UCStrategies Experts Review Gartner Magic Quadrant for UC

Transcript for UCStrategies Experts Review Gartner Magic Quadrant for UC

Marty Parker: Hello, everyone. This is Marty Parker with UCStrategies, and today we’re going to talk in our podcast about the Gartner 2011 UC Magic Quadrant or officially, the Magic Quadrant for Unified Communications 2011. It came out last week and as you know, we tend to comment on each annual version and talk about what’s new, what’s changed, what do we agree with, and do we disagree with any part of it.

Let me start with a few brief introductory comments, and you can see a longer text version of this in an article that was posted yesterday (Gartner 2011 UC Magic Quadrant – Growth and Maturity). So the Magic Quadrant is continuing the trend it’s been on. The Leaders quadrant contains the same three that it did last year – Microsoft, Cisco, and Avaya with Microsoft in a slight lead, very closely followed by Cisco. There was a return of Alcatel-Lucent and Siemens for reasons that are clearly explained. The Magic Quadrant goes on to cover a number of points that reflect the key themes that we’ve had here at UCStrategies for some three or four years now, and had been presenting at places such as Enterprise Connect and Interop, that the leading providers of both desktop business solutions and business communication solutions – the desktop being Microsoft, IBM, business communications like Avaya and Alcatel-Lucent, Aastra, Interactive Intelligence, Mitel, NEC, and ShoreTel, have all assembled suites of UC functionality. And David Yedwab will say more about that a bit later; but clearly, a theme this year of suites of functionality.

The second point Gartner makes is that the best approach for enterprise deployment of UC is to develop a multiyear strategy and then create a logical, affordable roadmap of a series of projects that can be defined and executed. And as you know, we’ve been saying that a roadmap is great execution strategy for some time. They mention the cloud-based options will play an increasingly important part as enterprises look at the cloud as a platform for some of their user communities. They don’t go into much specific on that in the space available. But we’ve talked about that; the field employees, remote workers, supply chain partners, clients, customers, consumers might all be connected to the enterprise through some of the cloud-based UC options, including social networks. So it’s interesting that they’ve opened that door up and made it part of the UC conversation.

And then lastly, there’s a nod towards mobility, that mobility has an important role in UC. But they don’t go too much further in the details. There’s some emphasis that Mitel, NEC, and ShoreTel all have some innovative mobility offers. But they haven’t made mobility, it seems to me, anyway, they haven’t made mobility a primary driver of their evaluations and ratings in the Magic Quadrant.

A few things that I would say that are kind of hidden behind the Magic Quadrant that don’t jump out and you have to read it closely and look at some of the research that we’ve made available to you, there’s big differences in the deployments of UC suites. So you can say every one of the vendors has a UC suite, but they are quite different. The functionality of those suites is quite different and you really want to be careful what you’re trying to do before you decide on which suite is going to be best for that purpose.

Lastly, I have a comment that the UC Magic Quadrant report doesn’t really bring out the wide variations between the vendors and the integration of their UC projects with business applications and business processes. And some of those vendors have a long history of excellent communications enabled business process integration. Others are kind of just getting going with it or see it as a sideline. So I think there’s a big difference if you’re thinking of embedding unified communications into the various parts of your business, as we’ve suggested you might, in areas like business applications or web portals or your collaborative workspaces like SharePoint or Quickr or your day-to-day productivity tools like your e-mail documents and spreadsheets, those kinds of places where communications can be very handy and very helpful for productivity.

The last thing I’ll say is in terms of new entrants to the Magic Quadrants, Huawei kind of caught my attention. And that’s a major Chinese corporation, and Gartner comments a $22B Chinese corporation. They’re most known for, I’ll call it network infrastructure, in Asia Pacific. Cisco sees them as a serious competitor in that category. But now they’re in the UC category and IP-PBX category, and I think that will create a very interesting new competitive dynamic; certainly, in Asia Pacific, at this point, and perhaps later into Europe and the Americas.

So with that, let me ask my fellow experts to give their views and commentary to expand on our thoughts on the Gartner Magic Quadrant. David Yedwab, I think you have some pretty important observations about this.

David Yedwab: Thank you, Marty. And before I start, let me apologize if there’s some background noise. I’m recovering from Irene here on the east coast and, unfortunately, am out in the open and there’s some noise around. First, and major observation on the Magic Quadrant for UC for 2011 is this year, Gartner, in effect, has reversed its prior strategy. In the 2010 Magic Quadrant for UC, Gartner was very much advocating best of breed. And this year, they are focusing more so and accepting the fact that a suite of solutions from one vendor might make more sense and they are saying that many of the vendors’ offerings have matured to the point that you can have more complete suites of solutions from one vendor. As we’ve debated and talked about interoperability across vendors, interoperability across solutions, interoperability across platforms, is not the easiest thing to accomplish. So now saying that one of your good options might be selecting a single vendor, if their suite of offerings meets your initial roadmap of needs, might make sense. And I think that’s a significant change from best of breed. Maybe it simplifies integration. Hopefully, it simplifies integration. And anything that can simplify integration and speed up deployments and realization of benefits is of value to us. That’s all I have for now, Marty, and thank you.

Marty Parker: Great, David. And you can recover from the storm real quickly. Russell Bennett had some comments. Russell?

Russell Bennett: Yeah, I was going to comment, Marty, on the changes over the last year. Microsoft, Cisco, and Avaya continue to be far and away the leaders, in that particular order, Microsoft, Cisco, Avaya. Interesting that Alcatel-Lucent and Siemens have joined them in the edge of the Leader’s quadrant. Some slips have been Interactive Intelligence has slipped to Niche. SAP is out altogether. I’m not even sure why they were in last year; they’re not an enterprise communications vendor. So they are out for this year. Digium and Huawei – Huawei’s already been mentioned by Marty – but Digium is a fairly well known open source player with their Asterisk platform. And they have joined the Niche players with Huawei.

Another interesting change was IBM took a fairly significant slip. Although it stayed in the Challenger’s quadrant, it’s very close to the Niche quadrant. And I think we want to look out for them next year.

So not much has changed at the front; a fair amount of change at the back. Some people added, some people left. Thanks, Marty.

Marty Parker: Thanks, Russell, for that perspective on the changes. Don Van Doren, I think you wanted to comment on a perspective of deployments and implementations.

Don Van Doren: Yeah, Marty. Thanks. One thing I noticed – and you made a comment about this at the start – Gartner, in their report they say – and I’m going to quote here – “Most enterprises take a longer term approach to UC. They start by defining a strategy and longer term direction. Then they determine the most effective way to order this. Often, UC initiatives focus on a particular project and as some projects are completed, others are initiated. In this way, UC evolves as a process of continuous and incremental improvement.”

Well, as you noted, Marty, that’s an approach, of course, that we’ve been taking in our consulting work for four years now. And I think you noted something about this, too, in your article that you posted last night on UCStrategies. The thing that I find interesting is – I mean, I’m delighted if Gartner is finding that kind of result – in our experience, we continue to run into companies that have not taken that kind of a strategy. Rather, they’ve approached this very piecemeal; frankly, frequently, in our opinion, misunderstanding the impacts that new vendors are having into this marketplace, misunderstanding the implications for how the whole communications and collaboration world is being changed by these new capabilities that are coming. And so, as a result, many companies we find are continuing to sort of take their own existing vendors and vendor solutions and just sort of throwing them forward into the future. For example, I think a lot of companies feel they’ve done UC by upgrading their PBX systems and then after they get all done with that, they sort of look around and wonder exactly what they’ve achieved and where the benefits are from the sometimes millions of dollars of investments in new phones that they’ve made. And I think, as we’ve been discussing for years – and I’m delighted Gartner is seeing this – I think the approach to really understanding a much longer term horizon picture and how these kinds of communications and collaboration solutions need to be integrated more seamlessly into the business processes is going to be a fundamental change. And I’m delighted to see that they are pointing that kind of thing out. And frankly, I hope that most of the companies out there that are considering UC will really look at that kind of an approach and take all these things into account.

Marty Parker: Great, Don. Thanks for that perspective. Art Rosenberg was going to comment a bit on some of the dynamics that are hinted at in the report.

Art Rosenberg: Right. Well, the obvious assumption is that we’re talking about larger organizations who are going to start with a migration, not a clean slate. And so they’ve got these invested at work and the question is what do they do first? And then they talk about the strategy planning; no mention is made of who does it and how do they do it. And this is where you really want to be looking at the business processes that need the benefits of UC; both for the automatic application, as well as the person to person contacts and so on. And so there is really a need for the tools to do your analysis of what hurts? What’s missing? What has high value that we’ve really got to fix first? So you can get to that project-by-project approach. And so this is where the need for having analytics that work on what you already have so that you can find out, “okay, let’s look at our problems first,” develop the strategy around that, and then plan the implementations accordingly. There’s a bunch of other things that I think are also important, that a lot is going to be dependent on exploiting mobility. And the report really just says, “there’s all kinds of things we don’t really know what the answer is, but we do know mobility is going to be very important.” And there’s going to be a need for having a way to support mobility from any user, whether it’s inside the organization or outside the organization, especially to customers. And I think that’s enough for me to say for now.

Marty Parker: Well, thanks, Art, for those pointers to us. Dave Michels, what would you observe?

Dave Michels: First off, just the undertaking of this Magic Quadrant report. You know, they do it every year; I’m always amazed at how they simplify such complex topics. They do a fairly good job of it, but there’s so much discussion that is not in this document that I think it can be a little dangerous for some organizations to use this with too much emphasis, as too much importance. A couple of other thoughts, listening to some of the speakers... David talked about the suite versus best breed approach. I think what they’re saying, really, is that the suite has taken on a… it’s become very common, a lot of the vendors are offering a suite. But they make it very clear that using a suite could be at the sacrifice of best of breed and that organizations need to choose that. I think that’s really consistent with what they said last year, although last year, there was less suites. And so I don’t think that they’re necessarily reversing on that path, but it is interesting how much suites have become standard in the space.

One thing that they don’t discuss at all in this document is the related infrastructure associated with some of these solutions. And, I think more and more, we’re finding that UC isn’t just a point solution. It involves a lot of things. It involves your directory structure, it involves whether you have thin clients or Mac desktops or things like that. You know, there’s just so many things that go into it. Some of these leaders that they’ve identified have a significant amount of infrastructure associated with them, and some of them have very little, and they are more of a best of breed approach. And I don’t think that was highlighted in this document.

The other thing is the concept of the Magic Quadrant is so simple and elegant. One on axis, you’ve got this ability to execute. And I find that a really difficult thing to do, worldwide. So we’ve already talked about – Huawei, and Alcatel-Lucent, are on here. And these companies have a fairly weak presence in North America. And so I think it’s difficult to come up with… of course, we do the opposite here in the US, we tend to only look at things from a US perspective. But I think it’s very difficult to make this a worldwide document, especially when you are evaluating their channel and their ability to market in their channel.

Just one other thought was Russell mentioned – Digium made it. I think that’s great news. The Digium product that they talked about is actually the SwitchVox product, which is not an opensource product. A lot of people get confused about that. And it’s been barely focused on SMB. And it’s interesting to see that Gartner now is acknowledging SwitchVox in the UC report. It’s a very interesting product, particularly around CEBP, which they didn’t really hit on. I think that’s about all I’ve got. Marty?

Marty Parker: Dave, thanks for those important points. Michael Finneran, you probably have a few comments about the mobility trends you’re seeing here.

Michael Finneran: Marty, how could you ever have guessed? Certainly I do agree with the basic observation you made at the outset, which in the Magic Quadrant report here, mobile is not a primary driver. Once again, as Gartner has done in the past, mobility is not broken out as a separate product area. Rather, they indicate that it’s an element in each one of the various categories, and that’s an idea with which I agree with primarily. All of these applications do need a mobile component.

Now, the most telling thing I recognized in my first quick reading of the report was that the words “mobile” and “mobility” will show up in virtually every vendor description. But they’re virtually absent when you look at the strengths for any one of the vendors. The sole exception to that is Teleware, who’s a name that’s not really a big player here in the US – again, the focus on the international market – who really seems to have constructed a UC solution around the general idea of mobility. But I think while they don’t spell it out specifically, what Gartner recognizes is that nobody really has come up with a mobile solution that’s a significant product differentiator. So if you read between the lines, mobility lip service continues in the UC camp. And really, the vendors are still struggling to come up with anything meaningful that they can throw out in the mobility space that really will set them apart from the competitors. So for mobility, it’s more of the same. But it serves the UC community, however, because mobile UC can be developing in parallel with a similar set of capabilities geared toward mobile devices, which could eventually subsume what we’re doing in the wired environment. So nobody’s gotten their arms around mobility yet. I’m definitely in sync with Gartner on that one.

Marty Parker: Yeah. I think you raise a very important point, Michael, before I call on Jon Arnold, is that there may be more of a tectonic shift coming than the report calls out in the mobility space. I think that’s good advice to us all, including all of our listeners, to keep our eye on transformations in mobility that go beyond the traditional viewpoints. Jon Arnold, what would you like to add?

Jon Arnold: Thanks, I’d like to echo a few points that were made so far, and add a few things, as well. First of all, yeah, I do agree that I think there are these tectonic shifts coming that may make this report look very different next year. And aside from mobility, of course, is video, and there’s hardly any mention of video here in the report. And I find it interesting, the other comment about this being kind of – I think it was Art saying that there’s a lot of premise-based focus on this analysis – it’s also, very telecom and very voice-centric. And again, this speaks to, I think, what people typically associate with UC. There is some comment there about text and chat and IM and stuff, but very little on the broader picture of collaboration, and network-centric ways of working that involve all of the modes. And on that front, I’m surprised at how well Cisco fares, considering how little attribution is given to their strengths in those areas, especially with their focus on collaboration and video. And I think that plays well to their story. And as current as that is, and as current as the bigger, also the big trends around tablets are going, which also drives collaboration and, of course, mobility, as Michael’s been talking about... they don’t talk much about that at all, yet they do provide some pretty good updates there about Lync and why that’s making Microsoft a strong player. And I’m glad they mentioned Skype, which also shows the currentness of this report. And I think that’s the biggest wildcard in this whole analysis amongst the established vendors in terms of how this landscape could change next year.

The other surprise is, as mentioned earlier, is Huawei, first time to see an Asian vendor there. And again, one known for infrastructure and not applications. And that also, I think, could signal another seismic shift we may see in the market. I know they had NEC in there as technically an Asian vendor, but really doing it mostly out of the US. I think that’s also a sign of what’s to come.

And the last thing I thought I’d mention is no one said anything yet about Mitel, and I thought it was kind of interesting to see them, as the report noted, as the only vendor in the Visionary quadrant. And we all know, those of us who have been to Mitel’s event, how much they’re betting the farm on virtualization and VMware, etc. And I think that vision is being validated here by the Gartner report. So I think that’s really good to see an independent vendor like Mitel getting that kind of recognition. So I’ll pass on to others. I think there’s probably a lot of other things we could talk about, as well.

Marty Parker: Thanks very much, Jon, for those observations. I think those are important and yes, Mitel did get some good note on the virtualization, as well as on the mobility. Also let me add, Gartner did comment on some vendors who are not in the Magic Quadrant because they don’t have all the different components of unified communication. But Polycom got mentioned for leadership in the area of conferencing and video conferencing, but primarily in conferencing. In unified messaging, AVST was mentioned. And they mentioned UC service providers AT&T and Google, Verizon, British Telecom who are not mentioned here because they are covered in a separate report on unified communications as a service in North America. So thanks for all those comments. Anyone else want to come back and add to or amend their comments at this point?

Jason Andersson: Hi, this is Jason Andersson calling in from Europe. I just had a short comment and that’s that seemingly Gartner is downplaying the importance of voice and the integration of voice. I know you’ve mentioned a number of times the complexities in doing integration in the business process automation perspective, and voice is a very important part there. And they downplay Interactive Intelligence’s connection to their call centers, I feel, they mention it as a strength but they still are fairly low in the quadrant. And that goes for many of the players who are strong in voice, and have a suite in unified communications.

I was happy to see Mitel in “visionary;” they are strong in the voice area, and also have a very good virtualization story. I was surprised that there is not too much commenting on Microsoft voice solutions, their lack of certain key features, for the, for example, European market is astounding, and that is causing some trouble for them here in some markets.

Siemens has a strong voice portfolio, I agree, and have added a lot of good UC functionality into their suite. It is interesting the change going from a best-of-breed perspective and now talking more of a suite perspective. And I think that’s good; most customers buy from a suite perspective, however, if you want to have a really good solution integrating it to your voice platform is key, and I don’t think that Gartner is putting enough emphasis on that area and I think that is something that we should maybe discuss more in the future at UCStrategies. That is a key area for us.

Steve Leaden: This is Steve Leaden. I find the Gartner Magic Quadrant very interesting year after year since 2003. They have obviously taken a painstaking amount of time in putting together a very comprehensive look at the industry and where the UC market is going, and I really appreciate all the support and knowledge that Gartner gives out there to the market.

My comments are brief. One is that I really agree with most of their findings, that I really do see the enterprise market as Gartner does. It’s significantly matured in the last year. I definitely see, as they do, a lot of UC suites arising, and the emergence really of messaging being still a separate piece of the UC suite, I see that as well.

Gartner also mentions the fact that there are multiple vendors for best-of-breed functionality; and that might be a spin, and yet a single-vendor approach might sacrifice some of that best-of-breed. So yes, while I agree with that, I also want to put a footnote in there as well that states, that from a practical point of view, we’re seeing most enterprises go with a single vendor, kind of single throat to choke kind of approach, if you will. So we’re finding most of the enterprise community going in that kind of direction.  

We’re also seeing that there are players such as Microsoft that are in the highest point in the quadrant, and yet because of their software-based legacy, or roots, I should say, we’re also finding that the market maybe has this slightly slower acceptance of Microsoft as this single engine that will take the place of the entire telephony environment.

But with that said, we’re also seeing that there are a couple of other things that are interesting in the report. One is the fact that we’re talking about a soft dollar business case rather than a more hard dollar business case, and I would actually footnote that and say that depending upon how you’re looking at UC, i.e. as a full VoIP kind of replacement, there are some significant changes that we’re seeing going on in the market that are favorable to the enterprise market. One being that in the last 18 months we’ve seen a significant drop in the total expenditure of a full greenfield deployment or a full brownfield replacement system, that would be voiceover IP and UC integrated. And by looking at the two together, we’ve seen at least a 9%, maybe even a 10% drop in the overall market price. We’re also seeing the elimination of software subscription pricing; not so much software upgrade, but software subscription pricing. And we’re also seeing reduction of lower maintenance contracts, actually by as much as 50% over TDM, legacy, maintenance contracts.

Lastly, you have to keep in mind that the focus really is more about the technology here, less about market share, less about strengths and weaknesses in specific geographic areas, or specific vertical markets. So my counsel would be to anyone who is seriously looking at this, to also take that next step beyond this report and ask based upon your geography, based upon your specific vertical market, and of course market share, who are the players that could potentially best suit your environment for your needs. And with that I will hand the microphone back to someone else. Thanks.

Art Rosenberg: Marty, this is Art again. One thing that I would like to mention if you’re planning an evolutionary  migration, obviously, you’re not throwing anything away. You want to be adding new stuff, whatever that may be. Mobility is the area that can best get payoff from UC. And so mobile applications, mobile UC applications are the ones that are going to benefit easiest and the best, and that’s where the strategy analysis could be looked at as a starting point rather than let’s go and replace our old stuff, which is still working – maybe not as well… But if you want to really take advantage of what UC can do, it’s in the area of mobility. And with Smartphones, this will apply to everybody in the organization, outside the organization, customers, it makes no difference; they all can benefit.

Marty Parker: Yeah, thanks for that perspective. Of course, I think it is an element of Don’s earlier comments, as well, that it is important to look at this incrementally. David, what would you like to add?

David Yedwab: The UC space, even in Gartner’s estimation, is extremely broad and they’ve got at least two other Magic Quadrants coming -- the UC as a service and the corporate telephony Magic Quadrants – that will probably have a significantly different story than the UC Magic Quadrant, which largely deals with enterprises and larger enterprises.

Marty Parker: Right. I think that’s an important point. So thank you all for your comments. We appreciate you all listening to our podcast or reading our transcript, and we would welcome any posts to the transcript on the website so that we can respond to those. And thank you again for listening. We hope we’ve been adding value to your planning for unified communications.