Gartner Magic Quadrant for Unified Communications 2017: Completing the Telephony-based Lifecyle for UC
The 14th annual Gartner Magic Quadrant for Unified Communications (UCMQ) was published on July 19, 2017. This year’s report was produced by Steve Blood, Megan Marek Fernandez, Mike Fasciani, and Rafael A Benitez. For the first time, Bern Elliot is not an author, which may be appropriate for the message of this year’s UCMQ.
Compared to the UCMQ of 2016, the changes are subtle:
- Cisco, Microsoft and Mitel remain in the Leaders quadrant.
- Avaya moves down to join Unify in the Visionaries quadrant, due the uncertainty related to Avaya’s Chapter 11 bankruptcy.
- Huawei and NEC remain in the Challengers quadrant, primarily reflecting some limitations in their product offerings and the variations in their offerings between geographic regions.
- ALE (Alcatel Lucent Enterprise) moves down to the Niche Players quadrant, based on Gartner’s assessment of shrinking regional coverage and limited investment by ALE’s parent. In 2016, ShoreTel and Interactive Intelligence were both in the Niche Players quadrant, but each has now been acquired (by Mitel and Genesys, respectively).
The essence of this 2017 UCMQ is that Microsoft and Cisco have taken the lead in UC, by following the definition that we at UCStrategies first stated in 2006, “Communications integrated to optimize business processes.” Granted, neither Microsoft nor Cisco really delivered on that theme, but they understood the theme well enough to focus their marketing on transformations and optimizations, rather than on the arcane aspect of replacing T-1 trunks with SIP trunks, using IP phones.
Now, those two leaders are taking the market in the new direction of team collaboration (including communication and application integration). We’ll come back to this.
The others in the 2017 UCMQ are either trying to:
- Emulate these leaders by bundling UC with IT infrastructure, licensing and support. This is true of Huawei and ALE (building on data networking capabilities), NEC (“Empowering the smart enterprise”), Unify (part of the IT solution with Atos); or
- Seeking, as Avaya and Mitel are doing, to maintain their hold on the corporate telephony market segments with core capabilities such as contact centers, core telephony functions, and competitive telephony pricing (Mitel). These two companies also seek to supplement user productivity and business workflows with UC software clients and with integrations to business applications through APIs and Communications Platforms as a Service (CPaaS) such as with Zang (Avaya) and CloudLink (Mitel). However, both Avaya and Mitel are challenged by the ability of their channels to embrace, sell, implement or support this business process integration model.
So, where are the Leaders going to take this market?
It is reasonable to expect that Mitel will stick with the delivery of economic and reliable telephony through their broad and diverse channels. If Mitel can continue to manage successfully the integration of their many acquisitions, this will likely work for them. It’s pretty likely that a lot of enterprises will be more than happy to buy low-cost "dial tone" whether on premises or in the Mitel cloud and put their innovative energies elsewhere.
Microsoft makes it clear that communications is part of what everyone should have at their fingertips (whether on a PC, tablet, smartphone, Surface Hub, or anything made by their thousands of partners). Microsoft Skype for Business is well integrated with the range of Office 365 packages and the functionality of Skype for Business Office 365 (SfBO) continues to improve. For those who wish to have their solution on premises, or in a hybrid configuration, Gartner says, for the first time that I can recall in a UCMQ, that Microsoft’s on-premises Skype for Business Server (SfBS) “has proven itself an IP PBX replacement for many organizations.”
From this Office 365 platform, Microsoft can integrate SfBO communications with Microsoft Teams (team collaboration and workstream collaboration), Microsoft Exchange, Microsoft Office, and many of Microsoft’s online applications such as Microsoft Dynamics CRM.
Cisco is leveraging their Leaders quadrant position in a similar way with the emphasis on Cisco Spark for messaging, meeting and calling. Cisco Spark provides a blend of new team collaboration capabilities to compete with Microsoft, Google, IBM, Slack, Atlassian and many others, with WebEx meetings, Cisco Telepresence, and Cisco Unified Communications. Many Cisco networking customers will see this as a very attractive evolution of their existing Cisco investments. Cisco has three compatible licensing options – traditional licensing, enterprise agreements, and the Cisco Flex plan – to provide the customer with financially practical ways to follow the Cisco roadmap.
The 2017 UCMQ may not be the last UCMQ, but it certainly illustrates the completion of the UC lifecycle.
UC as a productivity and business process optimization solution is now in the hands of Microsoft and Cisco, along with hundreds of business application software companies that will be building communications into their cloud-based products using CPaaS. In a few cases, the CPaaS will come from the companies in this year’s UCMQ, but much more likely they will come from the dozens of new CPaaS-only providers as exemplified by Twilio, Genband Kandy, and others.
UC as an enhancement to an IP telephony license, i.e. as an extension of Corporate Telephony (the Gartner Magic Quadrant for Corporate Telephony was recently merged into the UCMQ), is now a shrinking commodity market. Since about 2008, the companies in this category have gone through a series of consolidations, leveraged buyouts and bankruptcies. A few will likely survive as providers of economic telephony (see Mitel above), but the consolidation will likely continue for the others, as the technology integrations of digital media over IP continues.
Your comments and questions are welcome below. Listen for our Industry Buzz Podcast on this topic scheduled for August 15, 2017.