First few days into the New Year, I am reviewing some of the macro-economic numbers that came in towards the end of 2007. Preliminary analysis indicate a slowdown in procurement this year in Europe. I would like to invite my readers to mail me what you think 2008 has in store for us.
New Year Greetings!
I am aware of my irregularity in adding posts over the past two months. It is amazing how much time it can take up to maintain and update a blog. In the New Year, I'll try to improve on my track record. Let me start off my reproducing the article I wrote for CommBusiness which will also be available on frost.com in a few weeks.
Stepping into New Year, let’s look back at the European enterprise telephony industry in 2007 and review the major announcements that will affect 2008.
Key Announcements in 2007 and their relevance in 2008 and beyond
1) Microsoft releases its Unified Communication portfolio
The launch of Office Communication Server 2007 (OCS) and Office Communicator 2007 (MOC) has been one of the most high-profile announcements in the Unified Communication marketplace. This heralded Microsoft’s entry into the industry that has been dominated by PBX and switch manufacturers. In addition to Microsoft, close rival IBM has developed strategic interests in this market. The entry of these software powerhouses will play a strategic role in shaping the future of Unified Communication in the years to come.
2) Avaya goes private, Mitel acquires Inter-tel and NEC acquires the assets of Sphere
One of the leading companies in the enterprise communication technology industry, Avaya agreed to become a privately owned entity. This move led to concerns amongst a section of the market. User organisations who contend this to be a sign of further consolidation were fearful of the investments. Generally, buying organisations procure enterprise communication infrastructure with a long term view. Industry consolidation creates uncomfortable questions on the future of product lines and the validity of existing agreements. Despite these concerns, the industry witnessed consolidation amongst players that cater to the SMB and mid-market segments. Mitel acquired Inter-Tel to become the leading vendor in the SMB segment in North America. NEC acquired all assets of Sphere.
While the industry consolidated, new players continued to enter the market bringing with them innovative products based on cutting edge technologies. These effects of consolidation and innovation are set to play crucial roles in infrastructure/application procurement decision making amongst buyer organisations in 2008.
3) Leading vendors acquire strategic assets in the ‘Software as a Service’ space
Signalling changing times, leading ‘on-premise’ vendors acquired strategic assets in the ‘Software as a Service’ space. Microsoft acquired TellMe, Cisco acquired WebEx and IBM acquired WebDialogs to set them on par with changing times.
These market moves indicate that these players spot growth opportunities in the ‘SaaS’ space especially after the success of players such as salesforce.com and the growing clout of Google (GoogleApps). This makes sense as competition and innovation continue to erode the precious gross-margins in a market that is increasingly looking to share the risks with its suppliers.
4) New products continue to enter the market
Over the span of 2007, the market has been regularly greeted with new product announcements. This is reflective of the perceived growth opportunity. Alcatel-Lucent, Cisco, Panasonic, Samsung, Siemens Enterprise, and Toshiba BCD amongst others launched new products. Others released new versions of their successful products.
Alcatel-Lucent renewed its focus in the 100-500 user segment with the release of Business Integrated Communication Solution (BiCS). This launch fills the long standing gap in the vendor’s portfolio. Targeting the same segment, Cisco announced the launch of Cisco Unified Communication Manager Business Edition that will cater to the 150-500 user segment.
There were a number of new products released in 2007, majority in the sub 50-extension segment. Cisco launched Unified Communication 500 series that can scale to 48 users. Siemens Enterprise announced HiPath OpenOffice ME, to be released in January 2008. The IP based UC toolset is designed to not only cater to the 20-50 user segment, but scales up to support 150 user enterprises. Panasonic’s launch of KXTDE marked its entry into the IP world. The traditional vendors in the SMB space weren’t to be left behind. Toshiba BCD launched Strata CIX40 while Samsung released OfficeServ 7100. Besides them, Microsoft released its UC portfolio that we have discussed earlier.
At a glance these announcements reveal an interesting point. Almost all target the sub-500 segment. This is inline with market results published by Industry Analysts. One recent report released in December 2007 claims a decline in the growth in the mid and enterprise market segments, while the SMB segment in the U.K is reported to have grown by 20 percent in Q4, 2007.
Based on the developments on the supplier’s side and analysis of market demand in 2007, the following trends will shape 2008.
Market Trends in 2008
A) PBX is passé, ‘UC’ is the buzzterm
Unified Communication (UC) has certainly become a very popular term in the industry especially since Microsoft began its marketing. Its importance amongst the vendors can be felt by the fact that Microsoft, Cisco and Avaya have created business units to cater to this market. Most vendors in the enterprise telephony and indeed the communication software industry have developed UC portfolios.
Cisco re-branded its flagship Call Manager (IP PBX) as a Unified Communication Manager. Its UC portfolio includes IP telephony, messaging and collaboration products. Alcatel-Lucent on the other hand has bundled its applications into a suite, called OmniTouch Unified Communication. Avaya’s UC portfolio is similar to Cisco’s. The portfolio includes products from IP telephony, messaging, conferencing & collaboration and enterprise mobility families. Siemens Enterprise employs a different strategy. Its UC portfolio includes HiPath Openscape, a portal that offers presence enabled collaboration.
Besides enterprise telephony suppliers, software vendors such as Microsoft and IBM amongst others offer a suite of products under the UC banner. Others such as Oracle and SAP are all also set to join the party. Infrastructure players such as Tandberg and Polycom don’t want to be left behind either. These vendors have developed their own UC portfolio focussing on their strengths.
Overall the UC industry is an amalgamation of different communication technology and application silos. It will be the buyers who will help shape the market in terms of sourcing decisions in the years to come.
B) The Focus Market for Enterprise Telephony is Shifting to SMB
In the previous segment, we discussed the growing importance of SMB. In 2007, a number of players have developed new initiatives to foster channel presence in the SMB segment. Nortel created channel marketing bureau to deepen its presence in the SMB and mid-market. Siemens launched its global partner program- Go Forward! As part of that, there is news that Siemens Enterprise will be investing around € 4 million in U.K, a major part of which will be invested in the development of channel to carry their OpenOffice product. Cisco’s new channel initiative in the SMB space is called the Cisco Industry Solutions Partners Network. ShoreTel, another emerging player in the SMB has been extending its partner network for sometime now.
C) Enterprise Mobility is ‘Hot’
Industry Analyst reports suggest very high growth rates for mobile enterprise applications. A Frost & Sullivan study forecasts CAGR of over 20 percent for wireless e-mail and mobile CRM over the period of 2008-2013. It is only natural that enterprise telephony vendors will aim to get a piece of that action.
Several players such as Aastra Technologies, Alcatel-Lucent, Avaya, Cisco, Ericsson, Mitel, Nortel, Siemens amongst others have a breadth of solutions in this space. A number of players such as Ericsson and ShoreTel amongst others have been marketing Mobile Unified Communications. As buying organisations develop mobility strategies, we can expect to see an increase in activity in the times ahead.
D) Collaboration Gains Fresh Impetus
The growing mindshare for Web 2.0 innovations have given a fresh impetus to the need for collaboration software within organisations. Surveys indicate that a majority of business managers believe in the value of Enterprise 2.0 type collaboration tools and software.
Although there aren’t many stories on deployments yet, the strength in the buzz appears to have the potential to create a market. However there are concerns that some of the claims made are over-rated and the entire hype will fizzle out.
E) SOA and Web Services Gain Traction
Downward price pressure on hardware and the renewed focus on software and services has brought to fore the opportunities for SOA and web services. Most leading infrastructure vendors including Cisco, HP amongst others have been promoting the idea of SOA.
The current replacement cycle is an ideal ground to sow the seeds of SOA. The market moves by leading players such as Cisco, Microsoft, IBM, SAP and Oracle suggest that there will be stronger emphasis on web services.
F) Open Source and Open System Gain Mindshare
There has been a number of marked changes in the architecture and technology of IP telephony systems. There is an increasing acceptance of third-party components such as server and media-gateways. While a number of vendors continue to harden the servers, the momentum is towards the use of standard off-the-shelf components.
Since 2004, Linux has replaced Windows in most of the new products rolled out in the market. This, along with the growth of Asterisk (now used by Digium, Aastra technologies and 3Com), marks the ascent of open-source in call control systems of enterprise telecommunication. Apart from NEC United and Nortel (except CS2100) most tier-1 vendors’ flagship products run on open source OS, with Linux ranking highest on choice.
Industry standards such as SIP and SOA are getting embed in their core system design. Offerings from leading vendors such as Alcatel OmniPCX Enterprise, Avaya Communications Manager, Cisco Unified Call Manager, Ericsson MX-ONE, Mitel 3300 ICP and Nortel Succession series were made SIP capable. Several products including Siemens IP portfolio including Hipath 2000, 5000 and 8000, 3Com VCX7000 and InterTel 7000 were designed on SIP from scratch. All new products introduced in 2007 were SIP based.
The events in 2007 and the trends evolving as a result promise to make 2008 an exciting year for all of us!
I had promised the AR team at RIM that I will write about my experience with Blackberry. First, I have to admit that I am no crazy about gadgets. The last device I had before my blackberry was a Nokia 6000 series basic phone, which I left with my parents since I got the blackberry.
When I first got the blackberry, a first look made me like it. It is of the right size-neither too long nor too short for the keypad. It fit my pocket. The device is light and I loved the look.
Our MIS at Frost & Sullivan took a day to set things up and then I realised what I had got into. I was getting my office mails on my phone. wow! This was incredible. However, it didn't take a week for the reaction to transform from wow! to jeez! Now I was working on the train, between meetings, almost everywhere. I could be reached by e-mail and phone anytime anywhere unless I switched my phone off. Inevitablely, I was working harder and smarter. My response time has increased significantly. This blackberry is a power tool.
The best part of the experience is certainly the e-mail and qwerty keyboard. Together they just do it for me. Not seen anything better yet.
The blackberry curve that I have does almost everything for me. The other day I was travelling and didnot have a place to connect my laptop to the Internet. Phew! who needs a laptop unless one is using office applications and specialised software. Blackberry devices don't support native downloading and editing of office files unlike Palm and Windows Mobile which does. However, it is true that presentations do open on the curve, but one can hardly read what is written even after full zoom.
Integration of calender with my office system is just brilliant. However I am not sure why I don't get reminders. Nonetheless, what I can do now with this device is no less feat.
On the phone side of things, the experience isn't that great. The number of features clearly don't compare anywhere near the office phone (it isn't supposed to, yet!), it doesn't compare very favourably against what other phones can do. Especially around the conferencing and call wait side of things. However, what sets Blackberry apart is the fact that it supports Wi-Fi. Can you think of the potential when you can make VoIP calls at flat data rates.
The IM tool is just awesome. Blackberry Curve supports Yahoo!, ICQ, AOL, Windows Live, Google Talk and Blackberry Messenger. The best part of this capability is the ability to log-in to multiple IMs and toggle across them. One is notified when a new message is received. The engineers have been just great with this.
Having used it for four months, I must admit business life without it would seem a bit dull. Great job RIM. Hats off to the engineers..........
Yes, thats the phrase I got from the VP of a Bank in the U.S. He stressed that all different technologies are good in their own right. Examples: Telephone solves the need to have face to face communication. IM solves the need to phone to have a quick word. Video conferencing solves the need to travel (similar to face to face communication). Mobile phones allows telephone conversation while 'on the move'. All these are great tools. However left on their own, they can be bothersome in a work environment. Hardly does one not get distracted these days by these tools. How often have we not been distracted by a telephone/mobile phone ring or an IM pop.
The VP of a Bank says, "what is needed is a housing system that can offer a complete communication experience without the menace of distraction". Is he suggesting 'Unified Communication'? I don't know if UC can solve the issue of distraction. I heard Gurdeep Singh Pall from Microsoft suggest, that in the future, a telephone call without a subject line will be considered rude. Interesting and futuristic. I asked a few IT/Telecom Managers what they thought and guess what? They thought I am going 'nuts'.
Is it possible to imagine a world where we are contacted only when we need to be, that is distracted with reason?
Sometimes I wonder how business decisions are made! One of those that baffle me is the choice between Call Pilot and Exchange UM. A little background on this - Nortel and Microsoft announced an alliance in July 0f 2006 agreeing amongst other things to do joint R&D and synergise their go-to-market program in the area of UC. Nortel has a very strong background in the areas of telephony, contact centre, messaging (including Unified Messaging, a market where Frost & Sullivan ranks them second in North America). Microsoft on the other hand has very high market share in e-mail and collaboration space. One of the areas of product overlaps for the Microsoft-Nortel alliance is Unified Messaging. Nortel's offer, the CallPilot has been in the market for at least 10 years. I know, one of my peers used CallPilot in his lab way back in 1997. Microsoft on the other hand introduced Unified Messaging capabilities in Exchange 2007.
Unified Messaging seems to have never taken off as expected. In these years, the industry evolved to offer Unified Communications with very little installed base on Unified Messaging. So, despite the long history and relative product maturity, CallPilot and its product peers didn't create the adoption curve, the markeeters so hoped to achieve. On the other hand, UM in Exchange 2007 seems to have caught the fancy of many. In the numerous discussions that I have had in recent months with user organisations and channel, there is a unanimous voice to try and test UM within Exchange. That said, the numbers are far lower than what CallPilot commands. Now I am sure if I had spoken to the market when CallPilot was launched, I might have encountered similar euphemism. So when I hear the buzz in the industry suggesting Nortel might reduce R&D activities on CallPilot, I wonder how such decisions are made!
If you talk to people who have been part of the Unified Messaging (UM) evolution, you may notice a taste of bitterness towards Microsoft. The Redmond based company introduced Unified Messaging in their Microsoft Exchange 2007. This development comes almost 10 years into the life of UM. Yet all you hear in the market these days is Microsoft Exchange UM.
A few weeks ago, I was asked if there was any traction for Microsoft's UM in the market and how it affected competition. Based on my discussions with user organisations and having seen some fresh shipment figures of the main players, I could say with some confidence that I didn't see any effect on competition. To the question on traction, I begged for time.
Since then I spoke with a number of people in the channel community across the world. Plus I interacted with a number of user organisations. For instance, the other day the IT Director of a borough in England clearly indicated that he will be considering UM once he installs Exchange 2007. I met up with a country manager of a software vendor who said that a growing number of his clients are talking about UM in conjunction to Exchange 2007.
This begs a question--what is it about Microsoft UM that leads to such a traction compared to competition's products that has been in the market for over 10 years? I can offer you my thoughts but first let me find out what you think.
Microsoft released a number of UC products with a lot of fanfare in SanFrancisco. It was great to watch Bill Gates deliver the keynote. As always he offered a great vision; this time for office communication.
Microsoft released a few products today that include Office Communication Server 2007, Microsoft Office Communicator 2007, Microsoft RoundTable, Microsoft Exchange Server 2007 (new release), Live Meeting 7.
You may view the webcast http://www.microsoft.com/uc/default.mspx to get a grip of what they are saying if you haven't already done so. In this post I am going to focus on the challenges ahead for Microsoft UCG.
Challenge 1- Negotiating the installed communication technologies: The communication technology market (enterprise telephony; conferencing including audio, video and web; collaboration) are mature. In some cases (ex: enterprise telephony) the solutions are pervasive.
Microsoft has taken a bold approach that it will build a new communication paradigm. Its newly released products won't work with almost any PBX (probably except Nortel CS1000 perhaps), conferencing equipments, or phones that are already deployed. To address this, they are build a industry partner ecosystem. For example- In the PBX world, Nortel is developing a out-of-box integration capability with OCS. Similarly Ericsson has a mobility server in mind and Mitel is releasing a communication server built around OCS for the SMB.
Challenge 2- Unleashing the full set of capabilities: What Microsoft can offer in ideal conditions is no doubt powerful and very useful. There is no doubt in my mind that it offers significant advantages over present technologies. However to be able to enjoy the capabilities, users must not only deploy Microsoft UC products but also integrate them with their installed base. At this point in time this is a near impossibility. The success for Microsoft and the user depends on whether the users decides to replace their 'sunk-in investments' in favour of Microsoft certified products.
The assumption that users will deploy 'Microsoft or Microsoft certified products everywhere' is like a dream that every man on earth will one day walk on the moon. Nonetheless there will be deployments in pockets. Users will buy parts of the technology to fill gaps. However, they will resist discussions of replacements unless they are sweetened enough.
Dear Readers,
Apologies for not updating this space for over a month. It has been a crazy time. I am meaning to become regular again. You can help me by participating in this discussion. I am working on a report on the Unified Messaging market for which I am looking to tap into your insights. For starters, what has been your experience with Unified Messaging? If you have not yet deployed then why not?
Lets get this started. Please write-in your perspetives in the comments section.
Cheers,
Shomik
I am referring to IBM and Microsoft. Both announced a roadmap for their UC portfolio. IBM's Lotus Sametime Unified Telephony is expected to be GA by mid 2008. This launch will be preceded by the release of Lotus Sametime "Standard" in Q4, 2007, Lotus Sametime "Entry" 8.0 and Lotus Sametime "Advanced" 8.0 in Q1, 2008.
IBM's unified communication strategy is centred on its sametime offering. It aims to tie-in all elements of communication and collaboration to its sametime offer which is expected to evolve to support unified telephony. IBM signed a OEM agreement with Siemens Enterprise Communication to license elements of Siemens' Openscape.
Siemens has been one of the early adopters of open communication. Support for standards-based communication facilitating interoperability has been the cornerstone of its OpenPath mantra. Maintaining the central elements of its vision, Siemens has consistently believed in open communication since 'LifeWorks' was coined. In fact, their Openscape is probably one of the best fully-baked unified communication portals available in the market today.
Siemens had a very engaging relationship with Microsoft. Way back in 2005, Siemens had launched HiPath openscape telephony control link (TCL), a separate server that sits between LCS and PBX (supports Alcatel, Avaya, Cisco, Nortel in addition to Siemens) to facilitate exchange of presence and notification across platforms. Their relationship suffered since Microsoft formed an alliance (ICA) with Nortel. ICA recently celebrated its first anniversary. It is believed that they have sold in excess of 500,000 licenses (Nortel telephony licenses and LCS CALs) in their first year. ICA product portfolio is expected to be strengthened by the general availability of OCS/MOC.
Microsoft announced the 'release to manufacturing' of OCS/MOC and Round Table on July 26th. Eric Swift, Senior Director, Unified Communication Group at Microsoft said that OCS/MOC is due to be available from Oct 16th 2007. The price list will be made available on September 1. He said that Live Meeting 7 will be released this fall. Microsoft Exchange 2007 SP1 beta is released. At a keynote at VoiceCon, Gurdeep Singh Pall announced Quality of Experience monitoring server, a product developed by Psytechnics. He announced the licensing of Microsoft's RT audio codec about which I have commented in a previous post.
Microsoft's UCG seems confident of OCS/MOC. It has built a strong ecosystem, its alliance with Nortel is delivering results. Recent agreement of cooperation with Cisco is a great step towards creating a traction in the communication technology space. In the past one year, Microsoft has taken concrete steps to shape themselves as a player in the voice market.
My last post has been quite a while back. Have been busy trying to wrap up a mobile application report. In the meanwhile there has been significant developments in our space. I'll try to comment on them in the coming days.
Recently, John Chambers and Steve Ballmer shared the podium at an event in New York that was moderated by Charlie Rose. They announced that both companies would drive interoperability between their products. There is an interesting blog by NY times summarising the event. In my opinion, the discussion at the event bore a clear indication of a transition to 'best-of-breed' infrastructure sourcing amongst large customers. This came out loud and clear in two of my conversations yesterday. Earlier in the day, in a conversation with a good friend at Siemens, the success story of HiPath 8000 with Global Crossing came up. Later that evening, Eric Swift from Microsoft highlighted ICA's success with Global Crossing. Now thats a coincidence! It is well known that both ICA and Siemens have capabilities to have pitched for both of those RFPs with Global Crossing.
Another aspect of the announcement is the recognition of the market transition to convergence and collaboration. I remember listening to a Digital 2.0 panel discussion conducted by Jeffrey Moore, where Bill Gates evangelised the scope of digitisation. He urged us to think as if computing and storage were free. The scope of digitisation is indeed far reaching enabled by software. He mentioned communication, collaboration and group productivity as the areas where innovation will concentrate. Similar thoughts ware put forward by fellow panelist John Chambers who argued the next transition to be from transaction to interaction caused by innovation in the realm of collboration and convergence.
With both Microsoft and Cisco looking at the same market transition through their individual lenses, customers have started demanding that their products interoperate. This according to me is the fundamental underlining for their cooperation. The best-of-breed strategy that this alliance endorses will help unleash intellectual capital for innovation in the enterprise space that hasn't yet seen the success that consumer market continues to enjoy.
Software based PBX maker Sphere Communication has agreed to become a part of NEC Corporation. The Japanese manufacturer of electronics goods NEC Corporation is to acquire all shares, intellectual property and patents of Sphere for an estimated $ 42.1 million.
Sphere Communication is a tier-2 supplier of software based communication services available primarily in North America. One of the key assets of Sphere is its development platform (Sphere Communication Services Engine) that remains an object of envy for many. Its user-based pricing approach is its competitive advantage. This underlies its best-of-breed approach. Based on open technology, its PBX can work with a multitude of third party phones including Aastra, Grandstream and Polycom. They inter-work with third party voice media gateway from the likes of Allied Telesys and AudioCodes.
NEC on the other hand has a wide breadth of portfolio that ranges from TDM to IP. Frost & Sullivan analysis by Kriti Rao suggests NEC is ranked fourth in terms of market share in N.A. One of the main challenges facing the company is related to transformation and this is exactly where Sphere comes in. Sphere has a small team of talented people who have a forward-looking vision.
NEC Corporation has been focussing on growing their office equipment business for over two years now. They have a JV with Philips in Europe. In addition, they have something called NEC Infrontia. In the U.S the operating business is NEC United Solutions. With the acquisition, Sphere will be absorbed as a operating unit in NEC United solutions. We are yet uncertain of the autonomy of Sphere in the future. Todd Landry, Senior Vice President, Sphere Communication said "this announcement will help Sphere scale and expand its reach".
I am told that channel partners have nothing to fear. Most of them will be happy to include NEC's portfolio. I am not sure. The utility of Sphere's business with their distribution networks is very different from NEC's. Moreover, it will be interesting to see how Sphere's technology partners take this announcement. Overall, I think this is a good deal.
The press from yesterday read that Gurdeep Singh Pall is happy with the progress made by his technical team. OCS 2007 is now code complete and will release to manufacturing. This means that the product will be GA before the end of September, 2007.
The PR offered some pricing information. I have been betting on $100 list price for CAL. I was close. Gurdeep announced that OCS client access license (CAL) would come in two flavours: Standard and Enterprise.
Standard CAL: The standard CAL would have IM and presence capabilities. List price- $21.
Enterprise CAL: This would offer all of the conferencing and VoIP call management features and will be list priced at $97.
It has to be noted that in addition to the CALs, organisations need to buy the server(s). Customers using LCS need not worry. Microsoft has released documentation to help migrate from LCS to OCS. Its service assurance agreement takes care of the CALs. However, the enterprise needs to purchase the additional server.
The market opportunity is quite large. There has been in excess of 50,000 downloads of Microsoft OCS beta release software from the web in addition to the distribution of over 50,000 beta kits. If we look at the installed base of exchange systems & LCS globally, OCS in its first year can rake business of around $1 billion.
Finally, to be benefits. This is where I was a bit dissapointed. Well for two reasons. One that I wasn't commissioned to write the white paper that Art Rosenberg wrote. Nothing against Art. He is a veteran in this space with a lot of experience and I respect his views. However, the paper failed to come up with compelling reasons to deploy UC. It talks of
a) reducing internal technology TCO costs, including procurement, support and administration
b) reducing costs for user communication services particularly for mobile devices
c) increasing individual end user time productivity associated with communication activity
d) increased business processs performance by providing greater flexibility in making contact with different people more quickly and in different ways.
which to me looks like the solution to be cheaper and offer time-cost-productivity benefits. What about value destruction. How many of you turn-off your corporate IM clients to save yourself from distraction?
In the end, I believe that Microsoft's UC is a neat concept. Art very accurately talks of contexual communication. To me, thats the value-add of Microsoft's UC, whose ROI is subjective to user's business. To be clear, I am not a skeptic. I endorse the product. I fact, I think OCS and office communicator 2007 launch will drive away competition from telephony vendors in the presence and user interface market. One of the secret treasures in Microsoft's arsenal is its voice management capability. I reckon that the story of their real time audio codecs have not been well covered.
I spoke with Fabien Maisl, Head of Marketing in Cirpack last week. I am told that he is the best person in Cirpack to discuss IP centrex. He outlined the success stories of IP centrex in residential and business environments. Recent reports suggest a 50 percent rise in their installed base that has swelled to more than 6 million active users.
In a related story, Jeff Pulver's VON magazine attracted my attention to a news item from CommuniGate. Aurora, a Ontario based ASP has selected CommuniGate pro to offer messaging and groupware solutions to SMB customers (20-200 users).
It is interesting to see news items talking of the success stories of IP centrex, web services model amongst others. Telcos have undertaken massive restructuring of their infrastructures to facilitate these kinds of service delivery. At this point in time, user base is concentrated in the small business segment (sub 50 users). It will be interesting to see if operators can come up with value propositions to entice a mainstream.
Aastra Technologies released its second quarter results recently. Sales grew at 6.9% y-o-y in Q2 thanks to increased momentum in Germany. The completion of restructuring DeTeWe has helped it focus on the German market that I estimate to be growing at over 5.5%.
One of the fascinating items in the report has been the increase in its gross margins in Europe. Defying the market trend (well almost if you exclude Cisco), Aastra Technologies saw an improvement in its gross margin that grew to 43.1% of sales from 40.7% in the same period last year. This has been despite an increase in SG&A as the report suggests. My opinion is that currency fluctuation has a role to play in this. This is because the fixed costs overall including salaries has remained more or less stable and variable costs (read marketing) saw a modest increase in the past year. Honestly, this is a good result as I don't see price decline eroding gross margins.
In the previous quarter, Aastra Technologies completed the acquisition of Elocom, a Portugese distributor that promotes NeXspan family of products.
Yes indeed. Mobile IP Centrex arms the mobile operators to offer primary business telephony functions to very small businesses. Several mobile operators including Vodafone have been trialing such solutions for some time now.
I spoke with Thomson's Cirpack today who said that their platforms support in excess of 6 million active IP centrex subscribers. The number includes residential as well as business users. I believe that at a connection fee of around €15/user/month, the market size for business customers in sub 20 segment in Europe would be approximately €429 million in OPEX.
Mobile IP centrex is a platform that mobile operators can explore and target the small business segment of the market. The best advantage for a mobile operator is in the future proofing of their investment. As IMS mature, some of these softswitches can be turned into CSCF in the IMS core network.
g bit is that customers don't have to install any additional software on Nokia devices - a marked difference from the path Avaya and Cisco has taken.First the regulator, then the European Commission and now the judiciary. It seems like mobile operators are out of luck these days. Their comparative higher tariff for basic services is not helping them win any new friends. The days of their unique value proposition is over. Today, alternate technologies such as IEEE 802.x and other Internet based services are challenging the dominant position of GSM/GPRS/EDGE/UMTS etc.
Recently, in a case between Truphone and T-Mobile (UK), a judge granted mandatory injunction forcing T-Mobile (UK) to interconnect with Truphone. Truphone uses the Internet to route mobile calls thus reducing the mobile operator to a last mile mobile network provider.
This and others are creating a momentum. Mobile operators are facing similar situation as that the incumbent telcos faced with local loop unbundling and other aspects of deregulation. At the end of the day, increased competition is always better for a whole lot of people than not. Businesses and consumers are likely to benefit in the long run. It is an encouraging sign for the enterprise mobility industry especially for players such as Private Mobile Networks and BT Mobile.
Another feather in the cap of Internet service providers came from across the atlantic. FCC is planning to aution 30MHz in the upper and 30MHz in the lower 700MHz bands early next year. These frequencies became available as analog broadcasters using TV's UHF channels 52-69 are switching from analog to digital in 2009. The commission Chairman Kevin Martin appears to have circulated a draft order to have open access rules for two 11 MHz blocks of the total 60 MHz in the 700 MHz band that is to be autioned. This is a good news for players such as Truephone and others including Google who seem to have shown interest in bidding.
