The rise and rise of UC
The way we communicate in business is constantly changing, and integrating the different means of communication is the order of the day. The term Unified Communication (UC) has been around for years, but the aspects it covers are evolving.UC does not describe a specific technology, but rather stands as an umbrella description for many different solutions. It typically covers software-based functions such as chat and other text-based messaging, voice or video via internet connections.Examples of UC solutions can be to combine fax, email and voicemail delivered in the inbox. It could be voice and data going over the same cable; or it could be voice, email and instant messages handled by the same interface.Igor Portugal, CEO for the New Zealand based company Vadacom Limited, explains that what has really changed in the last few years is that the old hardware-based PABX (Private Automatic Branch Exchange) phone systems are starting to get phased out by the new software-based phone systems."This enables better integration of the phone system into the rest of the IT environment, which allows for more types of communications to be ‘unified’,” Portugal says.He says there are two types of UC phone solutions available on the market now. One is a combination of a traditional PABX plus a pc based unified communications ad-on. Another is the modern software based PABX with all the features inside the system.Increase predictedOne of the most comprehensive studies of our New Zealand market for UC is Frost & Sullivan’s New Zealand Unified Communications Market Report 2011, which was released in August.The study analyses market trends and the competitive landscape for all major UC application segments and enabling platforms, including enterprise telephony, email, unified messaging, conferencing and collaboration, mobility, unified client, tele presence and integrated UC applications as well as contact centre applications.The UC market is forecasted in the report to grow to $212.2 million by 2017 due to demand for conferencing, collaboration, email and mobility solutions.This follows a slight decline of 1.2% in market value between 2010 and 2009, which is attributed to a slow recovery from the economic downturn.The report found that banking and financial services institutions (BFSI), government and professional services led the adoption of UC in 2010, accounting for more than 70% of the year's UC revenues."The continuing need for cost savings given the slow economic recovery has been the major driver for government deployments, while the BFSI and professional services segments are primarily turning to UC for productivity and competitive gains” says Audrey William, ICT research director, Australia and New Zealand, Frost & Sullivan.In the wake of the recent earthquakes in Christchurch, William says non-essential IT spending is expected to be minimal in the year ahead as investment is focused on rebuilding essential platforms. A key component of this rebuilding is predicted be their communications infrastructure, as significant deployments of telephony, email and contact centres will be required as organisations replace their damaged or ageing infrastructures with up-to-date, advanced versions – which will be driving revenues for many UC vendors.William says the earthquakes have also contributed to a shift in the preferred mode of delivery of UC services. "Currently organisations show a strong desire to own and self-manage their UC infrastructure. However, heightened awareness of the need for redundancy and resilience are expected to drive higher adoption of hosted solutions,” she says. Customer driversBoth analysts and providers point to cost awareness as one of the main drivers for companies toward choosing UC solutions instead of traditional solutions. "The IT managers we spoke to for this study have made their views on unified communications crystal clear. Almost unanimously, they are looking to UC for improved business processes and an ability to reduce costs,” William says of the Frost & Sullivan research.Cameron Beattie, managing director for the New Zealand UC provider Conversant Ltd, says the focus has shifted away from complex, expensive on-premise solutions to cost-effective, scalable cloud-based offerings from innovative organisations."Entrepreneurs and start-up businesses see the benefit of UC services due to their flexible, scalable, cost effective nature. In the broader SME market traditional businesses are also starting to understand the importance of better serving their customers, although we have yet to see mass market adoption,” Beattie says."There is a large opportunity for cost effective services that integrate cloud communications with existing SaaS-delivered [Software-as-a-Service] line of business applications.”He says end users wish to communicate in a variety of ways and organisations need a consistent and manageable way of dealing with those channels. "Organisations that are seeking to succeed by better serving customers, know that customers have a variety of preferred interaction methods. To effectively address those needs an integrated, flexible, scalable solution is required.”Vadacom’s Portugal agrees that customers demand good integration and ease of use, and says that VoIP (Voice over Internet Protocol) is what is really driving UC forward."Many businesses have stretched the life of their old PABX technology to the max as they didn't see the need to replace them. VoIP offers them quantifiable saving,” Portugal says.While Portugal also points to cost savings and productivity improvements as drivers, he suggests the picture is different for contact centres."Contact centre managers are different. To them telephony is their business and they are quite knowledgeable. Many are looking at your ability to support their changing needs, and at your ability to develop new ways to unify their communications,” he says.Looking aheadThe market for UC - and the technology behind it – is still expected to evolve alongside such technologies as cloud computing.Conversant’s Beattie expect a continued "webification” of communications."I believe the strong trend towards cloud-based services and away from the "box and telco” model will continue. For small and medium sized businesses there will be a strong motivation to work with a communication provider that can provide easy and cost effective solutions that can integrate with other SaaS applications,” Beattie says.As technology improves, Vadacom’s Portugal says there will be more ways to communicate and more communications to unify, and he points to video as becoming increasingly available as a part of the unified communications suite.However, he also believes the next big push is going to be in social media. Bringing Twitter, LinkedIN, Facebook and others into the unified communications, and including them in workflow, is something he expects will be quite a hot topic next year. "Today most businesses have one person dedicated to responding to social media contact. This is a single point of failure. As the communication via social media becomes more important to businesses they will see a need to have multiple people within organisation responding to social media contact. Providing tools to do that is the role of the UC systems,” Portugal says.Larger international corporations also have their sight set on UC. At Polycom, James Brennan, director of Unified Communications, Polycom ANZ, also expects a continued evolution of UC offerings."Over the next few years we will see a greater push towards pervasive unified communications, true open standards architecture and the extension of visual collaboration in the cloud, on mobility devices and beyond. In line with the New Zealand UC market growth projections, more organisations will be looking for tailored UC solutions,” Brennan comments.In the Frost & Sullivan study it is noted that traditional applications, such as enterprise telephony, email and instant messaging, are approaching saturation point; and that future growth will largely come from infrastructure refreshes and uptake of mobility, conferencing and collaboration solutions."Until recently, the biggest challenge was the overall cost of purchasing and running such solutions. However, as more and more organisations realise the benefits of their UC deployments, this concern is dissipating and we anticipate steady market growth for the next six years,” Frost & Sullivan’s William says.