Reflecting on Inflection
UC industry pundits like myself frequently speak about disruption and inflection points. It’s a theme that over the past decade has ceased to get old. We use these terms to describe significant shifts occurring in the industry, such as digital to IP, prem to cloud, hardware to software, and hard phone to softphones. It also applies to less distinct shifts such as next generation applications and mobile-first/cloud-first.
It sure seems like a lot of shifts, but to be fair they are all legitimate. But hold on to your seat because these were all just the pre-show. We are heading into much bigger changes. Bill Gates agrees and said last week that we're in the fastest period of innovation ever.
For a moment consider just the endpoint. Ten years ago a new endpoint was a physical phone largely controlled by a single vendor connected over a dedicated network. Today, a new endpoint is more likely to be an app - and the innovation around that app is impacted by hundreds of vendors. It’s not just an app that defines the experience and tech, but the app runs on a device made by any number of different firms. The devices are highly innovative and changing quickly including the operating system and networks they run over. An extraordinary number of moving parts - all undergoing rapid change.
I would like to take a moment to identify five recent acquisitions and two observations that signal significant shifts occurring right now.
There has been plenty written on each of the above already. My point is a broad look at these acquisitions suggests a significant shift, expansion, and differentiation in coming value props. The industry is abruptly moving beyond multimodal UC - anytime, anywhere, any device. All of these acquisitions represent a significant expansion and/or morphing of value proposition.
Thin client integrations and cloud fueled Tropo, gUnify and Esna. Mavenir is about voice over LTE. Glip is about team collaboration. There are far more indicators that substantiate these and other broad shifts than just these acquisitions, but as a small subset of activity they provide an interesting snapshot.
Keynotes: At Enterprise Connect 2015 the keynote presentations told by four leading vendors (Cisco, Avaya, Microsoft, and Google) each shared one (and only one) common element: disruption. The century-old industry is on-fire. Cisco spoke about the danger of sitting still - or being “Blockbustered.” Avaya spoke about how “the rate of adoption and engagement is accelerating” demonstrated by a shortening lifespan of SP500 leaders. Microsoft reminded us how embracing change allows us to be on the “Kennedy-side of the debate” (referring to the first televised Presidential debate). Google spoke about the blurring of consumer and business platforms, and that “unified communications peaked in 2007” (as a search term).
Slack: Like all UC companies, Slack also claims to be a collaboration company. While it does indeed foster online communication, it does not offer voice or video services (today). In less than two years, the company has created over $25 million in recurring revenue. Slack’s recent fundraising gave the company a $2.8 billion valuation - in less than two years (see why the Slack bubble will burst).
That’s seven data points that suggest enterprise communications and collaboration as we know it is about to undergo major changes. I’m not talking about the run-of-the-mill disruption that we have (amazingly) become accustomed to. The rules are rapidly changing - as they say: shift happens. The vendors are diverging by making fundamental changes to their products, services, and business strategies.
The changes taking place in 2015 will have long-term ramifications. The other side of this journey will have a very different competitive landscape with new types of products and services addressing very different user expectations. Not all of the current vendors will make it. Depending on where you are sitting it’s going to be a very exciting or terrifying ride.