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UC Pricing Reflects Broad Adoption

There's been a lot of buzz in the past few weeks about UC Pricing, stimulated by Allan Sulkin's post about Avaya's bundling of the one-X (R) licenses with both new and upgraded PBX user licenses. The buzz following that post was mostly about how it's easier to discount software compared to hardware (though a poor strategy, IMHO) and about how this will misstate the actual UC market results. Both interesting but wait, there's more.First, this should not be any surprise. Back in September 2007, we wrote an article in Business Communications Review magazine on this topic--"De-Mystifying VoIP and UC Pricing"--and the market has been following the forecasted track. As noted in that article, the PC-based solutions from the desktop software providers started the trend by including IM and Presence, conferencing, and mobility services in their licenses. In 2007, those items were priced separately by the PBX systems providers, but, as forecasted, are increasingly being included in the price of the base PBX user license. So, on track to the forecast.

Second, this is being done for a very practical, customer-centric business reason: UC functions offer new value. Most of the toll cost savings were captured early on in the VoIP cycle, so those are not major investment justifiers at this point. However, Well-known examples include:

* Travel avoidance using web conferencing, and video conferencing where needed.

* Toll and cellular savings by avoiding calls either to voice mail using presence or altogether using IM.

* Cellular savings using mobile portals to deliver information.

* Office space savings by enabling remote, "virtual office" workers.

* Improved customer response and business speed with improved options for mobile personnel.

* Business acceleration and improvement by applying UC to optimize business processes.

The UC features, sold on their own, can generate savings for enterprises, but that does not help sell PBXs, which vendors still need to "pay the rent."

Which brings us to the third point: Many PBX channels are not well-prepared to sell UC solutions. Here's where bundling gets sticky, since a bundled offer provides no added commission for either the channel or the sales reps, unless they are skilled at identifying advanced applications that justify professional services as part of the implementation. Perhaps those channels with call center expertise or vertical market VAR skills can adapt to create a strong UC position, but the mainstream, high-volume PBX channels may not have embraced UC selling and are certainly constrained from developing those skills in a tough economy. Customers tend to buy from those channels that best understand the business applications of any technology, and that is true for UC as well.

In parallel, UC solutions from desktop software suppliers and from mobility suppliers are selling well. Indications are that suppliers such as Microsoft, IBM and RIM are running ahead of plan. A growing number of case studies indicate that enterprises are willing to change their business processes based on the new UC capabilities. The desktop and mobility suppliers have channels focused on realizing those improvements through both basic UC functions (UC-User Productivity or UC-U) and through the higher value UC system integrations (UC-Business Process or UC-B).

So, the buzz about bundling of UC functions with IP-PBXs is no surprise; it reflects the cost savings and business benefits that UC can produce, and is a competitive necessity for all types of communications suppliers. All this is a real indication that UC (and UC beyond VoIP) has arrived, since every type of communications system supplier is including it in their offers.

If you're an enterprise telecom, IT or LOB manager, this is good news, but requires some discretion. Free things provide you with easy options, but you will want to focus on actually realizing the business benefits--i.e., on how creative the suppliers and the enterprise customers can be with the new UC technology. We'll be highlighting real enterprise customer case studies again at VoiceCon San Francisco 2009--you'll want to be there to hear more first hand.