Cath Everett
8 August 2008
The growing adoption of unified communications will lead to a shake-up in the third-party distribution channel as voice, data and applications resellers are forced to converge in a similar fashion to the technology.
But the market is in a state of transition and many channel partners are unwilling to embrace change, which is slowing uptake. Another inhibitor is the fact that many customers are unsure what the term “unified communications” means, as each vendor has put its own spin on the definition. This has resulted in the moniker meaning different things to different people.
Brian Condron, business development manager at communication systems integrator Affiniti, explains, “It is a confusing time for customers to navigate through it all and understand what it means for them in real terms.
“Too many just look at things in a short-term tactical, siloed fashion, but you cannot just buy a system or solution – it is about a journey and it involves developing a strategic communications approach.”
This is because, to be effective, implementations of this type involve streamlining and optimising communications processes that do not stop at departmental boundaries. It also entails harnessing a range of communications applications that include instant messaging, voice, video and collaboration tools underpinned by a coherent architecture running over an IP-based network. This enables such tools to be accessed using common devices and managed from a single point, which cuts down on administration costs.
Change processes
But Condron warns, “Unless these things are joined up, they do not achieve what organisations are looking for. To get real benefits, engagement has to be across the wider business forum and include sales, marketing and HR, because it is necessary to understand how people work and communicate today and where they want to get to in future.”
One of the important issues here is providing context, as unified communications gives users choice about how contactable they are, how they want to be contacted and how they want to contact other people.
Annette Reynolds, business manager of distributor Sphinx’s Alcatel-Lucent unit, explains, “It is about combining multiple means of communication into a single interface that enables you to choose the appropriate method of communication dynamically, and presence is key to this.”
Presence information indicates the status of the person to be contacted and shows whether they are able and willing to communicate with a third party.
But Tony Corlett, product development director at voice and data consultancy Azzurri Communications, believes that unified communications comprises the inevitable second phase of a move towards increased integration and convergence.
Although voice and data network convergence has been going on for at least seven years now and is fairly widespread and accepted as a concept, he says the problem is that benefits are limited because such infrastructure is “just plumbing” and tends to deliver little more than dial-tone, traditional voice services such as call-back and some savings on IP voice calls over a wide area network.
Therefore, the move to applications convergence is a natural progression in organisations’ desire to derive deeper business benefits from their infrastructure at what amounts to an incremental cost. “It transfers things from the idea of just carrying content around to transforming the business environment by enabling communications to be more intuitive and contextual,” says Corlett.
So if, for example, a user is working on a document that requires someone else’s input, it becomes possible to hang over their icon, look at their availability and desired communications modality and choose to set up communications with them there and then. “It extends directly from the business process taking place and saves time that is normally wasted on failed communications,” Corlett says.
Benefits of unified comms
However, analyst firm Gartner warns that, although lower total cost of ownership and reduced equipment costs are the top two user expectations of deploying unified communications technology, in reality the top three benefits, based on a survey of 300 organisations, are enhanced employee collaboration, productivity and customer service.
Reynolds agrees. “There is an obvious return on investment for professional services organisations and other fee-earners that bill for time or are highly mobile, as they can be more productive for more of that time. But there is also the time that can be saved by knowledge workers who are collaborating on projects and sharing information. Response time is a big driver for businesses in competitive environments,” she says.
Nonetheless, the unified communications market is still immature. Although it is starting to move beyond the early adopter stage, it is definitely in growth mode and is unlikely to plateau for at least another two to three years.
According to Corlett, as many as 60% of medium-to-large enterprises are at least considering their options in a significant way and few are not discussing it when looking to replace current infrastructure, whether that involves upgrading it or introducing converged networks for the first time.
Moreover, the sector is starting to be stimulated by a range of vendors coming out with affordable, specific offerings for small-to-medium businesses, which is, in turn, starting to drive volume sales.
Uptake is particularly high among professional and financial services organisations, areas of the retail sector where customer responsiveness is key, and among companies that have introduced home, remote and teleworking practices, or informal call centres.
For example, says Condron, six or seven years ago, organisations used IP telephony for activities such as hot-desking, which meant they could over-staff by 25% to 30%.
Now, however, many are being much more aggressive about property rationalisation, especially in the public sector, which means that they are over-occupying by as much as 200%.
Condron says, “Firms are trying to drive out cost and show the market that they can tick the green and corporate social responsibility box by cutting their carbon footprint. Unified communications acts as an enabler because it is about providing a consistent end-user experience wherever people work.”
Staff expectations
Such technology is expected to become more important. Peter Howells, managing director at professional services organisation 5i, which specialises in unified communications, says, “Over time, more sophisticated communications capabilities will form part of organisations’ competitive advantage to attract staff – and I do not think it is that far off.”
Howells says he is already seeing situations where younger employees find themselves disappointed by the “dark ages communications” of their employers, and the situation is likely to become more entrenched, not least due to the economic downturn, which is expected to accelerate existing trends.
“End-users are looking at ways of working in smarter ways and being more responsive, as client retention is becoming very important to them now, and they see unified communications as a way to help with that,” Howells says.
But he warns that the reluctance of many resellers to embrace new skills is slowing market adoption down.
“Corporate clients are crying out for unified communication solutions, but the market is in a state of transition, as is the channel.
“Voice resellers have traditionally sold voice systems as standalone solutions, but these models do not work any more and their business models do not fit as this is a strategic software solution rather than a tactical hardware deployment,” Howells says.
The biggest challenge is the fragmentation of the channel into specialist areas, such as voice, data networking, security and applications. This siloed approach has in the past served partners well, but no longer provides them with a broad enough skill set, as deploying unified communications technology requires knowledge of all of these disciplines.
As a result, this dynamic is already starting to drive change – a situation that is being reinforced by the economic downturn. “This is forcing resellers to look at themselves and say ‘how can we sell more to customers’ as it is easier than finding new ones,” says Howells.
In some quarters, the channel is beginning to experience merger and acquisition activity, while in others, resellers are partnering with third parties to expand their expertise. “It will be interesting to see what happens, but I expect to see a new breed of partner emerging,” Howells says.
From salesman to consultant
Howells believes it will be necessary for resellers to change their business model from focusing on hardware to focusing on consultancy-led services-based packages. This is because they have to understand organisations’ business processes, how to deliver applications, and how to integrate, link and support them.
But partners also need to look at existing infrastructure to ensure that it can support unified communications. They need to know that the technology is able to interoperate with legacy systems, and to provide training so that staff can exploit functionality to the full.
“Once a suitable underlying IP platform is in place, the first and easiest application to introduce is generally IP telephony. But this will need to be integrated into the messaging environment, into the contact centre environment and into the customer relationship management or enterprise resource planning environment,” says Howells.
The next decision is which unified communications client should be deployed to talk to all of these back-end applications.
“It is a big job and it requires a lot of integration work, but the key thing is planning. This should be looked at from the perspective of being technology for the business’ sake rather than technology for technology’s sake, so it is necessary to decide what best suits the business and what the best delivery model is,” Howells says.
But all of this activity tends to have a heavy services bias and cannot be undertaken quickly unless the site is greenfield. Instead, migration to a unified communications world tends to take between 18 months and three years – or longer if there is a lot of legacy equipment in situ.
Although, on the one hand, such lengthy contracts are appealing in terms of ongoing revenue streams, on the other, says Gene Reynolds, communications consultant at converged solutions provider CC, sales cycles tend to be protracted.
“Sales cycles are always fairly long because you are talking about a fundamental change to the way the business works and some customers also have to make a big investment in core infrastructure to do more considerable things later on. So you will not realise the benefits at once – it takes time and customer education for sales to occur,” he says.
A growing market
Nonetheless, Reynolds indicates that the market is buoyant and he has not yet seen businesses shelving projects in this area, despite economic concerns.
What this all indicates is that the more traditional box-shifters need to start shifting their business models if they are to cope with the new world.
“Microsoft says that every $1 spent on software creates about $7 of services revenue for the channel, and those figures hold water for unified communications. People need to look at business processes and overlay information and call flows across them, while you also need technical guys to implement it,” Howells says.
However, because of the general skills shortage in this area most resellers are failing to sell a full solution to corporate clients, which means that there is frustration all the way around, he adds.
Reynolds agrees. She says the distributor is offering data networking courses for voice engineers as well as workshops on how to undertake a services-based sell in order to help partners develop their expertise. But she says that, for many, there is a fear of the unknown.
“They do not know what they do not know and while a certain amount of knowledge is required, it is not prohibitive. It just needs a determined effort and recognition that new expertise is required,” she says.
“But there is a mixed skills level out there. Those that recognised the need early have put in the investment, but there is still a good portion that need to grasp the nettle.”
Nonetheless, the widespread feeling is that unified communications is a market on the up and that there is a good living to be made if channel partners can make the transition.
“I think adoption will continue at a rapid pace, but it will mean that manufacturers have to change the way they deal with resellers and resellers will have to dramatically change their business models.
“Over the next three to five years, the traditional reseller will gradually fade away and will be replaced by solution specialists and systems houses, but it will be a gradual evolution over time,” Howells concludes
