Gartner Magic Quadrant for Unified Communications 2016 - Raising Questions about UC!
This year's 14th annual Gartner Magic Quadrant for Unified Communications (UC MQ) was published on July 13, 2016. The well-established UC experts Bern Elliot and Steve Blood continue as authors and are joined this year by Megan Marek Fernandez. As always, the report is a concise summary of the UC marketplace and vendors. Complimentary copies of the 2016 UC MQ are offered by Microsoft and Cisco at this time. Gartner notes that the UC MQ is now a (large) enterprise, on-premises UC report, since Mid-market UC and UC as a Service (USaaS - Worldwide) are covered by separate Magic Quadrant reports.
The 2016 UC MQ has some very clear messages of the evolving maturity of the market; Gartner opens with, "As the enterprise UC market continues to mature, we expect more consolidation and increased user expectations - prompting an emphasis on vendors' telephony capabilities and financial viability." This continues the theme from last year's report.
Also, Gartner continues their definition of UC as, "The primary goal of all UC solutions is to improve user productivity and to enhance the business processes related to communications and collaboration." Both UCStrategies and UniComm Consulting have been supporting this definition for over a decade, summarizing UC as, "Communications integrated to optimize business processes." Even the user productivity goal, if measured, will optimize business processes, since the productivity, by definition, results in more output per unit of input.
As always in a Gartner MQ, vendors are categorized into four quadrants. This year's quadrants are:
- Leaders Quadrant: Cisco, Microsoft, Mitel, Avaya
- Challengers: NEC, ALE, and Huawei
- Visionaries: Unify
- Niche Players: ShoreTel, Interactive Intelligence
The dynamics of the relative positioning since 2015 are that Cisco held its leading position while Microsoft declined slightly based on the effects of Microsoft's evolution to Office 365 Cloud Voice. Avaya declined slightly in ability to execute, but remained in the Leader's quadrant. Unify moved from Niche to Visionary while ShoreTel moved the opposite way. Huawei advanced from Niche to Challenger based on the increasing strength of their UC portfolio and geographic coverage. IBM departed the UC MQ based on IBM's shifting emphasis to work stream collaboration via the IBM Connections offer, in lieu of a continued emphasis on voice telephony. All others remained essentially the same, year to year.
With those highlights, the rest of this post is the author's analysis and viewpoint.
It seems to me that this 2016 UC MQ raises far more questions than it answers, resulting in mixed messages for the readers and the enterprise decision makers. Let's cover a few of them, briefly.
Is the future focus on Telephony or on UC?
Gartner says that consolidation of UC vendors and increased user expectations of UC prompt an emphasis on vendors' telephony capabilities. Based on our UniComm Consulting engagements, that is the exact opposite of what's happening in many organizations. Email and IM are dominating; work stream and workflow software use is increasing; most enterprise voice is now consumed in meetings rather than calls; and a continuing growth of cellular voice is marginalizing the PBX in most cases (run your PBX reports - please!). Enterprises will be well-advised to understand this dynamic in their businesses before investing in UC.
What is the message about Cloud UC?
Gartner points out that "The integration of on-premises UC with cloud and hybrid UC services continues to play an increasingly important role as these options (cloud and hybrid) mature." Yes, this sentence rings true; however, it may understate the disruption that is likely to occur. Of the 20 vendors in the 2015 UCaaS MQ, only three of them - Microsoft, Mitel, ShoreTel - are also in this 2016 UC MQ, and none of these three are in the UCaaS MQ Leaders Quadrant. It seems pretty impossible to make a UC decision without evaluating the evolving state of UCaaS.
Also, Gartner says that, "All UC vendors in this report have a cloud solution." But let's be clear, many of them (such as Avaya or Cisco HCS) are just offering hosted versions of the on-premises products and do not deliver the agility, new functionality, nor economy provided by a native cloud offer (such as provided by Interactive Intelligence Pure Cloud, Microsoft Office 365 Cloud Voice, NEC Blue, ShoreTel Connect Cloud). Further, cloud communications needed by an enterprise are very unlikely to be provided all by one company - interoperation in the cloud will change the game, providing communications tools or "Apps" from a portfolio of cloud vendors.
Which vendors are financially suitable for long-term partnerships?
As above, Gartner emphasizes the financial viability of the UC MQ vendors. However, the necessary data are not uniformly visible. Half of the vendors' financials (Cisco, Huawei, Microsoft, NEC and Unify) are buried in their parent company's results. In these cases it's more important to know the overall corporate strategies related to networks (2), productivity software, technology portfolio, and IT Services. Which strategy are you betting on for UC?
Gartner raises questions or advises caution for ALE, Avaya, and Mitel and does not comment on Interactive Intelligence or ShoreTel financials. However, ININ and SHOR are public companies and it is easy to see that they are each operating at breakeven levels with revenues in the range of $400M per year, an order of magnitude below the largest firms in the UC market.
Thus, financial viability is not a sure thing for any of the UC MQ vendors.
How will work stream collaboration be adopted in the enterprise?
Our UCStrategies Expert Dave Michels was the first analyst with the work stream collaboration theme, as I recall. It is a powerful concept, very closely related to CEBP, in which communications is intrinsic to the work stream of the worker (which UniComm Consulting categorizes into Usage Profiles). If this plays out in the ways it seems to be going, the leaders of work stream collaboration will not come from this 2016 UC MQ vendor list, with the possible exception of Microsoft's blend of Office 365 and Dynamics. Rather, the leaders are likely to be Salesforce.com, Slack, IBM Connections, and others. Perhaps, IBM's exit from the UC MQ shows foresight, not failure.
Gartner says that, "Half of the vendors in this year's Magic Quadrant have added this capability to their UC portfolios..." However, it's not clear that any of them, including Microsoft, are prepared to win in this emerging space filled by native cloud-based work stream services.
If Communications-Enabled Business Processes (CEBP) are an important direction, then is an IP PBX architecture the best platform for CEBP?
Gartner notes that communications platform as a service (cPaaS) is increasingly seen as an important option for partners and clients wishing to develop digital business initiatives. However, much as with work stream collaboration, this market for communications platforms is developing very independently from the UC vendor list. Sure, the incumbent UC vendors are rebranding and repackaging their application development and integration suites; some are investing in this area as part of their portfolio (e.g. Cisco's acquisition of Tropo). But we don't see much evidence that the UC (often the telephony department) in enterprise IT departments are making themselves known to the application developers as the cPaaS of choice.
What are the correct designs for the enterprise UC User Experiences (UXs)?
Finally, Gartner places great emphasis on the UX as the vehicle for integrating the communications services. Yes, this is important, but for work stream communications and CEBP, where the greatest value will be found for business processes and user productivity, the UX will more likely be driven by the business process or work stream or workflow software packages, rather than by the UC vendors' software client.
These are all important questions. Answering these questions would seem mandatory in order to develop an enterprise communications strategy as the basis for continuing UC investment. However, these questions cannot be answered within the limits of this UC MQ. Besides the Mid-Market UC and UCaaS MQs, decision makers will need to look at Magic Quadrants such as Social Software for the Workplace, Enterprise Content Management, Web Conferencing, CRM applications, and more.
The bottom line, it seems, is that UC can be analyzed as a stand-alone decision only at the peril of the organization's agility and economic efficiency. Communications has been diversified and modularized to such an extent that investment decisions will require an understanding of how communications will support and enhance the business processes and will support the participants (employees, contractors, partners, customers, clients) in those business processes.
Enterprise decision makers (and their vendors) are faced with a tough choice. The instinct at this time is to watch and wait as native cloud, work stream communications, CEBP and cPaaS mature. Yet waiting runs the risk of missing the boat, as they say. My advice is to pick one or two Usage Profiles where these innovations will have the greatest benefit and run one or more pilot projects right now, from a mix of cloud-based vendors, whether those are from the UC MQ or UCaaS MQ or not. Things are changing dramatically and you want to be ready for the pivot.
Again, this year, the Gartner UC MQ is extremely valuable. Asking the right questions is often much more important than just having the right answer to the wrong question. So, thanks, Gartner, for posing these important questions.
Also on UCStrategies.com on this topic:
- UCStrategies' Take on the Gartner Magic Quadrant for UC, Industry Buzz Podcast