The State of UC- By The Numbers
The State of UC- By The Numbers by Michael F. Finneran
I got to kick off the UC Summit in La Jolla a couple of weeks back with a review of the preliminary results from the annual InformationWeek State of Unified Communications survey that had arrived just days before; the full survey has since been published and can be found here. The survey provides some in depth insights into what’s going on in the UC market, what components of the UC suite are driving sales, and which vendors are perceived as leaders in the various UC components.
The big news to report is that there was a significant uptick in UC sales in the past 12 months. After lying relatively dormant from 2012 to 2013, respondents claiming to have deployed UC jumped from 38% to 44%. Not all the news is good, as 30% still have no plans to deploy UC at all, roughly the same percentage as last year. Equally important is the fact that more users at those organizations are getting UC. In 2013, 48% of those who had or were planning to deploy reported serving 25% or fewer of users. This year that percentage dropped to 36% and the percentage serving 76% to 100% of users jumped from 21% to 37%.
We did see mixed messages regarding cloud deployments. Despite all of the cloud talk, of those had deployed or planned to deploy UC, 64% were either fully on-premises (40%) or “primarily-premises based” (24%). Only 3% are 100% cloud with another 20% are "primarily cloud-based." If you want to look at it optimistically, 44% had at least some cloud deployment, but a significant 19% reported that their future cloud plans were “Not yet determined.” The top five UCaaS Vendors were Microsoft (46%), Cisco HCS (40%), AT&T (33%) Verizon 22%, and Google (15%). It is difficult to draw a clear picture from that as both AT&T and Verizon both offer Microsoft Lync, Cisco HCS, and other hosted options.
One of the more surprising findings was that desk phones are becoming more scarce. Only 30% of respondents who have deployed or are planning to deploy UC envision desk phones for 76% to 100% of their users, while 14% of the UC deployments indicate that 10% or fewer have desk phones and another 14% have none at all.
The survey also looked to determine which UC features users valued most. To force respondents to make some choices (rather than simply saying “everything’s important”) we asked those who had or planned to use UC what were the top three features they found most beneficial to the business.
The top five selections were: unified messaging, IM and chat, corporate directory, web conferencing, and audio conferencing; presence and softphones also scored well. Rounding out the bottom of the list were: collaborative workspaces (11%) room-size video conferencing (10%) (desktop video conferencing came in at 16%), enterprise application integration (9%) mobile UC clients (8%), and social networking (3%). Unified messaging came in second last year in a similar question (audio conferencing was first), but it appears the UC vendors hopes of incorporating “mobile and social” in UC are not playing out like they thought they would.
We also got to ask about the shift to SIP trunking and found that only 15% had fully migrated to SIP trunking, while another 33% had a mix of SIP and traditional PSTN connections; 23% reported they were piloting or evaluating SIP trunks. Some 36% reported having session border controllers and 37% had a unified UC security appliance.
Two clear messages that comes through are the continued dominance of Cisco and the ascendance of Microsoft. When we asked respondents who they considered to be the top three providers of UC systems, Cisco again topped the list with 73% (which is down from 83% last year), followed by Microsoft with 48% and Avaya with 38%. Last year Microsoft and Avaya were tied at 47%. Google actually came in fourth with 11%, passing Alcatel-Lucent, which had 10% of the votes. The balance of the traditional PBX suppliers ranked in the single digits.
It was most interesting to view that in light of who the respondents were using for key UC functions. Cisco's WebEx dominated in web conferencing with 52% of responses, far ahead of Microsoft's Live Meeting at 29%, though Microsoft's Office 365 added another 9%. Citrix GoToMeeting finished with 26% and Google was the only other offering that hit double digits, with 10%.
Cisco was also on top in on-premises voice systems being cited by 62% (down slightly from 64% last year), but Microsoft was a surprise second at 31% ahead of Avaya’s 27%. Last year’s survey had Avaya in second place with 35% and Microsoft third with 22%, so clearly Microsoft is taking share from Avaya in the voice area.
Microsoft’s strengths seemed to be in the emerging communications options. Cisco had a slight lead over Microsoft in video conferencing (33% to 30%) with Polycom coming in third at 27%. Where Microsoft really jumped out was in IM, where its Lync product garnered 52% of the votes to Cisco’s Jabber with 20%. However, Skype (also owned by Microsoft) had 22%, Exchange 2000 IM drew another 12%, and MSN Messenger had 8%. So all told, Microsoft IM products were cited by 94% of respondents. The only other significant finisher was Google Talk with 13%.
Despite all of the “good news, there is still that 30% who have no plans to deploy UC- roughly the same percentage as last year. When we asked those who had no UC deployment plans for their reasons for not moving to UC, the top two reasons cited were "Other projects have higher priority" (41%) and "No definitive business value" (40%). That "Other projects have higher priority" reason has led the pack for the previous two surveys as well.
When we asked respondents who had or were planning to deploy UC what elements they considered in their ROI calculations, “Improved employee collaboration” and “Employee productivity and job satisfaction” led the list with 54% and 52% (multiple responses were allowed). “Travel cost saving” were also on the list with 40% and “Improved communications with customers” was cited by 36%. In the meantime, of the 168 respondents (34% of the base) who had deployed UC and done a post-installation ROI analysis, 67% met or exceeded their predicted ROI and another 29% came close; only 4% missed by a wide margin. I guess those who are not seeing the value are looking in the wrong places.
So while Cisco’s entry into the PBX market rattled the traditional PBX vendors over the past decade, it seems that Microsoft’s arrival is beginning to have the same effect today. While Avaya is slipping somewhat despite its massive installed base, the rest of the traditional suppliers appear to be getting squeezed out with the move to UC.
For those of us who have been behind UC from the start, it is exciting to see the upsurge in demand. Telephony is now just one element in the communications suite, so the game is now moving in the direction of collaboration and new media. That shift is clearly helping some vendors, but it may be creating a major challenge for others.