Market Overview: Hosted Collaboration Services Providers

For: CIOs Market Overview: Hosted Collaboration Services Providers by TJ Keitt, November 22, 2013 Key Takeaways CIOs Can Choose Between Three Types Of Hosted Collaboration Services Providers The hosted collaboration service market is an amalgamation of three different kinds of companies: business collaboration hosters, telecoms, and systems integrators. Each of these providers has a different baseline value proposition, and CIOs should take care to select the provider whose capabilities match their cloud needs. Business Collaboration Hosters Focus On Giving CIOs Flexible Environments Many providers in this category have their roots in application hosting and are adept at providing secure, customizable collaboration environments. Most, however, do not provide professional services beyond initial migration assistance. CIOs looking simply for hosting expertise should consider these providers. Telecoms Allow CIOs To Outsource Unified Communications And Collaboration Tools While the telecoms provide hosted collaboration services, they really excel in delivering voice and networking services to create unified communication solutions. They re able to provide clients both services from global data center footprints. CIOs who need to move collaboration tools with unified communication should consider the telecoms. Systems Integrators Add Consulting To Collaboration Hosting The integrators have a range of IT services, such as application development and infrastructure renewal, which they can pair with collaboration hosting. This allows the integrators to help CIOs improve overall business operations. CIOs seeking a hightouch partner with a range of professional services should consider the integrators. Forrester Research, Inc., 60 Acorn Park Drive, Cambridge, MA 02140 USA Tel: +1 617.613.6000 Fax: +1 617.613.5000 www.forrester.com

November 22, 2013 Market Overview: Hosted Collaboration Services Providers Alternatives To Google Apps And Microsoft Office 365 Emerge by TJ Keitt with Khalid Kark, Christopher Voce, and Kelsey Murphy Why Read This Report Sixty-five percent of IT leaders Forrester recently surveyed said they are interested in or already using software-as-a-service (SaaS) for some portion of their collaboration technology portfolio. But many IT leaders particularly those at very large organizations are unsure whether standardized SaaS offerings from Google and Microsoft provide the flexibility they need. These concerns shouldn t prevent CIOs from moving collaboration tools off-premises. We find a burgeoning services sector that can deliver highly customized messaging, teaming, and real-time communication services for the enterprise. This report provides an overview of the market, giving CIOs a sense of the players, their capabilities, and their offerings. Table Of Contents 2 5 Complex Requirements Demand Specialized Collaboration Hosting Google Apps And Office 365 Can Prove To Be Too Rigid For Some CIOs Three Provider Types Emerge To Serve Complex Collaboration Needs Business Collaboration Hosters Focus On Building Simple, Customized Clouds Telecoms Give CIOs A Global Footprint For UC And Collaboration Services Systems Integrators Provide Expertise To Embed Cloud Collaboration In A Business Notes & Resources Forrester interviewed more than 18 provider and user companies. This report also uses data from Forrsights Software Survey, Q4 2012. Related Research Documents Answer Five Questions When Selecting A Cloud Collaboration And Productivity Suite April 16, 2013 The Forrester Wave : Cloud Strategies Of Online Collaboration Software Vendors, Q3 2012 August 16, 2012 15 WHAT IT MEANS Flexible Collaboration Infrastructure Comes At A Premium 15 Supplemental Material 2013, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester, Technographics, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. To purchase reprints of this document, please email clientsupport@forrester.com. For additional information, go to www.forrester.com.

Market Overview: Hosted Collaboration Services Providers 2 complex requirements demand specialized collaboration hosting Forrester s surveys of software decision-makers show that beyond cost savings, SaaS bolsters business agility and business innovation (see Figure 1-1). So it s unsurprising that two-thirds of software decision-makers want to use collaboration SaaS (see Figure 1-2). For many large enterprises, though, going to the cloud isn t as simple as migrating mailboxes to a vendor s data center. These organizations legacy infrastructure and operational considerations dictate what they seek in a cloud service: Custom development tools to embed collaboration in internal and external processes. Many organizations have tuned their collaboration infrastructure to support key business functions. Forrester s most recent survey of IT leaders involved in Microsoft SharePoint deployments supports this, as 61% had deployed custom internal-facing apps on the platform and another 32% created external apps. 1 Businesses still need these customized process apps in the cloud, so IT leaders need services that allow them to replicate those capabilities. Integrations between line-of-business applications and collaboration tools. IT departments have invested in connecting collaboration platforms like SharePoint to business systems like SAP. These connections make it easier for employees to communicate and share information within business processes such as customer intelligence. Moving collaboration to the cloud jeopardizes these integrations because IT leaders resist moving other key back-office systems. 2 So, CIOs need collaboration services that provide the flexibility to replicate deep on-premises integrations. 3 Unified communications solutions that let CIOs outsource their telephony systems. Close to a quarter of IT decision-makers have deployed unified communications (UC) technology. 4 Today, 15% of decision-makers use a UC cloud service. Going forward, 25% indicate that they want their UC technologies in a cloud. 5 However, the popular public cloud services can t provide a full UC solution that includes hosted voice services. CIOs looking to move UC with their collaboration to the cloud need partners with capabilities to deliver low latency voice services to all of their workers. Options to maintain security, privacy, and regulatory compliance. Organizations operating in Europe have to be conscious of where data resides to comply with European Union privacy rules. Furthermore, security-conscious policymakers can mandate that certain data be held separate from all other data. US and European government agencies often face this requirement. CIOs faced with these concerns need flexible cloud offerings that allow them to customize security settings, choose data center locations, and have separate infrastructure. Reliable service delivery in areas with low Internet connectivity. Forrester s IT spending projections predict regional groupings that include Africa and Latin America will see the strongest growth in tech spending. 6 While these regions will leap forward technologically, bandwidth and connectivity issues still confound organizations in those locales. However,

Market Overview: Hosted Collaboration Services Providers 3 Forrester regularly fields inquiries from firms operating in these areas that want the benefits associated with cloud collaboration. These organizations need in-region options to solve their network and latency issues. Figure 1 Maturing Attitudes Toward The Cloud Increase Interest In Cloud Collaboration Tools 1-1 Speed and flexibility surpass cost savings as the cloud s benefit How important were the following benefits in your firm s decision to use SaaS? (4 or 5 on a scale of 1 [not at all a factor] to 5 [very important factor]) Speed of implementation and deployment Allows us to focus resources on more important projects Improved business agility Faster delivery on new features and functions from SaaS/as-a-service providers Support business innovation with new capabilities 71% 69% 68% 65% 63% Capabilities related to speed and flexibility are what businesses want from the cloud. Lower overall costs To support a large number of mobile and remote users Lack of in-house IT staff to maintain a traditional software solution Gaining a feature or functionality that is not available in a traditional, licensed software package Improve collaboration with business partners (suppliers, customers) Iterative deployment model supports a higher level of innovation within the business Having access to a wide ecosystem of solutions around the core SaaS application Ability to substitute upfront costs with regular monthly payments 55% 53% 50% 48% 48% 45% 42% 42% Base: 1,429 software decision-makers at firms using or planning to use SaaS Source: Forrsights Software Survey, Q4 2012 105161 Source: Forrester Research, Inc.

Market Overview: Hosted Collaboration Services Providers 4 Figure 1 Maturing Attitudes Toward The Cloud Increase Interest In Cloud Collaboration Tools (Cont.) 1-2 Two-thirds of IT decision-makers want cloud collaboration What are your firm s plans to use software-as-a-service (SaaS) to complement or replace the following applications? (Collaboration software) 26% report the cloud will replace their collaboration tool set. Already replaced most/all with SaaS 13% Plan to replace most/all with SaaS within two years 13% Don t know 4% No plans to use SaaS 31% Using some SaaS to complement 18% Plan to complement with some SaaS within two years 23% 41% report the cloud will complement their collaboration tool set. Base: 1,052 software decision-makers at firms with 20 or more employees that implemented or plan to implement collaboration software (percentages do not total 100 because of rounding) Source: Forrsights Software Survey, Q4 2012 105161 Source: Forrester Research, Inc. Google Apps And Office 365 Can Prove To Be Too Rigid For Some CIOs Forrester fielded 98 inquiries from clients on Google Apps and Office 365 in 2012 and has already responded to 105 inquiries in 2013. These vendors continually make improvements to their offerings such as Google folding Postini into Google Apps and Microsoft adding Yammer feeds to SharePoint Online to increase their appeal to CIOs. However, many CIOs remain skeptical. Why? In an effort to create efficient offerings, the vendors provide services that are: Inflexible in how they are delivered. The vendors can deliver low-cost offerings because they allow for little deviation from the standard service. This limits how negotiable terms are for security and compliance. For example, non-us federal government clients requiring their data

Market Overview: Hosted Collaboration Services Providers 5 to be segregated will find Google does not provide a solution. This also affects whether a client can decide how the service is delivered. For example, prospects needing to choose data center locations will find that Microsoft selects facilitates based on a client s headquarters location. Strict on how a client can customize them. These shared environments run smoothly because the vendors don t allow clients to alter the platform. This affects the level of customization clients can do to the service and the types of integrations that are available. For example, SharePoint Online clients often maintain an on-premises SharePoint farm because their custom workflows are unsupported in the cloud. Similarly, Google Apps customization options are limited to what clients can accomplish with Google Apps Script. Limited in their features. The appealing feature sets of Google Apps and Office 365 have circumscribed capabilities. This affects how prospective clients can use the offerings, as well as affecting options for adding services. For example, a Google prospect interested in using Google Voice as a call-forwarding service will find that it is not covered under the Google Apps SLA (service-level agreement). Similarly, prospects interested in using Lync Online as a replacement for their PBX will find only on-premises versions of Lync provide this capability. Three provider types emerge to serve complex collaboration needs CIOs still have options for moving collaboration workloads off their premises beyond a public cloud solution. Flying under the radar are a group of outsourcing partners Forrester calls hosted collaboration services providers (see Figure 2). These firms deliver malleable infrastructure for hosting heavily customized and integrated email, teaming, unified communications, and social technologies. This market springs from three types of organization with different entry points into the hosting conversation (see Figure 3). The market breaks down as follows: Business collaboration hosters. These providers are multifaceted in their abilities to host complex applications. For example, NaviSite has practices built around managing Oracle and Microsoft Dynamics in addition to the IBM and Microsoft collaboration suites. This background also makes these companies adept at addressing the security, retention, and compliance issues that organizations in regulated industries face. For example, Apptix provides HIPAA-compliant Exchange and instant messaging services. Telecom and networks providers. Global telecoms provide baseline collaboration services similar to the business collaboration hosters. What starts to set these providers apart is how they bundle UC capabilities with hosted collaboration offerings. For example, Orange Business Services provides a UC solution called Business Together that unites hosted Lync with enterprise voice services. Telecoms global reach primly positions them to deliver services to remote regions. Dimension Data, for example, can stand up hosted collaboration services in sub-saharan Africa.

Market Overview: Hosted Collaboration Services Providers 6 Global systems integrators. What sets these firms apart from other collaboration services providers is the level of assistance they can provide clients. Capgemini infrastructure services expert Richard Gillam notes that the company s hosting engagements can be done in conjunction with application development projects, infrastructure renewals, UC implementations, and more. The integrators multiple areas of expertise can help CIOs optimize a cloud service. Wipro, for example, created a set of business process services, such as document digitization, that can be overlaid on a hosted collaboration offering. To help CIOs sort through this emerging market, we provide a further breakdown of these segments as well as prominent examples of firms that can help enterprise clients. Figure 2 The Hosted Collaboration Service Market Combines Three Different Provider Types Business collaboration hosters Global systems integrators Hosted collaboration services Telecom and networks providers 105161 Source: Forrester Research, Inc.

Market Overview: Hosted Collaboration Services Providers 7 Figure 3 Each Provider Type Specializes In Different Add-On Services Business collaboration hosters Best-of-breed security tools Archiving tools MDM solutions Business app hosting Some professional services (e.g., app development) Telecom and networks providers PBX replacement SIP trunking Unified messaging Conferencing services Mobile app and device Business app hosting Professional services (e.g., network upgrades) Global systems integrators Business transformation consulting Packaged and bespoke integrations App development services Infrastructure and monitoring Common services Migration project license customer support Collaboration services Email teaming tools real-time communications social software 105161 Source: Forrester Research, Inc. Business Collaboration Hosters Focus On Building Simple, Customized Clouds The providers in this space look to create a one-stop shop for migrating and customizing collaboration workloads. So, these providers are building solutions or partnering with vendors like Symantec or AirWatch to offer clients security, archiving, mobile device, and other critical cloud services. They then weave these supporting services together with full-featured versions of popular collaboration platforms, like SharePoint, that allow enterprise IT departments to replicate custom applications or workflows in this hosted environment. Business collaboration hosters solutions are ideal for CIOs who primarily seek a partner to build a customizable environment. While some providers in this category have robust professional services offerings, this isn t common. Additionally, these providers tend to be smaller than firms in the other two categories, so they don t have as large a global footprint. CIOs considering these services should test the notion of a one-stop shop: Is the combination of the vendor s own offerings and partners technology a comprehensive solution for me? A few prominent providers in this category are (see Figure 4): Apptix helps regulated firms move collaboration into the cloud. Apptix hosts the Microsoft collaboration portfolio for clients and augments that with partner solutions like archiving services from Sonian and malware protection from Symantec. It has carved out a HIPAAcompliant set of offerings for healthcare organizations, and the US-centric nature of its data

Market Overview: Hosted Collaboration Services Providers 8 centers allows the vendor to guarantee data sovereignty of American customers. CIOs seeking a partner with experience in regulated industries, flexible options for supporting services such as archiving, and US-based data center infrastructure should consider this provider. Intermedia provides a unified suite of collaboration and business tools. Intermedia focuses on small and medium-size businesses (SMBs) and small enterprises. It provides clients a business cloud that blends hosted Exchange, SharePoint, and Lync with its proprietary UC, file synchronization and sharing, and infrastructure-as-a-service (IaaS) offerings. Clients have HIPAA-compliant options and can choose between US and EU data centers. Intermedia s business is primarily US-based but is growing in Europe. Intermedia will appeal to CIOs looking for a unified set of collaboration and business applications that is easy to manage. NaviSite gives CIOs a broad range of hosting and professional services. NaviSite sets itself apart for its range of hosting options including virtual desktops and Oracle and Microsoft Dynamics application hosting and its application development services. It has data centers operations in London; San Jose, Calif.; and Andover, Mass. NaviSite also has some capacity in Asia through a rented data center. CIOs seeking a partner that can move and customize multiple workloads not just collaboration will find NaviSite s capabilities appealing. SilverSky provides a one-stop shop for cloud collaboration security. SilverSky is the product of the merger of security service provider Perimeter E-Security with business collaboration hoster USA.net. It has a security-centric value proposition built around proprietary security and network monitoring services. And this has helped it build a strong financial services and healthcare customer base. CIOs looking for a partner that understands collaboration-related security concerns and can provide robust solutions should look at SilverSky.

Market Overview: Hosted Collaboration Services Providers 9 Figure 4 Business Collaboration Hosters Provide Clients Best-Of-Breed Offerings Core collaboration Apptix Microsoft and SharePoint Intermedia NaviSite SilverSky Microsoft and SharePoint; Hosted PBX; File sync and share Security and compliance Antivirus, antispam, DLP, ediscovery, archiving, and email encryption Antivirus, antispam, email encryption, archiving, and HIPAA Business Associate Agreement Microsoft Anti-malware, disclaimer and SharePoint;, IBM Lotus intrusion Notes prevention system, antispam, attachment, encryption, anti-phishing, and archiving Microsoft and SharePoint Email security, DLP, encryption, ediscovery, and continuity Mobile device Ancillary services Mobile device solution (AirWatch), BlackBerry Enterprise Server BlackBerry Enterprise Server, proprietary mobile device mgmt tool (ActiveSync) None BlackBerry Enterprise Server, mobile device solution (AirWatch) Microsoft license mobility program, hosted PBX, server and desktop backup, virtual private servers, VIP customer support program, and migration services PC backup, application server, web hosting, fax server, and migration services Delivery options Dedicated and multitenant Migration services, Dedicated Lotus Notes application server, integration services for Lync, SharePoint application development, and business application hosting Log, vulnerability, brand protection, UTM, event monitoring and response, managed app services, and managed security services Target market Businesses with 100 to 30,000 employees Dedicated Businesses (Exchange and with three Lync) and to 1,500 multitenant employees (Exchange, Lync, and SharePoint) Dedicated and multitenant Enterprises with 1,000 to 10,000 employees Enterprises with 2,000 or more employees 105161 Source: Forrester Research, Inc. Telecoms Give CIOs A Global Footprint For UC And Collaboration Services The telecoms target their hosting services at Global 2000 companies. Their global footprint allows them to address issues related to distributed workforces and data sovereignty. The focus for many telecoms has shifted to building UC solutions around Microsoft Lync and Cisco Systems Hosted Collaboration Solution. This UC emphasis allows prospective clients to tie together traditional Exchange or SharePoint hosting with enterprise voice and video services for a holistic unified communication and collaboration (UC&C) service.

Market Overview: Hosted Collaboration Services Providers 10 CIOs that are interested in an end-to-end UC&C solution delivered on a global scale should consider the telecoms. These providers consider standalone collaboration hosting a commodity service that is being undercut by Google Apps and Office 365. So, many of the telecoms now emphasize UC as a differentiated offering. CIOs considering telecoms should press the providers on their non-uc services: Are they providing enough services around email, teaming, and social workloads to meet your needs? Prominent telecoms worth considering include the following (see Figure 5): AT&T provides global clients a range of application options. The global telecom delivers hosted Exchange, SharePoint, and Lync offerings to clients in 100 countries. Like other telecoms, AT&T is able to combine these offerings with voice services and SIP trunking to provide a UC solution. AT&T also has technical skills in areas like application and SharePoint. CIOs at very large companies seeking a partner with UC capabilities in addition to a broad range of technical skills should consider AT&T. BT blends voice service expertise with collaboration hosting and professional services. BT emphasizes its UC services based on Microsoft Lync and Cisco Jabber. BT UC portfolio and professional services general manager Jon Martin says the firm s focus is getting voice services right. BT weaves its UC services throughout its Microsoft offerings, such as incorporating presence into other apps. BT can also augment Microsoft s portfolio through applications development. CIOs at global organizations requiring expertise in voice services should consider BT. Dimension Data specializes in delivering collaboration services to challenging regions. Dimension Data sets up Exchange, SharePoint, and Lync hosted services in low bandwidth areas such as sub-saharan Africa and Latin America on its managed platform. The NTT Group subsidiary also has a robust UC business built around Cisco s collaboration solutions and successfully deployed them in countries like South Africa. CIOs at organizations needing cloud collaboration services in the developing world should seriously consider Dimension Data. Orange Business Services provide CIOs UC services on six continents. The focal point of Orange s collaboration offering is its Cisco- and Microsoft-powered UC package called Business Together. However, Orange does have Exchange and SharePoint hosting competency as part of a holistic UC&C offering. Additionally, Orange helps clients integrate these UC services into contact centers and other business applications. CIOs looking for global UC capabilities and an integration partner should consider Orange.

Market Overview: Hosted Collaboration Services Providers 11 T-Systems provides clients a virtual desktop experience combined with UC&C. T-Systems combines Microsoft collaboration hosting with desktop virtualization to create worker-specific workplaces. It provides tools for clients to control and monitor their private collaboration clouds and the devices where employees access the services. The company also emphasizes adherence to German and EU legal requirements and security principles. CIOs looking at VDI services that combine UC&C with tight security should consider T-Systems. Verizon provides vertical UC&C solutions for CIOs. Verizon provides Microsoft- and Ciscobased UC solutions in addition to core Exchange and SharePoint hosting. Around its UC&C offerings, Verizon has a robust networking business headlined by its hosted IP Centrex and midmarket-targeted Virtual Communications Express offerings. For its Cisco UC clients, Verizon delivers scenario solutions such as telemedicine and technical consultations in manufacturing. CIOs looking to address process-specific communication challenges should consider Verizon.

Market Overview: Hosted Collaboration Services Providers 12 Figure 5 Telecoms Give CIOs A Range Of Options For UC&C Implementations 105161 Core collaboration AT&T Microsoft and SharePoint; Cisco Hosted Collaboration Solution (HCS) BT Dimension Data Orange Business Services T-Systems Verizon Microsoft and SharePoint; Cisco HCS Microsoft and SharePoint; Cisco HCS Alcatel, Avaya, Cisco HCS; Microsoft Lync, Exchange, and SharePoint Microsoft and SharePoint; Cisco HCS; Siemens Enterprise Comms OpenScape Voice/Video/UC apps Microsoft and SharePoint; Cisco HCS Security and compliance Antivirus (email and IM), anti-spam (email and IM), content filtering, DLP, encryption, ediscovery, doc and portal security, info rights mgmt. Antivirus (email and IM), anti-spam (email and IM), content filtering, DLP, encryption, ediscovery, physical security, and bespoke security options (e.g., social media monitoring) Antivirus, anti-spam, archiving, and email encryption Antivirus, anti-spam, ISO 27001 certification Antivirus (Exchange and SharePoint), anti-phishing, archiving, ISO 27001 certification, Germany/EU security compliance Antivirus, anti-spam, communication encryption, physical security Mobile device Ancillary services Mobile device solution (AT&T) Mobile device solution (BT) None Mobile device solution (MobileIron) Managed mobility services (VeliQ, SAP/ Sybase Afaria, MobileIron) Mobile device solution (Boxtone) Project planning and, systems integration, custom application development, disaster recovery, application hosting (ecommerce, portal, business apps), UC consulting UC network optimization, Advise One professional services, systems integration, project planning and, and contact center services UC advisory services, integration and migration services, telecoms expense services, contactcenter-as-a-service UC assessment, design, and implementation services; UC advisory services; UC service ; UC maintenance and operation UC implementation services, network access services, telecom services, security strategy and implementation consulting, cloud migration assistance, cloud readiness assessments Voice services in the cloud, WAN, managed LAN Delivery options Dedicated Target market Enterprises with 5,000 or more employees Dedicated Largest 400 to 500 enterprises globally Dedicated Dedicated Dedicated/ Shared Dedicated (Microsoft Exchange, SharePoint, and Lync); multitenant (Cisco HCS) Enterprises with 1,000 or more employees Enterprises with 5,000 to 20,000 employees Enterprises with 1,000 or more employees and a global footprint Midsized businesses through multinational enterprises Source: Forrester Research, Inc.

Market Overview: Hosted Collaboration Services Providers 13 Systems Integrators Provide Expertise To Embed Cloud Collaboration In A Business A systems integrator can host an SAP instance and surface business analytics from it in a hosted SharePoint instance, thanks to its knowledge of both systems. In turning to integrators to host collaboration services, CIOs have access to experts in security, application development, and application, which can ease their path to the cloud. Organizations needing a great deal of support in addition to the baseline collaboration service are well served by systems integrators. As such, the client base for many of these consultancies is globally distributed organizations willing to pay a premium for a high-touch, globally available service. CIOs considering these services should push the consultancies on the value of their ancillary services: Can the integrator s combination of business and technical consulting help you use the cloud to improve your business operations? A few of the prominent integrators are (see Figure 6): Avanade brings clients deep Microsoft expertise and robust monitoring capabilities. Avanade has great expertise in Microsoft s technology because it s partly owned by Microsoft. In acquiring Azaleos, Avanade added remote capabilities for and SharePoint. Avanade uses its Microsoft expertise and monitoring capabilities to set up and monitor collaboration environments and ancillary hardware components like AudioCodes. CIOs wanting Microsoft technology and a partner with deep Microsoft expertise should consider Avanade. Capgemini brings secure collaboration to the European public sector. Capgemini s hosted collaboration offerings are built around Microsoft s collaboration portfolio and the Zimbra Software email platform. The big emphasis of its offerings is providing closed systems that these groups require for data segregation and control. While Capgemini s offering has found its initial traction with CIOs in European governments, security-minded CIOs in the private sector looking for a provider that understands and can deliver closed cloud systems should consider Capgemini. CSC touts industry expertise to deliver end-to-end solutions. CSC has several Microsoft- and Cisco-based UC&C offerings. The value CSC brings, though, is tying these hosted collaboration tools with a broader IT outsourcing strategy including desktops, mobile devices, and server infrastructure. This allows CSC to globally deliver an end-to-end collaboration experience for employees from the device through the collaboration tech. CSC uses its vertical expertise in areas like financial services and energy to tailor this for clients regulatory concerns. CIOs looking for vertical focus and a holistic user experience should consider CSC.

Market Overview: Hosted Collaboration Services Providers 14 HP provides CIOs flexible collaboration infrastructure in multiple regions. HP s global data center infrastructure allows it to deliver collaboration services from 70 countries. The integrator s collaboration portfolio is built on the Microsoft technology stack and can be bundled with services such as application development, mobile app stores, and service desks. HP allows clients to integrate a range of third-party applications, like NewsGator, into its environment. CIOs interested in global delivery of very flexible collaboration infrastructure should consider HP. Wipro adds packaged business process services to hosted collaboration services. Wipro can host the Microsoft portfolio for its clients. Its emphasis, though, is in creating and automating business processes on top of the collaboration portfolio. For example, Wipro has built a document digitization service to help clients reach a no documents in the enterprise state. CIOs interested in moving business processes into the cloud along with their collaboration portfolio should consider Wipro.

Market Overview: Hosted Collaboration Services Providers 15 Figure 6 Systems Integrators Can Give CIOs A Range Of Professional Services In Addition To Hosting Core collaboration Avanade Microsoft and SharePoint Capgemini CSC HP Wipro Microsoft and SharePoint; Zimbra Microsoft and SharePoint; Cisco Hosted Collaboration Solution Microsoft and SharePoint Microsoft and SharePoint Security and compliance Antivirus, anti-spam, DLP, intrusion protection, and archiving Antivirus, anti-spam, and DLP Malware protection, archiving, ediscovery, anti-intrusion, and DLP Antivirus, antispam, intrusion protection, and archiving Security services offered through partners Mobile device BlackBerry Enterprise Server, mobile device mgmt solutions (AirWatch, Good, MobileIron) Mobile device solutions (ActiveSync, Afaria, SAP Sybase) BlackBerry Enterprise Server, mobile device Mobile device solution (HP) and mobile file sharing Multiple mobile device solutions (Afaria, MobileIron, Zenprise) Ancillary services IT consulting and business transformation services, infrastructure services, app hosting, SharePoint app development, Lync CEBP services, UC&C change enablement services IT consulting services, business transformation services, IT service desk, infrastructure services, and other professional services offered by the broader consulting firm SharePoint app development, app development for communicationsenabled apps, communicationsenabled business processes, social user interface design Application, application hosting, file sharing, application development on SharePoint, app stores, Lync voice services IT advisory services, ISV integration, migration and deployment services/advisory, governance toolkit Delivery options Dedicated Dedicated Dedicated Dedicated Dedicated Target market Enterprises with 1,000 or more employees Enterprises in the global 2000, as well as government entities Global enterprises with 5,000 or more employees Enterprises with 3,000 or more employees Enterprises and govt., emphasis on oil & gas, insurance, and pharma for specific process offerings 105161 Source: Forrester Research, Inc.

Market Overview: Hosted Collaboration Services Providers 16 what it means flexible collaboration infrastructure comes at a premium Google Apps and Microsoft Office 365 have set a low price level for cloud collaboration services in the minds of many CIOs. But it s unrealistic for hosted collaboration services providers to deliver their services at the same cost. Flexible, dedicated collaboration environments wrapped with highend support and professional services are expensive for these providers to run. So, CIOs evaluating these services should be aware of the following: The providers will eschew commodity hosting as too costly to run. Many providers told us that Google and Microsoft were pricing them out of the small business base. So, these providers moved upstream, providing a more customized and flexible service for the enterprise. As Google Apps and Office 365 capture more enterprise clients, these firms will only ramp up the additional services they provide to stay competitive. This means that enterprises simply wanting to outsource email will not find many willing partners in this market, as providers focus on higher-margin consulting businesses. The premium price will never make sense for those seeking simple hosting. An IT leader who evaluated two telecoms hosted collaboration services before choosing Office 365 said that all of the additional services made him lose track of the value proposition. For those clients who determine that all they need are basic collaboration services, Google Apps and Office 365 will provide compelling, cost-effective solutions. IT leaders must decide if the value of these services is commensurate to the cost. The hosted collaboration services providers specialize in personalized customer support, specialized security, deep system integrations, and professional services. But are these types of services what the business needs to create a collaborative organization? This is the fundamental assessment CIOs and their business counterparts must do as they consider Google Apps, Office 365, or a hosted collaboration services provider. Supplemental Material Methodology Forrester s Forrsights Software Survey, Q4 2012, was fielded to 2,444 IT executives and technology decision-makers located in Canada, France, Germany, the UK, and the US from small and medium-size business (SMB) and enterprise companies with two or more employees. This survey is part of Forrester s Forrsights for Business Technology and was fielded during November 2012 and December 2012. LinkedIn Research Network fielded this survey online on behalf of Forrester. Survey respondent incentives include gift certificates and research reports. We have provided exact sample sizes in this report on a question-by-question basis.

Market Overview: Hosted Collaboration Services Providers 17 Each calendar year, Forrester s Forrsights for Business Technology fields business-to-business technology studies in more than 17 countries spanning North America, Latin America, Europe, and developed and emerging Asia. For quality control, we carefully screen respondents according to job title and function. Forrester s Forrsights for Business Technology ensures that the final survey population contains only those with significant involvement in the planning, funding, and purchasing of IT products and services. Additionally, we set quotas for company size (number of employees) and industry as a means of controlling the data distribution and establishing alignment with IT spend calculated by Forrester analysts. Forrsights uses only superior data sources and advanced data-cleaning techniques to ensure the highest data quality. Companies Interviewed For This Report Apptix AT&T Avanade BT Capgemini CSC Dimension Data Intermedia NaviSite Orange Business Services SilverSky T-Systems Verizon Wipro HP Endnotes 1 Forrester s survey also reveals 22% of these IT decision-makers plan to deploy custom internal apps on SharePoint, and 20% are planning custom external apps. Source: August 2012 Global SharePoint Usage Online Survey. 2 Forrester s data shows that IT leaders are hesitant to move systems of record/back-office software to the cloud. For example, our most recent survey of IT software decision-makers shows 51% either have no plans or aren t aware of company plans to move business process software to the cloud; 61% express similar sentiments about enterprise resource software. Source: Forrsights Software Survey, Q4 2012. 3 Forrester has put forth a cloud-to-on-premises integration concept called hybrid 2. Forrester defined this as: The concept of federated on-premises and cloud-based integration combined with the improved interoperability of existing and new middleware silos of application, B2B, BPM, business events, business rules, and data integration. See the May 1, 2013, The Hybrid 2 Integration Challenge report. 4 Sixteen percent of telecom and network decision-makers say they re implementing or have implemented a UC solution. Another 5% indicate they re expanding that implementation. Source: Forrsights Networks And Telecommunications Survey, Q1 2013.

Market Overview: Hosted Collaboration Services Providers 18 5 Currently, 11% of UC implementations reside in a cloud-type as-a-service (i.e., shared infrastructure). Just 4% is in a public cloud (i.e., shared infrastructure). When we ask telecom and network decision-makers with existing UC solutions where they would like to see those in the future, 19% say they want it in cloudtype service, and 6% want it in the public cloud. Source: Forrsights Networks And Telecommunications Survey, Q1 2013. 6 The Eastern Europe, Middle East, and Africa (EEMEA) region will grow local currency spending on technology 8.8% in 2013 and 9.0% in 2014, while Latin America powered by Brazil s World Cup preparations will see growth of 6.2% in 2013 and 13.3% in 2014. See the July 12, 2013, A Mixed Outlook For The Global Tech Market In 2013 And 2014 report.

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