The cloud has clearly changed much of what we know and what we do in recent times – from daily data interactions at a personal level to revolutionizing the way we work, being able to operate on the move has transformed how we live. And it has also transformed the way that IT vendors approach the market with their unified communications (UC) offerings.
Vendors have recognized their customers’ demand for UC solutions and have started to tailor their services accordingly. Leading vendors like Cisco and Microsoft now offer dedicated hosted UC suites which deliver the benefits of UC but with the added back-up of greater support and maintenance. This means their go-to-market message has no alternative but to change.
the new reality
The rapid rise of UC is evident in both the rise of mobile device sales – smartphones and tablets – and the general drop in the PBX market, down 10% in the past year. At the same time however, Unified communications as a Service (UCaaS) has entered the market as a disruptor, with research forecasting that the market will grow by more than 70% per year between now and 2018.
This rise in popularity of the "as-a-service" (XaaS) model has its foundation in the same drivers as many other cloud services: greater flexibility and scalability, future-proofing, reduced risk, greater business continuity possibilities and so on. The XaaS model also offers the benefit of no big up-front capital expenditure (CAPEX) or need for a large PBX. The UCaaS model gives organizations the benefits of on-premise capabilities in a cloud-hosted service. But how is it being taken to market?
who is doing what?
In Asia Pacific, the two leading players in the UC space remain Cisco and Microsoft. Both vendors have worked hard recently to develop the UC tools that let their customers take a strong UCaaS offering to market.
Cisco has recently upgraded its Hosted Collaboration Solution (HCS) suite to include contact center functionality as well as additional mobility features including single-number reach and clientless network-based fixed mobile convergence (FMC). They remain the only vendor to have a true cloud licensing model which allows service providers to include the cost of voice licenses in their pay-per-use offering.
Microsoft’s Lync is the other market-leading UC solution, and Redmond’s offering has the immediate advantage of Lync or Communicator being present on pretty much every business user’s laptop. It is worth noting however that customers still need to go to a service provider to get Lync with voice in the cloud, as Office 365 does not support this feature.
System integrators leveraging Cisco and Microsoft technology to develop UCaaS offerings must be aware that the two big vendors come at UC from different starting points, both in terms of functionality and price. Microsoft’s heritage is in OS and application software, whereas Cisco’s background is in voice and network. Basic features of Lync include greater collaboration and document sharing capabilities, but not voice features, which are optional and obviously cost more. Opting for Cisco’s HCS means standard and greater voice functionality through IP telephony, but then investment is required to upgrade to full collaboration tools using Webex; moreover, Cisco does not provide any messaging system. So it is a balancing act.
The AsiaPacific market is also home to Huawei, with the Chinese vendor following Cisco down the routers-and-switches path into video and UC. Huawei has introduced its own eSpace UC suite and, given the company’s successes elsewhere, they are surely one to watch.
what do Asia Pacific customers want?
When we speak to customers who want to make the shift to UC, the question arises of which approach they should take. Microsoft and Cisco both offer high quality products and are trusted vendors and valued partners.
The answer is that we must fully understand a customer’s needs and where they are starting out from. Is the customer starting from an application perspective and therefore in need of ERP, CRM software and messaging, or are they from an infrastructure background and therefore more focused on the network, voice and video?
The UC profiles offered by Microsoft and Cisco differ in this fundamental way, meaning that if the customer’s UC team comes from a voice background they are likely to be biased towards Cisco, while if they are more about application, messaging and document collaboration, then Microsoft will probably be their preferred choice. However for a total collaboration suite with full features, there is a real dilemma as both offering are comparable. In that case, a proper due diligence is required; it will focus on 1) the users’ needs, and 2) the legacy equipment (including PBX, video and voice end-points and gateways, messaging), and the cost of its transformation to UCaaS over a 3 to 5 year period.
doing business together
The UCaaS space is taking off in Asia Pacific now, with 4G LTE penetration helping to drive demand. The region’s diverse nature and the number of multinationals with operations here means that local expertise and datacenter capabilities will be vital to a seamless, global UCaaS deployment.
So it is all about what the customer is demanding. In Asia Pacific there are customers with varying levels of maturity. In Australia for example, organizations are keen to move UC straight into the cloud and enjoy the benefits of reduced CAPEX and the ability to scale usage up and down on demand. In China the landscape is different, with organizations more likely to want to own physical assets for the time being – incumbent telcos enjoy good relationships with vendors but nonetheless want to keep their kit on-premise. Vendors must also address regulatory issues such as India requiring PBX to be located within India’s borders – meaning that if UCaaS is hosted elsewhere, you have a challenge to overcome.
But with AsiaPacific enjoying economic growth and organizations looking to connect up widely-dispersed teams and enable greater mobility, the race is on for vendors to deliver the right, most attractive message. The ‘new workspace’ is a reality, and the productivity and business benefits delivered by UCaaS can only grow.
I am passionate about new communication and collaboration technologies that are fast changing the face of business. With over 20 years of experience in IT, Telecommunication and hi-tech sectors, including 13 years in Asia-Pacific, I lead the Asia Pacific business unit of Unified Communications & Collaboration for Orange. I am particularly excited about the dynamic market of Asia and cultural diversity it offers.