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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  • 21% of companies had more than 500 staff,, 5% had more than 10k staff, 79% had less than 500, 33% had less than 100 – bulk was 100-500 employees Fairly equally representation across industries with 16.5% each vertical UC deployment: 30% have already; 28% in process; 4% planning/evaluating; 18% have no plans
  • Approx half are CEO, rest other C-level and VP/managers
  • Interestingly healthcare & hospitality more focused. The others fairly even.
  • Approx 40% or greater penetration for all apps within our survey base.
  • Remember – around 42% of total sample use UC clients & IM. At frost we see unified clients and IM/presence as foundational UC solutions components. Apparently very important to our survey base.. Similar set of benefits sought- , improved mobility, cost reduction, , improve customer service, accelerate decision making Note that UC client -*single point of access was ranked 4 th benefit UC client popular in finance companies, not so much in hospitality. All company sizes and sectors see IM as very important.
  • Remember –around 50% of total sample use mobile ext. Both large & Small/Mid rated mobile ext as important Retail among highest, IT/telecom lowest – but IT/telecom say use for collab across distributed teams essential Cost reduction 7 th highest rated driver but small portion of comms budget allocated to mobile ext - (58% have <10% budget allocated to mobile ext; 24% have 11-20% allocated)
  • Remember – approx 50% of total use A/W/V conf. Approx 40% of total use telepresence. Video less extensively used throughout orgs, used more by senior management. Half plan to increase use of all apps next 12mos. All conf apps deployed for pretty much the same benefits/drivers, though prioritized slightly differently. (Reduce cost, Improve work/life balance, Enhance mobility, Improve collab) Except TP where value props around environmental benefits seem to be resonating. Top restraints for all: cost, implementation difficulty, user training.
  • Numbers based on total survey sample. As expected single vendor currently has higher penetration in Small/Mid where there are fewer in-house support resources. Participants report a fairly even mix of in-house and outsourced (VARs, vendors, telcos & SIs) implementation and management services. Note large accounts plan to integrate their multi-vendor solutions more tightly, as well as seek single source solutions. In 12-24 months survey participants anticipate increased in-house support Small/Mid expect 1% increase, large accounts expect 16% increase Note large accts plan greater increase of in-house support.
  • Numbers based on total survey sample. Survey and results speak only to comms virtualization. Still small penetration but likely to grow as part of buy cycle for upgrades, refreshes.
  • Numbers based on total survey sample. Note driver – re-assign IT/telecom staff. Not reduction but re-allocation. Note restraint – businesses think existing staff better equipped to support b/c better understand their company needs than 3 rd party can.
  • Numbers based on total survey sample. Surprising that 29% say they’ve implemented. Nearly as many in process. More about this later. Highest penetration in regulated industries.
  • Remember approx 43% of total sample use social media and teamspaces. There isnt much difference in terms claimed usage and value perceptions between large & small/mid accounts. Apparently high penetration for both types of apps. Are these business grade or consumer services/apps? 90+% think both are important and use exceeds expectations. *travel reduction ranked among lowest drivers Top restraints: lack of user training, difficult to implement, security, perceived value Small budgets: approx 70 % of participants have <15% UC budget allocated But 52% plan to increase budgets in 12-24 months
  • Macro findings based on total sample. Reduce travel actually rates among the lower priorities.
  • Frost and Sullivan market engineering reports –forecasts reflect customer plans to increase/maintain spending over the next few years. This research validates trends on a wider scale than our end user survey.
  • ERA A&T |V 1 |R SV/AM |E AM |A
  • 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 ( www.gil-global.com ) </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>( http://www.frost.com/growth ) </li></ul><ul><li>Register for Frost & Sullivan’s Growth Opportunity Newsletters and keep abreast of innovative growth opportunities ( www.frost.com/news ) </li></ul>
    25. 25. Your Feedback is Important to Us <ul><li>Growth Forecasts? </li></ul><ul><li>Competitive Structure? </li></ul><ul><li>Emerging Trends? </li></ul><ul><li>Strategic Recommendations? </li></ul><ul><li>Other? </li></ul>Please inform us by taking our survey. What would you like to see from Frost & Sullivan? Frost & Sullivan’s Growth Consulting can assist with your growth strategies
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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