A Short History of UC
Recently, we were asked, “How quickly did UC 'grow up' from a long-term trend to a 'now investment and opportunity' that enterprise is taking seriously?” Great question! Here’s a perspective on the UC market and a short history of UC, from my point of view, dating from the mid-1980s.
To set the stage, please remember that communications is the exchange of information in any form. It is not only voice communications. This is a critical point in understanding the many forces in the evolution of UC. Also, it is important to consider the primary definition of Unified Communications: “Communications integrated to optimize business processes.” This goes to the purposes and outcomes of the communications, not the underlying technology. The following short history shows that those who understand these concepts are finding ways to shift the playing field to their advantage.
Early Years: 1980s
In the 1980s, the idea of UC was emerging from the worlds of voice messaging, IVR, and e-mail. Voice mail systems with IVR-like features were recognized as an access mechanism to corporate information for mobile employees, before the explosion of cell phones and the proliferation of PCs. One of the most interesting access points was to the increasingly popular e-mail, and VMX, an early voice mail leader, offered an “e-mail reader” feature on their voice mail system in 1985.
Mid Years: 1990s
By the 1990s, this “unified messaging” (UM) idea had caught on and many investments were made to bring voice mail and e-mail together on the cellular or remote office phone and on the office desktop screen or PC. Digital Equipment partnered with VoiceSoft in 1989-1991 to provide UM with DEC All-in-One; by 1995, Lotus (pre-IBM) had partnered with AT&T to create Telephony One Stop; also, Microsoft was partnered with a VMX/Octel/vMail division to produce what became Octel Unified Messaging in 1997, a precursor to Microsoft’s own offer of UM in Exchange 2007.
As cell phones became more popular, these UM systems were enhanced to become “find me/follow me” systems, so that callers had an option to “find” the called party at that party’s current location and number. Lacking presence indications, this was either a multiple ring process or a relatively unreliable user-controlled setting process. Yet this was a popular feature with good user adoption.
Mobile users were also offered speech-controlled interfaces. WildFire was perhaps the most touted of these applications which would allow the user to make calls by saying contact names or numbers, control incoming and outgoing calls, hear and respond to voice or e-mail messages (text to speech), and do other needed functions such as read their calendar or set appointments.
At the desktop, unified messaging combined e-mail and voice mail in a single interface, but soon the vendors added call controls to those screens, initially using Computer Telephony Integration techniques, so that the users had their first version of what would become a UC and softphone PC client.
It was at this point that the term "Unified Communications" first showed up, as messaging and real-time communications were combined in the ways described here. Clearly, this was a precursor to current UC definitions and solutions, though those 1990's products and applications would not be called UC by today's standards.
The final notable UC event in the mid-years was the introduction in 1999 of the RIM BlackBerry product. Seemingly just a portable e-mail reader, we will see that as a tectonic shift in communications and UC.
Growth Years: 2000s
By the early 2000s, many companies had figured out that there were new ways of providing user communications. Of course, IP Telephony had arrived, spawning dozens of startups, most of whom got acquired by the likes of Cisco, 3COM, Nortel, Microsoft and others. When that was combined with the mid-year UM, mobility, desktop and speech experiences, customers could now buy a single “unified” communications experience. However, the customers were not ready to write off their investments in PBXs with voice mail and E-mail systems, so most of the new solutions experienced slow uptake, with customer demands for “integration” with the installed infrastructure and vendors.
When these innovations appeared from within the established PBX vendors’ development labs, they were often stifled by the established products to which they were a threat (this is described well in Clayton Christensen’s books, beginning with “The Innovator’s Dilemma”). Examples include the Lucent iCosm system, the Avaya Unified Communications Center, and the earliest Siemens OpenScape system, all of which were created via combinations of acquired and internally developed software; all of these were either killed before release or were adapted as adjuncts to the core PBX products in those companies. Today, we see these PBX-based UC solutions as Avaya one-X, Cisco Unified Personal Communicator, Siemens OpenScape (new version), Mitel Your Assistant (now Unified Communicator Advanced), NEC UC700, Alcatel-Lucent My Teamwork, ShoreTel Shoreware Call Manager, and others. Usually, these UC interfaces are bundled into the price of the PBX user license, apparently because customers are no longer willing to pay the full license price without these new functions.
Meanwhile, the e-mail and office software leaders also realized that communications was a broader market and was adjacent to or integral to the collaboration market into which e-mail was being subsumed. Their first thrust was into instant messaging, which naturally included online status of the participants, or “presence.” These IM and presence clients – Lotus Sametime and Microsoft Live Communications Server – appeared in 2003-2004 and became very popular; each company now claims over 100 million of these products sold to their enterprise customers. The natural evolution of these products was to add the ability to “click-to-communicate” or “… collaborate” to the presence status button and to the IM sessions. This concept was very logical and could proceed with or without links to the enterprise PBXs. By 2006-2007, both Microsoft (Office Communications Server - OCS) and IBM (Lotus Sametime and Sametime Unified Telephony) were shipping products that could provide all the communications tools needed by most users, including interfaces for desktops and mobile devices and with call control links to the existing PBXs when or where needed. These solutions seem to be gaining significant traction, showing triple-digit percentage growth in 2008-2009 while the PBX markets are forecasted to have a 30% year-to-year decline.
In parallel, collaboration tools were gaining traction for information workers and for business meetings, both to save time and accelerate information-intensive business processes and to cut costs for travel and office spaces. The leaders in these tools were IBM (Quickr and Lotus Connections) and Microsoft (SharePoint), who naturally and quickly integrated Sametime and OCS with those collaborative products. WebEx was the other leader in the meeting and collaborative space; Cisco, who appears to have a strategy of competing with Microsoft and IBM, purchased WebEx in 2007 and is pushing that solution, augmented with e-mail (Post Path) and IM/presence (Jabber) tools, to the business enterprise.
In parallel, the mobility sector has been increasingly important in UC. According to a 2007 Nokia slide, PBX-based voice calling minutes began to decline in 2001 while mobile minutes continued to grow, and by 2007, over half of all global voice minutes were on mobile devices, with that trend continuing. In addition, data networks – both cellular data and WiFi networks – have made the mobile device into a portable office and business interface, far beyond just mobile e-mail. This is dramatically represented by the 80% growth of Research in Motion, the maker of BlackBerry, in FY2009 over FY2008 to $11 billion in annual revenue, making them arguably the largest Unified Communications producer in the market. The mobility players are successfully capturing a major share of UC spend, via both the device revenue and by extracting value by displacement of traditional PBX and enterprise network expenses.
Finally, the business applications software companies are incorporating the needed communications tools into their solutions, to make those solutions more attractive to their customers and to maintain their account control and share of wallet. From SAP to Oracle to IBM (Global Services) to the vertical market or sector players such as Salesforce.com or McKesson (Healthcare), et al., these software producers are either including needed communications functions in their products or integrating to the necessary provider through available open or proprietary standards.
All of this has been reflected in the highly visible Gartner Magic Quadrant report on Unified Communications. The first report in 2003 had no one in the leaders quadrant and Avaya as the top ranked provider. In 2008, the report had Microsoft and IBM in leadership roles, along with Nortel and Siemens.
It has also been reflected by major companies, such as Cisco, defining the UC market as the sum of all available markets (see illustration below).
This "total view" can be misleading, since only a small portion of this revenue is in new, but very fast-growing segments. Blair Pleasant's UC Market Report captures this growth market view, reporting the UC market will reach $2.43 billion by 2012 (pre-recession forecast, but still major growth market from about $200 million in 2007.
However, the market is growing solidly, though not in the zones that would be expected by the traditional interpretation of Communications. Microsoft, IBM, Webex, RIM and more, show that UC is the growth vector and trend of the future for enterprise communications, as illustrated by this short history.
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