Enjoy the Status Quo While it Lasts

Enjoy the Status Quo While it Lasts

By Dave Michels September 29, 2014 1 Comments
Dave Michels JPG
Enjoy the Status Quo While it Lasts by Dave Michels

Phones no longer have dials, nor bells that "ring."

If you are under 20, you probably have never heard dial-tone or a busy signal.

Things change, and a lot quicker than they used to. It is not just around telephony, but enterprise communications in general. What was once a stodgy boring industry has become dynamic. It is fun to comment as a pundit, but I genuinely feel for IT decision makers trying to piece together a communications strategy. The only thing we know for certain is that anything you do today will be obsolete sooner than we care to admit.

AT&T and Nortel dominated the enterprise PBX market for something like 40 years. Disruptions such as IVR, FAX, and voicemail just strengthened their dominance. Today, neither company exists. AT&T spun out many divisions eventually leading to Avaya, which ironically acquired most of Nortel’s assets. NEC, Mitel, Alcatel-Lucent, Unify – each have more than 50 years of enterprise communications experience.

Yet. Today, there are no signs of stability. Every major vendor is working on redefining itself. Companies such as Thinking Phones, 8x8, RingCentral, and Twilio seemed to come out of nowhere. Cisco and Microsoft are exerting the most pressure on an industry which they were not even a part of 15 years ago.

In 1958, US corporations in the Standard & Poor’s 500 index remained in the index for an average of 61 years. By 1980, the average tenure of an S&P 500 firm had dropped to 25 years. In 2011, the average further shortened to 18 years. On average, an S&P 500 firm now is being replaced about once every two weeks. Assuming the rate holds, after the next 16 years, 75 percent of the current S&P 500 will have been replaced – though the trend indicates this will occur even sooner as technical waves disrupt the status quo at an increasing rate.

Technology comes in waves, and each one follows a predictable pattern: a boom, growth and then decline. Then a new innovation restarts the process. In order to create conditions for the new wave, the old way of doing things is destroyed. Think about those miles of copper wire connected to every home and business – being abandoned. An Austrian economist, Joseph Schumpeter, in 1947 coined the term “creative destruction.” Although initially it referred to broader economic structures, today Schumpeter's term frequently is used to describe how new technologies, practices, and companies fuel obsolescence at an astounding rate.

The current rate of change is, in a word, phenomenal. In 2007, Nokia was the world’s largest provider of cell phones. Its chief rival was Research in Motion (RIM), which dominated the smartphone market with its Blackberry devices. Then Apple introduced the iPhone. Five years later Microsoft acquired Nokia for a fraction of its prior value, and just recently decimated most of what still remained with a massive restructuring. RIM, now Blackberry, continues to struggle for relevance and survival.

The rate of change is so fast, in part, because of globalization. New ways of doing things become known instantly around the world. News spreads quickly as was demonstrated by NBC’s US coverage of the recent Sochi Olympics. Olympic coverage isn’t new – it dates to the early days of radio and television. The proven model was to package and curate the best events over the prior 24 hours into a packed prime-time segment. However, that model didn’t work well this time because event outcomes could not be contained to prime time. News of the medalists spread through many channels, including self-promotion of NBC News during its prime-time coverage. NBC got caught between its entertainment and news charters, and upset viewers of both.

As information spreads, the impacts are broad. Businesses and technologies are changing rapidly, as are attitudes. The way we worked just 20 years ago is practically unrecognizable today: Then, it was unacceptable to bring work into the home, and clear distinctions between work and home personas existed and there were consequences when this separation was violated. Today, people quit when they can’t work at home.

It is interesting to reflect on the amount of change that has occurred. But there are two very important considerations as we ponder about enterprise communications.  

First, look at your current infrastructure. If employees are still hearing dial-tone and busy signals, then it may indeed be obsolete. Today’s deployments must center on mobility and cloud. “Conversations” are no longer just talk, but include multiple modes of communications. Infrastructure should be centralized and integrated into other applications such as productivity suites and CRM. Endpoints are more than phones, and include pockets and applications. Communications solutions must be broader than real-time interactions, but also include overall experience, directories, and rich history – solutions that facilitate collaboration.

While presence, voice, and IM are well understood, a UC solution should also include video and conferencing. Video is very powerful form of communication that just makes sense now that it is realistically affordable enterprise-wide. Conferencing is also significantly improved with web, video, and screen-share elements. Modern conferencing solutions should be multi-modal, PIN code free, and integrated with calendars. A recording element adds an asynchronous element to an otherwise real-time medium. All of these tools, or modes, should be device and location independent.

The second point is to acknowledge that the industry is on the cusp of significant innovation. Long term strategies, beyond rapid adaptation, are pointless with the current rate of change and shear degree of new technologies emerging. The previous examples of the S&P 500 and Nokia are indicative that no vendor is immune. Long term technical viability is something you can tell your grandkids about.  

Think twice about that five-year depreciation schedule. There are virtually no high-tech solutions that will last five years without ongoing upgrades. Selecting solutions is less about picking the right technology than picking the right partnership. Inquire about the underlying R&D, and the vendor/provider’s ability to continuously update the solution in a way that is relevant to your organization.

The next generation of enterprise communications will include more robust ways to communicate between organizations – this includes WebRTC and other browser-based technologies. Expect that communications will occur more within applications.

Expect more intelligent communications. We see this a bit with softphones today – why show a “hold” button if you are not in a call? Contextual-based communications is about to go far deeper with intelligence that considers your location, calendar, and specific contact(s) and interaction. Expect more solutions for filtering communications, effectively a selective do-not-disturb capability. Also, expect a significant reduction in PSTN usage as UC modes of interaction extend outside the organization.

Ongoing innovations and yet-to-come new technologies means communications approaches and vendors that you have never heard of will become very important in the near future. No, I don’t know when or who, but I know the industry is in flux. New modes, robust APIs, and vendors create an environment that will bury the status quo.

Dave Michels, TalkingPointz.

 

1 Responses to "Enjoy the Status Quo While it Lasts" - Add Yours

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Art Rosenberg 9/29/2014 4:06:22 PM

Dave,

You covered a lot of business communications territory, most of which I agree with and have written about. It highlights the need for a graceful migration strategy that will support both legacy telephony users, as well as the new breed of mobile multimodal users who will be initiating real-time contacts in much more contextual, flexible, and efficient ways.

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