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Enterprise Communications in 2011 Buyers Reveal Top Priorities


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An analyst briefing presentation delivered by analysts Rob Arnold and Melanie Turek of Frost & Sullivan's Unified Communications & Collaboration practice.

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Enterprise Communications in 2011 Buyers Reveal Top Priorities

  1. 1. Enterprise Communications in 2011: Buyers Reveal their Top Priorities Rob Arnold, Senior Industry Analyst Melanie Turek, Industry Director Unified Communications & Collaboration North America Information & Communication Technologies Frost & Sullivan’s Growth Consulting can assist with your growth strategies
  2. 2. Agenda <ul><li>Year 2010 Highlights </li></ul><ul><ul><li>Hot Topics </li></ul></ul><ul><ul><li>Notable events </li></ul></ul><ul><li>End User Survey </li></ul><ul><ul><li>2010 North America Communications & Collaboration Products and Services </li></ul></ul><ul><ul><li>Mapping Hot Topics to Survey Results </li></ul></ul><ul><ul><ul><li>Mobility, UC, Conferencing, Video, Social Media, Collaboration, Best of Breed vs. Single Source Solutions </li></ul></ul></ul><ul><ul><ul><li>Drivers and Restraints </li></ul></ul></ul><ul><li>Frost & Sullivan Conclusions and Forecasts </li></ul>
  3. 3. 2010 UC&C Market Highlights
  4. 4. UC&C Hot Topics in 2010 <ul><li>Hot Topics </li></ul><ul><ul><ul><li>UC&C markets are exciting again </li></ul></ul></ul><ul><ul><ul><li>Cloud, CaaS/Hosted UC, mobility, tablets, video, virtualization, enterprise social networking, CEBP, multi-vendor interoperability </li></ul></ul></ul><ul><li>Notable Events </li></ul><ul><ul><ul><li>Cloud: Microsoft 365, Cisco HCS, Oracle Sparc, Juniper, SAP, Amazon </li></ul></ul></ul><ul><ul><ul><li>Mobility: Android , iPhone </li></ul></ul></ul><ul><ul><ul><li>Tablets: iPad, Cisco, Avaya, many others </li></ul></ul></ul><ul><ul><ul><li>UC: Lync launch, Lotus Foundations Reach </li></ul></ul></ul><ul><ul><ul><li>Social Networking: Siemens Enterprise, ALU/Genesys, Cisco </li></ul></ul></ul><ul><ul><ul><li>Consolidation: Avaya-NT, Cisco-Tandberg </li></ul></ul></ul><ul><ul><ul><li>Interop: UFIC creation, telepresence, Avaya, Alcatel-Lucent, others </li></ul></ul></ul><ul><ul><ul><li>Video: Polycom, LifeSize, RADVISION, Vidyo, others </li></ul></ul></ul><ul><ul><ul><li>CEBP: Siemens OpenScape Fusion, InIn IPA </li></ul></ul></ul><ul><ul><ul><li>Virtualization: Mitel, Aastra, Siemens Enterprise, others </li></ul></ul></ul>
  5. 5. End User Survey Scope Demographics of Survey Participants
  6. 6. End User Survey Scope <ul><li>2010 North America Communications & Collaboration Products and Services </li></ul><ul><li>200 companies across US & Canada </li></ul><ul><li>Company Size: </li></ul><ul><ul><li>21% have 500+ employees </li></ul></ul><ul><ul><li>79% have less than 500 staff </li></ul></ul><ul><li>Industries: </li></ul><ul><ul><li>Healthcare, Financial Services, Hospitality, IT/Telecom, Retail, Public Sector </li></ul></ul><ul><ul><ul><li>Each approx 16.5% of total </li></ul></ul></ul><ul><li>Budget allocation: </li></ul><ul><ul><li>Half of participants say IT budget (servers, storage, networking) <30% of total expenditure </li></ul></ul><ul><ul><li>Half of participants say UC&C budget is <20% of total expenditure </li></ul></ul><ul><li>Status of deploying UC: </li></ul><ul><ul><li>30% have already; 28% in process; 4% planning/evaluating; 18% have no plans </li></ul></ul>
  7. 7. End User Survey Scope (Cont’d) Survey Participant Titles/Roles
  8. 8. End User Survey Scope (Cont’d) Survey Participants with Large Focus on UC Strategy
  9. 9. End User Survey Scope (Cont’d) <ul><li>Survey Question: </li></ul><ul><ul><li>Which of the following communications and collaboration products or services are currently used within your organization (by employees)? </li></ul></ul>
  10. 10. End User Survey Mapping Marketing & Development Trends to End User Feedback
  11. 11. UC Clients and IM <ul><li>UC Client </li></ul><ul><li>62% use extensively company-wide, </li></ul><ul><li> 33% mainly by senior management </li></ul><ul><li>IM </li></ul><ul><li>71% use extensively company-wide, </li></ul><ul><li>23% mainly by senior management </li></ul><ul><li>90+% think IM and UC clients are important, use meets expectations & will increase/maintain usage next year </li></ul><ul><li>Top benefit: improve collab across dispersed teams </li></ul>
  12. 12. Mobility <ul><li>Mobility is HUGE </li></ul><ul><li>70% use mobile extension extensively across company </li></ul><ul><li>91% say mobile extension is important </li></ul><ul><ul><ul><li>both large and small/mid accounts </li></ul></ul></ul><ul><ul><ul><li>highest rating in retail; lowest in IT/telecom </li></ul></ul></ul><ul><li>All sectors plan to increase mobile extension use or maintain capacity in next 12 months </li></ul><ul><ul><ul><li>Drivers: work/life balance, customer service, collab across distributed teams </li></ul></ul></ul><ul><li>94% plan to expand or maintain current use of cell/mobile phones </li></ul>
  13. 13. Conferencing Use Importance 12 month plan Top Driver Audio 65% extensive company-wide 32% mainly senior management 60% very 34% somewhat 51% increase use 42% maintain use Reduce cost Web 65% extensive 30% mainly senior management 60% very 33% somewhat 52% increase use 40% maintain use Improve work/life balance Video 54% extensive 40% mainly senior management 62% very 35% somewhat 49% increase use 45% maintain use Accelerate decision making Tele-Presence 67% extensive 27% mainly senior management 58% very 38% somewhat 54% increase 40% maintain Environmental goals
  14. 14. Interoperability <ul><li>Survey Question: </li></ul><ul><li>How would you describe your communications infrastructure today (from a communications software point of view)? </li></ul><ul><li>Large Accounts Small/Mid </li></ul><ul><li>Multi-vendor & not integrated 48% 50% </li></ul><ul><li>Tightly integrated multi-vendor 45% 25% </li></ul><ul><li>End-to-end single-vendor 7% 26% </li></ul><ul><li>Survey Question: </li></ul><ul><li>How would you describe your communications infrastructure in 24 months (from a communications software point of view)? </li></ul><ul><li>Large Accounts Small/Mid </li></ul><ul><li>Multi-vendor & not integrated 29% 42% </li></ul><ul><li>Tightly integrated multi-vendor 60% 30% </li></ul><ul><li>End-to-end single-vendor 12% 28% </li></ul>
  15. 15. Virtualization <ul><ul><li>Adoption Status </li></ul></ul><ul><ul><li>32% have virtualized solutions; 25% are in process; 14% considering; 5% planning to deploy in next 12 months; 18% have no plans </li></ul></ul><ul><ul><li>Highest penetration in financial services, hospitality, IT/telecom sectors </li></ul></ul><ul><ul><li>Lowest in retail and public sectors </li></ul></ul><ul><ul><li>56% claim their virtualization administrator has influence on deployment; 26% have no such employee </li></ul></ul>
  16. 16. CaaS, Hosted UC&C <ul><li>44% of surveyed companies use hosted services </li></ul><ul><li>Hosted Trends: </li></ul><ul><ul><li>73% said hosted services utilization increased in past 12 months </li></ul></ul><ul><ul><li>76% anticipate utilization to increase in the next year </li></ul></ul><ul><ul><li>40% are likely to implement; 13% likely will not implement in next 12 months </li></ul></ul><ul><ul><ul><li>Top 5 Hosted Drivers: </li></ul></ul></ul><ul><ul><ul><li>Greater flexibility for growth/downsizing </li></ul></ul></ul><ul><ul><ul><li>Eliminate cost, hassle of multivendor integration </li></ul></ul></ul><ul><ul><ul><li>Lower TCO compared to CPE </li></ul></ul></ul><ul><ul><ul><li>Faster access to advanced capabilities </li></ul></ul></ul><ul><ul><ul><li>Re-assign current IT/telecom staff to other tasks </li></ul></ul></ul><ul><ul><ul><li>Top 5 Hosted Restraints: </li></ul></ul></ul><ul><ul><ul><li>Prefer to maintain full control </li></ul></ul></ul><ul><ul><ul><li>Significant investments in CPE </li></ul></ul></ul><ul><ul><ul><li>Too costly </li></ul></ul></ul><ul><ul><ul><li>Security concerns </li></ul></ul></ul><ul><ul><ul><li>Existing IT staff better understands needs </li></ul></ul></ul>
  17. 17. CEBP <ul><li>Survey question: </li></ul><ul><li>What is the status of integrating UC&C capabilities into business process software such as CRM, ERP, HR apps? </li></ul><ul><ul><li>29% of total have </li></ul></ul><ul><ul><li>24% in process, 18% considering, 21% not planning </li></ul></ul><ul><ul><li>Highest penetration in healthcare, financial services, IT/telecom sectors; lowest in retail and public sector </li></ul></ul>CEBP CEBP = Communications-Enabled Business Processes CRM/ HR/ ERP apps Line of Business software UC&C
  18. 18. Social Media & Teamspaces <ul><li>Large and Small/Mid customers use & view social media tools consistently </li></ul><ul><ul><li>67.5% use extensively </li></ul></ul><ul><ul><li>Top driver: improve customer service </li></ul></ul><ul><ul><li>Top restraint: lack of user training </li></ul></ul><ul><li>Team spaces usage & perception similar among Small/Mid and large accounts </li></ul><ul><ul><li>Used extensively by 60%, 33% mostly by senior management </li></ul></ul><ul><ul><li>Top driver: Increase collab across distributed teams; </li></ul></ul><ul><ul><li>Top restraint: implementation difficulty </li></ul></ul>
  19. 19. Frost & Sullivan Conclusions Mapping Trends to End User Feedback and Forecasts
  20. 20. Frost & Sullivan UC&C Conclusions <ul><li>Macro Findings </li></ul><ul><li>Approx half of businesses surveyed expect budgets to stay the same in next several years. Nearly half expected budgets to increase. Very few expect further cuts/decrease. </li></ul><ul><li>Businesses intend to invest in UC&C solutions to: </li></ul><ul><ul><li>Reduce cost compared to current capabilities </li></ul></ul><ul><ul><li>Improve collaboration </li></ul></ul><ul><ul><li>Increase productivity </li></ul></ul><ul><ul><li>Improve work/life balance </li></ul></ul><ul><ul><li>Enhance mobility </li></ul></ul><ul><ul><li>Reduce travel </li></ul></ul><ul><li>Survey participants indicated that they intend to increase their spending across all of these technologies starting in 2011. </li></ul>
  21. 21. Frost & Sullivan UC&C Conclusions <ul><li>Tablets in the enterprise </li></ul><ul><li>Used mostly for work & in the office space will reach 600K in 2010 </li></ul><ul><ul><li>This is almost 5% estimated of total tablet shipment in 2010 </li></ul></ul><ul><li>IP PBX market share </li></ul><ul><li>Avaya will retake #1 market share position for IP PBX lines shipped worldwide </li></ul><ul><ul><li>Avaya approx 7 million vs. approx 5.6 million for Cisco </li></ul></ul><ul><li>Interoperability and support </li></ul><ul><li>Customers expect more tightly integrated multivendor solutions as well as to deploy more single vendor solutions </li></ul><ul><li>This will allow greater reliance on in-house staff for support </li></ul><ul><li>CEBP </li></ul><ul><li>Recent research indicates immature market, with solutions ill-defined </li></ul><ul><li>Lack of uniform definition makes measuring adoption extremely difficult </li></ul><ul><li>Customers interviewed have mostly small & pilot projects </li></ul>
  22. 22. Frost & Sullivan UC&C Forecasts <ul><li>Audio Conferencing </li></ul><ul><li>World tabletop endpoints revenue CAGR (2009-2015): 16.9% </li></ul><ul><li>World installed endpoints revenue CAGR (2009-2014): 11.2% </li></ul><ul><li>World bridges revenue CAGR (2010-2016): 11.2% </li></ul><ul><li>North America services revenue CAGR (2009-2016): 2.6% </li></ul><ul><li>World Web Conferencing and Collaboration Market </li></ul><ul><li>$1.70B market in 2009 forecast to reach $4.12B by 2014 </li></ul><ul><li>5 Year CAGR of 19.4%. (includes web conferencing hosted services, on-premise web conferencing, web events, and remote support markets) </li></ul><ul><li>World Videoconferencing Systems and Services </li></ul><ul><li>$2.25B market in 2009 forecast to reach $5B by 2014 </li></ul><ul><li>5 Year CAGR of 17.4% </li></ul><ul><li>North America Enterprise Telephony Implementation & Management Services </li></ul><ul><li>revenue CAGR (2009-2016): 1.8% </li></ul><ul><li>World IP Desktop Phone revenue CAGR (2009-2016): 2.1% </li></ul><ul><li>World IP Telephony Line revenue CAGR (2009-2016): 3.5% </li></ul>
  23. 23. Appendix
  24. 24. Next Steps <ul><li>Request a proposal for our Growth Partnership Services or Growth Consulting Services to support you and your team to accelerate the growth of your company. ( [email_address] ) 1-877-GoFrost (1-877-463-7678) </li></ul><ul><li>Join us at our annual Growth, Innovation, and Leadership (GIL) 2011: Silicon Valley conference , September 11-14, 2011, Fairmont Hotel, San Jose, CA ( ) </li></ul><ul><li>Register for the next Chairman’s Series on Growth </li></ul><ul><li>Dec 20, 2010, Driving Innovation: The What, Why & How of Visions and Benchmarks </li></ul><ul><li>( ) </li></ul><ul><li>Register for Frost & Sullivan’s Growth Opportunity Newsletters and keep abreast of innovative growth opportunities ( ) </li></ul>
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  27. 27. For Additional Information Jake Wengroff Corporate Communications (210) 247-3806 [email_address] Twitter @JakeWengroff Craig Hays Director of Sales Information & Comm Technologies (210) 247-2460 [email_address] Melanie Turek Industry Director (970) 871-6110 [email_address] Twitter @melanieturek Rob Arnold Senior Industry Analyst (770) 436-7329 [email_address] Twitter @rwa_ca