Dave Michels
Dave Michels is a Principal Analyst at TalkingPointz. His unique perspective on unified communications comes from a career involving telecommunications...
Read Full Bio >>

Dave Michels | August 05, 2015 |


The Next UC Storm Is Brewing

The Next UC Storm Is Brewing As UC vendors consider how to achieve competitive advantage while enterprises become increasingly collaborative, watch for market turbulence ahead.

As UC vendors consider how to achieve competitive advantage while enterprises become increasingly collaborative, watch for market turbulence ahead.

Enterprise voice communications experienced a long period of stability up until about 15 years ago and the turn of the century, with top vendors enjoying long-term, sustainable advantages via widely used products and well-defined channels. Look at today's UC landscape and you'll see a far different picture.

Now turbulence and unpredictability, not stability, better describe enterprise communications.

UC vendors no longer have a monopoly on enterprise communications; they face competition from companies in multiple industries that promise increased productivity via online collaboration. Barriers such as manufacturing and distribution experience that once kept competitors away are disappearing. In some cases this know-how, expertise, and installed base are becoming anchors. New solutions that offer tremendous value are regularly appearing via direct Internet-delivered models.


In 2008, Gartner identified six "Leaders" in its annual UC Magic Quadrant report: Microsoft, Nortel, Alcatel-Lucent, IBM, Cisco, and Siemens Enterprise. In the 2014 edition, only Microsoft and Cisco remained on that list. That's a 67% turnover in in just seven years.

Enterprise organizations get excited and want new technologies, and their needs and demands fluctuate rapidly. It started with VoIP, when the once-dedicated networks, servers, and endpoints suddenly became shared resources. Organizations even started building their own PBX systems with open-source solutions such as Asterisk. At first VoIP was about the endpoints, but then SIP enabled IP trunking, too. Smartphones and Wi-Fi changed customer expectations regarding mobility, as is the case now with video and its march to pervasiveness.

The vendor landscape has been equally dynamic. In the early days, new competitors like Cisco and ShoreTel demonstrated that experience with digital communications was not a prerequisite for success in VoIP. Then voice expanded to UC and brought Microsoft with it. Nortel got carved up by Avaya and Genband. New companies like 8x8 sprang up and demonstrated that UC could be acquired and implemented as a (cloud) service using mouse clicks instead of indirect channels. And UC vendors got acquisitive, too -- Aastra acquired Ericsson's PBX business, for example, and then Mitel bought Aastra.

Currently the industry is taking a short breather. The disparities between solutions are decreasing, but only temporarily. What have been key product differentiators -- smartphone clients, HD audio, and integrations with popular services such as -- are now common among the offerings. The UC stack is maturing, if not commoditizing as some industry watchers suggest. But this is just the calm before the storm.

The next storm is coming, and it well be less about core UC and more about adjacent forms of collaboration, go-to-market strategies for products and services, innovation, and other factors that create a pipeline of new competitive advantages. This sort of strategy involves the concept of "transient advantage," as Rita Gunter McGrath, a professor at Columbia Business School, described in a 2013 Harvard Business Review article. "To stay ahead, companies need to constantly start new strategic initiatives, building and exploiting many transient competitive advantages at once," she wrote.

The main difference between sustainable competitive advantages and transient competitive advantages is the expected term of the benefit. Sustainable competitive advantages assume long-term winning value propositions; companies use mergers and acquisitions and efficiency improvements to maintain sustainable competitive advantages. Transient advantages are more about near-term innovation and experimentation. Rather than build a long-term advantage such as a patent or channel, vendors survive with an ongoing stream of short-term benefits.

To determine if competitiveness is currently at risk, McGrath suggested vendors ponder the following questions:

  • Is your company using its own products and services? (Or, in the case of UC, does your company frequently use external services and products for communications and collaboration?)
  • Are the margins and returns on investment on products and services delivered the same or higher, or are they decreasing over time?
  • Are customers finding cheaper or simpler solutions acceptable or "good enough?"
  • Is competition emerging from unexpected places?
  • Is customer interest in new products or upgrades declining?
  • Are new-hire candidates accepting offers or finding more interesting options elsewhere?
  • Is top talent leaving?
  • Is the stock perpetually undervalued?

Acknowledging four or more of these is a clear warning of imminent competitive erosion, McGrath wrote. I believe many UC vendors will meet that minimum. That's why the industry appears poised for broad expansion beyond UC. In this next phase, the offers will become much more difficult to compare as the value propositions become increasingly dissimilar. This explains why the industry is seeing so many unusual acquisitions lately. Historically, most acquisitions have been among UC competitors and partners, largely describable as various forms of "expand and grab" or consolidation plays. However, recent acquisitions involve entirely separate or, at best, adjacent markets. Here I'm thinking about acquisitions such as Mitel's purchase of Mavenir, Cisco's Tropo deal, and RingCentral's Glip buy.

With the changes ahead, another set of winners and losers will emerge, and some of those winners are companies we haven't heard of yet. This turbulence will be tough on some of the vendors, as enterprise users realize totally new ways to work and communicate. The fact is that we are more connected (and distributed) than ever before, and the opportunities are significant.

Attitudes are changing rapidly. Voice-centric communications gave way to email and are now shifting to IM/chat-type solutions. The terms "office," "meetings," and "travel" increasingly carry negative connotations. Cloud is becoming the preferred model, and both hard phones and desktop PCs are giving way to mobile platforms as preferred devices.

UC vendors are reconsidering not only the value propositions of their products and services, but also their go-to-market strategies -- including time-tested models. The roles of channel partners are shifting toward services and integration and vendor marketing is shifting toward online discovery. This next era will be more about fixing pain points than new modalities. This includes more than meetings, but addresses issues like finding people and content, synchronization between devices, and seamless security.

Along the way, hopefully the vendors and providers will take advantage of the tremendous opportunity to move from "good enough" to excellent.

Dave Michels is a contributing editor and analyst at TalkingPointz.

Follow Dave Michels on Twitter and Google+!
Dave Michels on Google+


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.