IDC (sponsored by COLT Telecom): High Quality Network: A Prerequisite for Unified Communication - Germany

WHITE PAPER High-Quality Network Infrastructure Prerequisite for Network-Centric UC Solutions Sponsored by COLT Telecom Dan Bieler Pim Bilderbeek February 2009 IDC OPINION This white paper is based on the findings of a major survey of ICT decision makers and end users in Germany. It underlines several aspects that IT managers should consider when planning a unified communications (UC) solution: UC is about creating a heterogeneous communications infrastructure: UC is about human beings. It is not about the formation of one single homogeneous communications infrastructure. End users have clear preferences depending on their gender and age. UC must support various facets of demand for communications with various devices and applications. In order to attain high usage rates of a UC solution — and so boost return on investment — it is essential to address these preferences as well as train end users to use the UC solution. The majority of end users already perceive IT-based communications as the most valuable communications applications: Communications end users do not think about the concept of UC. End users use communications to do their job. The survey highlights that end users are technology agnostic in so far as they already prefer to use communications solutions that are embedded in the wider IT environment of their firms. A high-quality network infrastructure is a prerequisite of a high-quality UC solution: Many aspects driving end-user demand for and concerns regarding communications relate to quality of service issues. Hence, network infrastructure matters greatly. Any software-based UC application is only as reliable as the network infrastructure it is based on. Telecoms service providers are well positioned to provide and manage a high QoS network infrastructure with service level agreements. UC is in most instances a long-term project affecting a firm's communications culture and transforming business processes. Open standards and interfaces are key to attain such a gradual UC implementation. IT managers should choose a reliable partner as UC provider. This partner should support the IT manager to plan and implement a gradual rollout based on modular components of the UC solution. Again, telecoms service providers are well positioned to act as reliable partners for UC projects, given their networking expertise, financial strength, and large partner network with hardware vendors.

TABLE OF CONTENTS P In This White Paper 6 Methodology 6 Definition 6 IT Managers' Perception of UC Application Elements .............................................................................. 6 Demand 7 Applications .............................................................................................................................................. 8 Devices..................................................................................................................................................... 10 Change in Communications Methods and Features ................................................................................. 12 Benefits 15 Pain Points and Issues ............................................................................................................................. 15 Vision for Communication Solutions ......................................................................................................... 16 Challenges and concerns 16 Main Challenges to UC............................................................................................................................. 16 Aspects End Users Dislike About Their Firm's Communications Solution ................................................ 18 Implementation 19 Status of UC Implementation and Plans for UC........................................................................................ 19 Measuring UC Performance ..................................................................................................................... 20 Departments Buying UC ........................................................................................................................... 21 Services Needed to Implement UC Solutions ........................................................................................... 22 Outsourcing of Communications Requirements ....................................................................................... 22 Types of Companies Seen as UC Providers ............................................................................................ 23 Conclusion 24 ©2009 IDC #IDCWP01R 1

LIST OF FIGURES P 1 IT Managers' Perception of Which Applications Are Part of UC ................................................... 6 2 Vision of IT Manager for Key UC Applications Versus End User Demand for Communication Applications ........................................................................................................ 8 3 Primary Communication Device for Business Activities as Expressed by End Users .................. 10 4 Actual Communication Methods Used Versus Methods Wanted as Expressed by End Users............................................................................................................................................ 12 5 Demand For and Existence of Communication Features at Work as Expressed by End Users............................................................................................................................................ 13 6 Pain Points and Issues Addressed by UC Solutions in the Minds of IT Managers....................... 14 7 Main Challenges to UC in the Eyes of IT Managers..................................................................... 16 8 Actual UC Implementation and Plans for UC ............................................................................... 19 9 Key Performance Indicators for Measuring of UC Performance................................................... 20 2 #IDCWP01R ©2009 IDC

IN THIS WHITE PAPER This white paper aims to help IT managers develop a sound UC strategy. The white paper is based on the findings of a major survey of ICT decision makers and end users in Germany, supported by IDC's existing knowledge of the IT and communications marketplace. The study compares the vision for emerging communications as expressed by IT managers with the demand for communications solutions as stated by end users inside businesses. The main areas of focus for this investigation into UC demand are devices, applications, network infrastructure, buying processes, and communications outsourcing. METHODOLOGY As part of the research for this white paper, IDC conducted a survey of 184 end users in companies in Germany. The survey segmented end users by gender, age group (20–34, 35–50, 50+), and company size (five groups ranging from SMBs to companies with over 5,000 employees). The survey did not discriminate between vertical sectors. The survey took place between November and December 2008 and was conducted via telephone based on a panel methodology. IDC also conducted telephone interviews with 59 CIOs and IT managers in Germany on a panel methodology. IDC discussed demand for UC, use of UC, the potential for outsourcing UC, and the UC buying process. The interview partners were chosen by IDC, and the discussions took place between November and December 2008. DEFINITION IT Managers' Perception of UC Application Elements German IT managers view horizontal applications as forming the core of UC. PIM and collaboration tools are central to their UC perception. When asked about the main applications that make up UC, German IT managers rank email (96%), calendaring (90%), contact management (86%), fixed voice (68%), and collaboration management (63%) ahead of other applications. Email was identified as a UC application by 98% of respondents, making it the primary component of a UC solution in the minds of IT managers. As can be seen in Figure 1, they rank email 30 percentage points higher than fixed voice as the most important UC application. Mobile voice was identified by just 56% of IT managers as a UC application, indicating that it is of secondary interest for decision makers when selecting a UC solution. CRM applications are seen as being part of UC by less than half of IT managers (42%). ERP fares worse still, being mentioned by only 22% of IT managers. Web 2.0 applications are considered part of UC by less than a fifth of IT managers (19%). ©2009 IDC #IDCWP01R 3

Somewhat surprisingly, presence functionality, VoIP, and instant messaging also rank low, at 39%, 36%, and 32%, respectively, as does video conferencing (29%). IDC believes that the low perception of these applications is indicative of the high degree of uncertainty still surrounding UC definitions in the market. Providers of UC should therefore certainly not assume in-depth expertise of UC among all IT managers. FIGURE 1 IT Managers' Perception of Which Applications Are Part of UC Email 98% Calendaring/scheduling 90% Contact management 86% Fixed voice 68% Collaboration applications (content/task management etc.) 63% Mobile voice 56% Sales and customer data (CRM) 42% Field force and services data (CRM) 42% Instant messaging 39% IP voice/VoIP 36% Presence functionality 32% Video conferencing 29% Supply-chain related applications (ERP, inventory management) 22% Web 2.0 applications 19% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Source: IDC, 2009 For the purpose of this White Paper, IDC will define UC as the integration of voice (fixed and mobile), messaging (email, instant messaging, fax), calendar and contact management, and presence functionality. Over 90% of IT managers agree with such a definition. DEMAND UC solutions have little value to an organization if they are not readily adopted by end users. Therefore, it is vital that IT managers take the communication behavior and preferences of end users into consideration when selecting a solution, in order to maximize uptake and thus boost return on investment (ROI). ROI is directly impacted by usage, a point that is often underestimated during UC planning and rollout. Hence, firms with UC ambitions need to take into account a variety of demographic factors (age, gender, etc.) and preferences related to job function when implementing a solution. 4 #IDCWP01R ©2009 IDC

Applications IT managers are generally much more enthusiastic about embracing emerging communications applications than end users are about using them. IT managers should try to understand what drives the underlying demand for communications among their company's employees. UC must be about people in order to be successful. IT-based communication channels already dominate business communications applications. PIM applications form the cornerstone of end-user business communications. Both male and female end users rank email as the most important communications application (90% and 97%, respectively), followed by calendaring and scheduling (75% and 77%) and contact management (39% and 38%). The fixed landline phone is seen by end users as the fourth most important communications device, with just a quarter of the importance of email (23%). Still, fixed voice is way ahead of mobile voice, which was rated at less than a quarter of fixed voice in terms of its importance to end users (5%). Significantly, important UC applications like video conferencing (7%), instant messaging (3%), or presence functionality (2%) are not yet perceived as important business communications applications, despite already being fairly widely used. Web 2.0, in this white paper defined as comprising social networking, wikis, and blogging, has essentially been ignored as a key business communications tool by end users (1%). SMB Demand The survey suggests that IT managers of SMBs have very similar needs to larger companies and are just as demanding regarding quality of service as other client segments. The demand patterns described above hold true irrespective of company size. However, end users in SMBs show very similar preferences to end users in larger companies. This observation underlines that UC solutions should be about the people using them, not technological possibilities in their own right. UC providers should therefore be wary of trying to serve SMBs' communications needs with a "UC light" service offering. SMBs are affected by the same technical issues as companies of other sizes. This makes it all the more challenging for UC providers to develop economically viable UC offerings for the SMB segment, given the combination of small-scale installations, complex demand, and challenging sales efforts. Vision of IT Manager Versus End-User Demand The survey shows several major discrepancies between the vision that IT managers have for communications and the actual patterns of demand coming from end users. In an effort to highlight these differences, we compare answers regarding application planning and usage provided by IT managers and end users. When ranking applications from one to ten in terms of importance, both IT managers and end users see email as equally important. The resulting difference is 0 (i.e., subtracting the ranking by IT managers from the ranking by end users) as shown in Figure 2. A similar picture exists for calendaring and scheduling, where the survey shows a difference of 1. The difference for Web 2.0 applications is also fairly small at 1.8, as neither IT managers nor end users rank Web 2.0 as crucial UC applications. However, most other communications applications show real differences in opinion ©2009 IDC #IDCWP01R 5

between IT managers and end users. Even contact management, which end users use fairly regularly, shows a difference of 4.7. FIGURE 2 Vision of IT Manager for Key UC Applications Versus End User Demand for Communication Applications 10.0 10.0 10.0 6.0 Difference (IT-manager vision less end-user demand) 9.2 8.8 9.0 8.2 Importance (1–10: 10 = most important) 5.2 5.0 8.0 4.7 4.8 6.9 7.0 6.4 3.9 4.5 4.0 3.5 5.7 6.0 3.7 5.0 3.1 3.0 4.3 2.8 4.3 4.0 4.1 4.0 3.7 2.2 3.3 3.0 2.0 3.0 1.8 2.5 1.9 2.0 1.5 1.6 1.0 1.0 1.0 0.8 0.4 0.5 0.2 0.2 0.3 0.1 - - ) e ns g ) e t M ns ng y l en M ai g ic in ic IP li t R lin io io Em R gi vo vo ec na em Vo (C at (C at sa u er t io ed ile d ic ic e/ ag ta es xe ta nf pl pl nc ob ic h da an da tm co ap sc ap Fi vo fu M m es g/ o er an n 0 IP ce de in tio ct 2. ic om st en r ta rv Vi ra da eb In st on se es bo en W cu C Pr la d al an d ol C an C e rc s le fo Sa d el Fi Vision of IT Manager for key UC applications End user demand for communication applications Difference Source: IDC, 2009 The biggest discrepancy between what IT managers consider to be part of UC and communication applications that end users actually use relates to mobile voice. While IT managers believe that mobile voice is a fairly important part of UC, end users do not see it as central, resulting in a difference of 5.2. Features of Future Communications Applications When asked which features should be part of future communications solutions, end users and IT managers are fairly conservative. Email tops the table with 10 out of 10 points, followed by fixed and mobile voice (with 9 and 8.8 points, respectively). "New" functionalities in the form of mobile Internet access and presence information are placed fourth and fifth, respectively, in terms of importance (with 8.7 and 8.6 points). "Flashy applications" like social networking or instant messaging rank fairly low on the agenda (7.3 and 6.9 points), as do audio- and video-conferencing (7.6 and 7.1 points). 6 #IDCWP01R ©2009 IDC

However, rather than painting a reliable ranking of absolute demand, IDC believes that the survey highlights a considerable degree of confusion regarding several aspects of UC solutions. For instance, it makes little sense to see instant messaging so much lower in the ranking than presence functionality. IDC sees these features as being intrinsically linked. An important observation from this survey relates to the high level of interest among older employees relative to their younger colleagues in UC features such as social networking and instant and unified messaging. Businesses with UC solutions should embrace these interested employee groups as their enthusiasm could help to encourage adoption among colleagues. Devices Primary communication devices for business A large majority of end users, 77%, view their PCs and thus IP-based communications as their primary communications channel for business activities. Over half of end users of communications, 54%, assert that their primary communication device for business activities is the desktop PC, as can be seen in Figure 3. An additional 23% of end users maintain that their laptop is their primary communication device for business activities. In other words, 77% of end users already prefer a communications solution that is part of their company's wider IT environment. This figure is four times the rating given to the traditional landline phone, which was mentioned by just 18% of end users as their primary communications device for business activities. While the overall trend is similar between various age groups and male and female, the survey highlights some noticeable demographic differences. For instance, more female than male end users make use of their work PCs (77% Versus 62%). Meanwhile, laptop use is much more pronounced among male than female end users (49% Versus 25%). The survey points towards a slight preference among male end users for IP-based communications, largely because of the higher laptop preference among male end users (28% for male versus 18% for female). The position of the mobile phone as a primary communications device for business activities is still weak, being mentioned by just 4% of male and 5% of female end users. The survey also highlights fairly pronounced differences in communication behavior between age groups. While all age groups see their work PC as the central communication device, young employees use their work PC more compared to their older colleagues. Perhaps surprisingly, their older colleagues are more avid users of laptops, smart phones, and their home PCs. The survey shows that the demand for devices is fairly similar between companies of all sizes. IT managers should take note of these differing preferences when designing UC solutions. Inappropriate design or policies can potentially undermine end-user adoption of UC and thus the UC business case. IDC believes that businesses that ignore or downplay such issues during UC planning are unlikely to reap all the potential benefits that UC promises. ©2009 IDC #IDCWP01R 7

FIGURE 3 Primary Communication Device for Business Activities as Expressed by End Users 22% Phone (landline) 15% Personal digital assistant 1% (with Internet/email access but not phone- 0% enabled) 5% Female Mobile phone Male 4% 18% Laptop personal computer 28% 54% Desktop personal computer 53% 0% 10% 20% 30% 40% 50% 60% Source: IDC, 2009 This shift in communication preferences away from traditional communications — which IDC assumes most end users are not consciously thinking about — forms a solid basis for UC. Devices That Deliver Highest Productivity and Efficiency Increases An astonishing 84% of end users view communications channels that are embedded in the IT infrastructure as generating the highest productivity and efficiency increases. Fifty-seven percent of end users believe that the desktop PC is the primary communications device for increasing productivity and efficiency in their daily communications tasks. 26% of end users see the laptop in this role. These figures are way ahead of the traditional landline phone at 15% or the mobile phone at 1%. IDC believes that these findings underline three important points: End users do not fear new communications channels if they work intuitively, such as email. IT managers should do everything they can to focus on ease of use when designing UC solutions. End users do not care about technology as long as it is simple to use. The mobile phone as a central communication device for business is over-hyped and is not yet reflected in the views and behavior of the wider end-user base. Many end users outside the classic "BlackBerry jobs" like senior management, financial analysts etc., do not perceive the value that the mobile phone brings to their business communications needs. 8 #IDCWP01R ©2009 IDC

The mobile phone, especially because it not yet viewed as a device that boosts productivity and efficiency, is most likely to see the most significant change in perception in the medium-term. IDC believes that its importance will increase dramatically. This view is supported by the fact that about half of all end users, 53%, believe that their reliance on mobile solutions will increase in the next 24 months. As handset manufacturers and mobile service providers work on ways to facilitate mobile email solutions and make them more affordable, both in the business and the consumer segment, IDC expects end users to embrace a similar usage pattern for mobile email as they have done for PC- and laptop- based email. Therefore, IT managers should focus on the desktop, the laptop, and the landline phone as core UC solution devices, while preparing to integrate mobility at relatively short notice. Moreover, the range of communications devices in use stresses the importance of an HQ network that is needed for non-voice–related traffic. Change in Communications Methods and Features The survey highlights that the majority of end users, 57%, expect the level of collaboration with colleagues in other cities and countries to increase in the next 24 months. Only 4% of end users expect the role of virtual teams and international collaboration to decline. The increase in collaboration will necessitate an increasing reliance on a UC solution based on an HQ network As pointed out above, nearly as many end users, 53%, believe that the reliance on mobile solutions will increase in the next 24 months. The need for mobile communications is driven by changing working patterns. Just under half of end users, 46%, believe that the number of times that they or their colleagues work outside the office will increase. Hence, IT managers should consider mobile solutions like WLAN or WiMAX or even femtocells and picocells to be part of emerging UC solutions. Actual Communications Methods and Features Used Versus Methods Wanted Comparing end-user responses about the communication methods they say they want to use with their actual usage of them reveals the scale of the potential for UC- style applications such as collaborative working and virtual teams. The survey suggests that the greatest potential is for a solution that allows the forwarding of calls to coworkers or business partners with all the relevant information attached. The difference between demand and supply stands at 26%, as Figure 4 indicates. The second largest opportunity, with a difference of 25%, is for solutions that enable audio, Web- or video-conferencing session setup with a single mouse- click. The possibility to instantly communicate with a coworker regardless of time, location, or method comes in third with a difference of 21%. ©2009 IDC #IDCWP01R 9

FIGURE 4 Actual Communication Methods Used Versus Methods Wanted as Expressed by End Users 100% 11% 89% 90% 21% 80% 26% 78% 70% 70% 64% 25% 60% 49% 50% 45% 38% 40% 30% 20% 20% 10% 0% Instant communication with Forwarding a call to a Accessing email, fax, and Set up of an audio, Web, or coworker(s) regardless of coworker or business voicemail from a single videoconference with a time, location, or method partner with all the relevant interface single mouse-click information attached Ways of communications used at work Ways of communications wanted at work Source: IDC, 2009 The ability to access email, fax, and voicemail from a single interface is most in demand, but has the smallest potential with a difference of 11%. This is because unified messaging is effectively already a decade old and fairly widely implemented. The extra demand relative to supply is hence smaller. The survey also compared the demand for and existence of communications features at work. As can be seen in Figure 5, the highest unsatisfied demands among end users are for reliable data backup and high fixed and mobile voice quality. However, this demand has been recognized by IT departments and most businesses have solutions in place to address them. 10 #IDCWP01R ©2009 IDC

FIGURE 5 Demand For and Existence of Communication Features at Work as Expressed by End Users 90% 25% 80% 77% 78% 77% 22% 22% 20% 20% 70% 66% 66% 19% Desire for less existence of features 63% 63% 60% 59% 60% 58% 16% 14% 15% 50% 12% 13% 44% 41% 42% 11% 40% 40% 38% 10% 10% 31% 30% 20% 20% 20% 18% 5% 10% 10% 0% 0% Automatic High fixed Reliable back Convergent High mobile Conference Click-to call Collaboration Presence Single-sign least-cost voice quality up of data device for voice quality calls session tools functionality on routing making calls through mouse click Technical features available at workplace Technical features wanted at workplace Difference Source: IDC, 2009 When comparing demands and the availability of features to address them, the largest difference emerges in other areas. 42% of end users want single sign-on, but only 20% say they have this feature available to them at their workplace — a difference of 22%. 63% of end users want presence functionality, but only 41% say they have access to it — also a difference of 22%. A difference of 20% can be found for collaboration tools, and there is a 19% difference for click-to-call features. IT managers should work on solutions that target these high-difference features. These features also offer providers a real potential for differentiation. ©2009 IDC #IDCWP01R 11

BENEFITS Pain Points and Issues IDC believes that IT managers turn to UC primarily to address short- to medium-term pain points. The most important of these is the deployment of a more cost-efficient telecoms infrastructure, as Figure 6 shows. IDC believes that the macroeconomic financial crisis will accelerate the pursuit of this goal. The second most important pain point that IT managers need to address is the establishment of a better quality of service for their company's communications infrastructure. In addition to quality connectivity, this means fewer breaks between various communications devices, applications, and solutions through more seamless communications. Telecoms service providers are well positioned to address the two most important drivers for UC projects due to their deep network management skills. FIGURE 6 Pain Points and Issues Addressed by UC Solutions in the Minds of IT Managers Cost reduction through more efficient telecoms 10.0 infrastructure Better quality of service (QoS) 9.1 Improve customer service 8.2 New ways of working to increase productivity 5.0 Focus on firm's core competencies 4.5 Conscious strategy to alter business processes 3.2 - 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 Importance (1–10: 10 = most important) Source: IDC, 2009 The third most important pain point for IT managers concerning UC is the desire to improve customer service; i.e., better customer acquisition and retention mechanisms. Only half as urgent as the prime concern is the desire to establish new ways of working to increase productivity. Less important still is the role of UC to alter business processes. 12 #IDCWP01R ©2009 IDC

Integration of Communications and Business Processes Figure 6 highlights, in IDC's view, that the long-term concept of communications- enabled business processes (CEBP) is still in its infancy in Germany. This observation represents a disconnect between the end user/IT manager and provider viewpoints. Many providers and analysts are preaching the value of UC as an enabler and transformer of business processes. However, this message has not yet been recognized or accepted by the target audience. Although IT managers list short- to medium-term issues as the main reasons for rolling out UC solutions, IT managers do clearly recognize the long-term implications of UC for company communications. Nearly two-thirds of IT managers, 69%, say that communications will be integrated into their firms' business processes. Ultimately, the concept of communications-enabled business processes is most likely to alter not only communications infrastructures but also communications cultures. Only one-third of IT managers see the need for communications to be siloed beside other silos like CRM and ERP in the future. Vision for Communication Solutions The feeling that future communications solutions will alter things significantly is shared widely. Only a small minority of end users and IT managers, 27%, believes that everything will stay the same. The vision of end users and IT managers in terms of what communications solutions might achieve centers on improved customer relationship management (61%), productivity enhancements (58%), and collaborative working (53%). CHALLENGES AND CONCERNS Main Challenges to UC There is a major human concern among end users regarding future communications solutions. While end users and IT managers clearly recognize the benefits UC and future communications solutions can deliver, 50% also fear that UC will result in more stress because everyone will have to be available at any time. This fear is most pronounced among the older employees (62% among the 50+ age group). It is the responsibility of businesses with UC solutions to introduce UC in a manner that shows the potential to reduce rather than increase stress levels — if used correctly. As Figure 7 highlights, for IT managers, upfront investments in UC solutions constitute the biggest challenge. The global financial crisis and more pressing calls for greater cost control further underline this challenge. It is therefore essential for IT managers to get their total cost of ownership (TCO) and return on investment (ROI) pitch right when discussing the UC solution with the their firms' CEO or COO. ©2009 IDC #IDCWP01R 13

FIGURE 7 Main Challenges to UC in the Eyes of IT Managers Too costly 10.0 Staff does not see value of UC / no demand from end users 8.8 Too complex to implement 7.6 Technology not ready yet 7.6 Budget for UC project has been put on halt as result of global 7.6 financial crisis No single department has clear responsibility to take on UC 6.0 Top management (CEO, CFO, COO) 5.7 Uncertainty within IT department regarding benefit of UC 3.6 - 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 Importance (1–10: 10 = most important) Source: IDC, 2009 However, if IT managers can provide a credible TCO or ROI story, the headline investment cost of the UC solution can melt into the background. Both UC providers and IT managers have to demonstrate clear business benefits and a lifetime cost of the solution. Moreover, IDC believes that UC providers and IT managers must work on new charging models. IDC sees leasing models for UC — "UC on credit" or "test free now and pay later" approaches — as the most obvious ways to address the funding challenge of UC projects. The second most pressing challenge for UC adoption is that end users do not see the value of UC. In order to counter low demand from end users, both UC providers and IT managers' must engage in additional education and training that makes UC benefits more explicit and relevant to end users. This form of "UC lobbying" can take many shapes, involving solution road shows, executive events, conferences, roundtable workshops, end-user forums, white papers, or traditional advertising. IT managers ranked uncertainty within the IT department regarding the benefit of UC as the lowest challenge. This demonstrates that IT managers themselves do not represent a barrier to UC deployment and adoption. 14 #IDCWP01R ©2009 IDC

Aspects End Users Dislike About Their Firm's Communications Solution When end users are asked about the aspects of their firm's communication solution that they dislike, they point to a scenario where they have to download or buy their own communications solutions in order to do their work. This issue clearly highlights a problem in the communications policy of several businesses. However, IDC believes that IT managers can exploit this concern by designing complete UC solutions that preempt such scenarios. Essentially, IT departments should turn into more service- oriented divisions. The second most important of end users' dislikes about their firm's communications solution is overly strict security policies. This is probably being driven by the fact that many companies do not allow their staff to use sites like YouTube, Skype, MySpace, etc. Given that the 20–34 year old group uses work PCs a great deal, the most effective UC solutions should strike a balance between the end user's desire for real freedom to communicate and legitimate corporate security concerns. IDC believes that businesses that ignore or downplay such issues during the UC planning process are unlikely to reap all the potential benefits that UC promises. End users' third greatest dislike relates to devices that are perceived to be unfit for purpose. IDC believes that functionality ignorance rather than faulty technology is at play here. In other words, many employees only use a fraction of the capabilities offered by their business communication devices. Therefore, one of the best ways to address this issue is to improve training. Businesses with UC solutions should encourage employees to investigate the functionality of their devices and offer as much training as possible. Businesses with UC solutions do not get exposure to the "prosumer" community, where many innovative UC applications are being used in a semi-professional manner. These relationships are often owned by carriers or retailers. Therefore, it is an important task to try and get UC usage-related information across at the point of device introduction. End users hate having to try multiple communications channels to find people when they need them. This aversion is particularly pronounced among the 20–34 age group. UC offers great potential to address this concern. The survey indicates that female employees are potentially more demanding of their firm's communication solution than their male colleagues. The relative discrepancy between male and female employees is particularly pronounced in two areas: female end users dislike communications systems that have too many features that they do not use; and female end users dislike having to manage multiple sources of communications more than their male colleagues. UC offers great potential to address these concerns. Technical Issues That Irritate End Users When end users are asked which technical issues irritate them the most, applications that run very slowly or crash come up top, with female users being slightly more irritated by this phenomenon than their male colleagues. Slow email is the second most irritating technical issue facing end users. ©2009 IDC #IDCWP01R 15

Male email users seem to be less stressed by slow email than their female colleagues. These observations highlight the benefits of a UC HQ network infrastructure. Males are more aggravated by poor mobile voice quality than their female colleagues. Similarly, males get more annoyed than females when having to handle multiple telephone numbers for multiple devices. Although not among the most infuriating technical issues, the gender gap is the widest when it comes to being able to handle telephone interfaces. Males are more disturbed by a fixed or mobile telephone interface that is difficult to handle than females. In simple terms, females tend to have a preference for speed, while males demand simplicity. The survey highlights that older employees find poor fixed-voice quality a great deal more irritating relative to their younger colleagues. IT managers who implement VoIP as part of the UC solution should pay particular attention during the VoIP migration to this employee segment since they are potentially some of the strongest UC advocates within the organization. IMPLEMENTATION Status of UC Implementation and Plans for UC While IDC has seen a rough doubling of UC installations by German businesses between 2007 and the end of 2008, the total number of businesses that have installed UC remains a minority at 36% as can be seen in Figure 8. Of the 64% of businesses that report that they have not yet installed a UC solution, only 21% have plans to implement UC — and two-thirds of those have no short-term plans but a 1–2 year time horizon or longer for their UC rollout plans. Put differently, the tangible potential for UC in the medium term is only around 57% of businesses, with the remainder having no concrete plans for UC. UC providers and IT managers clearly need to focus on making a stronger business cases regarding the benefits that UC can deliver. 16 #IDCWP01R ©2009 IDC

FIGURE 8 Actual UC Implementation and Plans for UC Percentage of UC implementations by companies No 64% Plans to implement UC in company Yes 36% Yes 21% Timing of UC implementation No 79% < 6 months 13% 6 to 12 months 13% 12 to 24 month 74% Source: IDC, 2009 Measuring UC Performance Companies place the availability of the UC solution ahead of all other key performance indicators (KPI) for measuring UC performance, as can be seen in Figure 9. IDC sees this as a key opportunity for telecoms service providers and telecoms equipment vendors to differentiate their UC solutions from those offered by software firms. The end-user expectation for availability of voice communications is set at 100% — the legacy of the PSTN/TDM world. Any software-based UC applications are only as reliable as the network infrastructure they depend on. The gradual migration by companies towards an IP-based network infrastructure and the migration towards VoIP means that communications are becoming an integral part of a firm's IT infrastructure. IDC believes that a main challenge for software firms with UC offerings is to meet "traditional voice expectations" of 100% availability. End users will never tolerate the "reboot your phone" approach as a viable way to resolve voice communications issues. Telecoms service providers and telecoms equipment vendors should therefore score well in the "availability of the UC solution" area against UC competition from software firms. ©2009 IDC #IDCWP01R 17

FIGURE 9 Key Performance Indicators for Measuring of UC Performance Availability of the UC solution 10.0 Client/customer satisfaction 9.4 Direct IT and telecommunications cost savings 5.9 Higher return on assets 2.9 Employee productivity increase 2.4 Number of dropped calls reduced 1.2 UC user satisfaction 0.6 Reduced capex 0.6 - 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 Importance (1-10; 10 = most important) Source: IDC, 2009 The second most important KPI for measuring UC performance relates to client and customer satisfaction. This is linked to the observation that one of the most important pain points that IT managers need to address is the desire to establish a better quality of service for their company's communication infrastructure. If a UC solution fails then it reflects badly on the brand of the firm using UC. Client-facing UC in this sense is a "mission critical" solution and should not be underestimated by IT managers. Departments Buying UC In 52% of instances, the finance department is involved in purchasing the UC solution. It is therefore essential for IT providers to get the TCO and ROI pitch for the UC solution right. The macroeconomic financial crisis may turn this into an even more pressing issue. In about 45% of instances the procurement department is still involved when purchasing the UC solution. It would be wise for IT managers to keep procurement firmly involved in any selling process. In many respects, the relationship with procurement should be among the most important relationships, and maintaining it should be a priority. Importantly, operational departments are involved in 41% of UC purchases. This figure increases to 66% for those companies preparing to buy UC solutions. Hence, IT managers must be able to demonstrate how UC benefits operational requirements and helps to improve business processes. This point is particularly important given what we mentioned above about the disconnect between providers and users in terms of UC and business processes. 18 #IDCWP01R ©2009 IDC

The selling process of UC solutions therefore throws up many more challenges than the traditional communications portfolio. Many more departments are involved. Often these departments fail to cooperate and exchange information regarding the UC implementation, thereby potentially slowing down or undermining an entire UC project. IDC sees a role for IT managers as central negotiators between various internal departments and UC providers. In the marketplace IDC observes that the successful UC provider tends to go into a large corporate customer as a team. That team usually contains someone who is going to lobby the sourcing department or the ICT decision- makers. The team also comprises a technical account manager who goes in and speaks to the operations manager to explain the benefits of the solution, the differentiators, and the kind of back-office support they can expect from the provider. In other words, successful UC providers make sure they hit as many people as they need to, and they rely heavily on personal relationships across various client- departments. Services Needed to Implement UC Solutions The vast majority of IT managers, 85%, state that they require some form of consulting services before or during their UC implementation. Of course, UC covers many different facets of ICT. Telco service providers are particularly well positioned to provide consulting services in the networking space, such as network analysis and network planning, as well as network rollout. All UC providers should build up sufficient skill sets in this space to address this consulting requirement by IT managers at least partly by themselves, without the help of third-party consulting firms. The majority of IT managers, 65%, report that they want help with UC integration. Telco service providers can offer network-related integration services, such as integrating various network components. While systems integrators are positioned to take on a central role concerning many IT-related integration issues during the UC rollout, and UC solutions with network components rely on network-related integration as well. Moreover, non-SI UC providers should build up a sufficient systems integration understanding to mediate between their enterprise clients and any SI partner that they might have. Assistance with managed services is required by 43% of IT managers. Although managed services are of less pressing concern than consulting or integration, a professional managed services portfolio still constitutes a competitive advantage for UC providers. Outsourcing of Communications Requirements Over two-thirds of IT managers, 73%, state that parts of their company's communications infrastructure are outsourced. Of those firms that engage in outsourcing of communications elements, mobile device management ranks highest, followed by fixed-device management. Network infrastructure components are also outsourced. As the survey highlights, the next stage for the enterprise market will be to use UC to communicate better with their business partners (B2B) and their customers (B2C). This will come in the form of Web 2.0 and video applications, all driven though a consolidated infrastructure ©2009 IDC #IDCWP01R 19

stemming from the IP PBX. Conversations with enterprise IT managers reveal that deployment of UC is a topic of intense interest. However, swapping older on-premises equipment with new equipment to support UC is not popular, especially in the economic downturn. A hosted IP PBX solution can deliver UC applications with lower upfront capital investment. Nearly 40% of IT managers say that they can envisage embracing the concept of communications as a service (CaaS) in the next one to two years. UC providers and IT managers should prepare offerings to cater to these requirements as they emerge. IT managers value outsourcing primarily as a way to help them focus on their core competence by freeing up management time. The second most valued aspect of outsourcing for IT managers is to facilitate improvements in IT service delivery and support business development. These aspects boost the IT department's internal perception as a source of benefit and value via the creation of an efficient communications infrastructure. Types of Companies Seen as UC Providers IT managers perceive telecoms equipment providers to be particularly well positioned to provide UC solutions, with 45% of IT managers placing them in the category of prime UC providers. SIs and software firms follow in second and third place with 24% and 17%, respectively. Telecommunications service providers, meanwhile, are seen as prime UC providers by only 14% of IT managers. IDC believes that this perception does not paint the full picture, however. Telecommunications service providers play a central role for UC projects, as they constitute the main channels to market for telecoms equipment providers. IDC believes that telecommunications service providers should intensify their partnerships with telecoms equipment providers to leverage their respective strengths in the network design and management/maintenance space. Moreover, the fact that many telecommunications service providers have already begun to beef-up their services divisions, including managed services, should alter the perception of them among IT managers as more than just plain-vanilla connectivity providers. Telecommunications service providers are increasingly also network services providers. As such they are key players in the UC solution provision. 20 #IDCWP01R ©2009 IDC

CONCLUSION UC is about creating a heterogeneous communications infrastructure. End users have clear personal preferences. In order to attain high usage rates and boost the return on investment of a UC solution it is essential to address these preferences as well as train end users how to use the UC solution. End users are technology agnostic in so far as they already prefer to use communications solutions that are embedded in the wider IT environment of their firms. Already, the majority of end users a perceives IT-based communications as the most valuable communications applications. Importantly, a high-quality network infrastructure is the prerequisite of a high-quality UC solution. Many aspects driving end-user demand for and concerns regarding communications relate to quality of service issues. Telecoms service providers are well positioned to provide and manage a high QoS network infrastructure with service level agreements. UC is in most instances, a long-term project affecting a firm's communications culture and transforming business processes. IT managers should therefore choose a reliable partner as UC provider. Again, telecoms service providers are well positioned to act as reliable partners for UC projects, given their networking expertise, financial strength, and large partner network with hardware vendors. Copyright Notice External Publication of IDC Information and Data — Any IDC information that is to be used in advertising, press releases, or promotional materials requires prior written approval from the appropriate IDC Vice President or Country Manager. A draft of the proposed document should accompany any such request. IDC reserves the right to deny approval of external usage for any reason. Copyright 2009 IDC. Reproduction without written permission is completely forbidden. ©2009 IDC #IDCWP01R 21

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IDC (sponsored by COLT Telecom): High Quality Network: A Prerequisite for Unified Communication - Germany

by Alessandro Vigilante on Aug 11, 2009

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IDC (sponsored by COLT Telecom): High Quality Network: A Prerequisite for Unified Communication - Germany — Document Transcript