Zeus Kerravala
Zeus Kerravala is the founder and principal analyst with ZK Research. Kerravala provides a mix of tactical advice to help his...
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Zeus Kerravala | January 22, 2016 |


Unify Past, Present, and Future

Unify Past, Present, and Future With the sale to Atos complete, Unify is ready to start a new chapter -- one largely written around its Circuit collaboration tool.

With the sale to Atos complete, Unify is ready to start a new chapter -- one largely written around its Circuit collaboration tool.

The year isn't even a month old and we've already had a flurry of analyst events and sales conferences -- last week, Polycom and Fortinet, and this week, Unify. In Unify's case, the timing coincides with the completion of the company's sale to Atos SE. With the sale's closing, the next chapter opens in the long history of the company formerly known as Siemens.

Earlier this week I had a chance to discuss the new beginning with Unify executives Bill Hurley, CMO, and Uwe Hermanns, vice president of global product marketing. For starters, Hurley walked me through the numbers, and with Unify apparently on much better ground than it had previously been -- its financial situation bottomed out in third quarter of fiscal 2014 -- the acquisition is well timed.

Going into Q3FY14, the company had seen its revenues drop in the range of 15% to 20% for several consecutive quarters. Since then, Unify's fortunes have turned around, evidenced in consecutive quarters of growth. In the last full quarter, Q4FY15, Unify had its largest order intake growth number ever (up 38% year over year) with its book-to-bill ratio being greater than one for the first time in a long time. Although I haven't talked to Atos about Unify's financial situation, I imagine the improvement made pulling the trigger on the acquisition easier.

1, 2, 3
In accounting for the turnaround, Hurley pointed to three contributing factors. The first is just plain old good sales execution. Sometimes the winner isn't the company with the best product or the biggest organization, rather it's the one that does all the little things well -- getting orders in on time, dotting all the i's, approving discounts, etc. This seems obvious, but being able to accomplish this over a sustained period of time requires an organizational culture of execution excellence.

The second factor is the sales force's ability to use Circuit, which is Unify's communications and collaboration tool, as a door opener to large voice and UC deals based on the traditional OpenScape platform. Customers such as Stony Brook University in New York and the state of Oregon are interested in Circuit but not ready for wide-scale deployment yet, Hurley said. However, customers are deploying OpenScape as the foundation for a future Circuit rollout. The ability to lead with a differentiated product, like Circuit, has led to about 35% more enterprise deals than a year ago, he said.

The third component of the turnaround is the vertical strategy. Instead of trying to be all things to all people, Unify has focused on a few verticals. These include healthcare, the public sector, and financial services.

I certainly think this is the right strategy for Unify. Every vendor talks about the importance of selling business outcomes and moving "up the stack." For Unify, at its size now, it's better off mastering a few verticals rather than trying to be OK at a bunch of them.

Collaborative Positioning
Unify is taking a practical approach to positioning its collaboration portfolio. While it has designed Circuit as its solution for the digital workplace, it will maintain OpenScape until the majority of customers invest in digital transformation. Given how hot a topic digitization is at the World Economic Forum currently going on in Davos, Switzerland, that shift may come sooner than later for Unify. This year should be a big year for Circuit, with the addition of complimentary features absorbed from traditional UC functions.

The Yammer-like blueKiwi, Atos's enterprise social tool, is the other component of Unify's collaboration portfolio. Circuit and blueKiwi do have quite a bit of overlap, so a good way to think of the difference is that blueKiwi is an application centered around communities whereas Circuit is communities plus conversations. From what I understand, blueKiwi will continue to serve the needs of large and very large enterprises looking for a traditional social tool but some integration work between the two is required.

Other 2016 initiatives revolve around expanding the routes to market for Circuit. In 2015, Unify released the product, launched a referral sales model for partners, and pre-launched a Circuit developer program. In a November post, I also pointed out some new pricing and a focus on the current install.

In 2016 Unify will add a number of new routes to market, including:

  • Service provider program
  • Reseller program
  • Circuit developer network
  • Vertical integration scenarios

Unify was one of the first vendors to roll out a workstream communications and collaboration solution, but has lost some momentum to more aggressive vendors like Cisco, which has Spark, and Slack. These new routes to market can get Circuit into more customers' hands quickly. With Circuit driving large OpenScape deals, as Hurley told me, I see these programs as crucial to Unify's long-term success. The needs to get them up and running quickly.

Lastly, don't look for much change post Atos. The two organizations will combine their services groups so the customer sees them as a single entity, and Unify is reaching out to its larger customers to assure them that there will not be any disruption. Unify certainly has had its ups and down since rebranding in late 2013. New executives, a new product, headcount reduction, and an acquisition were some of the major events of the past few years. With much of the hard work done, and under new ownership, it's now time to begin cranking out that next chapter. As I pointed out in my year-end wrap-up, time is of the essence given all of the other vendors having gone through their own restructurings.

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