SHARE



ABOUT THE AUTHOR


Marty Parker
Marty Parker brings over three decades of experience in both computing solutions and communications technology. Marty has been a...
Read Full Bio >>
SHARE



Marty Parker | July 20, 2010 |

 
   

Systems Integrators Again Key as UC Moves to the Cloud

Systems Integrators Again Key as UC Moves to the Cloud The NTT acquisition of Dimension Data is in the same size category as Cisco’s acquisition of WebEx and of Tandberg, both of which have been industry-shaping moves. So what's the meaning of this latest deal?

The NTT acquisition of Dimension Data is in the same size category as Cisco’s acquisition of WebEx and of Tandberg, both of which have been industry-shaping moves. So what's the meaning of this latest deal?

Just over two years ago, we posted "VARs and SIs: The Arms and Legs of Unified Communications." That forecast of the importance of VARs (Value Added Resellers) and SIs (Systems Integrators) for Unified Communications (UC) has proven to be right on target. Now, we're seeing the logical extensions of that value in major industry moves.

The big news is that Dimension Data announced this week an agreement to be purchased by NTT for US$3.2 billion. This is in the same size category as Cisco’s acquisition of WebEx ($3.2B in 2007) and of Tandberg ($3.3B), both of which have been industry-shaping moves.

So, what’s the meaning of this? First, let's ask why NTT, and what are they planning?

NTT is the 31st largest company in the world as measured by the Fortune Global 500 (2010) and one of the top 3 largest service providers in the world. NTT has a client base of over 3,000 global multinational clients; a leading edge, international network and communications infrastructure including a global IP-VPN Network across 159 countries; an extensive, world class data center infrastructure in 20 countries and 31 cities; and both R&D and strategic initiatives around IaaS (Infrastructure as a Service) and SaaS (Software as a Service).

But that infrastructure and software need to be delivered, connected, managed and enhanced. As we have seen in the growth of UC, the ability to provide these services (delivery, connectivity, etc.) is key, both for the technology providers and for the enterprise buyers of those technologies. With the choice of growing those skills internally or acquiring them in one major move, NTT chose the major move, and bought an industry leader. Little doubt that NTT expects to grow the Dimension Data global presence both for execution and expansion of the NTT ICT strategy.

Dimension Data has been a leading systems integrator for UC. Revenues in 2009 were at $4 billion, with healthy profit margins. About 40% of these revenues are from systems integration, primarily for their leading VAR positions with Cisco and Microsoft. As noted in 2008, Dimension Data built a portion of that growth on their innovative Unified Communications Development Model.

This acquisition is just one more example of the growing investment in systems integration by the network providers. BT Services is a major UC SI arm of British Telecom. AT&T and Verizon both have business services divisions. And, about a month ago, in a similar move, Paetec acquired Quagga, the leading western US VAR for Avaya, to round out a prior eastern US acquisition.

As for what this all means, there is growing evidence that Enterprises will have more options in the future. With the backing of carriers both for funding and customer relationships, new Systems Integration options will blossom. Enterprises will have access to SIs who can work fairly seamlessly across on-premise and network infrastructure. Enterprises will also see SIs who have a broad range of technology elements at their disposal; as noted, Dimension Data is a leader with both Microsoft and Cisco UC product lines. This flexibility should result in more and better solutions, delivered more rapidly and effectively.

Also, this is a necessary step on the road to SaaS or "Cloud" solutions. To date, a major question about SaaS or Cloud options has been whether the Cloud options can seamlessly integrate with the existing enterprise infrastructure. At the core, that is a system integration question even more than a technology question. Addition of large, skilled SI organizations should address these issues effectively.

Our forecast has not changed. VARs and SIs are the arms and legs of Unified Communications. With the stream of investments in the leading SIs and VARs, we can expect further enrichment of UC solutions and options, and a further acceleration of enterprise customer adoption.

As always, your comments are welcome. Post below or write to mparker@unicommconsulting.com.





COMMENTS



Enterprise Connect Orlando 2017
March 27-30 | Orlando, FL
Connect with the Entire Enterprise Communications & Collaboration Ecosystem


Stay Up-to-Date: Hear industry visionaries in Keynotes and General Sessions delivering the latest insight on UC, mobility, collaboration and cloud

Grow Your Network: Connect with the largest gathering of enterprise IT and business leaders and influencers

Learn From Industry Leaders: Attend a full range of Conference Sessions, Free Programs and Special Events

Evaluate All Your Options: Engage with 190+ of the leading equipment, software and service providers

Have Fun! Mingle with sponsors, exhibitors, attendees, guest speakers and industry players during evening receptions

Special Offer - Save $200 Off Advance Rates

Register now with code NOJITTEREB to save $200 Off Advance Rates or get a FREE Expo Pass!

April 5, 2017

Its no secret that the cloud offers significant benefits to enterprises - including cost reduction, scalability, higher efficiency, and more flexibility. If your phone system and contact center are

March 22, 2017

As today's competitive business environments push workforces into overdrive, many enterprises are seeking ways of streamlining workflows while optimizing productivity, business agility, and speed.

March 8, 2017

Enterprise IT's ability to innovate is critical to the success of the business -- 80% of CIOs agree. But the CIO role has never been more challenging than it is today, with rising operational respo

March 23, 2017
Tim Banting, of Current Analysis, gives us a peek into what the next three years will bring in advance of his Enterprise Connect session exploring the question: Will there be a new model for enterpris....
March 15, 2017
Andrew Prokop, communications evangelist with Arrow Systems Integration, discusses the evolving role of the all-important session border controller.
March 9, 2017
Organizer Alan Quayle gives us the lowdown on programmable communications and all you need to know about participating in this pre-Enterprise Connect hackathon.
March 3, 2017
From protecting against new vulnerabilities to keeping security assessments up to date, security consultant Mark Collier shares tips on how best to protect your UC systems.
February 24, 2017
UC analyst Blair Pleasant sorts through the myriad cloud architectural models underlying UCaaS and CCaaS offerings, and explains why knowing the differences matter.
February 17, 2017
From the most basics of basics to the hidden gotchas, UC consultant Melissa Swartz helps demystify the complex world of SIP trunking.
February 7, 2017
UC&C consultant Kevin Kieller, a partner at enableUC, shares pointers for making the right architectural choices for your Skype for Business deployment.
February 1, 2017
Elka Popova, a Frost & Sullivan program director, shares a status report on the UCaaS market today and offers her perspective on what large enterprises need before committing to UC in the cloud.
January 26, 2017
Andrew Davis, co-founder of Wainhouse Research and chair of the Video track at Enterprise Connect 2017, sorts through the myriad cloud video service options and shares how to tell if your choice is en....
January 23, 2017
Sheila McGee-Smith, Contact Center/Customer Experience track chair for Enterprise Connect 2017, tells us what we need to know about the role cloud software is playing in contact centers today.