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Entering a New Era of Communications: Preparing Your Organization Amidst a Tumultuous Environment


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An examination of the market for and adoption of enterprise communications, including virtualization and cloud computing

An examination of the market for and adoption of enterprise communications, including virtualization and cloud computing

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  • 1. Entering a New Era of Communications Preparing Your Organization Amidst A Tumultuous Environment Vanessa Alvarez, Industry Analyst and Alaa Saayed, Industry Analyst November 19, 2009
  • 2. Agenda The State of the Market Technology Roadmap General Trends IP Telephony Endpoint Market Conclusion and Recommendations <GPS> 2
  • 3. Economic Crisis: Factors Contributing to Decline U.S. Unemployment Rate (%) •U.S. Unemployment Rate: 10% 12.0% •GDP: Declined in 2H08 and 10.0% 9.7% 9.8% 10.2% continued to decline 1H09 9.4% 9.5% 9.4% 8.9% 8.5% 8.0% 8.1% •Most technologies had great 7.6% earnings for 1H09, but came 6.0% from cutting, not revenue growth 4.0% 2.0% 0.0% Source: U.S. Bureau of Economic Analysis <GPS> 3
  • 4. An Economy in Crisis Impacts Adoption of Enterprise Communications Enterprise Telephony Market: Shipment Forecasts (World), 2009-2014 54,000,000 8 52,000,000 6 G ro w th R ate (% ) 50,000,000 4 48,000,000 2 46,000,000 0 44,000,000 -2 Units 42,000,000 -4 •Enterprises are delaying 40,000,000 -6 their purchasing 2007 2008 2009 2010 2011 2012 2013 2014 •Equipment lifetime is being extended units grow th rate CAGR: 3.1% •IP migrations going forward Source: Frost & Sullivan will drive growth <GPS> 4
  • 5. Technology Roadmap: Drivers to Adoption Communications On Demand (Cloud Computing) CaaS Virtualization Software based Dynamic resource allocation; Telephony flexibility; on demand billing Reduction of physical Cost savings; servers; flexibility; Reduction of on resource efficiencies premise hardware 2008-2009 2010-2011 2012-2013 Source: Frost & Sullivan <GPS> 5
  • 6. IT and Telecom Continue to Converge •Amazon •Cisco •Google •Avaya •TerreMark •Siemens Enterprise Group •3Tera •Mitel Source: Frost & Sullivan <GPS> 6
  • 7. A Market in Convergence: Virtualization Finance HR Oracle SAP Voice Video App App E-Mail VM VM VM VM VM VM VM virtualization infrastructure •The ability to power multiple virtual machines on one server •Applications can share the necessary resources on demand • IT environment is moving in this direction Source: Frost & Sullivan <GPS> 7
  • 8. A Market in Convergence: Cloud Computing Clients Services Software as a service, Google Apps, IBM’s LotusLive Application Platform as a service Microsoft Azure, Google App Engine Platform Infrastructure as a service Amazon, GoGrid, Rackspace Amazon, GoGrid, Rackspace Infrastructure and Storage Source: Frost & Sullivan <GPS> 8
  • 9. A Market in Convergence: Enterprise 2.0 Has Emerged as the Next Wave of Productivity Formal Use of Social Networking/Web 2.0 Initiatives (N=1439) Yes No 57% 43% Source: Frost & Sullivan <GPS> 9
  • 10. IPT Endpoint Market
  • 11. Business Communication Endpoints PBX System Analog Phones Digital Phones IP Phones Corded Devices Analog Deskphones Digital Deskphones IP Deskphones IP Devices Analog Cordless DECT VoWLAN Phones Cordless Devices Single-Mode IP DECT/SIP DECT PC Softphones Desktop & IP Clients Mobile Soft Mobile FMC Clients Clients UC Clients Source: Frost & Sullivan <GPS> 11
  • 12. IP Endpoint Unit Shipment – General Shift from Hardware to Software 2008 2015 19.5 Million 85.0 Million FMC Clients Total IP2.4% C FMC Endpoint Snapshot 2.4% UC C UC Clients FMC C FMC Clients 3.8% 24.9% PC IP Desk Softphones Phones 7.0% 40.6% Cordless IP IP Desk Phones Phones 3.4% 83.5% UC ClientsC UC 29.5% Cordless IP PC Phones Softphones 2.6% 2.4% IP Desk Phones: Growth/Maturity FMC Clients: Introduction/Growth IP Desk Phones: Decline FMC Clients: Growth PC Softphones: Maturity/Decline UC Clients: Introduction/Growth UC Clients: Growth PC Softphones: Decline Cordless IP Phones: Growth/Maturity Cordless IP Phones: Decline Source: Frost & Sullivan <GPS> 12
  • 13. Total IP Endpoint Trends - Move from Diversification to Integration and Simplicity Integrated, Multi-purpose Diversification Endpoints Simplicity + Mobility Multiple Types of IP More Intelligent IP Fewer Devices – With Endpoints Targeted at Endpoints Integrating Transformable Form Different Users & Multiple Functionalities: Factors – Simplifying Platforms: Communications : • IP Desk Phones • Multiuse Headsets • Desktop Softphones • Advanced UC Clients • Mobile Communications • VoWLAN Single-mode Devices with a Desktop Phones • Advanced Mobile Clients Docking Station • Basic UC Clients • IP/SIP DECT • Basic FMC Clients • Basic Headsets IP Telephony Hype Era IP Telephony Plateau Era Future Enterprise Comm. Era Last 5 to 7 Years Present and Next 3 to 5 Years Beyond 5 Years Source: Frost & Sullivan <GPS> 13
  • 14. IP Endpoint Opportunity Assessment PC Desktop Softphones Demand Potential: Very Low Revenue CAGR 2008-2015: (9.6%) Demand Factors: Absorption of softphone capabilities in advanced UC Clients. F&S Recommendations: Focus on development of advanced UC clients, the implementation of various migration programs and campaigns and limit (not discontinue) the use softphone-only solutions to specific groups (e.g. telecommuters, SMBs, etc.) UC Clients Demand Potential: Very High Revenue CAGR 2008-2015: 45.7% Demand Factors: Continuous investments in development of UC-related applications, growing number of virtual workers, and adoption of UC clients. F&S Recommendation: Allocate present resources to enhance UC offerings, strive for increased partnerships, develop strategic bundling, offer value-added applications and integrate with Enterprise 2.0 tools. <GPS> 14
  • 15. IP Endpoint Opportunity Assessment VoWLAN Single-mode & DECT Phones Demand Potential: Medium Shifting to Low within 4 to 6 years Revenue CAGR 2008-2015: VoWLAN Single-mode: 20.9%; DECT: 0.7% Demand Factors - Near-to-medium-term: Mainstream adoption of WLAN infrastructure and device penetration into new vertical segments. Demand Factors - Medium-to-long-term: Proliferation of advanced FMC clients. F&S Recommendations: Focus on key verticals, evidence of ROI and application integration. Advanced FMC Clients Demand Potential: Very High Revenue CAGR 2008-2015: 61.4% Demand Factors: Growing number of road warriors and mobile workers, escalating mobile costs, the need for increased productivity. F&S Recommendations: Allocate present resources on extending enterprise communications through mobile devices. Offer multiple FMC flavors. Strive for continued support of mobile operating systems, prosumer device models and prosumer service delivery methods. <GPS> 15
  • 16. IP Endpoint Opportunity Assessment IP Desktop Phones Demand Potential: Medium Shifting to Low within 4 to 6 years Revenue CAGR 2008-2015: 11.4% Demand Factors - Near-to-mid-term: Decline in price points, adoption of SIP and general productivity gains. Demand Factors - Long-term Demand: Shift from hardware to software. F&S Recommendations: Focus resources on SIP, open-standards phones, and simple and easy-to-use, yet feature-rich devices. Enterprise Headsets Demand Potential: Medium Shifting to High within the next 3 to 5 Years Revenue CAGR 2008-2015: 4% Demand Factors: Need for multi-tasking and device integration F&S Recommendations: Focus on the development of multiuse wireless headsets that integrate multiple present IP endpoints and standardize voice quality across multiple UC apps at the headset level. <GPS> 16
  • 17. Strategic Considerations Enterprises must plan a Gradually Shift cohesive and holistic IT Investment Focus and communications from Hardware to strategy Software Enterprise Develop Mobility Evaluate the lifecycle Communications Strategies Based on of equipment, consider User Based Roles hybrid approach Success Strategies Work with your vendors to Increasingly Bet on Open ensure interoperability Standards Source: Frost & Sullivan <GPS> 17
  • 18. Global Perspective • 1,700 staff across every major market worldwide • Over 10,000 clients worldwide from emerging to global 1000 companies <GPS> 18
  • 19. Next Steps Request a proposal for a Growth Partnership Service or Growth Consulting Services to support you and your team to accelerate the growth of your company. ( 1-877-GoFrost (1-877-463-7678) Join us at our annual Growth, Innovation, and Leadership 2010: A Frost & Sullivan Global Congress on Corporate Growth, September 12-15 2010, San Jose, CA ( Register for the next Chairman’s Series on Growth: The CEO's Perspective on Market Research (December 1st) ( Subscribe for Frost & Sullivan’s Growth Opportunity Newsletter and keep abreast of innovative growth opportunities ( <GPS> 19
  • 20. Your Feedback is Important to Us What would you like to see from Frost & Sullivan? Growth Forecasts? Competitive Structure? Emerging Trends? Strategic Recommendations? Other? Please inform us by taking our survey. <GPS> 20
  • 21. For Additional Information Jake Wengroff Angie Montoya Corporate Communications Global Analyst Briefing Coordinator Business and Financial Services Marketing (210) 247-3806 (210) 247-2435 Craig Hays Elka Popova Sales Manager Research Manager Information & Communication Unified Communications Technologies 416-495-2699 (210) 247-2460 <GPS> 21