Transcript for UCStrategies Experts Discuss Impact of Free Cisco Jabber

Phil Edholm: Hi, this is Phil Edholm. Welcome to the podcast of UCStrategies. Today we are going to discuss the topic of Cisco’s announcement of making their Jabber client for IM free if you have a Cisco Unified Communications Manager on your site. For some of your users, being able to use that to support IM for any number of users at your organization.

There has been a lot of discussion over the past couple of weeks since this announcement was made about why Cisco did this. And what the logic was and what it means. And today, we will try to clarify that and have some discussions around it, and really understand what does this mean in terms of the industry? Is IM now a mandatory requirement? Is IM essentially free and included? And what should you do in terms of thinking about you IM strategy?

So, we are going to start off with the fundamental question of why did Cisco take the step of essentially enabling any number of users to use their IM product without having direct revenue associated with it? Is it purely, as some have said, a reaction to the fact that Lync is deployed in over potentially a hundred million enterprise desktops? And that IM presence that Microsoft is getting is actually potentially blocking out Cisco? And Cisco’s reaction is purely to respond to that? Or, are there other motivations?

So, first Kevin Kieller has got a few comments on what he thinks Cisco’s strategy is and why this is an essentially a fundamental change. Kevin?

Kevin Kieller: Thank you very much. Yes, I definitely see this as a very defensive reaction by Cisco to the fact that, as you point out, many organizations have already deployed Microsoft Lync, and the basic Microsoft Lync package, while it includes instant messaging and presence, it also allows organizations to use Lync for peer-to-peer voice, as well as peer-to-peer video.

So even in the simplest Lync installation, in the typical Microsoft “bundle-in capabilities” fashion, organizations are experimenting with the voice capabilities of Lync, and quite frankly they are finding that in many cases they work quite well. And I think then what we are seeing is that they are stepping up and licensing the enterprise voice features that allow them then to extend that voice to the PSTN. And when they do that, Lync grows to become a replacement for the PBX.

So, certainly Cisco definitely does not want that to happen. I think this is a great, as I said, marketing defensive maneuver similar to what we saw previously where Cisco created the cookie Lync integration between Cisco voice and the Microsoft Lync product. Once again, both initiatives are trying to keep Microsoft out of the organization. Or at a minimum, kind of painted into a very small corner where all they do is provide that instant messaging at an absolute maximum.

Phil Edholm: It is absolutely very interesting that this certainly appears on the surface to be a reaction. So, I think that brings in another question. If you look at the other vendors in the industry, Avaya, Siemens, ShoreTel...they may or may not have, depending upon the vendor, a really strong IM strategy. Is this beginning to raise an expectation of an open IM strategy as being a requirement in UC procurements from here forward?

And then I guess the second question that comes out of that is, is this kind of inclusive pricing, either within the enterprise cal that Microsoft has that obviously includes a lot of other components other than Lync. Or as an extension to any user when you have a group of users supported by the Cisco Communication Manager? Does this really make it so that IM is something you cannot charge for? Don, do you have any comments on that?

Don Van Doren: I think it is pretty clear that IM is going to be a given. It is just going to become part of the infrastructure that people are going to be deploying in the future. I mean, Barry O’Sullivan in the announcement basically made that point when he made that comment about how this will be the precursor to dial tone in effect. And I think that there is going to be a lot of push and a lot of pressure on all the other vendors to really come up with some strategy. Either  coming out with something on their own, or else having some sort of a clear convincing arrangement with another vendor to provide that kind of capability.

As to how that is done and how open it is, et cetera, I think we have already seen a couple of models of that going on. There are some. Jabber obviously was leading the charge before they were acquired by Cisco to be truly open. Microsoft has taken a somewhat different slant on that in terms of we are open in the sense that we publish what our interface opportunities are, and invite people to write to those specifications. That battle is still going on and I think it is going to continue for awhile. I think that is going to be real interesting to watch how that particular part of it plays out going forward.

Phil Edholm: That’s excellent. So, if we kind of think about not just what this means in terms of the industry, what does it mean for customers? If you are a customer who has both a Cisco system and obviously has Microsoft in your shop, how do you evaluate the decisions of which of those two vendors to choose for your IM solution?

I know Don, I think you had some comments on this as well.

Don Van Doren: Yeah, Phil, I do. I think that because this is going to be pretty universally available in slightly different guises, I think what we are going to see is that companies will make choices. Not because of the specific offering perhaps that the underlying company has for their IM or Presence solution – that’s just going to be a given that will be part of other decisions that are made.

And so I think that there really are at least two prime drivers that we are going to start seeing emerging. Number one is just what’s your overall architectural and infrastructure plan? I do not think that this in and of itself is going to sway somebody to go in a different direction, in other words.

And then the second piece of it is what are the use cases that are coming out? For example, if a company turns out that a lot of its people are very document centric, for example. Their focus is around their desktop and how they work at the desktop, then desktop-oriented solutions will tend to predominate in those kinds of organizations. Conversely, if it’s a much more voice communications centric company, then people will tend to gravitate to Cisco, or Avaya, or one of the others’ tradition voice suppliers. And I think that I do not see anything that is disrupting that pattern in this particular announcement.

As I say, I think Cisco has raised the stakes and lowered the price point. And I think other companies are going to – other suppliers – are going to have to follow suit with that. But I do not think that any of those things are going to be singly enough to sway decisions on the part of what the customers are doing. Frankly, there are other more important issues that they should be looking at as I’ve suggested.

Phil Edholm: Yes. So, Kevin, I know you had a comment about what Microsoft has done in terms of I think it was their Friends and Family through Federation, and how that drives certain companies to look at Microsoft favorably, and how that compares with the Cisco offer. Do you want to make a few comments on that?

Kevin Kieller: Sure, Phil. I think one of the things that some people fail to understand is, as Don points out, you really need to look at the use cases. So, while with Jabber you may get Instant Messaging inside your organization. The question becomes, who do you do business with? And one of the strengths that we have seen emerge with the Lync platform specifically is its ability to federate with other organizations that are also using Lync.

And so when you are federated, not only with Lync – not only are sharing instant messaging and presence, but now all of a sudden you are also able to voice call all the organizations you are federated with. As well as video, share your desktop. So, all of the modalities of federation between organizations using Lync are available to you. And really what I saw at Enterprise Connect is it almost feels like we have gotten to the point where the momentum behind Lync is increasing greatly as more and more organizations support this.

And Lync already supports federation with anybody running Windows Live Messenger. Likely on the horizon is federation of all the modalities with Skype users. They’ve demonstrated federation with people using Xbox Live.

And now if we contrast that with the Jabber federation, so, Jabber very much does support XMPP Federation. But really right now that is a very limited kind of universe you can federate. First of all, the XMPP Federation, while it is supported for example between – Cisco will talk about that supported between Lync and Jabber, the reality is that you need to install the CUP Server. That is Cisco’s presence server. And then it needs to be like Version 8.5 Release 2 to support Federation with Lync. So, you have got to be running the latest, greatest. And then you are only able to federate to Instant Messaging and Presence. So, you cannot do...you cannot escalate the voice. You certainly cannot do video, share desktop, etc. And even inside the Cisco world, while the branding of Jabber is universal across different devices, that’s is more of a branding. Right now, CUPS does not even support federation between an 8.x version and let us say another organization that is running the Cisco Presence server 7.x.

So, there is a lot of limitations right now in terms of Cisco’s federation. And yet, on the Lync side we are really seeing that explosion of federation which is driving people that deal with other organizations running Lync, to increasingly, as Don said, do the use cases and say, “you know what? Lync may be the direction.” And I think that scares Cisco to death.

Phil Edholm: So, your view on it is that Cisco’s reaction here will not have as much of an impact because of federation. There is another comment?

Don Van Doren: I just wanted to go back to Kevin. Kevin, do you think the users, though, are going to accept the way Microsoft wants to do their federation approaches? I mean, granted, there – certainly it works fine in other Lync strategies. Although there are some issues frankly still another level of conversation, that gets into what happens on intra domain and inter domain with federation issues. But I guess my question to you is do you think people will react about this? Or try and push Microsoft to add more of a let me say two-way open approach to doing some of these federation issues?

Kevin Kieller: Yeah, I mean… I think that everybody says they are open. And as I think was pointed out at the earlier, it depends on your definition of open and you kind of skew it to whatever suits you. I think all of the vendors are still playing for all the marbles. So Microsoft, I think has the numbers with them and I think they are playing so that they define the federation model, and they seem to be gathering that momentum. I know Matt Landis has created a Lync Federation Directory of organizations that support open federation. And it’s already thousands and thousands of organizations. And I think if you include the people that are running Windows Live Messenger, which allows for some of the business to consumer. Federation models between Lync; potentially, and then if you open up the Skype Federation model, now that Microsoft owns Skype, I think that you could come up with potentially a billion customers that are running a platform that in the very near future could fold into the Lync federation model. So, I definitely think Microsoft is going to pursue that. They do have an XMPP bridge that is available for free to support XMPP Federation with Lync. It is very much as most of those bridges as I talked about, just Instant Messaging and Presence. So, if you absolutely were running Lync, and wanted to federate with a Cisco customer supplier, you could do that through the bridge. But, it is kind of the lowest common denominator approach. And certainly Microsoft I think would rather kind of remake the world in the image that everybody is running Lync. And I think right now, they are going to move forward with that. Until that strategy runs into a roadblock if it does.

Phil Edholm: I think that brings up another question then, which is, does Cisco pushing IM to this new point of essentially being included begin to push Microsoft to something that I think we have been thinking in the industry was coming for some time; which is, where voice services in a more complete nature were included in the basic Lync. Currently you really have a basic Lync, which gives you essentially Lync-to-Lync IM, but also some basic Lync-to-Lync voice communications. But being able to use it as a more complete system requires additional purchases. Does that begin to change as Microsoft begins to react to this, to say, “well, we do not want to be perceived as being a block to voice communications, therefore, we will begin to reduce those kind of secondary barriers.” Any comments on that as a thought process?

Don Van Doren: I think, Phil, the way you outlined that is exactly what is likely going to be happening over time. I think that we have seen this sort of pattern in the past where things; features, functionality, capabilities becomes subsumed into the operating system. And I think we are going to see that kind of trend continuing, obviously, to the extent that there is opportunity to charge extra dollars for functionality, companies will continue to do that as long as they can. But, Microsoft has both the ability and has in the past shown the propensity to incorporate things into the plumbing as I would like to say; when it serves their interest. And I think that is likely to be what we will see continuing to happen going forward into the future.

Phil Edholm: So, I guess the final question then is, does this begin to be a real watermark change in how the industry operates? And I think, Don, you are saying that it probably will become that. So, as people begin to look at voice and voice is less of their primary buying, they may begin to see some pretty major changes in buying behavior. Is that kind of a general conclusion then that – that time is beginning to come? And these events are beginning to really predict that as something that is going to happen?

Don Van Doren: That is certainly my view, Phil.

Kevin Kieller: In some respects, I see this announcement as more Cisco’s acknowledgement that things are changing. I would suggest that Microsoft... We see with Microsoft Office; and they are very big in bundling functionality. And where else other than in unified communications do you start to really have customers benefit from that bundling. So, I think Microsoft really changed the industry with their bundling, and they are not charging per port, and when you do audio conferencing with Lync you do not pay per user. In terms of as opposed to like a hosted bridge where you are paying per port, or even some of the on-prem. But I think what has happened is it has taken a number of years for traditional vendors like Cisco to realize that, and potentially for customers to vote with their dollars and start exploring some of the bundled features. So, I really see this as just Cisco acknowledging that they can’t charge an incremental price for a service that another major vendor in Microsoft is including kind of in the all-you-can-eat price point for their product.

Phil Edholm: Which of course brings us to that challenge of voice. Does voice follow that same path? And that, of course, is one of the things we have talked about in the industry for quite a while.

Art had a question. Art wanted to talk a bit about do cloud services have an impact here? And this has all been about IM more on the prem. Art, did you want to talk a little bit about how cloud impacts and how it changes the game as well?

Art Rosenberg: Well, obviously, when we say cloud, we are just saying we are moving the processes somewhere else, off premise, it could be virtual, private clouds, or whatever; which makes accessibility a lot easier. It is mainly software-based rather than hard connections and so on. I haven’t thought it out, but it is not clear to me that making things easier to implement, especially at the application level, which is where you are going to see the use cases show up, is going to be a way to facilitate everything; including the use of the communication applications like Instant Messaging and so on. And it certainly should facilitate the ability to federate. Because it’s all out there and hopefully in a convenient way to do that. And hopefully in a standard way to do that. So, thought maybe somebody could comment on their perception of the impact to the cloud.

Phil Edholm: I think that is a very interesting question. I mean, one of the things that I did not see was Hucks being talked about relative to the Jabber client. But obviously if this applied in that space, that would open some very interesting doors for smaller cloud deployments then being applied across the larger organization. Has anyone else got any comments on specifically the cloud and what it means relative to some of these changes?

Kevin Kieller:  Well, this is Kevin. I think Art is correct in that the cloud and the ability to access the cloud from any point, and any device, I mean, that is part of normally the cloud architecture, opens opportunities so that you had hoped that there was a – more of a standards based approach to be able to access things when they are in the cloud. I think that while that is the hope, the logic sometimes is not necessarily – does not follow in terms of the reality, which is they are still proprietary services. So, Microsoft, through their Office 365 offering has Lync in the cloud, but that does not mean that they open it up and support different federation bridges.

They are predominately supporting their own federation but in – between other on premise Lync offerings as well. I think Cisco definitely has once again writing the XMPP standards. But once again, whether that is on prem or in the cloud, there just does not seem to be as many people with Cisco IM interested in federating. And maybe that interest is limited because of the federation services that are typically supported are just Instant Messaging and Presence

Don Van Doren: I was just going to say, I think one of the things we will see coming out of this is there is the potential for cloud to be ... in the sense that they may start providing some of these kinds of offerings. We are already starting to see some vendors that are in effect writing middleware that allows them to support federation of various kinds.

And we may see a trend in that kind of a direction as well. Cloud services could be an avenue to support some of that. But to Kevin’s point, I think it really depends on what is the – what is the market demand for this? I think that federation is a concept. It is something that people think that they want to have, but many companies in our – in our consulting work at least, have not fully figured out and embraced how they would really use these kinds of services.

Personally, I feel it is going to be critical going forward. But, frankly, business process changes are going to have to come into play in order for companies really to take advantage of what these capabilities can be. And right now many of them just do not see it.

Art Rosenberg: Don, I think you are correct. And Kevin also, that things are not going to move that quickly; change doesn’t happen so easily and fast. But I think one of the drivers is the fact that with globalization and people dealing with people outside the organization more and more, especially when they are mobile, there is going to be a demand for having that kind of flexibility, which you did not have to have when everything was in a location base in one office, or in one company, and so on. People have to be interacting with others, and if you look at the use cases, I am sure you are going to find the hotspots are where especially where people are not in your organization.

It is not so easy to communicate with them. Especially if it is time sensitive. Look at a health care or whatever. So, I think there is going to be that kind of pressure building up as the need is recognized. And to be more flexible and to be communicating and federating with people, experts, whatever, who are not inside the organization. So, things that have to stay in the organization, they do not have to change so much. But I think there is more pressure for doing the other; slowly building up.

Kevin Kieller: And I just – and maybe we are just working with different customers just for the luck of draw. But certainly, the customers that we are working with. I mean, federation is already there. Right? So, I was just checking that said. They said this Matt Landis is the person who created this Lync Federation Directory. I mean, right now globally there are 7,966 organizations that support Lync Federation. And it’s big organizations. Right, so I mean, it is sometimes with Lync you can support open federation which means there is no process. Sometimes the security departments want to just verify. But it is really a five-minute exercise that sometimes needs a form to be filled but. But we are seeing big organizations supporting this. And really, once you know the person’s e-mail address, you type it into your Lync client. And it either federates it or not. And certainly, big, large global customers that I am working with. They all support – for federation. And it really changes how they do business. Because now, they can see the presence and they can do a quick IM: “is now a good time to call you?” And if the person says yes, you click to call in Lync. And you are making a voice call. And they could be long-distance around the world. And there is no PSTN connectivity required and there is really no cost being incurred.

Phil Edholm: That’s great.

Art Rosenberg:  Yes, I just wanted to expand on that a little bit. It is one thing when you are dealing person to person, which is not going to go away. But more and more, you… If somebody needs an answer. They want – and just like in the contact center. Who can answer this? Whoever is available--? Not just one person that I happen to know. And I think that kind of flexibility also is going to be a driver.

Phil Edholm: This is Phil. I think what you identified here is really the two sides of the federation coin. There is federation at an individual level where it is all about knowing someone and having a methodology where I can establish that it is the person that I know. And federate and interact with them. And I think there is more business process federation where you get into in health care and other businesses where it is not individual to individual, it is business to business. And I think in the end those are very different.

And it is probably a good topic for our future podcast – about what are the differences in the tools there. Let me ask one last question. And  I think from my perspective it seems to me that if I was a customer or a buyer or Siemens, I would feel a little bit left out of the game now relative to IM. Should – and obviously, if I have got Microsoft, I can use Microsoft. But, do any of you expect a reaction from Avaya, Siemens, ShoreTel, Mitel? The players that we have not seen as being IM players... To the fact that Cisco has put a real stake in the ground, saying if you want to be a UC player, you have to have  a strong IM strategy for your customers.

Art Rosenberg: I just wrote something describing what interactive intelligence is doing with IBM. And they are really – the partnering tremendously. And taking care of the problem in that way. They do not have to have IM. But they have got all the other pieces that will work with it. And they basically are not just integrating well to products and services, and putting in the cloud, et cetera, et cetera; but they are also getting their channels to work together in the same way.

Phil Edholm: That is interesting. We did not talk about IBM. And IBM obviously is another vendor that has IM as part of their package. But, I think obviously they are in a relatively small base. Any other comments on do you expect a reaction from Avaya or Siemens relative to their IM offers?

Kevin Kieller: This is Kevin. One of the things that I have seen is… So, certainly Mitel has their full complete UC stack. And we have had customers that kind of buy the Mitel bundle and are quite happy with that. Avaya has their OneX product that provides that. I think that the challenge comes when the customers have invested on kind of both sides of it. So, on the application sides they have invested on Microsoft. And they have IM on the desktop for Microsoft. And then they have tradition telephony and the customers really, what they want is quite simple – they really want to leverage both of the investments. And that is where kind of things break down. That is where I think Cisco tried to create Cookie Lync but with this maneuver, and this offering, they are trying to have customers just deploy the full Cisco UC stack.

And the challenge that I see for customers is it seems to me that when you do the use cases, which I know Don and Marty who isn’t on the call, talk about, and I think it is – key is a bundled offering often meets the user – the use cases better than multi vendor offerings. So, while I think Siemens, and Mitel, and Avaya have ways that they can address and integrate other vendors’ IM strategies, now we have the complete Microsoft stack, which people may or may not think is ready on voice. But I think we are finding organizations that find they can meet their voice needs. And you have the Cisco UC stack where now Cisco is saying you do not pay incrementally for the IM piece. I think that puts pressure for those other vendors to come up with a bundled offering as opposed to a way to leverage an IBM or a Microsoft IM product integrated to their solutions.

Phil Edholm: And that actually brings up, and I think another interesting question, which is obviously the Microsoft bundle comes out of an organizational perspective was traditionally the desktop grew. Where a Cisco or Avaya bundles, typically when they come out of the telecommunications group. How do you see that? The fact that organizationally; obviously a fairly good chunk of the market has both of these products. They have Microsoft and they have Cisco. Do you see organizations actually competing to offer IM? Or potentially you see some organizations even having both offers at the same time?

Don Van Doren: This is Don. I think – I think that is a really interesting question. I mean, it goes – it really speaks to the question who owns presence? And how many Presence servers will you have within an organization? There are some people that argue that has to be one. And I think the reality is that they are going to be multiple presence servers within organizations for several different kinds of reasons. One is the organizational issue that you just brought up, Phil. Another one has to do with use cases. And we are going to see I think different kinds of approaches being taken by different organizations. It is one of the things that I think long-term  is going to be a driver to federation – through federation in a way that we are just starting to see being approached right now.

Phil Edholm: That becomes actually a very interesting question that the knowledge workers who are predominately the Microsoft Office users, and using the suite of tools are using the Microsoft IM and the more traditional telephony users are using the Cisco IM, now the question of federation even within an organization of bringing those together becomes a challenge for the IT department.

Don Van Doren: Absolutely correct.

Phil Edholm: All these things, there are definitely consideration that organizations need to look at as they – as they look forward to this IM decision. And how to deal with the multiplicity of offers that are now essentially very low cost. So, that is an exciting change for the industry. Any final comments?

If there are not any additional comments, I think we will leave it at that. And thank everyone for your participation. And thanks to you who are listening for coming along with us.