6) The Impact of Free
Wainhouse Research has studied the conferencing and collaboration market for over a decade. In the figure below, we make a point about the impact of free by illustrating the percentage of conferencing users who use various Web conferencing solutions.

Figure 3. Web conferencing platform usage among end users as of 12/2008

The stunning statistic highlighted by the black arrow is the number of people still using Microsoft NetMeeting as their conferencing platform. At the end of 2008, NetMeeting ranked fourth after WebEx, Live Meeting, and "Other." The "Other" category includes a variety of conferencing solutions; consequently, NetMeeting would actually rank as the third most regularly used Web conferencing platform in the world! This is in spite of the fact that Microsoft no longer supports NetMeeting and has not supported it since NetMeeting 3.01 shipped in 2004.

The point we make is that free tools, if they provide adequate functionality, resonate with the market and influence the market long after the vendors may wish the tool's influence would wane. As a case in point for the UC market, consider presence and IM engines. We would submit that presence and IM have been declared as free commodities given the number of places one can go to get a free client: Microsoft Live, Yahoo!, AOL, Google, Skype, etc. We believe that vendors who want to charge for a presence and IM solution UC element will be disappointed in sales because these capabilities are so readily available for free. One exception might be IBM Sametime, which still has a sizeable base paying for licenses.

Why might a company consider paying for presence/IM when they can get it for free? There are a few reasons, and they will revolve mostly around identity and control. With a premises-based presence/IM engine, the company can specify what a user's IM name shall be; this gives the user an identity associated with the company, and it gives the company control (and an archive) over unorthodox, or frankly goofy, IM names and messages. The company can also control who the user engages in IM conversations as well as control the content and archival capability of the IM messages by using IM hygiene software. We note, however, that there are IM hygiene solutions that work with the free, public presence/IM clients as well, so the control issue is a bit more moot than the identity issue.

There will be some instances where a company will need the presence engine integrated with the user's calendar, phone, or some location-based service. For companies requiring these more robust presence capabilities, the free presence/IM solutions are clearly not adequate. However, we believe this is the exception rather than the rule: the majority of presence/IM users will get along fine if an IM system has only computer presence. Even if there is phone presence, calendar presence, and location presence, a common courtesy is to send an IM asking if the other person is there and can chat or speak by phone; hence, while the context a person is working in is sometimes helpful, many people still ask for permission to disturb before commencing a communications session.

Therefore, our belief is that enterprises will generally not pay for the presence/IM elements of a UC solution since these capabilities can generally be obtained for free. One can look at the data in Figure 2 (see Part 1 of this article) to see that companies are clearly not paying for UC clients made by the telephony vendors.

Along with presence/IM, we also postulate that desktop video is free. Microsoft made it free beginning with NetMeeting, and the tradition of free desktop video continues on with Skype, Google, Yahoo!, AOL, and a host of others. Like presence/IM, we believe user companies will generally not pay for desktop video. Over the past 10 years, we have seen a zillion desktop video companies enter and then exit the market simply because there is no money in desktop video. Some entrepreneurs and venture capitalists believe that the advent of scalable video coding (SVC), with its higher quality, will be the breakthrough that will make desktop video profitable. Our experience suggests that SVC video is an incremental improvement that will ultimately show up in the free desktop video solutions (Google's video chat already has SVC technology).

What other UC elements are free? Voice has been free for a long time, thanks primarily to Skype. However, good voice has typically not been free. This too may be changing if the article by John Malone in NoJitter is correct which states that approximately 18% of the PBX market is open source. Furthermore, business quality voice has been compromised due to lower MOS scores on business calls made using mobile phones. Because voice is so important, our belief is that people will continue to pay for it; however, we expect to see more free voice deployments and the cost for paid deployments (read PBXs) to fall significantly, particularly when OCS 2010 comes online with remote survivability and E-911 capabilities.

Another free UC capability is email. While most of us have email through our employers, most of us also have free email accounts through Google, Yahoo!, and others. Companies pay for email primarily to have an identity. It looks a lot more professional for my email to be from wainhouse.com than from Gmail or Hotmail. Plus, one can avoid the tiresome blinking ads that come with free email services. Clearly there are some control and hygiene components in an enterprise email solution that one does not get with a free email solution. However, the value is primarily in the identity a paid email solution provides.

So, which UC elements will enterprises pay for? Well, they still pay for the PBX with good voice quality, but the cost for PBXs is clearly on the decline. They will pay for good executive, group, and telepresence video solutions. They will pay for audio and Web conferencing although Web conferencing is often bundled with audio conferencing at a very low cost. They will pay for shared workspaces and enterprise email solutions. They will pay for mobility. There are a lot of UC elements companies will and are paying for. Our objective in this section was to point out that companies are generally not paying a lot for UC clients nor are they paying for desktop video.

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