SHARE



ABOUT THE AUTHOR


Melanie Turek
Melanie Turek is Vice President, Research at Frost & Sullivan. She is a renowned expert in unified communications, collaboration, social...
Read Full Bio >>
SHARE



Melanie Turek | February 17, 2010 |

 
   

The Real Revenue Role of Unified Communications

The Real Revenue Role of Unified Communications UC is not a new market; it's a way for vendors in existing markets to continue making money.

UC is not a new market; it's a way for vendors in existing markets to continue making money.

We are about to release Frost & Sullivan's latest research on the unified communications market, and one thing stands out to me above all others: UC is not a new market; it's a way for vendors in existing markets to continue making money. The biggest impetus for the players in this space to keep playing isn't to deliver new business revenue; it's to stop existing, or past, revenues from disappearing-not to another vendor (although that's always a risk), but from the market altogether.In the case of Microsoft and IBM, the goal is simply to give customers a reason to upgrade. Unless those vendors can deliver a compelling reason for companies to move to the next version of their communications and collaboration software, companies aren't going to--sometimes for many years. Before OCS and Sametime (in its robust iteration), fewer companies were upgrading their Outlook/Exchange or Notes/Domino deployments on a routine-or even occasional--basis.

And the telephony vendors have it even worse: Hard phones and network gear should be built to last--sometimes decades or more. And except in certain specific use cases, like the contact center, businesses don't need or want to add more features to their employees' handsets. As a result, there are fewer opportunities for those vendors to upsell their existing customer base.

Of course, that doesn't mean there isn't a market for UC, or that UC revenues aren't worth tracking. OCS and Sametime are not simply "upgrades" of Outlook and Notes, after all--they are entirely new applications. But the revenues they promise to generate may not be a profit bonanza to the vendors that sell them; they may, instead, simply serve to keep those vendors in business. They may even act as loss leaders; we are seeing certain companies in the market giving away UC clients, to encourage the purchase (or upgrade) of other applications and servers, for instance.

This has an impact on the size of the UC market. Obviously if you're giving away the software for free, you're not making any money off it. But even more important, when we look at the overall size of the UC market, we need to continually remind ourselves that most, if not all, of the money spent on UC clients and servers would probably have been spent on other communications applications (IM, conferencing, voice, etc.).

The question for vendors, then, is how to grab a bigger piece of the already-existing pie.UC is not a new market; it's a way for vendors in existing markets to continue making money.





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!

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

February 22, 2017

Sick of video call technology that make participants look like they're in the witness protection program? Turns out youre not alone. Poor-quality video solutions can give users an unprofessional ap

February 7, 2017

Securing voice communications used to be very simple since it was generally a closed system. However, with unified communications (UC) you no longer have the walled protection offered by a dedicate

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.