Lync goes from strength to strength – what is its secret?

While Microsoft is facing a mighty competitive battle in a range of core areas, such as smartphones and PCs, in unified communications (UC) it is going from strength to strength. According to Microsoft’s recent financial results, Lync sales grew 25% in Q2 2014, and the company declared itself excited about the UC opportunity – via Lync and Skype.

The company said almost a year ago that it had already deployed 5 million Lync seats up from 3 million 14 month previously. So if only same rate of growth was maintained this year, then the total number of deployed Lync seats could now exceed 7 million. So what is the secret of Lyncs success? Here are four reasons that struck me.

1. strong enterprise presence

Microsoft has done very well in the core enterprise marketplace with its UC products, with 90% of Fortune 100 organizations using Lync. “Increasingly, the adoption of Lync is a natural progression for companies using Active Directory, Sharepoint and Microsoft e-mail,” says  Audrey William, Head of Research, ICT Practice, Frost & Sullivan Australia & New Zealand. “These companies are now moving to Lync for IM, presence, collaboration and voice.” The analyst predicts that the traditional PBX and UC vendors will feel increasing pressure from Microsoft in 2014.

According to the latest data from Synergy Research Group, Microsoft is closing the gap on Cisco in the worldwide UC collaboration market, which it estimates was worth $5.7 billion in Q4 2013. the analyst said that Microsoft had a market share of 19% compared to market leader Cisco with 24%. The next two largest players are Avaya and IBM, both with around 10% of the market.

2. fully-fledged voice platform

Although Lync is built upon earlier Microsoft products (Live Communications Server was the first, way back in 2003), it is only relatively recently that it has been recognized as a fully-fledged enterprise PBX replacement.

In his 2013 roundup, analyst Zeus Kerravala said that: “2013 will be remembered as the year Lync moved out of the labs and into the mainstream.” Increasing numbers of companies are choosing Lync for all their communications needs including voice – which is an area where Lync had previously been weak. Kerravala says that in a UC deployment survey he carried out, Microsoft was the second most common primary UC provides and the most popular secondary provider.

This is echoed in a report from Infotrack, which found that “almost 60% of enterprises (500+ seats) surveyed are deploying or planning to deploy Lync, including enterprise voice, up from 45% last year.” In addition, one-quarter of enterprises now say that Microsoft is their preferred IP-PBX vendor.

3. credible mobile offer

Mobility should be a natural match for unified communications. Mobile UC clients allow users to access their UC functionality from everywhere and the increase in smartphone ownership means that everybody has the processing power in their hands.

However, Michael Finneran, from dBrn Associates, who has been tracking the mobile UC market for half a decade says that “mobile UC clients on smartphones and tablets remain the most over-hyped and least utilized of communications technologies.” He points to the State of Unified Communications report from Information Week, which found that mobile clients ranked fairly low in importance, behind telephony, video conferencing and messaging.

With its interests in smartphones and mobility, Microsoft is well-placed to give mobile UC a boost. Although initially weak in mobile UC, Microsoft has been busy extending its mobile functionality for its own Windows Phone platform along with the Android and iOS platforms. Finneran says that owning a mobile operating system gives Microsoft the chance to offer “a mobile user experience that makes the native operating system work seamlessly with Lync and its other software tools”.

4. focus on UCaaS

UC as a service (UCaaS) is increasingly popular in enterprises. According to research from Infonetics, “hosted PBX/UC grew the most of any VoIP service in 1H13 as businesses, particularly larger enterprises, continue to turn to hosted services as a viable alternative to premises-based solutions.” The analyst said that 22% of respondents had part of their UC implementation in a private cloud, with 19% doing the same in a public cloud.

This development can be a positive for Lync, because of Microsoft’s involvement in cloud. Indeed, the new Microsoft CEO Satya Nadella come from the company’s Cloud and Enterprise Group. Kerravala says that research carried out by ZK Research found that Microsoft dominated cloud with 40.7% of respondent marking it out as the leader for UC in that area. Microsoft offers a range of different cloud versions of Lync and UC both directly and via partners, where it is reporting good growth.

A number of third parties offer UCaaS solutions based on Lync that suit larger enterprises. “From the user perspective all of this is good news because there are now service providers out there to help them, whatever their needs,” says David Moloney, Principal Analyst, Enterprise at analyst Ovum, in a research note looking Lync UCaaS offerings. “Some enterprise users are still nervous or skeptical about the resilience of a single UCaaS platform, but the new offers on Lync integration should give them encouragement.”

Are there any other reasons you think that Lync is reporting the success it is doing – and how do you think it will fare in 2014?

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Anthony Plewes

After a Masters in Computer Science, I decided that I preferred writing about IT rather than programming. My 20-year writing career has taken me to Hong Kong and London where I've edited and written for IT, business and electronics publications. In 2002 I co-founded Futurity Media with Stewart Baines where I continue to write about a range of topics such as unified communications, cloud computing and enterprise applications.