Converge or Else? UC Shifts Partner Business Models

By Tara Seals

Here’s a newsflash: End users are starting to see the productivity benefits of unified communications. Here’s a bigger newsflash: They’re also wondering where the folks are who can sell it to them.

The converged channel partner has been a character in the telecom play for quite some time. It’s the rarified partner that has the IT chops of a VAR and the network services expertise of an agent. It’s the trusted adviser that can do it all that’s needed — from installing the boxes to troubleshooting the LAN to integrating circuits. This character is more and more in demand on the stage as IP convergence continues to take over the networking rooms of enterprises and the telecom budgets of SMBs.

Perhaps the biggest driver right now for the converged partner is the ramping up in demand for unified communications — defined as integrated voice, video, data, presence, chat and mobility, all accessible from a desktop client that allows “click-to-x” access to each application. Increasingly, these capabilities extend outside the enterprise to partners and customers, as there becomes more and more interoperability between systems.

The interest is high; In-Stat and Wainhouse Research expect the worldwide market for unified communications to reach a whopping $24.2 billion in revenue by 2012. The compound annual growth rate over this period is estimated at 24.9 percent — and that’s a big pie from which a channel partner can snag a slice.

Unified communications is in fashion; it’s true, but it’s not just the breathless prognostications of analysts contributing to the buzz. “On the hosted side especially we’ve had great dialogs with distributors,” said Sita Lowman, leader of converged core solutions at Nortel Networks. “A lot of them are still getting their arms around that VoIP for SMBs idea, but UC brings them a fantastic tool to expand the base for that because it’s no longer just about saving toll costs — this is about improving the operating profile of the end-user customer, which is a story they are willing to listen to.”

It helps that it turns out the benefits of unified communications actually are being realized. UCStrategies.com, a market research and information site, conducted a unified communications end-user productivity study to see whether the people who actually use the systems — those that do the click-to-calling, as it were — felt unified communications helped them be more productive. The responses were overwhelmingly positive in favor of bolstered efficiency. While few respondents could quantify it, citing unified communications as saving them between 20 minutes to an hour of work daily, the benefits were nonetheless undisputed amongst those surveyed.

Channel Not Ready to Sell Unified Communications

So far, so good. The problem, according to a survey by COMMfusion LLC and Sierra Summit Group, is that the majority of the channel isn’t ready to give the people what they want. “The products are available and waiting to be put in the hands of the end user,” said analyst Pam Avila at Sierra. “The end-user is already prepared to acquire some of the UC tools and reap the business benefits. But the majority of the channel is not ready to sell.”

Avila cited the need for expertise in such diverse areas as data certification, testing, product management and, of course, the ability to grasp a specific businesses’ needs and pitch accordingly. The latter is especially important given that the term “unified communications” has taken on nebulous, and extended meanings. Recently, for instance, AVST Inc. has been positioning its CallXpress UC platform as an ideal response to the legislation in many states requiring only hands-free calling. Businesses, challenged with ways to keep mobile employees accessible and safe, can make use of AVST’s speech-enabled personal assistant for hands-free access to e-mail, voice and fax messages. Users can place and receive calls, manage their calendar and set mobility features completely hands free. But of course CallXpress also does everything else, too, and many channel partners are left wondering how to position this, or any other, unified communications solution.

The lack of comprehensive expertise on the part of partners also contributes to real technical deployment issues. “A lot of people are well-schooled in data, but not so much in voice,” said Aaron Talwar, product marketing manager for AT&T Inc., which offers a managed unified communications service on its private MPLS backbone. “And a lot of things that map well from one app to another start to fall apart when you get to voice. Take alphanumeric passwords — how do I enter that on a telephone? Well, you’d need to create a custom interface. This eliminates some endpoints. Or it gets complex — how do I enter a semicolon? At that point it’s just not practically realizable from a human interface perspective.”

Andy Zmolek, senior manager for GCS security technology development at vendor Avaya Inc., said solving the problem requires a cultural shift. “There are those trained in data, and those trained in voice,” he explained. “Few have experience in both realms. It’s extremely rare in practice because of cultural concerns, where you have the data world with a cowboy attitude, a frontier mentality. Voice guys are less frontiersmen and more caretakers.”

Vendors increasingly are aware of the issue. “The rapid growth in unified communications is requiring the VAR channel to undergo an evolution that is an extension of the transition they went through when voice and data products, and services first emerged,” said Donald Girskis, senior vice president of worldwide sales at unified communications supplier ShoreTel, which hired consultants to help transition its partners to a converged model. “IP telephony combined two disparate technologies [voice and Internet]. With unified communications, it’s even more complicated because video, messaging, chat and presence requires VARs to hire a broader skill set, secure broader partnerships, and inherently change their sales model. The unified communications purchase is less about replacing outdated systems and more about adding new functionality, improving productivity and reducing costs.”

Avila noted like ShoreTel, other vendors are seeing the need to educate their partners. Some are wisely starting with making sure the basics are in place. “On the UC side, we are fairly active in the market with [Microsoft Corp., with a big partnership focused on enterprise UC,” said Lowman. “We’re trying to be very clear that there are three kinds of solutions: full CPE, where there is a voice PBX and a desktop piece, and you integrate the two. Then there are hybrid approaches, where the desktop is on the desk, but you add hosted voice, with a carrier delivering the voice. This is more of a large enterprise play because they’ve got the e-mail on Exchange but are also Centrex users. Then there are fully hosted solutions, with telephony, e-mail, collaboration and so on included for the SMB market at a per month fee.”

There are other signs that vendor support for convergence is happening. Cisco Systems Inc. is in the late stages of its channel partner training transition, which offers master certifications in unified communications and supporting technologies. Microsoft also has extensive training requirements in place to support its increasingly ubiquitous unified communications server-client platform.

Unified Communications Solutions Evolve

While the channel still has plenty of evolving to so, the market is beginning to see some changes. Consultancy Unisys Corp. for instance has deployed Quintum Technologies Inc.’s Tenor VoIP gateway in its “unified communications hosted trial” service. The service allows customers to test Microsoft’s unified communications technology for 30 days at no cost, including Microsoft Exchange Server 2007, Microsoft Office Communications Server 2007 and Microsoft Office Live Meeting. Unisys developed, implemented and manages the hosted trial service in conjunction with Microsoft, and salespeople from both companies san sign up to 20 accounts per customer to evaluate the latest unified communications technology from Microsoft for 30 days, including e-mail, calendaring, unified messaging, multi-party instant messaging, and voice and video conferencing.

In addition, there are companies that are cropping up to host Microsoft OCS on a permanent basis, which stands to change the delivery model altogether. In January 2008, Intermedia Inc., became the first to host the software giant’s unified communications. “OCS 2007 is a major new product in business communication, and we are proud to offer the world’s first software-as-a-service version,” said Rurik Bradbury, vice president of strategy for Intermedia, in a press statement. “Small and medium businesses can now enjoy powerful instant messaging and unified communications, integrated with Exchange 2007, for just a few dollars a month for each employee.”

OCS 2007 hosting is available to all users of the Intermedia hosted Exchange 2007 service, and costs each user $7.95 per month, with a one-time setup fee of $7.95 per user. Also included is a free download of Microsoft Office Communicator, a sophisticated instant messaging program, for each user of the service.

“The bottom line is that the converged channel is still in its infancy – just ask almost any vendor in the industry – yet unified communications is rolling over ‘convergence’ from vendor and end-user perspectives,” Avila writes in a white paper. “Can the young, still forming, converged channel keep up with this shift? Not easily! The very nature of unified communications — open platforms, tighter integration of voice and data, addition of video as an accepted business tool, presence, integration of business processes with communication systems, etc. — requires a much higher level of both technical and business expertise from the converged channel.”

Wise partners would take note now.