The sound of clashing armies can be heard across corporate networks as Microsoft, Cisco, IBM, Unify, Mitel, ShoreTel, Avaya and a lot of other UCaaS providers battle it out in intense competition for market supremacy.
Analysis from Gartner and other research firms shows that UCaaS is increasingly becoming an overcrowded area. Gartner’s 2013 Magic Quadrant for Unified Communications as a Service examined 16 of the leading UCaaS providers in terms of richness of services, branding, experience and ability to scale. Gartner named Thinking Phone Networks as the “Leader” UCaaS Magic Quadrant– a company that did not exist a couple of years ago.
Our internal research study tracking the key trends in the Fortune 1000 (F1000) UC market between 2012 and 2013, revealed that there was a 188% growth rate in the number of enterprises moving from on-premises UC platforms to a hosted or UCaaS deployment. (Please see our November 22, 2013 blog, Reflections on the UC Market and the Second Law of Thermodynamics, for details about the NextPlane study.)
While the F1000 companies are collectively moving toward adopting UCaaS, a closer look at the trends revealed some clear winners and losers. Our research showed Microsoft and Cisco to be the most widely adopted UCaaS vendors among the F1000 between 2012 and 2013. This clearly shows that F1000 enterprises are buying UCaaS offerings from well-established vendors instead of new entrants.
We foresee that this trend will continue well into the future because many UCaaS providers can successfully roll out a few enterprise deployments, but they lack the deep bench of Cisco and Microsoft to simultaneously support large F1000 deployments. We also believe that the landscape of corporate communication will continue to change in dramatic ways, but one constant will remain–the increasing demand for B2B UC collaboration.
Although the concept of entropy originated in thermodynamics (as the 2nd law) and statistical mechanics, it is very applicable to the current state of the UC market. In simple terms, entropy is the measure of the level of disorder in a changing system, a system in which energy can only be transferred in one direction from an ordered state to a disordered state. The higher the entropy, the higher the disorder and lower the availability of the system’s energy to do useful work.
As the entropy value of the UC market increases, the disorder is reflected in the increasing number of new hosted platforms, and the number of customers who are switching from on-premises platforms to hosted and cloud-based platforms. An increasing number of customers are also switching from one vendor to another in the hopes of finding more holistic unification of communication modes.
The results of a recent internal study that NextPlane conducted between 2012 and 2013 tracking the key trends in the Fortune 1000 (F1000) UC market, revealed that there was a 188% growth rate in the number of F1000 companies moving from on premises UC platforms to hosted or UC-as-a-Service (UCaaS) deployments. Another indicator of increasing entropy in the UC market in our study showed a 59% growth rate in organizations that are deploying both SIP and XMPP-based platforms. This shows a fluid market space fraught with migration activities.
As opposed to commissioning a customer survey, we wanted accurate and unbiased “repeatable” results. To achieve this, we wrote a DNS crawler application to examine the externally published XMPP and SIP records for known F1000 domain names. Analyzing those records revealed the following insights:
- UC platform vendor
- Hosted vs. on-premises
For example, the SIP SRV record for delta.com (sipfed.online.lync.com) shows Delta Airlines is an Office365 customer, and XMPP SRV record for gm.com (_xmpp-server._tcp.gm.com. 900 IN SRV 5 0 5269 s2s.gm.com.webexconnect.com) shows General Motors is a Cisco WebEx Messenger customer. The lack of a published DNS SRV record for a given UC domain is likely indication that the domain lacks federation readiness.
Despite this proliferation of platforms, services, and protocols the study also showed that less than 25% of Fortune 1000′s (F1000) companies have the ability to collaborate with their business partners (B2B UC collaboration) outside of the company walls even though they have mature UC deployments. In fact, over the past year the number of F1000 companies that can be considered federation-ready only grew by roughly 15 percent. This means that companies are not positioned to leverage the advantages of B2B collaboration despite the competitive advantages of enhanced, accelerated decision-making and increased productivity that B2B collaboration provides.
Why such as low rate of federation among F1000 companies? The answer lies in barriers that companies are facing when they try to implement direct Do-It-Yourself (DIY) federation. Please read our previous blog posting, The Road Less Travelled: The Perils of “Do-It-Yourself” UC Federation.
Given the parallels between the second law of thermodynamics and the trends we see in the UC market, we have to pose the question, is there a way to decrease the entropy value so that organizations can fully leverage the value of unified communications and B2B collaboration?
As we discussed in our previous post, one of the perils of Do-it-Yourself (DIY) federation is trying to figure out if your external partners are “federation-ready.” Currently, there are limited external resources out there that can help companies attempting DIY federation.
There are several self-service directories for Microsoft Lync where UC admins can self-register their Lync or OCS domains (http://www.lyncdirectory.com and http://windowspbx.blogspot.com/). (As far as we know, there are no available directories like this for Sametime, Cisco WebEx Messenger, and other UC platforms.) But, aside from the fact that these are Lync-only directories, they both have significant limitations.
First, the information they provide is neither qualified nor verified; in reality, anyone can fill out the form and register domains.
Perhaps more importantly, the directories are not actionable. Assuming the UC platform info listed in them is correct, you still have to locate their UC admins to send them federation requests.
NextPlane’s UC Exchange Members Directory solves these problems. The NextPlane UC Exchange Member’s Directory is a platform with an integrated workflow that allows members to request federation with each other. The NextPlane UC Exchange Member’s Directory is secure, the information it provides is current and verified, and most importantly, members can immediately connect with their federation-ready partners.
UC Exchange member information such as UC Type, FQDN, etc. is not shared with the public. Only qualified UC Exchange members can access this information via the NextPlane secure Management Portal.
The UC Exchange Members Directory contains only qualified and verified information since all of the listed companies have already provisioned their domains for federation and are verified as “federation-ready.”
Finally, once a company joins the UC Exchange, they can quickly search for federation-ready partners and send and receive federation requests to and from other community members regardless of their underlying UC platforms.
Joining the UC Exchange is easy and free. Simply go to www.NextPlane.net and fill out the membership form.
Today, less than 25% of Global 1,000 companies are collaborating with their business ecosystem through UC federation. Moreover, across all industries, those companies that are federating are doing so with only a handful of business partners.
Why the low federation rate? It’s been proven that real-time communication and collaboration with customers, partners and suppliers through UC federation increases productivity, reduces time to market, achieves higher profit margins, and results in competitive advantage.
These benefits are not mere abstractions or wishful thinking. Actual studies show that UC federation can result in cost savings of up to 75 percent by reducing email trails and phone tag, and allowing companies to drastically enhance operational efficiency in a variety of ways.
Given the considerable advantages of federation versus the relatively low adoption rate, I think it’s worth taking a look at some of the barriers that companies are realistically facing when they try to implement direct Do-It-Yourself (DIY) federation:
Considering Open Federation
XMPP platforms have made DIY federation easy since all you have to do is publish a DNS XMPP SRV record. Once the DNS SRV record is published, any organization can send XMPP traffic your way. Microsoft Lync open federation option (which was in the response to the XMPP platforms) works the same way, except that you have to publish a SIP SRV record.
Open federation is one of those things that sounds good in a UC vendor’s marketing collateral but is not a practical option for the world we live in. You do not see many commercial organizations practicing it.
With open federation anyone out there, including Chinese P.L.A. Unit 61398 hackers, can add your employees to their UC client’s contact list, send an invite (pretending to be a legitimate entity), and engage them in unsolicited chat sessions. Unfortunately, you and your organization would come to know about it when it’s too late.
Finding the right people at the right time
First and foremost, to establish a “Like-to-Like” direct federation requires knowing the other organization’s UC czar. Once you have discovered who the right folks are on the other side, you have to get them to agree to configure their UC platform to exchange communications with you. This takes considerable time as they will likely have to put together a business justification and get management approval for this. In the meantime, your management is asking for status and you have better things to do than chase somebody else’s UC administrator for updates.
Establishing Federation with Dissimilar Platforms
Secondly, the most likely scenario is that you are asked to establish federation with a partner that has a dissimilar UC platform. In this case, depending on your UC platform (and despite what the UC vendor may tell you) it is either not possible, or you may need to install and maintain additional components such as on premise gateways on your end. Worse still, you may have to also convince your counterpart to install one. (Good luck with that!)
Even if you do manage to endure the agony of installing a UC vendor’s specific gateway, it may take several months to complete the DIY federation (not counting the time it takes to get management approvals). Just tracking down the folks you need to test with is a huge time sink. Plus after all of this effort, your users are not going to be excited at the result – as these gateways often support only a very basic collaboration capability such as basic presence and 1-to-1 chat.
Now comes the really tough part, once your DIY federation is working there is no guarantee it will keep on working. There are no monitoring tools that can alert you when the service is down or if it is operating in a degraded mode. You are basically going to hear it from your end-users through phone calls to the Help Desk. Heaven forbid if it goes down and your sales reps are not able to chat with their customers then all hell will break loose.
Reporting & Tracking
Finally, sooner or later, your management will want to measure and track the monthly use of collaboration with business partners. How can you accurately track your usage statistics? Once your management gets a taste of federation, they will want you to establish DIY federation with the entire business ecosystem.
No wonder DIY UC federation is the road less travelled by many UC administrators!
Keep reading our blog and in the next posting we talk about how UC admins are finding alternatives to DIY federations.