Blog archive - July 2012

Apple announced today its intended acquisition of Authentec for $356 million – a valuation of nearly 7x over fiscal year 2011 revenue. Interestingly, although the acquisition is being highlighted in terms of AuthenTec’s flagship business in fingerprint scanning and touch sensor technology for security of mobile computers, revenue growth for this side of the business has been falling. On the other hand, revenues for the company’s embedded business more than doubled from $12.5 million in fiscal year 2010 to $25.3 million in fiscal year 2011. Margins for embedded are at an impressive 83% for 2011, up from 2010, while the margins for hardware-based smart sensor solutions came in at 36%, down slightly from 2010. Part of Authentec’s embedded security products include DRM solutions based on OMA and PlayReady DRM for Android and iOS devices. Customers for Authentec’s multi-platform DRM Fusion products include Japan’s largest cable provider J:COM , Cyfra+ (part of CANAL+) in Europe, Pantech – among Korea’s top three mobile handset makers, and Samsung. Growth is fed by the soaring adoption of personal computing devices on the one hand, and massive global investment in TV Everywhere offerings on the other. OTT and ubiquitous video offerings are becoming a must-have component for any online video offering. At the same time, video is becoming the killer application for a range of high-performing handheld and portable devices, and secure DRM clients are required to receive and render high-quality premium content on such devices. Thus, a range of companies from traditional conditional access systems (CAS) vendors to vendors of home media gateways, set top boxes, embedded operating systems and CE devices are either developing their own software DRM technology or acquiring established vendors of software DRM clients. Examples include Irdeto’s acquisition of Cloakware, Motorola’s acquisition of Secure Media, Google’s subsequent acquisition of Motorola Mobility and also Widevine, and Cisco’s recent acquisition of NDS. Microsoft is an interesting outlier, with its own PlayReady DRM as well as a rich ecosystem of third party solution and component providers. Apple’s acquisition of AuthenTec is interesting, then, not just for the well publicized enterprise security possibilities, but also because it is the latest twist in a long-running chain of interesting merger, acquisition and strategy stories in the conditional access and DRM space. AuthenTec has a significant range of offerings for Google's Android which competes directly with Apple in the smartphone and living room TV spaces. It also offers strong support for Microsoft's PlayReady which has significant market share and forms the heart of secure SmoothStreaming services which compete with Apple's media streaming alternatives. As a result, this acquisition is likely to cause far reaching ripples and changes in competitive landscape for a wide range of vendors and applications. Does this finally place Apple within reaching distance of the maturity and reach that Microsoft and Google have with their IPTV middleware platforms and OTT TV solutions - which might well justify the high premium Apple is paying for the company? Does this create new opportunities for competitors like Discretix who also offer strong multi-DRM solutions for a range of mobile platforms? Or will Apple simply focus on the enterprise security portions of AuthenTec as expected, and spin off the DRM unit to a vendor of set top box middleware or hardware conditional access systems? Time will tell.

Juniper and Polycom were among some companies reporting their Q2 results yesterday. The results were in both cases better than Wall Street's consensus but both companies leaned towards caution (perhaps Polycom a bit more so than Juniper, which was more optimistic in the long term). My quick comments follow below: Juniper: Q2 results for Juniper were a solid beat, mainly due to OPEX control (and that is expected to continue, as JNPR guided for FY13 opex to decline by $150mn YoY) and gross margin improvements in services. More importantly, guidance was better than expected and the visibility is much more improved. Juniper's comments on 2nd half 2012 carrier spend was mostly in line with the Street's expectations (modest increase in US CAPEX will be offset by a decline in EMEA spend). Book-to-bill was >1, Verizon represented about 12% of sales versus 15% in Q1. Switching strength (including PTX) helped Enterprise sales (up 13% QoQ). Juniper is still trying to show improvement in Security, with revenues down 5% QoQ but the company announced a new partnership with Riverbed, paying $75m up front to licence Riverbed's ADC technology; longer term it plans integrating RVBD's Steelhead Mobile Tech. into JUNOS pulse. Polycom: PLCM had a solid Q2 with revs of $379m (versus consensus estimates of $360m), however the company guidance for the second half of 2012 left some pundits disappointed. The market remains in a stalemate position, given a difficult macro backdrop and software transition. Visibility also continues to be limited, On the positive side, new offerings focused on software, cloud and web video collaboration solutions can drive growth in 2013, Fiscal Q2 results were led by strength in China (51% share) and share gains vs. competition in North America. Gains in areas such as UC Group Devices (+5% QoQ) and UC Platform (+6% QoQ) were partly offset by losses in UC Personal Devices (-5% QoQ). Gross margins of 60.9% implied limited pricing pressure in the quarter, but its not clear whether that will be sustainable in the long run.

It’s rare for me to meet a Cabernet Sauvignon that I don’t like. My favorites are Cabs with backbone: big and full-bodied. I like my wines earthy (even a little herbaceous [taste and aroma of herbs]) with some tobacco flavor. And I love when the wine finishes dry. My wine preferences have matured and changed over the years (I have attended many, many tastings) I started off liking the more fruity, light reds and creamy, buttery chardonnay’s and now I really cannot abide either. My design skills have also matured and improved through the years. I have designed many pages, some good, some great, some forgettable, and some truly insightful. I find that my best designs are conceived when I have a few key principles in mind. When keeping proximity, similarity, and order (a few of the Gestalt principles of perception) top of mind I produce clean, easily navigable pages. Proximity occurs when elements are placed close together. While they are still separate objects they are perceived as unified because they are close to each other. Similarity occurs when objects look similar to one another; they are then perceived as a group or pattern. Repetition of colors or objects is pleasing and aids in fast comprehension. Order (or symmetry) occurs when the whole of a figure is perceived rather than the individual items that make it up. When designing to instruct, order and symmetry help the information to be consumed and comprehended quickly. There are more principles, but these three are the ones that help me the most when designing guidebooks. Chelsea Cappetta created this slideshow that showcases all the Gestalt Principles: Gestalt Laws and Design from chelsc Simplicity is beautiful, especially if your end goal is comprehension. Attending all those tastings allowed me to learn what I liked and didn’t like and have been the building blocks for me to be a more informed and happy wine drinker. The Gestalt Principles give me a great starting point when designing a page, as long as I know how things interrelate on the page, I can then design the page for maximum, full-bodied, consumption. Jannette is the Senior Graphic Design Artist for Growth Team Membership, a premier best practices research group within Frost & Sullivan. You can follow her on Twitter: @jwhippy.

Vidyo is grabbing the headlines this week with the announcement of VideoWay - a free cloud based connectivity service for anyone using H.323 and SIP-based video conferencing endpoints, Lync clients, and mobile devices to connect with each other and/or with Vidyo endpoints. Scheduled to launch this fall, the free service is targeted at users in the enterprise videoconferencing market which is currently dominated by traditional MCU and gateway solutions and services. According to our recent research, the market for video conferencing infrastructure systems continues to grow rapidly with global revenues reaching $746.6 million in 2011, growing at 26.8% over the prior year. The top two vendors – Cisco and Polycom– dominate the market with 75% of the revenue share. Vidyo aims to disrupt this space with its software-based routers that leverage H.264 SVC technology for delivering HD video over general purpose IP networks at lower costs. Growing at 82% in 2011 (albeit from a small revenue base), Vidyo is expanding its footprint for its branded products as well as non-branded offerings through service provider and OEM partners. I was at the pre-briefing and demo of VidyoWay last week at an analyst event hosted by Vidyo in New York city. The process of joining a VidyoWay call seems extremely simple for even the most novice users. Users can click to connect from the email invite and join the video conference via the web interface with a meeting number and PIN, similar to using an audio conferencing service today. This takes away the complexity typically associated with multi-vendor environments connecting for B2B video collaboration. Users can invite participants from their own address book instead of a centralized directory. VidyoWay also offers a mobile client for smartphones and tablets. VidyoWay being completely free will appeal to IT managers that are looking to extend the reach of their existing video conferencing systems for B2B connectivity without busting their budgets. This announcement will directly impact not only the traditional MCU market but also services offered by the likes of Blue Jeans (though Skype connectivity is missing), Vidtel, and Glowpoint. When asked about the cost model and monetization opportunities, Ofer Shapiro Vidyo’s CEO and co-founder explained that VideoWay is strictly meant to connect existing video conferencing endpoints from providers such as Polycom, Cisco, and LifeSize (roughly measuring at a million endpoints today). Vidyo will monitor usage and through its fair use policy will require the use of the service only for the purpose of connecting traditional room and desktop based video conferencing devices. Vidyo is not giving away any free video conferencing clients, such as VidyoDesktop licenses, so it will continue to generate revenues for its product line. As a result, Vidyo will be able to contain the costs while being able to use VidyoWay as a platform to create awareness and get into the enterprise. According to Vidyo, the economics work out way better than the expensive marketing campaigns. Vidyo has already created a buzz in the market for its solutions and its message against what it calls expensive legacy MCUs. While it does not publicly disclose in-depth revenue details, in Q1 2012 when most vendors reported a Y/Y revenue decline Vidyo grew revenues by 90% for its branded products. With VidyoWay, the adoption will escalate even further making it a key provider in this space. B2B connectivity has been one of the biggest pain points for videoconferencing users. VidyoWay addresses that challenge directly and since it will be free for any number of enterprise users, it has the potential to immediately swing users from competitive offerings. However, the move is not without risks. It goes without saying that VidyoWay will catch on only if the service delivery is top notch and users don't face any technical or usabilty issues. Moreover, Vidyo’s success will eventually hinge on its ability to have a sustainable monetization model and on conversion of free users to its paid-for solutions and services. While it remains to be seen if Vidyo will be able to significantly impact the well establised video conferencing businesses run by Cisco and Polycom, this announcement is sure to pose some serious headaches for Vidyo’s competition.

I recently published Frost & Sullivan’s 2011 Analysis of the Mobile Endpoint Security Products Market - Tackling the Shift to Mobility with a Strong Endpoint Security Solution. The study is already available on Frost.com for our Information Security subscribers. Smartphones, tablets, and other mobile devices are quickly replacing traditional laptops and desktops. As we continue to hear the terms bring your own device (BYOD), security and device management is becoming a crucial topic. With the proliferation of smartphones and tablets, the risk of losing corporate or personal data is heightened. The launch of the iPhone in 2008 drove the adoption and acceptance of smartphones in both the consumer and corporate segments of the market, so much that often times individuals use a single smartphone to conduct both business and personal matters. Frost & Sullivan estimates that in 2011, the global smartphone and tablet market reached 509.1 million units shipped and we expect growth in to continue. Specifically, we expect to see increased growth within the Android device market as they gain acceptance within the corporate market. In turn, this will ultimately create more security risks and headaches for IT administrators. As this market continues to grow, hackers will continue efforts to target smartphones for theft of personal and/or corporate data. With increased demand for mobility, hackers now understand the vastness of the opportunity it presents, and as a result the threat landscape for mobile devices has rapidly evolved to create significant challenges for businesses implementing a mobile strategy. As mobile computing continues to expand with the mobile workforce, cyber criminals will continue to place significant focus on this lowest hanging fruit because of its enormous profit potential. With the global explosion of wireless devices, software developers have responded to market demands by creating a vast and growing number of business and productivity applications for the mobile workforce. Although this has been a positive development for mobile workers and their employers, organizations continue to struggle to centrally to manage application deployment and ensure that security protection on mobile devices can keep business critical data safe. With the growth of smartphones and tablets, end users are extending their computer endpoints to these smaller personal devices. Endpoint security vendors are challenged to offer consumer mobile security solutions that provide the same level of protection as one would expect from a typical desktop or laptop computer. While mobile security offerings have evolved from simply protecting devices from anti-malware, protection from malicious applications has become a critical functionality and essential to any solution. As a result, many security companies are offering mobile anti-malware solutions in conjunction with application scanning and protection of data on the device. For the enterprise, endpoint security companies are combining mobile device management solutions. Companies are going beyond just protecting the mobile device, but are now leveraging their capabilities to manage beyond the PC to manage iOS, Android, and Windows mobile devices. Refer to Frost & Sullivan’s annual global market study “Analysis of the Mobile Endpoint Security Products Market – Tackling the shift to mobility with a strong endpoint security solution” for more information regarding revenue growth, market trends, and competitive analysis. Martha Gomez Vazquez is occasionally allowed out of her cube, but if not then she can be reached by e-mail martha.vazquez@frost.com

Last month I had the opportunity to attend the Alcatel-Lucent Enterprise Analyst Conference in the beautiful city of Chicago. Many analysts from different world regions focusing on the enterprise communications market were brought together to meet with the ALU Enterprise executive team and hear about the company’s strategic direction, product development, and customer wins. The event was very productive and the audience received clear guidance on where the company stands today and where it is headed with its enterprise communications strategies. The following are some of the key highlights of the event: Genesys Spinoff Completed with Successful Technology Transfer At the event kick-off Mr. Michel Emelianoff, the president of the ALU-Enterprise business unit, explained how the company successfully imported the source code, object code, and tools from the Genesys organization. The results were described as very satisfactory and receiving validation and acceptance from the company´s customers. The main outcome of this technology transfer is Alcatel-Lucent’s advanced OpenTouch architecture, which now comes in various flavors, including the OpenTouch Business Edition and the OpenTouch Multi Media Services. Alignment of Core Focus Areas Taking into account the different market trends impacting the enterprise communications space, Alcatel-Lucent identified key focus areas based on specific business opportunities. Some of the company´s main goals included delivering on the IP/SIP transformation, enabling new consumer-led usages of applications and devices, delivering on the pod/mesh architecture, and turning on dynamic application fluency on optimized access. In pursuit of these core goals, the company has set up concrete plans for growth. First, Mr. Emelianoff explained that Alcatel-Lucent will focus on key target markets, placing special emphasis on the small and mid-market segments. A recent Frost & Sullivan study revealed that 70 percent of the world SMB businesses are still using legacy communications infrastructure. The same study revealed that around 50 percent of these users consider implementing advanced IP communications within the coming two to three years. As a result, there is a clear business opportunity in the SMB space that Alcatel-Lucent could leverage. Furthermore, due to the consumerization of IT, the company wants to capitalize on its installed base by leveraging various UC-related communications applications and consumer-led models. Its strategies revolve around the notions of multi-party, multi-device, and multi-media conversations. For this, the company will specifically aim at creating a leading position with OpenTouch and introducing new attractive applications and cloud-based models. Finally, Alcatel-lucent wants to continue to bet on an accelerating infrastructure transformation by helping enterprises to implement an application-fluent network and invest in data center transformation. The goal is to achieve double-digit growth in data. Alignment of Online Marketing Strategy In order to increase brand awareness and adapt to the continually changing landscape of enterprise communications, Alcatel-Lucent has decided to align its online marketing approach with the customer buying cycle. Based on the notion of educating the prospective customer (creating reputation), providing a potential solution (generating demand), and helping in the selection process (enabling sales), the company is investing in different marketing resources, such as virtual events, webinars, marketing automation (ELOQUA), a reference store, and an SMB microsite. The final goals are to engage, influence, and enable customers to acquire new communications technologies. Shifts in World Regional Emphasis One of the most tweeted phrases in Mr. Jan Zuubier´s presentation, Alcatel-Lucent´s Vice President of Sales, was "Southern Europe (e.g., Greece, Italy) is keeping me awake at night". The very challenging economic climate resulted in a weak company performance in the enterprise communications market. As a result, substantial resources were released and allocated to other world regions, such as Latin America and the Middle East. Aside from this region, Alcatel-Lucent has done pretty well in all the rest of the regions, including Central and Northern Europe (healthy growth in Germany, Poland, Turkey, and UK), Middle East and Africa (including South Africa, UAE, Quatar, Morocco, Saudi, Algeria, Kuwait, and Senegal), South America, and North America. Mr. Zuubier revealed that the order intake in enterprise communications increased around 17 percent in North America, with strong growth in education, healthcare, and the hospitality sector. Finally, the Asia Pacific region was described as a very fruitful region with double-digit growths in both the enterprise communications and networks markets. Healthy growth figures are seen in South-East Asia, Singapore, Indonesia, Japan, Korea, and China. Expansion of the OpenTouch Solutions & Technologies Alcatel-Lucent also shared insight on the evolution of the OpenTouch portfolio and the transformation of the user experience, the technology, and the consumption models. New products have been added to the broad range of communications solutions and technologies related to OpenTouch. On one hand, the OpenTouch Conversation is the new face of this OpenTouch architecture and provides a single, intuitive interface to access a complete range of UC features on the iPads today, and other mobile devices in the future. On the other hand, and on the visual front, the company introduced OpenTouch Video Store, a “YouTube-like” experience that allows companies to own a private portal to record and share visual content. As Lizardo Espinosa and Craig Walker simply explained, the OpenTouch Video Store allows you to own the content of videos, instead of having YouTube owning the information. While there have been many other new and interesting technologies announced to the analyst communities, those were under strict NDA requirements. My Takeaways From the Event Overall, the company made a very good impression to the analyst community in terms of its understanding of the latest market trends and how it is planning to address them. In the vision and strategy presentation Mr. Emelianoff described the emergence of a new era: the personal cloud era, brought by the tablet, one of the major disrupters in the enterprise space. The personal cloud era is founded on the user’s ability to use the technology the way he or she likes it. How will Alcatel-Lucent help in this paradigm shift? By evolving the infrastructure to user-centric application-fluent networks and, thus, enabling organizations to move to the personal cloud era at their own pace.

I have been tracking the North American hosted IP telephony and unified communications (UC) market for over a decade and have always found it tremendously exciting. Nimble, entrepreneurial companies have been quick to pursue this opportunity, continually innovating and valiantly overcoming the numerous hurdles thrown their way by shrewd competitors and demanding customers. It’s been a great pleasure to develop relationships with the amazing people who run these companies and learn from their insight and broad industry experience. I still remember my early conversations with 8x8, BroadSoft, CallTower, Covad, M5 Networks, Pingtone, Telekenex and other pioneers in the hosted space. These companies shaped the hosted IP telephony market and did all the hard work of educating customers and competitors about the benefits of hosted communications long before cloud became a trendy word and everybody flocked to be a cloud provider. The market has grown at a steady pace over the years. According to my estimates, in 2011, the North American hosted IP telephony and UC services market grew at 42.5 % in terms of installed lines and 35% in terms of revenues. I expect the market to continue to grow at about 30% in terms of both installed lines and revenues over the next six years. Now the market is going through a major transformation. The cloud hype and changing market conditions have resulted in a flurry of announcements by new market participants, causing positive excitement for some and serious grief for others. More specifically, the PBX vendors are bringing the heavy artillery to the hosted market. Most of their solutions are multi-instance, virtualized platforms that use shared hardware and dedicated software instances to address the needs of larger, more demanding and security-conscious business customers. Here follows a brief summary of key PBX vendors’ cloud and hosted offerings. Mitel was one of the first PBX vendors to launch a portfolio of hosted/cloud solutions. The Multi-Instance Communications Director (MICD is targeted at service providers looking to brand their own hosted IP communications services and provide all billing and management support. MICD is a high-density platform that competes directly with the more “traditional” hosted IP telephony platforms (such as BroadSoft’s) and appears best suited for small and medium-sized (SMBs) looking for standard PBX functionality, along with voicemail, twinning, and basic conferencing. Mitel Anywhere is an MICD-powered service provided by NetSolutions, Mitel’s carrier division. Virtual Mitel Communications Director (MCD), on the other hand, is available to service providers looking to target a slightly different customer base—typically larger businesses with hybrid (hosted and premises-based) environments. As always, Siemens Enterprise Communications was also quick to market with an innovative technology and delivery model. Siemens’ OpenScape Cloud solution leverages Siemens’ UC suite to deliver a broad set of communications and collaboration applications to businesses looking to outsource their communications infrastructure. Siemens has chosen to use data-center partners to host the platform and to sell exclusively through its channel. Siemens also had some OpenScape Voice implementations with service providers such as Postrack and Engage prior to the launch of the new solution. Even though the OpenScape Cloud solution was launched more than a year ago, Siemens has shared little about the success of this offering. Cisco initially forayed into the hosted market with its Hosted Unified Communications Services (HUCS), but this product saw limited success. It is now heavily marketing its Hosted Collaboration Solution (HCS) solution and claims over 20 partners globally. Verizon was the first one to launch an HCS-based unified communications as a service (UCaaS), which is intended to complement, not replace its hosted IP Centrex (HIPC) service. AT&T followed suit with an HCS-based service, differentiating through a more sophisticated user client. Soon after, Sprint launched its own UCaaS service with a unique value proposition around advanced mobility features. EnPointe is betting on its advanced contact center capabilities, complementing the core HCS suite, and SpanLink is looking to deliver a similar value proposition, but in a partnership with Convergys. Inteliquent is positioning itself as a wholesale provider focusing on platform management and using partners to interface with customers. West IP Communications is already reporting significant traction of its HCS-based service (complementing its heritage hosted IP telephony offering), but mostly in Asia. Cypress Communications, now Broadvox, has launched an HCS-based service along with its heritage solutions based on GenBand A2 and C20 and BroadSoft . Most of Cisco’s partners are targeting large businesses, primarily those with existing Cisco infrastructure. One of the key benefits of the HCS platform is customer ability to preserve Cisco IP phones and even port Cisco licenses. Microsoft is attacking the market from a different angle. With its Office 365 offering it is mostly targeting small businesses looking for an all-in-one package of business and communications applications. But Lync in Office 365 doesn’t support PSTN connectivity, so it’s not a true PBX-replacement offering. However, recently, Microsoft introduced a multi-tenant Lync platform for its partners to deliver hosted telephony and UC services. Interest appears to be very high among partners and I expect to see a plethora of hosted Lync offerings in the near future. In fact, an entrepreneurial company called GeniSys Global engineered a multi-tenant platform out of Microsoft Lync Enterprise and has been delivering hosted Lync services for over a year now. Avaya, somewhat surprisingly, forayed into the hosted space with a small-business, over-the-top cloud offering dubbed AvayaLive Connect. Using its web.alive platform (now rebranded as AvayaLive Engage) for the e-commerce portal and Nortel’s SCS technology at the back end, Avaya is targeting businesses that look for on-demand usage and billing, quick and easy provisioning, and relatively simple functionality. The solution features basic PBX functionality, voice conferencing, voice/unified messaging, video, mobility, presence, and instant messaging (IM)/chat. The solution supports PC, Apple Mac, iOS and Android devices. AvayaLive Connect is part of a broader framework and portfolio—Avaya Collaborative Cloud. I expect Avaya to launch a large-business cloud solution as part of this framework in the near future. Alcatel-Lucent has a cloud solution based on its OpenTouch architecture that can be deployed on premises or as a hosted, multi-instance platform targeting larger business. It is likely to use the OpenTouch architecture to enable partners to deliver hosted services to small businesses as well. Earlier this year, NEC launched UNIVERGE Cloud Services/UCaaS. The initial offering is a comprehensive suite of voice, data and video services accessible through a Web-based end-user client that can be deployed on any device, including PCs, smartphones and tablets. As of Q2 2012, UNIVERGE Cloud Services UCaaS were expected to be available in three packages—basic, standard and premium – specifically designed to be offered through NEC’s broad network of authorized dealers, as well as directly from NEC’s enterprise sales group. Most recently, Toshiba announced its VIPedge cloud offering, hosted in Toshiba’s data centers and delivered through its vast network of dealers. As the name suggests, Toshiba’s IPedge is at the foundation of the new cloud solution, which offers all the functionality of the premises-based platform, including PBX features, voice messaging, PC-based call control, soft phone, presence, instant messaging, integrations with CRM and other business applications, and mobility. ShoreTel chose a different route to the hosted IP telephony and UC services market. Instead of developing a hosted or cloud solution in-house, it acquired M5 Networks, a leading provider of hosted communications. M5 has leveraged BroadSoft’s platform to develop its own robust, customized SaaS back end, which allows it to better manage the applications and network and be more agile with new features and capabilities. ShoreTel ‘s partner channel is likely to provide significant growth opportunities for the cloud offering. This article is already too long to delve into the advantages and disadvantages of the different solutions and business models. But the key implications of these new developments are as follows: End users can enjoy a continually expanding array of hosted/cloud options available to them. New platforms launched by PBX vendors offer a broader set of pre-integrated capabilities than most multi-tenant solutions. Multi-instance platforms are allegedly more secure as each customer receives a dedicated instance of the software. With the new business models, end users can continue to do business with their trusted value-added resellers (VAR) and local interconnects even as they migrate to hosted solutions (unlike the past, when hosted solutions were only available through telecom carriers). The success of each individual vendor is largely dependent upon the strength of its channel and its partners’ willingness and ability to promote hosted solutions. S Special programs, incentives, and, more important, education and training will be critical to partner success. The more traditional multitenant solutions (e.g., BroadSoft’s platform) will continue to offer a more economical and easier-to-manage infrastructure for service providers targeting businesses with fewer customization and security concerns. Regardless of the platform used on the service provider network, businesses need to make a choice whether they wish to deploy a managed or an over-the-top solution. The quality of public broadband has greatly improved over the years, but a managed solution can provide the business with a peace of mind with regard to service availability and quality. Check these links for additional insight on the hosted market: • My Enterprise Connect presentation on hosted IP telephony and UC services (to access, use: Username: 12enterprise, Password: connect12) • Avaya Collaborative Cloud Goes Live with AvayaLive Connect North American Hosted IP Telephony and UC Services Market

Marketers continue to be faced with the imperative tofind ways to appeal to specific customer needs, keep costs down, and drive higher ROI. This focus on the customer has marketers reassessing their value propositions and customer segments—to target the “right” audience with an engaging message. However, marketers are expected to take on this task with limited resources—budgets and staffing levels are expected to remain stagnant. To accomplish more with less, marketers are striving to improve the effectiveness of lead generation efforts and adoption rate collateral by Sales. More pointedly, marketers are striving to improve their channel strategies and collaborate closely with Sales on segmentation efforts. To examine these challenges in more depth, the survey asked respondents to “root cause” their top internal challenges; indicating if they stem from issues with staffing, process, technology/systems, or strategic alignment. Respondents attribute their challenges to two primary causes: limitations in staff and a lack of common objectives. When comparing Marketing’s 2012 resource allocations to forecasts made in 2011, the belief that budgets and staffing would remain static is inaccurate. In fact budgets have decreased since 2011. In regards to staffing, budgets have dropped by over a third. In contrast, marketers’ growing love affair with social media is readily apparent as social media activities are receiving twice the budget allocation they did last year. Additionally, marketers have allocated more budget to “content development”, which is critical for demand and lead generation activities. This year’s survey included examined Marketing’s demand generation capabilities. Overall marketers are satisfied with their demand generation effectiveness—most respondents ranked their effectiveness as “Above Average”. Marketers are also satisfied with their effectiveness at specific demand generation tactics—with the exception of social media and mobile marketing. Differentiating the Value Proposition: 2012 Asia Pacific Marketing Priorities Survey Report View more presentations from Frost & Sullivan Holly is the Research Lead for the Growth Team Membership, a best practices research group within Frost & Sullivan. Follow her on twitter at @hlykehogland.

This month I had the pleasure to attend the Mitel 2012 Business Partner Conference in San Diego, California. I not only had the opportunity to get to know a beautiful city, but also to learn about the company´s direction, latest advancement and upcoming goals. Overall, Mitel´s event was very upbeat, with scores of partners carrying the company’s flag proudly. Healthy financial results, numerous product announcements, and revamped go-to-market strategies were among the highlighted themes in the event. In terms of finances, the vendor report to have grown its position in all major areas of its business. Product revenue growth has been mainly attributed to the move to a software-based product industry. Growth in services revenue is attributed to a shift from the legacy, hardware-centric break/fix type of maintenance to the higher margin software and services business model. Mitel revealed that the company´s non GAAP net income grew about 67% for 4th quarter 2011 versus the same quarter in 2010. Also, Mitel revealed a net income as percentage of revenue of 8.1 percent year-over-year. Finally, Mitel´s international revenues grew by more than USD 10 Million in 2011. Mitel also delivered several key product advancements in both enterprise communications platforms and endpoint offerings. While premises-based platforms have been strengthened with the additional features and capabilities in latest releases, the major stars here were clearly virtualization and cloud communications solutions. During the demo sessions, I had the opportunity to for hands-on, real time experience with Mitel Virtual Solutions. Besides taking a look at how MCD and Mitel unified communications and collaboration (UCC) applications are available as virtual appliances in a VMware vSphere environment, I had the chance to also test how UCC applications have been extended to the VMware View virtual desktop environment, with single sign-on to Mitel desk phones and Unified Communicator Advanced (UCA), including how the UCA softphone works within a virtual desktop environment. I have to admit it was impressive. Today, there is no doubt that Mitel has one of the strongest communications virtualization stories in the enterprise UCC market. In terms of cloud-based communications, Mitel supports this evolution with a single, cloud-ready software stream that can be deployed in any type of architecture, including private-, public-and hybrid-cloud deployments, allowing easy movement between the various deployment models. With Mitel Anywhere, the company delivers platforms enabling service providers to offer everything from high volume, standardized business communications offerings to highly customized unified communications solutions. Two different service delivery models for public cloud versus private/hybrid cloud were showcased: Mitel Anywhere Cloud Communications Solutions and Mitel Anywhere Infrastructure-as-a-Service (IaaS). From a new product perspective, Mitel’s new endpoint advancements were the highlight of the event. On one hand, UCA for iPad, iPhone and Android complement the existing Blackberry client, and support the ‘Bring Your Own Device’ trend. UCA mobile clients enable users to control their Dynamic Status, view corporate contact details and presence information, access call history information and unified messaging, and dial over the corporate network using OfficeLink. With much build up, the surprise of the event was the unveiling of the Mitel UC360 Collaboration Point – a multimedia collaboration device for in-room presentation delivery and multi-party audio and visual collaboration. Specifically designed for small group meetings, the Android-based endpoint allows presenters to share information stored on a USB stick or in a cloud-based service, such as Google Apps or Dropbox. All participants can access the content being presented and interact through video conferencing using different types of endpoints. UC360 definitely fills a need many organizations have by delivering a robust yet cost efficient multimedia collaboration endpoint. In 2011 Mitel evolved its go-to-market business model to become a predominantly channel centric company. The basic idea has to make Mitel an easy and simple company for partners to do business with. In North America, Mitel has implemented a “direct touch” sales organization designed to prospect for new business. Mitel fulfills this business though channel partners, with very few exceptions (i.e., customer stated preference). Today, Mitel performs 95% of its sales through channels and 5% direct in North America. In addition there are opportunities for North American channel partners to augment their service delivery capabilities (such as data center virtualization skills) by joining the Mitel Authorized Partner Services program (APSP) and reselling Mitel professional services. Mitel's go-to-market strategy for international markets (EMEA, APAC and CALA) is wholly focused on an indirect channel model as opposed to direct sales. Mitel is a channel-centric vendor with sales, engineering, training and marketing resources aligned to support channel partners. Mitel works with a variety of channel categories based on specific country market requirements, market coverage and in-country resource. In some markets (UK, Netherlands and France) the channel structure is complemented by Mitel "high-touch" sales teams which provide vertical market assistance and business development expertise to support those channels in selling into larger enterprise organizations. Going forward, Mitel´s key areas of focus will be to strengthen customer loyalty, elevate marketing to the next level, and modernize IT infrastructure. I look foreard to hearing about the company’s progress throughout the year and at next year’s Business Partner summit.

I once read an article in the Wall Street Journal about how writing the pilot episode of a new series is usually easier than writing the second episode, which can be an excruciating process. Maybe it’s because writers use all their good material in the first attempt, and feel a bit empty for the second go-round. I hope this isn’t the case with me and this blog. I so enjoyed writing the first one – I hope you enjoy reading the second one as much. At least I teed up a few things to discuss in this one, so I’m not starting at ground zero. Wasn’t that savvy of me? For instance, I promised you all a list of my favorite detective stories. The “Professional Communicator” in me thinks that it would be a good idea to close with this, rather than lead with it…so scroll to the end if that’s why you’re here. I also promised to tell you more about something that I just wrote – a new growth process toolkit on technology strategy. There can’t be a more satisfying feeling in the world that finishing a large project, especially one that took a great deal of personal blood, sweat, and tears (and no, for a writer, that’s no exaggeration: writing is a blood sport, played sitting down). I love to finish writing something, and then not look at it for a few weeks. That way, when I read it again, I see it with fresh eyes. Sometimes this means I’m disappointed in something that I previously had thought was terrific—and other times, I feel nothing but pride in what has been produced. I’m happy to say that in this case, my re-reading of this toolkit produced the latter sentiment. Maybe it’s obnoxious of me to say that, but trust me – my standards are high, and this isn’t praise I would give myself, or anyone else, lightly. Furthermore, I think it’s probably a good thing for a writer to believe in her work. If you don’t, who will? And if I didn’t believe in it, I wouldn’t be blogging about it right now. I wouldn’t be telling you how I think there’s something in it that will strike a chord with many of you. As I mentioned in my previous posting, technology is such a complex, moving target that it’s nearly impossible for anyone to make sense of the chaos. Patterns are fleeting, and moments of normalcy or consistency even more so. What this toolkit is designed to do is to help you stay calm in the storm. To take a systematic approach to understanding your business, identifying market opportunities, and evaluating them. To nurture creativity within your organization, because without it, you’re a sitting duck. These are really important ideas—and perhaps not entirely new, but still meaningful, and difficult to execute. The toolkit’s purpose is to aid that execution to the greatest extent possible. If you’re interested in reading the entire thing, and you are a member of Growth Team Membership, you can click here. If you’re interested in reading the entire thing, but you’re not a member of Growth Team Membership, you can still read an excerpt by clicking here. Enough about that. I mentioned at the start of this blog that I would close with a list of my favorite detective stories. In the interest of brevity, because brevity is the soul of wit, I shall keep the list to five (starting with my favorite). 1) Some Buried Caesar, by Rex Stout 2) Black Orchids, by Rex Stout (I realize it would be more interesting not to repeat an author, but…my blog, my rules) 3) Murder on the Orient Express, by Agatha Christie 4) The Big Sleep, by Raymond Chandler (read this, and then watch the movie: Bogie and Bacall at their most snazzy) 5) The Maltese Falcon, by Dashielle Hammett (read this, and then watch the movie: Bogie at his most Bogie, sans Bacall) For a more in-depth book discussion, or to share your thoughts on technology strategy and its myriad challenges (none of which really existed in the lovely 1930s, “stuff dreams are made of” world I’ve just recommended for you), please take to the comments. As always, happy computing. Katherine Burns Katherine is the Director of Strategic Communications for Growth Team Membership, a premier best practices research group within Frost & Sullivan. You can follow her on Twitter: @KatherineSBurns.

This year’s survey results indicate sales executives’ 2012 challenges are shaped by their need to increase productivity. Specifically, sales executives need to pinpoint the highest-value sales activities, streamline their sales processes to match, and invest in new tools and practices for team collaboration. The other prominent challenges are enhancing the ability to monitor the business environment for shifts in pricing pressures and customers’ purchasing behaviors and needs. To further explore this year’s challenges, respondents were asked to “root cause” their top challenges—whether they derive from issues with staffing, process, technology/systems, or strategic alignment. Sales executives attribute their challenges to the gamut of process, tools, and people. While respondents foresee little to no increase in staff, budgets are on the rise. Given social media’s increasing role in companies’ strategies and activities, the survey asked respondents about the sales force’s use of social media. An overwhelming majority (98%) of the respondents are using social media in their daily sales activities. Specifically, respondents employ social media to identify needs, build awareness, and nurture ongoing client relationships. Unsurprisingly, LinkedIn is the primary social media platform sales executives use—primarily joining special interest groups to enhance their understanding of customer needs. Fewer respondents are actively participating in or creating special interest groups, which forgoes opportunities to demonstrate topical expertise. Regarding the use of virtual and social media tools in sales activities, respondents employ tele-presence and/or live streaming video and predictive analytics—the analysis of customer behavioral data to identify patterns and insights for customer interactions. However, few respondents are using social media monitoring tools (e.g., Radian 6), dashboards (e.g., Hootsuite or MediaFunnel), or CRM systems (e.g., Nimble). Consequently, sales executives are not realizing the full benefits these tools offer for improving customer focus, collaboration, and productivity. 2012 Asia Pacific Sales Leadership Priorities Survey Report View more presentations from Frost & Sullivan Holly is the Research Lead for the Growth Team Membership, a best practices research group within Frost & Sullivan. Follow her on twitter at @hlykehogland.