Reflecting on Gartner's 2017 UC Magic Quadrant
What this year's assessment reveals about the evolution and revolution of enterprise communications
Gartner recently published its 14th-annual "Magic Quadrant for Unified Communications" (UCMQ), which shows both the evolution and the revolution of enterprise communications. Here are the highlights, followed by my thoughts on the changes.
In compiling its Magic Quadrants, Gartner uses a relative rating of the qualifying companies according to "Ability to Execute" on the vertical axis and "Completeness of Vision" on the horizontal axis. The Leaders quadrant, with higher ratings on both scales, is the most coveted position.
The changes from 2016 to 2017 are subtle:
- Cisco, Microsoft, and Mitel remain in the Leaders quadrant
- Avaya, surrounded by uncertainty related to its Chapter 11 bankruptcy, moves down to join Unify in the Visionaries quadrant (higher on Completeness of Vision)
- Huawei and NEC remain in the Challengers quadrant (higher on Ability to Execute), primarily reflecting limitations in their product offerings and the variations in their offerings between geographic regions
- Alcatel-Lucent Enterprise (ALE) moves down to the Niche Players quadrant (lower on both Execution and Vision), based on Gartner's assessment of shrinking regional coverage and limited investment by ALE's parent. In 2016, ShoreTel and Interactive Intelligence appeared in the Niche Players quadrant, but each has since been acquired (by Mitel and Genesys, respectively)
For inclusion in this year's UCMQ, a vendor has to offer specific product capabilities and meet a specific business profile criteria.
Requisite product capabilities are:
- Telephony (presumably the requirements of the former Corporate Telephony MQ, which Gartner stopped compiling two years ago)
- Online audio, video, and Web meeting solutions, which can include partnerships
- Instant messaging and presence
- Messaging, via email, voice mail, or unified messaging
- Software clients for multiple environments (i.e., devices, operating systems, etc.)
- Ability to integrate with other business and communications software applications
Other criteria are:
- Integration of all product capabilities into a complete on-premises UC solution with a consistent user interface
- Significant market presence in three or more of the product capabilities
- Minimum annual revenue of $150 million from UC
- UC solution offered in multiple regions -- North America, Europe, and Asia/Pacific
- Evidence of investments that support market objectives for large and very large enterprises
Note that the UCMQ covers on-premises solutions, including telephony capabilities as I noted above. Neither UC as a service (UCaaS) nor contact centers are included in the UCMQ, as Gartner issues separate magic quadrant reports on those.
So, what does all this mean? Seems to me it boils down to two major market trends.
The first trend is that corporate telephony is still a viable market. Perhaps we should call this "plain old telephony system," adapting the "POTS" (plain old telephone service") acronym of the past. Clearly, many enterprises still see telephony as basic infrastructure comprising mature, highly reliable, and very economical trunks, phones, and features. While the vendors of these core telephony systems may be developing UC features, their channels and customers are actually buying and deploying POTS capabilities, not UC extensions.
In many cases, these buyers are local government, education, or other enterprise organizations that have many analog lines, or they are organizations in areas such as retail, food service, or branch banking that have very low-level user requirements. Also, some enterprises in manufacturing, distribution, or natural resources production are most interested in the economy of the solutions rather than the sophistication of the software. These enterprises can serve their mobile users with cellphone technologies while addressing their meeting requirements with low-cost cloud-based services.
Mitel (including the acquired ShoreTel), NEC, Avaya, Unify (Atos), and ALE are all excellent providers of these mature, highly reliable, and economical systems. Cisco and Microsoft also offer core telephony capabilities, but Gartner notes that Cisco's are not usually the "most economical" and Microsoft's on-premises telephony is only now reaching maturity.
The second major market trend is that the top two Leaders, Cisco and Microsoft, are rapidly expanding their value propositions. They seem to be moving their solutions, and their marketing messages, far beyond telephony -- and, at least in my view, even beyond unified communications.
Cisco and Microsoft each clearly regard traditional voice communications, as well as meeting and messaging technologies, as infrastructure for use in delivering more comprehensive business applications and solutions. Examples include:
- Cisco's main UC-related initiative is its cloud-based Spark service. Spark is a messaging-based collaboration application that integrates with key components of Cisco WebEx. The Spark solutions focus primarily on collaboration among workgroups and teams, with Cisco's Spark messaging being: "Create. Share. Do."
- Microsoft's main UC-related initiative is the inclusion of all types of communications, including its Cloud PBX and all UC capabilities, within the Office 365 suite of personal and business productivity tools. A point of emphasis for teamwork and collaboration is Microsoft Teams, branded as "... the new chat-based workspace in Office 365."
Gartner addresses this trend with the term "workstream collaboration," one of seven adjacencies to the UC market it has identified. These adjacent technologies will play a crucial role in UC's evolution, the firm suggests.
In summary, the Gartner UCMQ 2017 shows 1) the rapid consolidation of the corporate telephony markets, as evidenced by mergers, acquisitions, and even a bankruptcy proceeding; and 2) the focus by the Leaders to move up the value stack by emphasizing and developing productivity-enhancing applications for both generic and specific usage profiles within enterprises. Enterprise organizations will need to take due care in determining where to apply each of these industry approaches. Hopefully, the 2017 UCMQ will be helpful with that planning.