UC+C Insights Part II of II

Insight on Cisco UC+C

Cisco has some challenges that need to be acknowledged:

- They have grown their UC+C portfolio through acquisition which has led to cross-platform integration challenges.

- Cisco’s messaging is still very network- and IP phone-centric - illustrative of an underlying reliance on hardware. However, consider the fact that a large percentage of high value work within an enterprise takes place off-net.

- Though Cisco now refers to everything UC as “Collaboration” they still tie all their value back to IP phone (as is evident in press releases and case studies). But how often do you use your desk phone to communicate today vs. 3 years ago?

These types of challenges impact Cisco’s ability to innovate and slows time-to-value for customers to realize the benefits. As an example, Cisco has been doing some work to integrate their own variable bit rate codec (similar to Microsoft RT Audio) into their UC and VoIP products. However, because of the reliance on hardware, most customers will have to replace their Cisco IP phones to be able to support this codec.

Cisco’s UC+C strategy is based on Communications Manager at the core – focusing on VoIP as the foundation for UC+C. This can be considered the fatal flaw in their story. If UC+C is dependent on a customer running VoIP for corporate telephony that means that all users must first be migrated to Cisco Unified Communications Manager. But Cisco VoIP can be considered expensive and complex. Consider the following:

- According to industry market research firms, Cisco VoIP has very low penetration (single digits) in companies with over 1,000 users and low double digit penetration in companies overall.

- The vast majority of Cisco’s VoIP customer base is still on Call Manager 4.x which was generally available in 2004.

- During a multi-city voice roadshow earlier this year, attendees were asked two questions:

1. How many of you have deployed some form of VoIP in your enterprise? Consistently, >80% of attendees or more would raise their hands.

2. How many of you have deployed VoIP throughout your entire enterprise? In all 10 cities around the world every single person lowered their hand when asked this follow up question.

For customers that choose to standardize on Cisco VoIP, they risk paying a lot for technology that has a track record of never being fully deployed. They also risk decoupling the UC+C platform and associated value and telephony will continue to live outside of collaboration and remain a communications commodity.

In fact, Cisco has become a technology laggard for the first time in their history being out-developed (but not out marketed) by Microsoft’s UC+C platform. Consider the actions Cisco has taken since becoming a competitor with Microsoft:

- Acquired Webex to accelerate their move to a software-based solution and compete in the Software + Services (S+S) market. They previously acquired Metrios to create a software development environment to attract developers but it never took off. Webex Connect is being positioned as the new development platform to compete with Microsoft’s UC+C development environment.

- Hired Cordell Ratliff from Apple to lead the redesign of their user interface

- Acquired PostPath to compete with Microsoft Exchange

- Acquired Jabber to compete with Microsoft OCS

- In March 2009, Cisco introduced “Cisco UC Integration for Microsoft Office Communicator,” or CUCiMOC. Cisco implies that the plug-in is the result of collaboration between Cisco and Microsoft; however, this is not the case. When using Office Communicator with CUCiMOC, users take advantage of the Office Communicator interface for IM and Presence, but must learn and use a separate Cisco designed interface for other communications functions. Cisco provides a 41 page user guide to explain their multiple interface approach and some of the behaviors which may not be intuitive to users.

- Introduced Cisco Unified Workspace Licensing (CUWL) as a direct response to Microsoft’s software suite model.

UC+C Insights Part I of II

Insight on Microsoft UC+C

Microsoft has some challenges that need to be acknowledged:

- Had a lot of start/stop messaging around corporate telephony and enterprise voice. Customers and their own field resources folks have heard a lot of varying messages – OCS is a PBX replacement, OCS is a compliment to existing PBX’s, etc.

- Enterprise Voice is new to their account teams and is intimidating for them as shown in the lack of confidence in much of the customer facing messaging and conversations

- They has been challenged to effectively articulate the differences and technical value in how they are approaching telephony, especially within traditional IT and Telecom

However, all of these challenges relate to the cultural rather than the technology. Those cultural challenges will continue to lessen as the organization becomes more comfortable with enterprise voice and telephony and how it fits into the Unified Communications and Collaboration (UC+C) platform.

Innovative Technology
Microsoft makes really innovative software and technology, especially as part of the UC+C platform. Some examples:

1. Enterprise Voice/VoIP Telephony
The use of Real Time Audio (RT Audio) in Office Communication Server is a great example of technology innovation. RT Audio has been used extensively in delivering VoIP in the consumer market as part of Windows Live Messenger and Xbox Live, logging over 2 billion minutes per month. It’s designed to be a variable bit rate codec that can adjust to fluctuating network conditions on-the-fly during a conversation.

Cisco’s first reaction to Microsoft’s use of RT Audio in OCS was extremely hostile and negative but once they understood the value and innovation of that technology they moved quickly to introduce their own version of a variable codec – a clear testament to Microsoft’s leadership and innovative thinking.

2. Communication-Enabling SharePoint Workflows (CEBP)
Customers can use SharePoint to create business process workflows. A simple example is a workflow for on-boarding new employees. As part of that, SharePoint can provide reports about the workflow that can be used to identify bottlenecks and latency (i.e. it took security 10 days to provide RAS access).

Organizations can use the analysis data and map it to UC capabilities to "communication-enable" the process (i.e. route the RAS request to security based on presence, if the request with security is unresolved for more than 2 days then escalate a communication to a manager, etc.)

You could then go back and re-run the process and reports to measure the improvements. This could be easily repeated across the different LoB’s.

As a software platform, Microsoft UC+C is uniquely positioned to deliver CEBP capabilities. Hardware vendors like Cisco (CUAE) and Avaya (CPM) have made attempts to do the same thing with very limited success.

Microsoft Voice – A PBX Replacement Today
Microsoft has been doing voice in the enterprise (via OCS) for two years and is already recognized as a top 5 voice player in Gartner’s Magic Quadrant for Corporate Telephony. Gartner also noted that Microsoft is positioned as a “Visionary” reflecting Gartner’s view that telephony, which should be viewed in the context of a broader unified communications decision, is increasingly moving from hardware to software.

Microsoft has also been recognized as the leader in the Gartner Magic Quadrant for Unified Communications for the past three years.