About this blog

News and analysis of developments in the enterprise communication industry and market with primary focus on Europe.

The author aims to tap into ideas, insights and thoughts of the readers to get varied perspectives.

Views expressed in this blog are solely the author's opinion and in no way reflect those of his employer.

Tuesday, March 27, 2007

Enterprise Telephony - Market Performance Card

This card is demonstrates the relative performance of tier 1 vendors by their PBX line shipments in Europe in 2006.

Enterprise Telephony shipments forecast

PSA initiative?

Sponsored by some of telecommunications biggest names, British Telecom, Cable & Wireless, TeliaSonera and QinetiQ, the Product and Service Assembly Initiative (PSA) is a collaboration of vendors and service providers who are looking to solve today’s largest operational problem: How to create an IT reference architecture which will:

- Streamline the NGN product/service lifecycle
- Bridge the service creation gap between OSS/BSS/Service Execution
- Reduce the cost of service/product production

The founding members of the ‘Product and Service Assembly’ (PSA) initiative today announced that Convergys, Microsoft, QinetiQ and TIBCO are to participate in the second phase of the Product and Service Assembly Initiative and associated TeleManagement Forum (TM Forum) Catalyst.

The aim of the PSA initiative is to develop a reference IT architecture that enable new telecommunications services to be easily assembled from existing or new service elements and to dynamically orchestrate the required changes that result within the appropriate OSS/BSS applications.

QinetiQ, one of the world's leading defense technology and security companies joins BT, Cable & Wireless and TeliaSonera as sponsors of the initiative, while Microsoft, TIBCO and Convergys join existing vendor and systems integrator participants Atos Origin, Axiom Systems, Huawei and Oracle.

The approach is based around a set of co-operating product and service catalogs that are designed to allow product management, service and network engineering and operational communities to easily collaborate. TM Forum standards are leveraged to provide off-the-shelf integration of the OSS/BSS elements, dramatically reducing the time in which this type of architecture, utilizing multiple vendors’ products can be created and demonstrated.
Phase 1 of the PSA Initiative’s Catalyst demonstration, which served as the initial ‘proving ground’ for the Initiative, was successfully showcased at TeleManagement World (TMW) Dallas in December 2006, through a scenario that showed how a VoIP-based product can be conceived, designed, assembled and delivered within a matter of minutes.

The second phase of the PSA initiative expands the scenario to a consumer oriented Triple Play bundle of high value broadband media services that includes broadband Internet connectivity, basic voice services based on VoIP and IPTV services including Video on Demand. This will allow the development of production ready standards and the creation of an ecosystem of PSA compliant COTS.

Ofcom and Enterprise Mobility

Ofcom has stepped in to regulate the mobile call termination charges, in what I think would lead to a depreciation in value of enterprise mobility offerings. Last year, Ofcom awarded 12 licenses from its guard band in the 1800-1900 MHz frequency range. It was believed that the licensee's will derive value by offering a bypass from high call termination charges, making the propsosition very attractive.

However, now that the termination charges are being regulated, alternate solutions stand to lose some shine. In addition, interconnect between these new players and mobile carriers are yet to be worked out, restricting the networks setup by these players into what would look like islands.

New metric for calculating productivity: Profit per employee

Several vendors ask me how we could evaluate the intangible benefits for a business. Increasingly, new applications such as Unified Communications offer intangible benefits such time-savings and ease of communication amongst others.

The key to the measurement is the metric-Profit per employee. If a company moves away from measuring capital intensive universal financial performance and focusses on the core business to measure profit per employee, there is a greater chance to measure the intangible benefits of the new applications of ICT.

Sunday, March 25, 2007

Media enterprises are losing the plot.....

Financial Times, London reported that NBC Universal and News Corporation have sealed plans to create an online site to distribute professionally produced film and television content- the biggest media industry effort yet to knock YouTube aside as the top online video destination.

The report goes on to say News Corp and NBC Universal, part of General Electric, will create a 50/50 JV, yet unnamed, based in LA and NY. Mr Chernin will sit on the new company's board with Jeff Zucker, NBC Universal president and Chief exec.

It is known that the proposed JV has the blessings of AOL, MSN, MySpace and Yahoo to disribute the videos, which will be free to internet users and funded by advertising. Video content is expected to be beyond news. The JV is aiming to license content from other media houses including Time Warner, Sony Corp, CBS and Viacom.

On looking at the big news, it seems like YouTube is sure to be threatened. However, minute inspection tells otherwise. In today's world, the content that is proposed to be distributed by the JV is already available through television, a service that is widely accessible across countries through a licensing agreement. The business model is based on advertising and license fee (applicable in only some places). The JV aims to put the content into another distribution channel, that it perhaps considers to be more far reaching. They hope that this will improve their overall top line at the cost of an insignificant increase in the bottom line. I would not agree to this general consensus without more data. I say so because, where ever advertisers stand to gain value or customers, existing distribution reach those parts. It includes politically difficult countries such as Iran, Russia, China amongst others. Moreover, the JV allows free access to its content, therefore depriving it of a natural source of revenue (license fee). Saying this, I am not disapproving the use of internet. I suggest looking beyond existing business model to derive value. I am in agreement on a fundamental position, that the centre of information, entertainment for consumers is fast changing from being a TV to being the Internet. Hence, there is a need to be present in this new medium. There is a potential to gain more eye-balls, however the chances of improving topline will need some out-of-the-box thinking like what Google did years back.

Talking of the shift in preferred media, I would like to point out to the shortsightedness of the media moguls of the JV. YouTube isn't what it is because it shares some pirated versions of news, TV shows and cinema. It is what it is because of a different paradigm. Its the concept of user generated content that give it the scale at such low costs, and also the popularity and visibility. The moment somebody tries to bring QoS of TV into the internet world, the costs would be too formidable to offer free services and just depend on advertisers. Further, leveraging the internet is one thing and partnering with stronger distribution channels another. Google Video, a service from Google will be a biggest contender. If Google Video joins the plan and become a distributor along with AOL, Yahoo and others, it will be a completely different ballgame. The JV in such circumstances will become restricted to content generation and marketing with distribution left to people who know the trade.

Friday, March 23, 2007

Nortel on track with management priorities

Life has not been easy for Nortel's CEO Mike Zafirovsky. He took the helm when Nortel was reeling. He communicated his vision and now he is executing them with perfection. Last year, Nortel divested its UMTS access business to Alcatel, now Alcatel-Lucent. Later, Nortel inked a major innovative communication alliance (ICA) with Microsoft around enterprise communication (unified communication). Steve Ballmer, CEO of Microsoft likes to compare ICA with their relationship with Intel and DEC (later Compaq and now HP).

Now, Nortel is getting ready to get rid of its GSM business. Rumour mills are abound with the news that Alcatel-Lucent has secured an agreement towards 'first option to buy' when the business goes on sale. Since I don't track the mobile market, can't offer much beyond the news. However, with all this Mike and Nortel are keeping their promise to be in business where they are the best.

Uptake of web 2.0 apps within enterprises

There is a rise in user activism these days. Leveraging the scale and reach of internet, user-driven applications and services have created a new paradigm, sometimes referred to as web 2.0. The success of MySpace, Wikipedia, YouTube, Facebook and Orkut are some examples. Most of these developments have been in the consumer space, something that the enterprise market have been keenly watching for sometime.

The technologies that power web 2.0 phenomenon have had traction in the enterprise market. Collaboration, including Web services, peer-to-peer networking, blogs, podcasts, RSS, social networking, mash-ups amongst others have been tried and deployed within enterprises. Saying that the strategic direction in general has been towards adoption of technologies that enable automation and networking.

In one of McKinsey's recently published surveys, 79.3% of early adopters of web 2.0 applications were satisfied with the financial ROI over the past 5 years. Only 10% of respondents said they were dissatisfied. However the situation changed with fast followers. Only 59.5% of respondents claimed to be satisfied and 17.4% were disappointed.

One of the key challenges for web 2.0 apps has been to demonstrate value and put a price tag to it. Fortunately for the users of the internet, it allowed for unique experiences that led to a movement. Most of these applications came free of cost. In one of his visionary presentations, Cisco's Chief Development Officer, Charlie Giancarlo very nicely explained the changing lifestyle of the new generation. He explained with amusement that his daughter uses e-mail only when she wants to connect with him. The Google model created a new form of doing business. Internet gave it the platform and the market. Still the fundamental question of assigning a value to an application remains central and unresolved.

Today enterprise investment in web 2.0 apps is around creating another channel to interface with their customers, suppliers and partners. The advantages of the channel is around costs, transparency and collaboration. Enterprises derive significant in-tangible value from the use of these apps in managing internal collaboration. Value is derived from time-savings, resource management, collective intelligence amongst others. Lifestyle improvement at work is another driver that is at time overlooked.

Friday, March 16, 2007

Italian province of Trento goes Wi-Fi

The province of Trento is the southern part of the historic Trentino region whose history dates back to the mid-stone age. Being an autonomous province, the local administration has to fend for itself. The terrain is mountaneous which doesnot offer a great scope for wired network deployment. Therefore, its no wonder that DSL penetration is lower in this area in comparison to the national average of Italy. The economy of this province depends on primarily on agriculture and tourism. Lower spending capability in communication services and a difficult terrain are probably the chief reasons for the lack of adequate communication infrastucture in this region.

Not any more. The public administration has decided to deploy wi-fi to provide municipalities, businesses and residential users access to internet and voice services with wireless broadband access. Alcatel-Lucent along with a consortium of sub contractors will deploy 1600o wi-fi access points in one of its largest deployments in Europe. If successful, voice over wi-fi will be rigorously tested in this province as some parts will have no alternative access route as DSL isn't widely deployed. The province has a optical backbone that the Wi-Fi network can leverage. However, the rollout of the solution will take time. Until then we'll have to wait for the outcome....

Is FMC on track?

I read a report that says that FMC is firmly on track. However, my understanding had been that FMC has suffered casualties, for instance Deutsche Telekom abandoning its T-one service and BT not getting enough uptake for its fusion offering.

To investigate further, I followed the trail of the report to FMC services elsewhere- UMA in the Netherlands, Denmark, USA, Italy, France, and the UK, and dual-mode WiFi-GSM services in France, Germany, Spain, Japan, and Scandinavian countries-these are examples cited in the report, which I think is missing a point. FMC services have got some takers for sure, but then these (some 400,000 subscribers globally by end of CY 2006 representing less than 3% triple-play subscribers) users are the hep crowd who get the latest to stand out. This number includes users who have bought the latest service package, and aren't necessarily users of FMC. What I mean by that is, someone buying the latest Nokia E-series phone doesnot necessarily become a 3G user, the consumer can be using the latest device to make simple voice calls. We will need to look at other statistics such as network usage or service usage to determine the uptake of FMC. Saying so, I agree that for operators and investors, what matters is sales of FMC service packages. Currently, the usage of FMC services is pitifully low and the sense of fashion parity is yet to kick-in with the mainstream. In the current state of the industry, its a very costly proposition to stand out in this market. With ever changing industry dynamics (what with all the consolidation), constantly revised marketing schemes, launch of new devices have left the consumers feel lost in this myriad of change. The sense of catching-up with the latest will happen for sure, but at a cost. The conumdrum will have to solved, allowing a set of simple and clear propositions emerge offering customers choice and value. Will FMC in its current form achieve this state, I don't know. I remain, the skeptic!

Thursday, March 15, 2007

Cisco acquires WebEx

Cisco announced the acquisition of Webex- a web based conferencing and collaboration service provider. In an all cash offer of $3.2 billion Cisco gains access to the SME market along with a new but growing subscription based business model.

The offer of $57 per share for WebEx communications Inc is 23% premium over yesterday's closing price at Nasdaq. The buying price is almost double the January stock price of WebEx. WebEx made $380 million in net earnings in FY2006. It has around 2100 employees serving 28000 customers, approximately 2.2 million users across 85 countries. WebEx is the market leader in its space with around 65% market share followed by Microsoft and Citrix. Close to 80% of its business is in the non-enterprise segment. It has a considerable reputation in the SME space.

WebEx brings to Cisco market knowledge of SME, an area where Cisco hasn't been a player to be reckoned with. Also, WebEx offers Cisco with a unique business model. Subscription based services of unified communication and collaboration is in its nascent stage. As this model gains credibility, improves reliability the platform can offer an affordable channel for SME's to access the latest developments in unified communication and collaboration being disassociated with the technology risks.

The unified communication landscape is evolving. The game is on.

Wednesday, March 14, 2007

Telepo explores client-server architecture

Telepo caught my attention when I saw a PR highlighting an award that they won at 3GSM. On closer reading, I found that their solution targets the enterprises. I was curious. I requested for a briefing with them to which their CEO, Lars-Michael Paqvalen kindly obliged.

Lars-Michael outlined Telepo's focus on mobility that helps enterprises optimise their resources and predict cost. Now I have been talking to a lot of mobility players recently and many of them offer similar value propositions. It is already a crowded market. I was beginning to wonder if Telepo was one of the many newcomers in that space. But what Lars-Michael said next dispelled my apprehensions.

He said that Telepo is a technology provider that aims to leverage the service layer in a client-server architecture to offer new capabilities to enterprises. Now that is a start. Here is a company that understands the scope of opportunity in service oriented architecture in telecom industry. Therefore, Telepo is not only a mobility company- its much more than that or at least has the vision to go beyond mobility.

Telepo's current offering is a combination of Business Communication Server that comes with a routing engine, and a softclients to run on computers and mobile phones. Telepo's solution set works on both private wireless technologies such as IEEE802.11b/g and public mobile technologies. Its no surprise that Telepo has a close association with Ericsson who launched Enterprise Mobility gateway recently. I would like to hear more on their collaboration efforts.

FMC in deep shit

Over the past couple of years, several PTTs have dabbled with FMC. BT launched BT-fusion, a bluetooth variant in 2005. After a strong market push, stands at 3GSM and other events, communique from evangelists plus a subsidy to employees, the offer managed to attract around 13000 users. Feedback from users pointed to some disadvantages with the technology/service, something that the operator claimed to have addressed with its new offering- BT Openzone. However initial uptake has been conservative. Till date the service is used by some 10000 users.

In Europe, Deutsche Telekom launched T-one (their flagship FMC service) at CeBIT last year. And just before CeBIT starts this year, they announced to have dropped the service. It is understandable. The operator is facing a precarious financial health condition, a state that doesn't allow it to carry extra fat and non-functioning organs. It is said that the operator managed just a few thousand users inspite of aggressive marketing campaigns.

What does that tell of the future of FMC in Europe?

Microsoft acquires Tellme- Is it about mobile search?

The news of Microsoft acquisition of Tellme has being doing the rounds in the silicon valley for days. Now, its official. Tellme, founded in 1999, offers voice services for the phone, including its popular mobile search services on 1-800-555-TELL. Businesses use Tellme’s voice services and platform to provide customers with voice-access services ranging from banking to package tracking. According to Mike, CEO of Tellme, around one in every three americans use their platform once a year, pretty neat I say.

Industry veterans from the late 90s talk about the roller coaster story of Tellme, from a high profile voice portal company to becoming another victim of the crash, .......only to rise again. Kudos to the management who did a tremendous job of the difficult task of creating a business case and indeed a profitable revenue stream from an otherwise free portal. Today, amongst its customers, Tellme counts AT&T, FedEx,Merrill Lynch, E*TRADE and American Airlines amongst others who use its platform and services to answer millions of calls every day for information such as directory assistance, tracking mail/post, airline details, finding local businesses, driving directions, sports scores, stock quotes, weather, news, movie show times and more. The press release from Microsoft notes, Tellme powers billions of calls to hundreds of phone services used by more than 40 million people every month.

The company is privately held. Commentators have reported $230 million of funding. Mike, during the analyst call claimed that the company was profitable. Om Malik estimated the revenue to amount $100 million in 2006. It is widely speculated that Microsoft would be paying around $800 million -$1 billion for the acquisition. Once approved, all of the 320 employees of Tellme will become Microsoft employees joining Jeff Raikes team at MountainView, California.

Jeff mentioned four key areas that this acquisition will add value:

a) Software as a Service: Tellme's successful experience in hosted software platform will give Microsoft access to the competencies to launch SaaS a much bigger scale. Saying so, there were other means to acquire the expertise cheaper and with more flexibility and depth.

b) Unified communication: Jeff mentioned the use of hosted voice-enabled customer service solutions that complement Microsoft's existing unified communications offerings. The value proposition is compelling. I find it hard to understand the need to own a application developer when customised apps could have been OEMed. It doesn't make sense to me unless Microsoft launches voice-enabled UC products in 2007.

c) Roadmap for speech solutions: It is said that with this acquisition, developers and partners will be able to build new speech based solutions on a scalable, standards-based voice-enabled applications platform. This is plausible, yet I see areas of overlap with what Microsoft currently offers. Also, there might be a conflict of interest between Microsoft and its ISVs on the usage of this specific application platform.

d) Access to mobile search technology: Tellme technology will allow voice user interfaces in existing Microsoft products to search services on mobile phones that integrate with Live search on mobile offerings. This capability, if robust, could prove to be a jackpot for Microsoft. The key challenges for Microsoft will be to establish the key relationships with operators. It cannot be emphasised enough the lack of sustainable/growing revenue streams for operators, definitely in Europe. Most of network advancements is taking place on the back of future earnings potential or to be on par with competition. This is constantly raising the bar, also making the services costlier. Mobile search technology would offer another offering, that if successful could create a two-dimensional sustainable and growing revenue streams-

1. from the users-for paid search
2. from the advertisers

Use of speech technology to interface mobile search is, what I think is a brain-wave. Not suprising then that Google was rumoured to be in take-over talks, something that helped Tellme push the price, but also something that gave Microsoft an opportunity to beat them to the post. Overall, an interesting move, one that holds a future. But it needs a lot of hard work, right strategy and hope that customers will buy

Tuesday, March 13, 2007

Lotusphere, London

One of my colleagues suggested I register to IBM's Lotusphere show in London. Listening to him, together with my lovely manager (yes!), we attended the event on the banks of River Thames just by the Tower Bridge.

There were more than 500 people at the event. The spokesperson said this event saw 50% rise in the number of registrants. Saying so, IBM has a tall order. Over the past three years, ever since Exchange 2003 gained market acceptance, e-mail business has been a losing battle for the big blue. Now they say, they have had enough. According to them 2006 was the best year ever for Lotus (it wasn't bad for Microsoft either!). Leveraging their market leadership in corporate collboration suite and triggering the e-mail replacement cycle with the latest version release, they registered a whopping 30% growth and increased traction. They boasted of a deal with the Government of India, whom they are selling a Lotus Portal that the government plans to use to offer information services to its citizens. Its a project of a massive scale, thanks to the population of the country and increased sense of empowerment. Saying so, I am compelled to write about IBM's contribution to the rise of the Indian IT and software industry. It is well known that today's economic boom in India is based on its IT and software industry. However few people are aware that IBM is responsible for that. Had IBM not felt the lack of any business opportunity in India and moved out in the late 70's, the industry that commands the world's attention and respect wouldn't have been born. Thanks to their actions, today India houses several multi-billion dollar IT/software/BPO companies that gives the big blue a run for their money on global outsourcing deals. And Microsoft? Had IBM bound Bill Gates by an exclusive agreement, we would be living in a different world today.

Okay, now back to Lotusphere. Lotus 7.5 was released last year. Nice products, some enhancements. It has helped them create traction. Now that Microsoft is coming up with Exchange 2007, it seems that the e-mail replacement cycle (forced) is in vouge. Sametime, the Lotus IM client has undergone some serious changes. Apart from adding the much needed voice, video and presence capabilities; Sametime has gone open. It can be integrated to non-lotus platforms such as Outlook. Sametime can federate with public IM clouds. It can interconnect with Google talk, AIM and Yahoo. Sametime 7.5 is more than just an instant messenger. Its a platform for collaboration that offers location based services, advanced presence capabilities, integration with blackberry and other mobile devices, file transfer, a neat slide presentation capability, hand-up for attention to the moderator during a conference amongst other cool features. Together with e-mail and IM, Lotus has a very advanced product set-up. This with their strong websphere portfolio will make their proposition quite lucrative to enterprises with some disposable cash.

All that was said was said and heard. Great stuff. However when the folks tried to run a demo, working wasn't as good as the talking. The blame was conveniently placed on the poor wireless data network.

There was more to come, but mostly talk. IBM requested its customers to try out the beta version of Lotus 8 which is said to offer further advanced capabilities such as group calender, advanced scheduling and office capabilities such as documents, spreadsheets and presentations sharing. And you know what, Lotus will support both Microsoft and open document formats. IBM is taking the market seriously. My job will get more exciting.

It also appears that IBM is watching the market closely. Lotus has come up with a slew of applications such as social networking, websphere portals, Quickr, Lotus connections amongst others. To me, they all seemed like the enterprise version of cool consumer tools like flickr, facebook, orkut amongst others. What I missed was a underlying thread that linked them together so that for instance the profile information on Quickr could be replicated and found on other tools. Also, the discussion seemed very silo-based, but I may just be a skeptic.

Finally, the area that interests me the most. IBM's UC2. Finally, the big blue is up in action. It has created an ecosystem of partners, build the necessary framework and is planning to use the upcoming e-mail and collaboration uptake surge to promote UC2. It will be an interesting space to watch. IBM is undoubtedly the leader in collaboration, and is placed second to Microsoft in corporate e-mail. The two giants are expected to be using the replacement surge to push their agendas of unified communication during 2007-2009. With these thoughts in mind, I left Lotusphere wondering how the industry will shape in 2007. More, later.

Saturday, March 10, 2007

Siemens maintains its topline in FY 2006

I had a quick chat with Siemens execs before some detailed discussion around CeBIT. I have been concerned about their performance in real growth in systems, shipments, new accounts and top line. It has been widely speculated that the vendor might take a hit in its topline. However, in FY 2006 Siemens measured upto its FY 2005 performance after registering a growth of slightly greater than 5% in shipments. This is chiefly attributed to a buoyant CAPEX in the market and its success with Hipath 8000. The ongoing replacement surge, better investment climate in Germany and successful growth in its indirect channel helped it maintain its course. I am very hopful of the success of its pure IP product, the Hipath 8000 in CY 2007.

Inter-Tel 7000 to target its Axxess installed base

I had a long conversation with Jeff Ford, CTO of Inter-Tel today. He said, Intertel's 7000 GA has already made some inroads into the UK market. In its early traction, it aims to replace the Axxess installed base with the SIP based 7000 product apart from targeting other medium sized organisations up for replacement. Inter-Tel 7000 has some clear advantages which I shall write about in another entry. Its a great time for Inter-Tel in UK. Already the vendor does around $60 million business in Europe.

Thursday, March 08, 2007

Skype doesn't have a PBX

Today I spoke to Michael Jackson. Yes, you read it right. Michael Jackson, Director of Operations for Skype discussed his company and its vision. He came across as very helpful. During the discussion he mentioned that Skype, a 500 strong organisation spread across Europe and North America doesnot have a PBX. wow! I said. He added that they have one external line for the reception. I wondered how did the receptionist transfer calls internally. Pat came the reply, "We use Bosky Box". Hmm, let me provide a little bit of background on Bosky. It is a small manufacturer based out of United Kingdom that has built a small box to connect Skype with a KTS/PBX or a phone.

So, all small enterprises out there reading this blog know that you need not invest in costly end points. You can do without. Not only do we have Bosky, but there are others who offer some kind of plug-ins. These can be used to interface with KTS and PBX in an enterprise. Skype as a standalone comes very handy to a traveller. Last year, Polycom announced the launch of a product that supported Skype. Asterisk is understood to be in discussions with Skype. That makes sense. A partnership will help create an interesting PBX solution for enterprises. Its interesting times for small enterprises.