month after month and quarter after quarter that prove out hard dollar benefits. So it just puzzles me that that statement would be there. It turns out the company in the highest leader position, namely Microsoft...Garter reports that Microsoft's UC business is growing year over year. And they talk about how OCS 2010 R2 has seen year-over-year increased adoption. I think that's understating it. I think Microsoft didn't tell Gartner everything that Gartner would like to know. Microsoft now states it has 100+ deployments of over 2,000 telephony users. That sounds like the way that Cisco was talking when they were passing the five to eight percent market share back in 2003 or 2004. So basically you're seeing the numbers on the Microsoft side are growing, and Microsoft's website is full of hard dollar ROI. So I think there might be a marketing issue here more than there is an adoption issue in the UC market. And I’d just advise customers to challenge their vendors to come up with the hard dollar ROI and maybe look for the vendor who can.

Art Rosenberg: Could you clarify when you say hard dollar ROI are we talking just about cost savings or revenue generation, or both?

Marty Parker: Both. In fact there are case studies on both sides of that line. Cisco has nice ones. Siemens has some pretty good ones. I mean it's not just one vendor. But in Microsoft's case, they  have hard dollar: “I'll save you money on travel;” “I'll save you money on space;” “I'll save you money on labor;” “I'll save you money on telephone costs;” “I'll save you money on conferencing service costs;” “I'll save you money on infrastructure costs;” “I'll save you money on licensing costs.” We could go on, but I'll stop. The point is that there are case studies proving all those things. And they also have case studies that talk about how I’ll get you to market faster and save you money on development, I’ll help your logistics flow a little more smoothly, I'll reduce the cost of running your help desk. I mean, these are all hard dollar numbers. By the way, done with UC! The point is these are UC case studies. They're not some other kind of case studies, they are UC case studies.

Jim Burton: Thanks, Marty. I thank you all for participating today, and look forward to next week’s podcast. Thanks everybody.