A Tipping Point in Enterprise Communications and Unified Communications

20 Oct 2013

Microsoft Claims Global Voice Line Shipment Leadership

Microsoft posted a blog entry today claiming that Microsoft is now the global leader in enterprise voice telephony line shipments (for customers with 400+ lines). Microsoft bases this on their internal license shipment data for Microsoft Lync with the Plus CAL, the Client Access License which provides the Enterprise Voice functionality on Lync. Microsoft compared their internal data to the current line shipment report from the T3i Group, which includes the InfoTrack service. Lync users on Office 365 are not included in these internal license shipments.

This is pretty important news both for enterprises and for the industry. The news reflects the trends we have been highlighting here at UCStrategies for the past four or five years. Let's review those trends.

1. UC, not Voice is driving enterprise communications purchases. For several years, our annual commentary on the Gartner Magic Quadrant for Corporate Telephony has emphasized Gartner's notation that Corporate Telephony decisions are being heavily influenced by Unified Communications (UC) capabilities. This is also indicated by the evolution of the IP PBX vendors' licensing programs; most core IP PBX license packages now include some amount of non-voice capabilities - at least IM, presence and voice/unified messaging, and often video and some document sharing functions.

Microsoft started their enterprise communications business by building on their franchise in e-mail (Exchange/Outlook) and document sharing (SharePoint) and created a leading position in IM/presence beginning with Live Communications server in 2001. The addition of enterprise voice, via Office Communications Server in 2007, was the natural path to today's Microsoft blog post.

2. Voice is best for the user when integrated into the users' primary business applications. From the beginning of the UC market evolution, UCStrategies has emphasized the UC definition of, "Communications integrated to optimize business processes." In other words, we have always predicted that voice will be most effectively used (i.e. optimized) when it is associated with the task, process, or collaboration which the user or their employer must perform. Further, achieving optimal results is most likely when the best communications mode is selected for each task, process or collaboration. We see so many examples of this such as web pages replacing voice, or IM being the first point of contact for a collaboration.

In the past few years, we have highlighted many examples of how communications is being built into the users' primary business applications, both their UC-U (User Productivity) applications, such as Microsoft Outlook/Office or IBM Connections or Google Apps, and their UC-B (Business Process) applications such as Salesforce.com, Cerner Health Care, SAP CRM, or Microsoft Dynamics.

In Microsoft's case, the most important integration of enterprise voice into user applications has been with Microsoft Outlook, the leading enterprise e-mail product. Actually, with Lync, Microsoft Outlook becomes the user's communications dashboard, orchestrating presence, IM, voice and video into that "all day" application interface. The competitors realize the importance of this, of course, as Avaya, Cisco, Mitel, NEC and Unify all offer some form of plug-in to Microsoft Outlook and as Cisco even made a venture at one point into the e-mail market with their purchase of PostPath.

Per my recent post on User Experience, the expectation is for more, not less, integration of communications into the user experience, likely sustaining Microsoft's growth in enterprise voice line shipments.

3. Customers will buy more than one voice engine, as justified by their use cases or user profiles. This is a very important point and one that should give the entire industry some reason for an optimistic view of Microsoft's blog post. Increasingly, we see that enterprises are willing to have more than one communications platform in their architecture for many good reasons.

  • In some cases the enterprise's Use Cases or Usage Profiles, about which UniComm Consulting has provided numerous posts and suggestions, will call for different solution sets for the specific Usage Profiles.

  • In many cases, as shown in the "UC Without A New IP PBX" RFP at Enterprise Connect, the highest ROI and fastest time to benefit is available from an "overlay" approach in which the new UC solution for specific Usage Profiles is installed in parallel with the existing PBX.

  • In almost all cases, the new UC system will, or must, co-exist with some portion of the existing PBX or IP PBX system, at least during a transition and perhaps for many years.

All of these examples will result in the enterprise purchase of more voice licenses than in the past. It is not inconceivable that UC-B applications could produce three, four, or more voice licenses per user within many of the Use Cases or Usage Profiles that are now visible. Those vendors who argue for a "single call control plane" in the enterprise should re-examine their viewpoints.

Microsoft's blog post may be the tipping point in the UC market that everyone was watching for. After reviewing the free sample InfoTrak for Enterprise Communications (from 2009), it appears that market leadership would represent between 10 percent and 15 percent of the global shipments of enterprise voice lines. Recent market share reports have shown Microsoft with around 5 percent of the market, but if those are based on "deployed" seats, then license shipments could easily exceed 10 percent of the market, since another InfoTrak survey from July 2013 shows that both SMBs and large enterprises own about twice as many Plus CALs (required for "enterprise voice") as they have deployed. Thus, the Microsoft post is not startling as to the claim, but does suggest a tipping point in customer adoption of voice communications software.

As suggested in the May 2013 post about industry revenues and profits, much more growth in the industry will come by finding new value to add to enterprise business processes and workflows rather than just battling over the replacement of one phone line per employee. Today's Microsoft news seems to show the effectiveness of such a strategy.

It seems we have passed a tipping point. It will be a "new game" and the winners will be those enterprises who figure out how to apply these new communications tools to "optimize" their products and services. Best of success to everyone - the sky may be the limit in this new UC market.


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