Making Sense of Unified Communications Five Decision-Making Strategies

White Paper Making Sense of Unified Communications Five Decision-Making Strategies Contents Executive Summary....2 Unified Communications - State of the Market....2 Five Decision-Making Stategies....5 Conclusion....9 About Ziff Davis B2B Ziff Davis B2B is a leading provider of research to technology buyers and high-quality leads to IT vendors. As part of the Ziff Davis family, Ziff Davis B2B has access to over 50 million in-market technology buyers every month and supports the company s core mission of enabling technology buyers to make more informed business decisions. Copyright 2014 Ziff Davis B2B. All rights reserved. Contact Ziff Davis B2B 100 California Street, Suite 650 San Francisco, CA 94111 Tel: 415.318.7200 Fax: 415.318.7219 Email: marty_fettig@ziffdavis.com www.ziffdavis.com

Executive Summary If you are considering Unified Communications now, chances are you are already using VoIP, and presumably that has been meeting your expectations. When you made the transition from legacy telephony to VoIP, the choices and issues were relatively simple. Whereas VoIP is a singular mode of communication, UC covers multiple modes and will accommodate new ones as they come along. This is but one example of how UC is different that VoIP, and we have prepared this guide to further explain the various differences that make the decision-making process so difficult. Ziff Davis has published other guides that explain why and how UC is good for your business, and presuming you have come to that conclusion, this guide should prove very timely. Businesses are not alone in being uncertain about UC; vendors and channel partners also struggle with how to bring it to market and focus on the right things to drive adoption. UC remains a moving target, yet businesses know the underlying benefits are worthwhile, and that s where the immediate challenge likely lies for you. To address that challenge you need to understand how the broader market is evolving, and then develop an appropriate strategy that management will buy into. The technologies behind UC are very important as well, but this business-level perspective is crucial for you to make sense out of a landscape that never stands still, and an opportunity you cannot afford to pass up. To that end, this guide assesses the impact of five key trends on the current state of UC, along with five strategies for IT to make the right choices. Unified Communications State of the Market Technology by nature is constantly evolving, and when new things like Unified Communications come along, you have to expect that change will be part of the bargain. What makes UC different and thus more challenging is the fact that the surrounding environment is actually changing faster than UC itself. The underlying technologies that drive UC are, in fact, relatively stable and proven. Unlike other new technologies that never seem to work right first time around, UC solutions work quite well, but are highly dependent on what s going on around them. We have published other guides and primers that break down the various offerings which fall under the UC umbrella, but not one that examines the bigger picture. The current climate is complex with many mixed messages about what UC is and how you should deploy it. Our research clearly indicates that business decision-makers are unsure or even confused, leading to inertia and a newfound justification to keep the status quo. To make matters worse, the same is also true for channel partners, upon whom you likely rely for guidance on UC. ziffdavis.com 2 of 9

To address that, here are five updates on trends that are defining the state of the market. Chances are you re reasonably certain at this point that UC will be good for your business, but not sure what to do next. In our view, the next thing is to understand the broader context around UC, as you ll be looking to live with this decision for the foreseeable future. Update #1 - choices are getting wider UC may have started out as an extension of what telecom vendors were doing with VoIP and IP PBXs, but it quickly expanded to a broader pool of players that continues to push out into new and sometimes unlikely places. First, UC has shifted from being hardware-based to software-based, which opens the door for vendors who are not from the telecom world. More recently, there has been another shift from being premise-based to cloudbased. The cloud has been gaining momentum in 2013, as it makes UC accessible to businesses that could not justify investing in a premise-based solution. Aside from the established UC vendors now offering cloud, yet another layer can be added to this market. Cloud-based UC solutions can also be sourced from Web-based operators as well as service providers. Each type serves a different market, however. The former is best for businesses that want basic, economical solutions, which are provided over the public Internet. Service provider offerings are more comprehensive, with some running on the public Internet, while others are on their own private network. The latter provides more reliable, higher quality service, but that comes with a price. The good news is you have lots of options to choose from, but the variations can be overwhelming. All of these choices are viable, and if you re prepared to explore beyond your incumbent telecom vendor, there will certainly be at least one option out there that is ideal for you. Of course, this will take more work, but for the time being, the market will support this level of diversity. Update #2 less emphasis on telephony This may cause the most confusion, especially if you re new to VoIP and view the desk phone as your hub of communications. Many businesses still think this way, but the trend is going elsewhere. Even legacy telephone vendors talk very little now about desk phones the UC focus is on applications that are typically accessed on the desktop or a mobile device. This trend, of course, is directly related to the previous trend in that new entrants do not require a telephony pedigree, and for this reason, some options will come from unlikely places. Whereas VoIP was very much about telephony, this is just one of ziffdavis.com 3 of 9

several applications in a UC solution. Voice will always be the go-to mode for real-time communication, but within UC, the desk phone is only one option. End users can also use voice quite effectively with a softphone and even Web-based chat platforms or click-to-call applications. The desk phone will be with us for years to come, but there is no doubt where things are going. Vendors will continue talking less about this and more about where UC applications are most being used. UC is a big step up from VoIP, where the value proposition shifts from saving money on phone service to making employees more productive. Update #3 price curve keeps dropping There really are two drivers for this trend, and both help explain the current state of the market. First is the basic fact that software is cheaper than hardware, and the stage has been set for anyone who has migrated from legacy to IP for telephony. Not only is the equipment less costly, but VoIP has largely commoditized phone service to the point where there s little money to be made any more. Compounding this is the pricing trend within the UC space which is almost always built upon the VoIP experience. Remember, UC is a service not a product, meaning that you re starting from a position that has a relatively low cost base. Add to that the hyper-competitive environment that comes with the first trend discussed in this section. Not only are there many players vying for your UC business, but some are new to this space, so they have to be even more aggressive to buy market share. We re not yet in a race to zero, but with too many sellers and not enough active buyers, you can expect to see favorable pricing, at least for the UC applications. Once software platforms are built, the incremental cost to take you on is nominal, so some vendors can afford to do this. Keep in mind that some UC offerings especially those from facilities-based operators such as cablecos or some CLECs can be loss leaders to win your business, where the profit will come from add-on consulting services or providing business-grade connectivity. In time, the market will consolidate and prices will rise to support the survivors, but until then, conditions favor the buyer. This means you have leverage to negotiate, but with caution. UC is still far from being standardized, making it difficult to get fair price comparisons with other vendors. Update #4 role of channels is in flux Just as the vendor landscape is difficult to navigate, so is the channel, which you will likely rely on for UC. This trend is important to monitor since channels are also unclear ziffdavis.com 4 of 9

about UC s prospects, and many struggle with both the associated technologies and the new business models. UC is not good business for every channel partner, as some still prefer the returns on phone systems. Some partners welcome UC and see it as the way forward. However, this requires an investment in time and training, meaning that very few channel partners are fully UC-ready today. Just because you are ready for UC doesn t mean that your channel partner is ready too. VoIP was initially met with resistance from legacy purists, and 10 years later, it still has a long way to go to replace TDM. The UC scenario will not unfold much differently, so you need to recognize the disruptive impact on channels, along with the need to choose your partner carefully. Update #5 value proposition remains a moving target This has always been the biggest challenge with UC and that s not likely to change. Two things need to be considered here, and you need to accept that both come with the territory, and you will never have 100% certainty going down this path. First is the fact that the components comprising a UC solution are not fixed. There is no standardized definition of UC beyond the ability to integrate various real-time and near real-time modes into a common interface. Furthermore, the fluid nature of Web-based applications means that new features and functions will be ongoing. Unlike the last time you bought a phone system, there is nothing static about UC. You could choose to see this as daunting, but we view it being a core strength of UC, as it allows you to stay current with a communications environment that is still evolving at a rapid pace. The second consideration has to do with the business case. Again, unlike a phone system, whose value can be defined by various cost factors, UC s justification lies mainly in improving workplace productivity. There are some ROI metrics around SIP trunking that could help sell UC to management on this basis, but it s a minor element. Similarly, productivity metrics do exist, but they re not widely used, and SMBs in particular don t have the resources to get up to speed enough to support the business case for UC. Some vendors do offer tools to help on this front, and even if their metrics are somewhat biased, you should ask them for help. Nobody disputes the value of improving productivity, but for UC, you ll likely have to show it in other ways. Five Decision-Making Strategies Any of the above trends could give pause to your UC aspirations, and there are certainly others in play as well. Our purpose here is to provide enough clarity on the strongest trends to determine which ones will most impact your situation. Rather than try to understand these trends in depth, we want you to have a working knowledge of them, along with a core set of strategies to guide your decision-making. Our view is that the following five strategies will ziffdavis.com 5 of 9

serve you well regardless of which trends you re struggling with. Think of these as a universal set of principles that will hold for any UC scenario. Strategy #1 be open-minded UC will remain a work in progress, and that s actually a good thing. There wasn t much thinking required with a legacy phone system everyone knew how to use it, the feature set was fixed, it always worked and the phones last almost forever. The exact opposite holds for all of these with UC, and a legacy mindset will not serve you well here. On one level, you need to think broadly about UC being a solution for all modes not just voice or telephony. This is new for most businesses, and to get value from UC, both you and end users need to use these modes in an integrated manner. Each has some value on a standalone basis, but the power of UC comes from using them together, not just to do everyday things more efficiently, but to enable new ways of working and collaborating. There s another level you need to be open-minded about, and that s the delivery model. As noted earlier, the choice of vendors is wide and getting wider. While you need to buy a phone system from a telecom vendor, the same does not hold for UC. Depending on your comfort level with both technology and the companies you re considering, UC solutions could come from a telecom vendor, a communications vendor, a software vendor, a telco, a cableco, an over-the-top provider, or even your channel partner who has integrated a vendor s offering into one under their own brand. On top of that, these offerings increasingly come in two flavors premise-based or cloud-based along with a hybrid mix, so UC is far from being a simple check box on a list. In short, since UC is part hardware-part software-part Web application, there is no single path or right way to deploy it. The most important thing strategy-wise is to keep an open mind UC is new and different and you must be willing to consider options that weren t on the table with your last phone system. Strategy #2 think about being transformative When you decided to go with VoIP, you were basically replicating legacy telephony at a lower cost. Neither you nor management was likely expecting anything more, and hopefully VoIP has delivered on that promise. In most cases, this was a fairly small transition the network could support it, the dial plan didn t change, end users had very little new to learn, etc. ziffdavis.com 6 of 9

UC can certainly be just that replicating applications most people are already using but you can and should be thinking larger. VoIP can add some value beyond cost savings, but UC can truly have a transformative impact on the business. In other guides, we talk about CEBP Communications Enabled Business Processes where UC helps the business operate more effectively, and can do so in ways that are measurable. UC does this by automating manual steps to speed things along and reduce human error. Taking this further, by integrating with business databases and software such as CRM, ERP and OSS, UC can improve performance on many levels, such as shorten sales cycles, process orders more quickly, resolve customer problems faster, etc. This represents the highest-order value of UC, and while not easy to do, the potential is there for any business. Ultimately, this is a matter of vision and will for IT decision makers to share with management and show what is possible. If you can transform your thinking about communications technologies, you can use UC to achieve transformative results for the business. Strategy #3 focus on the needs of the business, not price This may not seem like a strategy, but UC has to be positioned differently from VoIP to get management buy-in. UC will be very difficult to justify on cost savings alone, and this actually undermines its true value. Saving money is really a tactical decision, and you need to elevate UC to being more strategic. The best way to do this is to demonstrate how UC solves problems that management understands and seeks to address. When UC goes from being a want to a need, cost savings become secondary to making the business run better by addressing those problems. To do this, you need to identify problem areas in the business that could be improved with UC. Keep in mind that UC works best with real-time situations, especially those that require teamwork. More importantly, you should focus on processes that drive teamwork. Good examples include setting up conferencing for an ad hoc planning meeting or trying to solve a customer problem that requires input from multiple departments. Chances are these situations today involve many manual steps and a lot of back and forth messaging. By addressing these situations in terms of businessrelated outcomes such as improved customer satisfaction, faster time to market, shorter sales cycles, etc. you make UC more strategic to management. Strategy #4 think about what makes UC different from telephony, not the same While this has some overlap with the other strategies here, it is particularly relevant if your business has been running with the same legacy phone system for as long as ziffdavis.com 7 of 9

you can remember. The more entrenched that frame of reference, the harder it is to understand this difference. As noted earlier, migrating from TDM to VoIP is largely like-to-like; VoIP will give you a few more features, but you re still just doing telephony. Along the lines of being transformative, you need to get comfortable with how UC is fundamentally different. Many vendors do not make such a clear distinction, and if you re too telecom-centric, you ll likely end up with a UC solution that really just a souped-up VoIP service. To become UC-centric, you must first recognize that telephony is just one application within a broader solution the world no longer revolves around the desk phone. Similarly, with UC, you re buying a service a suite of integrated applications, not a gaggle of desk phones that connects to a VoIP provider. Not only will this distinction help you better narrow down the field of vendor candidates, but it allows you to attack a broader set of business problems to make UC of strategic value to management. Furthermore, the latter connects more strongly to the former in that once you identify specific problem areas, you can query vendors to determine which ones are the best fit on that basis. Strategy #5 carve out a role for yourself Last but not least, your objective for getting management buy-in with UC needs to do more than just meet the needs of the business. IT needs to be equally concerned with addressing its own long-term needs. Whether you brought UC to management, or vice versa, your strategy should be to own UC, and the other strategies discussed above will help you do that. If management thinks this is their idea and you don t dispel that, IT will not gain the credibility that comes with bringing transformative technologies into the business. This is part of making UC strategic, and by taking ownership, IT becomes strategic as well. This really comes down to adding value, otherwise, management can just outsource UC to the cloud, leaving IT with little more than a caretaker role. Opportunities like UC don t come along every day, and if you ve done a good job transitioning to VoIP, you should have earned the right for this much bigger transition. Of course, there is an assumption you want to own UC, and that you have the capabilities to deploy it effectively. If not, the downside is as big as the upside, so if you set high expectations with UC and don t deliver, IT bears the fallout, which could include your own demise as well. ziffdavis.com 8 of 9

Conclusion Unified Communications has never been so confusing, but the need has never been greater. The main goal of this guide is to give you enough tools to manage this confusion and prevent that from driving you away. The first step is to view UC in the right context its core value comes from improving both workplace and organizational productivity, not reducing telephony costs. From there, you need to recognize that UC s flexible nature is a strength, and not a weakness. While this flexibility means that UC comes in many flavors, it also provides the adaptability you need to stay current with today s rapidly changing communications landscape. This guide is not meant to be a definitive blueprint for every UC-ready scenario, but it does provide a framework to make sense of all the options. Understanding the technology alone will not suffice, as every variation is viable for a particular situation. More importantly, this guide stresses the need to think strategically about how value can be added, not just from UC with your end users, but also by IT to ensure you have an active role in its success. If you can achieve both, UC will likely be the best decision you ll ever make. ziffdavis.com 9 of 9