Unified Communications 2009 - A year in review

A look at the successes and challenges for Microsoft and partners in the unified communications marketplace.

As we wind down 2009 and prepare for 2010, I think it's best to take a look back at this year to see what has worked and what has not worked so well in order to strategize on the future on unified communications in the marketplace moving forward.

So, in my opinion, the following were the most noteworthy events for Microsoft in the UC marketplace for 2009:

1.     Microsoft started its campaign as a leader in the new telecommunications and unified communications industry with the global release of Office Communications Server 2007 R2, and Exchange Server 2010 providing many new features to enhance communications and set the foundation of what is to come in 2010 with its Wave 14 release. 

2.     In addition to the above, Microsoft finally marketed the capability of the Microsoft Unified Communications platform for developers by exposing and providing education and tools for developers through its Unified Communications server and client products by enabling a rich set of APIs, SDKs, and integration kits through a new program named CEBP (Communications Enabled Business Processes).  Finally, organizations and the largest developer community in the world (.NET) could see the true value of the Microsoft Unified Communications platform versus its main competitors through the ability to connect communication enabled solutions and applications to traditional and converged communication devices and equipment.

3.     The introduction of Microsoft's Wave 14 or 2010 release of its Unified Communications platform was unveiled on a more public level at the Microsoft Worldwide Partner Conference in New Orleans, LA in July of 2009.

4.     Partners in the Microsoft and non-Microsoft partner ecosystem began investing and cultivating Microsoft core infrastructure and consulting/professional services practices to support the future of the new platform whilst existing small/medium sized business partners were awarded for their commitment over previous years at the Microsoft Worldwide Partner Conference and other various events.

5.     Microsoft invested in doubling its marketing efforts from previous years by exploding content through the Microsoft.com/uc website, but also through podcasts and broader sites such as Network World and ITWorld to increase the Microsoft UC platform campaign and set the stage for 2010.  To add, new development tutorials and portal sites via MSDN were made available with downloadable self-starter kits were made available for IT developers to begin their journey in the creation of new UC applications.  Even iTunes now carriers a subscription-based channel of podcasts focused on Microsoft UC alone - very helpful!

6.     Gurdeep Singh Pall outlined his own and the UCG's focused vision on Microsoft's Unified Communications platform at VoiceCon in Orlando by buying out a massive booth space but outlining it only with much needed comfortable seating space for interested parties to speak with strategic Microsoft and partner personnel about creating their UC strategy for their organizations or building surrounding businesses around the platform as partners while Gurdeep himself inspired many at his keynote speech.

7.     Eric Swift and his team covered many events such as the Microsoft Worldwide Partner Conference, UC Interact, and many others to convey the same message, but also start the launch of the Microsoft CEBP focus for UC developers worldwide.

8.     Microsoft invested heavily in their fiscal year of 2009 in incentivizing new customers in the enterprise space and even smaller organizations through investment funding to kick start pilots and proof of concept projects to install and experience the Microsoft UC platform consisting of Office Communications Server 2007 R2, Exchange Server with Unified Messaging, Live Meeting, and for most enterprise accounts, Communicator Phone Edition devices and applications.

9.     In late 2009, but in Microsoft's 2010 fiscal year, Microsoft launched a new CEBP funding campaign that provides investment funds through Microsoft partners to create unique applications integrated within the Microsoft UC platform through the .NET platform of development tools to the tune of $20K USD for enterprise accounts and thus created a massive push for existing and new Microsoft partners to develop .NET focused CEBP practices and newly creative and innovative UC-focused business applications.

10.   In July/August 2009 Microsoft softly launched an updated version of the existing Microsoft Office Communicator Mobile "CoMo" application through the larger launch of Windows Phone.

So what were the challenges that were most noteworthy that will set the stage for 2010 and beyond?  The following are my comments:

1.     While existing Microsoft product and professional services partners in the Microsoft UC partner program continued to assist in the evangelism and adoption of the platform within enterprise accounts on a global level, most if not all of these successes were funded by Microsoft so there really was little revenue to be made out of larger UC infrastructure engagements as customers were hesitant to bite off more than a funded pilot program provided for its subsidized user base.  Most of this was due to the current UC platform not truly having a competitive list of features although competitive through a combination of additionally required hardware.  Because of this cycle and the lack of funding in the last half of 2009, many, if not most of these smaller partners who had made significant investments in this program have now faced major financial issues and the market has now witnessed many mergers, acquisitions, and even bankruptcy filings due to the lack of adoption with the only remaining successful partners comprising of larger organizations like HP, Dimension Data, and BT with a very small handful of smaller organizations who have held on due to innovative CEBP application development, devices, or very focused and niche professional services consultants.

2.     With a lack of continued success within the Windows Mobile platform even with the renaming and re-marketing of the platform to Windows Phone, applications such as Microsoft Office Communicator have not had the proper chance to penetrate the market as envisioned due to the overwhelming success of the iPhone and now the upcoming penetration of the Google Android platform.

3.     Due to the economy as a whole, many organizations faced financial distress and even those who did not, used the situation to block purchases of any new applications or services giving any vendor, not just Microsoft, a much more difficult time to launch a new market entry product/platform.  In addition to this, many skilled workers in the IT industry were displaced and R&D budgets, as they always are in hard times, were cut significantly causing a bit of a slowdown.

4.     Adding to the previous statement, Microsoft's own R&D strategy around small and medium business voice systems faced a tough financial decision with the final outcome being the cancellation of its promising Microsoft Response Point IP-PBX system and devices.  Many partners, device manufacturers, and ITSP providers faced a major investment drawback due to this decision as well including Quanta Computer, while others such as D-Link and Aastra were able to survive due to other products and services sold.

5.     Based on the requirement for Microsoft's current UC platform need for surrounding device hardware and services to truly compete head-on in an all-in-one system package versus Cisco, Nortel, Avaya, NEC, and others, the previously stated factors such as the economy, the lack of partner funding, and the showcase of the 2010 platform release caused the platform to not to penetrate the market as expected due to customers’ ability and defined reasoning for waiting a bit longer.

6.     Due to the lack of integration with UDP (industry standard) ITSP SIP Trunking providers, Microsoft's ability to woo customers who were interested in moving forward with product and services purchases ended up having to halt their decisions due to existing relationships with communications vendors such as AT&T and others as the cost to switch their service to TCP-only ITSP trunks would be greater.  I will say though that many strides have been made, even with AT&T specifically and other leading international ITSP providers to provide a better integrated solution to the Microsoft UC solution.

So where do we go from here?  What steps are necessary to enable a successful 2010 with the release of Microsoft's UC platform to reach the potential of its vision as a market leader within both the UC and telephony industry?  The following are my thoughts:

1.     From a Microsoft partner perspective, larger organizations such as HP, BT, Dimension Data, Accenture, and others can benefit by acquiring smaller entities as they have developed and obtained the Intellectual Property, customer base, and real world experience to kick start and fully complete these larger partner organizations' UC practices.  As stated previously, most of these existing smaller UC partners that have "survived the storm" so to speak over the past two years have more knowledge in how to sell, deploy, and develop UC solutions and customers that it would be much harder to piece mail specific individual contributors rather than outright buying a packaged company that contains both a product and professional services portfolio.  These smaller partners who have pipeline would be a bonus as well!  Once assembled, organizations such as HP, DELL, and others should be outfitted with an elite force of infrastructure, application development, business solution focused, strategic consultants as well as offer customers enhanced UC devices encompassing specialized and tuned UC servers, handheld devices, and optimized PCs.  There will still be a demand for niche management consulting and application development firms, but there will really only be less than 10 of these on a global scale that will be profitable.  Also, Microsoft MVPs in the UC space should now be heavily sought out as the individual contributors who have spent many years in understanding the history, dynamics, and future of this technology as well as those who have spent much sweat equity into the creation and evangelism of this platform will be the highest caliber weapon in a large consulting or even customer contract arsenal.

2.     Microsoft will need to heavily incentivize customers through pilots and proof of concepts over the next two years to see the kind of penetration that they desire in order to win the Fortune 500 and Global 1000.  I also believe that these agreements need to include some skin in the game for customers as well as Microsoft should not just give their products and services away for nothing.  This also greatly hurts the Microsoft partner ecosystem who end up banking their business on Microsoft funded starter projects and when it comes down to real customer-financed engagements, there is nothing left on the table.  My suggestion is a 40/50/10 model where Microsoft funds 40%, Customer pays 50%, and partner provides 10% towards the deployment.  Most of these enterprise customers already own these products through their Microsoft Enterprise Agreement so this should be a no brainer.

3.     Bottom line, Microsoft is going to have to beef up its marketing engine.  It's understandable to wait up to this point as the 2010 release is the key release for Microsoft's UC vision, but with this release, there needs to be a dramatic marketing push to penetrate a market that is and has been dominated by the likes of Cisco.

4.     Windows Phone just needs a complete re-write/re-vamp.  I'm sure that this is happening, but the fact that these devices seem archaic when you are using something like an iPhone or Android phone is ridiculous.  The answer is not a Zune phone either.  If Microsoft wants to be truly innovative, the device should have an awesome UI like the iPhone, but have the ability to truly have competitive UC features that are integrated with location-based services, security, etc, but from a device perspective should support any media type (iTunes or Zune), have a kick ass camera, a minimum of 100GB of storage, and options for a stable keyboard and platform for additional device connectivity (inclusive of existing Bose iPhone / iPod station speakers through device adapters).  The old Windows Phone and Windows Mobile platform should be a distant memory and cry from this newly designed mobile operating system.

5.     Continuing to follow through with the CEBP campaign, Microsoft should incentivize developers to create a repository of UC solutions that are industry based as to deliver as proof of concepts to energy, federal, retail, legal, healthcare, financial services, and other industries.  There should be some kind of bake off and then a rented space at several industry events such as a, hmmm, UC Developer Pub maybe, where we can share ideas and present award to those most creative, innovative, and productive.  These solutions should be showcased via a separate CEBP website off of the main Microsoft.com/uc website to help customers realize the true value of the Microsoft UC platform.

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