As we come to the end of the calendar year we will see many newspapers, magazines, and, of course, blogs running Top 10 lists for the first decade of the century in a particular field or market. So why make an exception? I present my list of the Top 10 events in the enterprise communications market during the past decade.
For an event to make the list it must have, in retrospect, been a milestone that changed market dynamics or was an industry first with reverberations for years to come. I am sure that most readers will concur with some events in my list and disagree with others. I welcome comments from readers to suggest their candidates for the list.
In chronological order:
1.) 2000: Cisco Systems introduces CallManager Release 3.0
This was the first release of the product that reflected Cisco's input following the acquisition of Selsius Systems in late 1998. Release 3.0 featured increased system scalability and redundancy. A new 7935 Media Convergence Server was introduced as the key element of a new clustered system design. Cisco's new 7900 IP telephone models were the first modern-day desktop instruments that were more than modified versions of older-generation digital telephone instruments (like its Intecom ITE-based predecessors). The Cisco 7900 series phones were characterized by a large display area and softkey feature implementation instead of programmable keys (XML browser capability would be added a year later). Cisco also introduced new media gateways that were a major step forward in design and function compared to the almost laughable original Selsius Systems equipment.
The IP telephony era had officially arrived and Cisco leveraged the updated design to totally upset the competitive equilibrium of the market.
2.) 2000: Lucent Divests Business Communications Systems (BCS) Unit: Avaya is Born
Six years earlier, AT&T divested its telecommunications equipment operations, both carrier and enterprise, to create Lucent Technologies. Several years later, the powers that be at Lucent decided that it should focus its resources on its carrier equipment business, and spun off the enterprise business unit as a new corporation known as Avaya.
The BCS unit was always treated like a stepchild in its days under AT&T and Lucent, mostly because its revenues and profits paled in comparison to those of other business operations; the enterprise communications business was never a preoccupation of top management.
The divestiture was the best thing to happen to the business unit, because it allowed the newly-formed company to focus on the enterprise market without battling for corporate resources or the attention of executive management. If BCS had remained with Lucent, it would also have gone down with the rest of the ship, up to the point where Lucent "merged" with Alcatel several years later. Instead, almost 10 years later, Avaya remains a market leader while a significant number of Lucent employees were terminated before and after the Alcatel deal.
3.) 2001: Mobile Extensions behind the PBX
The introduction of the Ericsson Mobile Enterprise Communication System and Avaya EC 500 Extension-to-Cellular options may have been the beginning of the end of the age of PBX desktop telephone instruments, though we didn't know it at the time.
The Ericsson and Avaya options allowed a station user to use a cellular handset as an extension behind their premises PBX system for one-number service, abbreviated intercom dialing, calling name/number display, and single voicemail box functionality. Calls were not forwarded, as was the previous custom, but effectively bridged between the desktop instrument and mobile handset.
Though the first cellular extension options were hardware-dependent, the basic option today can be implemented without additional server or circuit card equipment. During the past few years, GUI client options for smartphones have greatly increased feature functionality and user productivity.
Although most PBX station users still have a desktop telephone, the number of system calls placed or received from a mobile communications device is growing at an accelerating rate; dual-mode cellular/WLAN devices help minimize air time charges from the cellular services provider. The increasingly mobile nature of the current-day enterprise communications user threatens the existence of desktop telephone instruments, though it will still be many years before they are whisked off to a museum display.
4.) 2002: First SIP-Based PBX
The very first drafts of what was to become the Session Initiation Protocol (SIP) standard were written in early 1996, and the first Internet Engineering Task Force (IETF) draft, which was titled "draft-ietf-mmusic-sip-00," had a single request type for a call setup. SIP has come a long way and is now part and parcel of virtually all things related to communications.
The first PBX to fully incorporate the SIP standard in the architecture design was announced by Pingtel at SuperComm 2002. Most, not all, of the first-generation IP telephony systems were based on IEEE H.323 standards originally developed for videoconferencing. The Pingtel SIPxchange system did not change the market at the time, but did get the SIP ball rolling. Previous to the announcement, Pingtel was best known for promoting its SIP-based telephone instruments. Several months after SIPxchange was introduced, Zultys announced its own native SIP system, the MX 1200.
After lackluster sales, Pingtel changed its business model for its SIP system to an open source software model, and Zultys went bankrupt in 2006 before its assets were acquired by Telrad Connegy; yet nowadays, virtually all currently marketed IP telephony systems support SIP to some degree (and some more than others). While SIP trunk services are likely today's hottest PBX option, the true benefits of SIP are yet to be realized.
We have some inkling, though. For example, Avaya Aura Session Manager's Application Sequencing capability has the potential to take PBX design and functionality to a new level and dimension (see my recent No Jitter post). SIP, unlike ISDN, is firmly taking hold and will be a core design element of all new communications systems and products for the foreseeable future.
5.) 2003: Siemens and Microsoft Launch OpenScape
The powerhouse duo of Siemens and Microsoft combined for the milestone event in the creation of what we have been referring to as Unified Communications (UC). The original OpenScape offer was based on the convergence (remember that term?) of the Siemens HiPath IP-PBX and the Microsoft Live Communications Server (LCS) 2003 (formerly known as RCT Server) to support a variety of voice, video, calendaring, wireless and messaging services support by presence management.
In retrospect it was the beginning of Microsoft's long-term plan to enter the enterprise telephony market, and that by itself was reason for inclusion on this list, but the resulting Siemens OpenScape server offer was the first full-function UC solution, and for this reason it is cited. The following year, Nortel introduced its MCS 5100 UC solution, and since then UC announcements have not abated.
The original OpenScape may have been ahead of its time, because of the scope of new communications capabilities and some of the more subtle features of the offer. I was present when Siemens first introduced OpenScape to the analyst community ahead of the public announcement, and I must confess that I was unable to grasp the entirety of what was being introduced without further thought in the following days. OpenScape was far more than just a softphone or 1990s CTI-type of application. Today, with many years of subsequent product announcements, the first full featured UC solution is much better understood.
Eventually, Microsoft was able to leverage its Siemens relationship to help design and develop more enhanced versions of LCS 2003 and rename it Office Communications Server (OCS); Siemens soon offered OpenScape as its own standalone solution that eventually converged with the HiPath 8000 software platform, emerging as OpenScape Unified Communications Server in 2008. Though it has now been more than six years since OpenScape was announced, the majority of the market has yet to implement it or a comparable UC solution.
According to research studies many customers have not even implemented basic presence services in support of their telephony system. UC, or communications and collaboration (the term I now personally prefer) is following a slower adaptation curve than IP telephony, but there are indications that customer implementations are beginning to pick up at a more rapid rate.
6.) 2005 Industrial-Strength Open Source IP-PBX from Digium
Digium Asterisk Business Edition was the industry's first industrial-strength version of its open source IP-PBX software. Asterisk was originally created in 1999 by Mark Spencer in 1999 when he found it too expensive to buy a traditional PBX solution for his linux-support.net business. Though not the first open source PBX software offering, Asterisk has become the most widely known, downloaded and implemented solution for customers seeking an alternative to more traditional IP telephony systems. Until Digium introduced Asterisk Business Edition (ABE) in 2005, open source PBX solutions were regarded as less stable and reliable than fully packaged and tested systems. Many open source customers were on their own if they downloaded the software and attempted to implement a functioning system with third party hardware. More than a few customers who purchased an open source system from a local dealer that packaged a system solution had post-sale service and support issues, even in those cases where the dealer didn't go out of business shortly after the system was installed (as was sometimes the case).
Digium's new $795 ABE package came with a version of Asterisk tested for over 240 simultaneous calls per server. Just as important, it also included a technical manual and quick start guide, upgrades and support, and a commercial license with legal protections. The stability and reliability issue was addressed, and open source PBXs became a viable competitive threat to the traditional enterprise communications system establishment.
I believe the ABE announcement was a turning point for open source PBXs, and though most open source solutions have been implemented in the small systems market, more than a few larger enterprise customers have chosen the alternative solution and many more are considering it. Digium now fully packages ABE with hardware equipment (servers, gateways, telephones) and is among the top ten enterprise communications system suppliers in North America based on line station shipments.
7.) 2006: Microsoft Launches OCS 2007 at VoiceCon Orlando
Jeff Raikes, president of Microsoft's Business Division, announced during his VoiceCon Orlando 2007 keynote address the public beta release of Office Communications Server (OCS) 2007 and Office Communicator (OC) 2007. It marked a significant milestone in the enterprise telephony market, because there was now no doubt that Microsoft planned to eventually replace more traditional voice-centric PBX systems with its own UC solution. Rather than operating at the periphery of the telephony market (see above) Microsoft intended to be at its center.
Industry reaction to the OCS 2007 announcement was, as expected, substantial. Though Raikes has since left the company, Microsoft has been making strong headway in OCS 2007 development in the past 30 months. Most noteworthy: For the first time Microsoft is tentatively scheduled to participate in my annual RFP workshop at VoiceCon Orlando 2010.
Microsoft has been shipping millions of OCS/OC 2007 licenses to customers, primarily for presence and Instant Messaging (IM) applications, but each license also includes restricted telephony capabilities. For a relatively modest fee, customers can activate full telephony functionality and essentially have replacement software for their currently installed PBX system (assuming they also install the necessary server, gateway, and telephone equipment). This was a driving force behind Microsoft's ICA (Innovative Communications Alliance) relationship with Nortel: Install as many OCS 2007 solutions as possible to work behind a PBX system as the initial step towards replacing it sometime down the road. The other PBX system suppliers have also been engaged in this strategy by supporting interoperability between their system and the Microsoft solution.
The next release of OCS 2007 will bring much more functionality to the product, such as E911 and analog station support (as disclosed during the Release 2 announcement in 2008) to make it a more feasible standalone solution for a wider universe of customers, if only in a group environment. In a few years it may be difficult to distinguish between the OCS 2007 feature/function set and a current full-featured PBX offering. Though traditional telephony services will remain invaluable to customers as time progresses, alternate communications methods will continue to grow in use and stature, and that's when Microsoft's solution will be on an equal, perhaps greater, footing with more voice-centric competitive offerings.
8.) 2006: 3Com/IBM Brings Virtualization to PBX Market The fate of 3Com's telephony system business is currently shaky following the recent HP acquisition announcement, but at one time the data networking system supplier had growing momentum as a player to watch. After 3Com acquired start-up NBX Systems, they slowly gained market share in the small systems market for IP telephony systems. When 3Com decided to repackage its central office softswitch as an enterprise solution, they gambled they could succeed in the highly competitive large systems market. The 3Com VCX 7000 was a native SIP carrier-grade communications system that utilized third-party hardware equipment. An agreement with IBM to resell the product through its distribution channels was a major victory for 3Com at the time.
The first joint offering utilized IBM's eServer xSeries platform, but to reduce costs and complexity, 3Com and IBM repackaged the VCX 7000 to work on an IBM System i5 server, model 520 or 550. In addition to the VCX 7000 IP Telephony Suite (including presence, unified messaging, audio conferencing, video conferencing, contact centers, and enterprise mobility), the single server solution also supported a variety of IBM software applications, including ERP, CRM, Websphere, and DB-2 using virtualization technology.
Other enterprise communications system suppliers soon followed the 3Com/IBM lead in virtualization, most notably Mitel Networks in 2007 when it repackaged its 3300 call control software with a suite of applications (Mobile Extension, Teleworker, NuPoint Messaging, and Live Business Gateway) on a single SunFire server. Recent virtualization announcement from Aspect and Avaya merely continue the ongoing design trend.
Today, virtualization is one of the key enterprise communications technology trends deployed by system designers for any number of reasons, including cost reduction, design simplification, Green initiatives, and software management and reliability. Let's hope that the days of dedicated-server farm solutions will be over thanks to virtualization.
9.) 2008: Cisco Announces WebEx Connect, a "Cloud Computing" Offer
One of the smartest Cisco acquisitions of the past few years, and they have made many, was WebEx. WebEx service supports a wide variety of on-demand desktop sharing collaboration, online meeting, web conferencing and video conferencing applications. It is the largest and most well-known service of its kind with more than 2 million customers.
The Cisco WebEx Connect Communications as a Service (CaaS) offer builds on the original Webex platform, including presence and IM capabilities, to support a variety of UC-type features and functions designed for both small and enterprise-size business customers. WebEx Connect is, in essence, the hosted solution equivalent to two Cisco premises solutions: Unified Presence and Meeting Place.
At the recent Cisco Collaboration launch, it was announced that the company itself would use WebEx Connect for its own presence and IM requirements, integrated with its own premises solutions. Among the other launch announcements was a new WebEx Mail service, designed as an alternative to premises email solutions, such as Microsoft Exchange. There is little doubt that much of Cisco's existing premises solution portfolio for communications and collaboration will be available as CaaS offerings in years to come.
Though WebEx Connect was not the first hosted CaaS offer by a leading enterprise communications system supplier, it is likely to be the one with the most long term impact on the market. A few years earlier, Avaya launched three hosted service offerings (telephony, messaging, and contact center), but has since discontinued the formal project. CaaS as a concept dates back to the glory days of Centrex services in the 1970s for large customers and the last 15 years of the 20th century for small system customers.
Hosted communications offerings by service providers of all stripes have been growing the past decade, but it takes the imprimatur of someone like Cisco to effect a major change in customer perception and acceptance. In North America, most hosted telephony customers have been small business customers, though large line-size customers across the globe have also showed a tendency to migrate from premises solutions to CaaS offerings more quickly than they do here.
Cisco believes that a hybrid mix of premises and Cloud offerings will co-exist and often be the optimal solution for many enterprise customers in the coming years. Look for Microsoft to follow in Cisco's steps with its Windows Azure operating system platform as the services underpinning. Google, currently the wild card in the enterprise communications market, will most likely make its move through an expansion of its current Google Voice and Google Wave services. We are now at the beginning of the new CaaS era, but it will have been the WebEx Connect announcement that we will look back at as the market-changing starting point when the dust settles.
10.) 2009: Avaya Acquires Nortel Enterprise Solutions
I may be jumping the gun, because the Avaya/Nortel deal is not yet final, but I assume it will go through later this month or early next year at the latest. Much has been written about Avaya/Nortel on this website during the past few months so I will try not to be too redundant.
The combined operations, sales, and installed base of the two system suppliers creates the largest global enterprise communications competitor by almost any measurable metric: installed customer base; annual global market share (line stations and revenues) for a variety of basic product areas (telephony systems, contact centers, voice messaging/processing systems). The combined product portfolio will have to be winnowed down, but it will satisfy virtually any and all enterprise communications customer requirements. Geographic market coverage will also be the most comprehensive, as will field support services (technical and professional).
On the downside, Avaya must do everything in its power to retain as much of the Nortel installed customer base as it can. There are early indications that uncertainty about the future of existing Nortel products is beginning to drive customers to look for new solutions: Almost every competitor has put into place a Nortel replacement strategy designed to replace existing product with their own. While this is going on, the task of merging the two business operations will take valuable resources, including time and personnel, away from competitive battles, including continuing skirmishes with Cisco and preparations for the Microsoft invasion. And look for more staff downsizing to maintain a lean organization and reduce expenses for bottom line results.
Avaya will make big news again after the New Year when it reveals its product roadmap. I don't envy them this task, because a major mistake of any sort could be very costly, be it the wrong discontinued product or a poorly worded message. For an analysis when the roadmap is revealed, keep tuned to No Jitter.
Special Mention: Cisco and Siemens Bring Social Networking to Enterprise Communications Market
Two announcements last month broke new ground within the enterprise communications market. As part of Cisco's Collaboration launch, three new offers were grouped under the banner of social awareness: Show and Share, Pulse, and Enterprise Collaboration Platform. Only a week before at VoiceCon San Francisco, Siemens Enterprise Communications previewed Twitter functionality for its OpenScape Unified Communications (UC) Server. You can read about each in earlier No Jitter articles and blog posts (at the hyperlinks in this paragraph).
It is much too early to properly assess the coming convergence between social networking services and enterprise communications, but there is little doubt in my mind that the relatively recent revolutionary new communications process in the consumer world will translate very nicely in the business world. Is it possible that today's enterprise communications networks will one day be known as enterprise social networks? I wouldn’t bet against it.
