Blog archive - August 2011

We recently wrapped up a Market Insight on next-generation UC architectures. The study specifically focuses on enterprise session management solutions. Please watch for it to be published in coming weeks. For purposes of the study Frost & Sullivan defines session management solutions, or architectures, as those that incorporate premises-based SIP session management and IP telephony applications, SIP trunking services and enterprise session border controllers to integrate/unify disparate voice infrastructure (TDM/IP and multi-vendor) to achieve centralized control, uniform dial plan and ubiquitous access to central UC applications for all end users. A primary value proposition of these advanced, SIP-based architectures is the ability to unify multi-vendor networks and disparate components, whether hardware or software, to improve intra-company communications and enable operational efficiencies of centralization. Session management environments provide enterprises with phased migrations to IP communications that leverage existing investments in legacy platforms, orchestrate the rollout of IP telephony and UC, and scale to connect the islands of IP communications that exist in a company’s network. There are broadly two types of competitors in the enterprise session management market: applications developers (e.g., PBX and UC vendors) and infrastructure vendors (e.g., media gateway and SBC manufacturers). Elements from both camps are typically required to create session management architectures. While Avaya is credited as a thought leader and innovator in the space, a number of UC solutions developers now offer session management solutions of their own. Most notable among these are UC applications developers such as Alcatel-Lucent, Cisco, and Siemens Enterprise Communications. Developers position session management solutions as defensive strategies to protect and migrate their installed customers, and as offensive tools to move their own laggard customers as well as competitive accounts toward end-to-end IP communicaitons capabilities. Infrastructure suppliers such as Acme Packet, AudioCodes, NET and others have increased concentration on the opportunty. Infrastructure vendors have generally stuck to their knitting by providing solutions for network connectivity, security, interoperability and integration. While not optimized for all enterprises, we generally believe that session management may be the perfect storm of capabilities needed to help to move enterprises toward the end-to-end IP communications capabilities that promise to unleash the full potential of UC and address a number of impediments to adoption. Market trends coming together to form this perfect storm include: Ability to protect and prolong use of existing enterprise investments Increased adoption of industry-standard SIP by vendors and service providers Emergence of SIP trunking services as lower-cost means for traffic transport, and carrier and PSTN connectivity Momentum of centralization and enterprise data-center deployments Emergence of virtual machines to more affordably deploy applications Increasing demand for always-on (e.g., mobility, IM and social software) and high-bandwidth video applications Emergence of cloud-based solutions that lower the cost and complexity of deployment Maturation and increased feature functionality available with hosted offerings Flexibility to create hybrid solutions integrating cloud/hosted elements with CPE Increasing availability of professional and managed services to support advanced capabilities

As we are about to wrap up our voice and unified messaging study, we would like to share with the UC&C community some of our main findings that are worth mentioning: •In 2010, the world voice and unified messaging market generated revenues of approximately USD 897.8 Million, a decrease of 5.86 Million from 2009 aggregate revenues. • Continuous price reductions, increased bundling of solutions and the de-prioritization of messaging systems in favor of other technologies have been some of the main factors in altering the market. • While revenue decrease is expected to last at least through the next two years, future moderate growth is still anticipated as unified messaging solutions contribute to a larger portion of the total enterprise voice and unified messaging market revenues. • In 2010, unified messaging contributed to approximately 60 percent of the total messaging revenue, and is expected to contribute to almost100 percent of the revenue at the end of the forecasted period. • Unified Messaging (UM) seats shipped continued to increase to 12.72 Million - a 27.3 percent year-over-year growth from 2009 and representing a significant 53 percent of total VM/UM seat shipments. • For the first time, UM-enabled seat licenses, belonging to mailboxes that do not require any additional license or cost to "become" UM capable, have exceeded the number of Voicemail-only (VM) seat licenses. • Similarly, UM year-over-year revenue growth was up by almost 10 percent to USD 538.3 Million, and is expected to noticeably increase by a CAGR of 7.1 percent through the forecasted period. Although challenged by multiple factors that are expected to decelerate its overall market growth, UM is still very active segment that offers multiple market opportunities to communications vendors. • Today, an increasing number of businesses are learning about the productivity benefits associated with unified messaging (UM). As enterprises seek new ways to enable their workforce to be more productive and efficient while performing multiple tasks (either on their desks or on the go), anywhere and anytime access to non-real-time messaging is becoming crucial. • Besideimprovements in end-user productivity and business outcomes, other drivers that are expected to continue to fuel the market opportunity behind UM include the creation of various value-added messaging features, the inclusion of UM as part of boarder UC bundles, the increasing mobility of the enterprise workforce, and the continuous replacement lifecycle of telephony systems and messaging platforms. • As part of this analysis, Frost & Sullivan has identified market drivers, restraints, competitive issues, and growth opportunities within the world enterprise voice and unified messaging platform market. Through extensive primary and secondary research, this analysis offers telecommunication providers and messaging vendors an in-depth perspective on the dynamics of a changing market. • Frost & Sullivan expects that this analysis will provide industry participants with valuable insights to increase their growth and penetration opportunities within the VM/UM marketplace.

Google is known for making information accessible. The search giant is beloved by end users for the easy search and ready experience it enables for content ranging from books to videos. However, what endears it to the masses has fostered significant distrust in the community it needs most to fulfill its GoogleTV ambitions - Hollywood in particular, and the M&E community at large. Until GoogleTV can win the right to deliver a significant library of compelling content to a broad range of Android-powered devices, reaching critical mass will be challenging. So far, this has not happened. Two little acronyms - CA and DRM - have the power to change that, if deployed seamlessly and leveraged effectively. With the acquisition of Motorola, Google gains a little more than heavy ammunition to defend Android in the battle of the patents. It acquires a major conditional access technology, with the associated set top box deployment, patents, trusted brand name and content channel relationships. Combined with its low-profile acquisition of Widevine earlier this year, which has established security solutions and a strong installed base in key verticals like connected TVs, Google is quietly but surely filling in the pieces of the content jigsaw puzzle. For quick background, CA or conditional access is the security scheme used by cable operators such as Comcast to protect their broadcast or PayTV content. DRM or digital rights managment is a per-title, per-user set of privileges that is used by services such as iTunes and Netflix to secure pay per download or over the top (OTT) content. As multi-screen delivery and on-demand models gain prominence, and CA systems transition from hardware to software, the line between CA and DRM is blurring somewhat. Microsoft has an early lead in the DRM space, with a strong licensing community for its PlayReady (and legacy WMDRM) technology that powers many OTT and IPTV installations, but does not itself provide CA implementations. Irdeto, traditionally a leading provider of CA systems, has been making huge strategic strides in software-based systems to protect a broad range of content delivery models, partly through its acquisitions of Cloakware and Rovi's BD+ technologies. Viaccess also combines a strong pedigree in content protection across broadcast, unicast, over the top and multi-screen applications. With Widevine and Motorola tucked into its pocket, Google is the unexpected new entrant into the small club of companies who have full-fledged DRM, CA and watermarking platform capabilities. It also has partnerships with Intel, the custodian of link protection for premium content, and Adobe - both trusted copyright community partners. Will this be enough to propel it to becoming a mainstream source for the brave new frontiers of OTT? They are certainly off to the best start that money can buy.

HP stated yesterday that they plan to discontinue their webOS phones, but will "continue to explore options to optimize the value of webOS software going forward." With that being said, the real question becomes "What will happen with webOS?" Here are a few options: 1. RIM can purchase webOS or partner with HP to upgrade their existing smartphone OS. Pros: RIM is rapidly losing market share for several reasons - mobile OS being one of them. webOS is one of the best operating systems on the market, and integrating it into RIM devices would help to enhance the appeal of their smartphones. Cons: The move will cost RIM both time and money to integrate webOS, when they already have a roadmap for QNX (RIM's newer OS). Furthermore, if RIM does finally get painted into a corner, they can integrate Android into their devices which would cost significantly less, and would immediately add apps to their customers. 2. Samsung can purchase webOS or partner with HP to expand the capabilities of their current products. Pros: Samsung is one of the largest electronics manufacturers in the world, and as of late, they're doing better than everyone not named Apple in the smartphone space (in terms of smartphone shipments at least). Mobile to Mobile or M2M has become a hot topic as of late, with connectivity coming to cars, televisions, appliances, etc., and Samsung is a major player in most of the M2M spaces. webOS would provide the opportunity for Samsung to evolve and embed an operating system that could allow features and apps to be shared across all of these electronic devices. Cons: Samsung already is working on Bada (their own mobile OS), and they have been very successful with Android as of late - which already has an app ecosystem in place. Furthermore, Google is working on expanding Android capabilities into TV's and other electronic devices, leaving Samsung in a position to help to evolve Android without having to invest capital into the webOS platform. When push comes to shove (and it will), HP may find a way to sell webOS. However, the inherit problem isn't the webOS platform, it's the fact that the webOS ecosystem wasn't properly developed from the start. As a result, none of the key players in the industry will want to throw money into a platform that has a very limited number of apps when they could simply use Android and increase product sales with far less costs associated. That being said, much like Symbian, we may be witnessing the death of yet another mobile OS in the past year. Who's next??

Google (GOOG) today announced it was acquiring Motorola Mobility (MMI) for $12.5B (or $40/share, a 63% premium over Motorola’s Friday close) in a deal that will cause a substantial impact on the mobile OS and smartphone industries. The transaction is expected to close by the end of 2011 or early 2012, subject to regulatory approval in the US, the European Union and other jurisdictions. After losing the $4.5B Nortel patent sweepstakes, many industry pundits expected Google to make a move to further strengthen its IPR portfolio and there had been some rumours circulating that the company would perhaps acquire InterDigital (IDCC). Judging by how well Android OS has done and CEO’s Larry Page blog post about the acquisition today, one can logically conclude that the transaction was primarily driven by IP, with Google being able to shore up its patent kitty and as such, better sustain patent assaults by the likes of Apple and Microsoft. Motorola has over 17,000 patents and with increased Internet usage coming from mobile devices, this was a key deal to protect Google’s own IPR arsenal. The deal also creates some interesting synergies for Google in the emerging connected home space, with the ongoing shift of set-top boxes software to IP-based, which will give Google an opportunity to get IP to the TV. However Google will have to play along with MSOs in order to maintain a wide hardware product distribution. On the other hand, the acquisition will present Google with some execution issues. First and foremost, there is the question of how this transaction will impact Google’s other Android OS licensees such as HTC and Samsung. Even though Google tried to reassure the market that they’ve spoken with the top five Android partners prior to the announcement, some questions will still linger. Will these partners continue to remain committed to Google’s Android platform? With few other options available, chances are good for that to happen. However, some might decide to go with a more balanced approach maintaining at least two tracks (one for a proprietary OS like Samsung with Bada) and another one for Android. However, this move can also open some doors for Microsoft to license its own Windows Phone OS. Sure, with Microsoft the OEMs will have to pay a license fee, but they will be assured that they will be getting the same package their competitors are. Last but not least, the move also means that Google will enter the low-margin hardware business (Motorola is expected to make a 3% margin in 2012).

The president of United States, Mr. Warren Buffett and the analyst on the wall street; many are blaming S&P for downgrading the US ratings. I have the highest respect for the world's greatest investor.. Eu to Buffett? In stead of congratulating S&P for doing a good job and being honest (even at the potential of getting this wrath from various angles) its a pity that we are blaming S&P. They say S&P is evaluating America politically and S&P is not a political judge. How can you evaluate a country without looking at its political stability? Not only has S&P judged it politically, they have got it perfectly right. With the democrats not willing to give up on healthcare expenditure and the republicans not willing to budge on taxes, the fact is US is a debt ridden economy and will remain so for the near foreseeable future! Some are even asking what was S&P doing four years ago when it gave the highest ratings to asset backed securities (that ended up nasty with the beginning of Lehman going belly up) and hence doubting their analysis. That's the point, S&P has learnt its mistake while a few others including the spendthrift US government has not. I haven't heard a more lame excuse than "we can print more money so we will not default". What about the eventual devaluation of the US dollar and its effect on buying power for Americans? What about the devaluation of billions of dollars of US securities held by other governments? Obama saying "US will always be a triple A country" is optimism misplaced at the highest. The spiralling US government debt is indeed worrisome. The US government's last week's decision to raise the debt ceiling is only expected to postpone the bad news and not put it off for good. The world did not see a concrete plan to put away the larger danger. The easiest way out is to say don't give too much importance to rating agencies. If the president of United States himself had not mentioned and made such a big deal of the US ratings downgrade, nobody else would have. Either believe in the S&P ratings and do something about it or don't believe it and don't talk about it!

Latin America has a mobile phone penetration of approximately 103%, a figure that indicates some level of saturation. In this sense, the Machine-to-Machine (M2M) technologies market appear with great potential for development, what led Frost & Sullivan to conduct a recent regional study on the topic. The objectives were to contextualize the subject, to verify its offer in the six largest countries in the region, to identify drivers and barriers and to point out the major initiatives. The top eight markets identified were: Industry, Retail and Finance, Safety and Emergency, Transportation, Healthcare, Utilities, Consumer and Home, Infrastructure and Buildings. The first four are found in a more mature phase, with the industry already showing infrastructure based on M2M processes; Retail and Finance have a very structured network of POS machines (card payment) and ATM; and Safety and Emergency posses various alarm products and private monitoring, besides public systems of civilian oversight. In the transportation sector relies now the strongest promise for M2M development inBrazil, based on two major Denatran (National Traffic Department) projects. The first aims to deploy tracking chips in the entire fleet of new vehicles sold inBrazilby the second half of 2012. The other comes from the SINIAV (National System for Automatic Vehicle Identification), which aims to have all vehicles in the country tracked by radio frequency technology. As for the Healthcare and Utilities sectors, they emerge as high potential in a longer term, depending on further technological innovation and government procedures. The expectation by 2020 is that both industries show higher impact in their markets, highlighting the intelligent networks (smart grids) with potential to generate millions of remote devices supplied with data chips, one for each residence. In addition, House and Buildings should occupy a more relevant position when the technology is better established in other sectors, as for examples home appliances and of commercial use communicating with each other and with external recipients. As for the technical level, there is still a lack of technology standards amongst existing devices. In the commercial field, many regional carriers are in the initial stage of the supply structuring process, while demand itself has not yet found the most effective and feasible way to address the issue. Within this scenario, we will probably see the next steps for this market evolution that is now the next big step for the global telecommunications sector.

In recent years there has been a growing trend of offering integrated services to consumers, through the merger of fixed networks (PSTN, DSL) and mobile networks (2G, 3G, Wi-Fi, WiMax), what we commonly call the fixed-mobile convergence (FMC). This term also includes convergence of devices and services, in order to present a universal wireless solution with seamless transition between networks. The FMC has a value proposition for both operators as customers. Operators seek to create new revenue opportunities, reduce customer churn rate and reduce costs through economies of scope and better use of networks. Customers want to satisfy their communication needs with connection at any time, place, network, and with any device, at best price and simplicity ("one stop shop"). However, operators need to ensure that they sell a service, not a technology. Only then there will be of interest to the mass market, stressing simplicity and convenience, rather than simply technology. The challenge is to find solutions for interoperability, roaming connectivity, joint billing for services, security and quality of service, considering that there are lots of networks and devices in the market today. Convergence in Latin America While trendsetter operators have already deployed fixed-mobile convergence services in developed markets such as NTTDoCoMo in Japan, KT in Korea, BT in the UK and PCCW in Hong Kong, the lack of availability of infrastructure and regulatory restraints have delayed the deployment these services in Latin America. However, there are some initiatives of converged services in the region such as Brazil, Chile and Mexico. Oi in Brazil and Telmex in Mexico have integrated offerings of mobile and fixed services, including broadband. But they face regulatory restrictions to offer IPTV, having to supplement the bundle with satellite TV technology (DTH). Other examples of fixed-mobile convergence are those of TIM Brasil and Movistar Chile, which offer Wi-Fi internet services in hotspots and indoor locations, along with its 3G broadband offering, in an initiative to try to better manage 3G traffic and encourage the use of Wi-Fi whenever possible to reduce network costs and investments. Considering the experience of the operators we can see that the main market drivers for fixed-mobile convergence in Latin America are: 1) Rapidly growing economies throughout the region with improving social conditions of the middle class; 2) Exponential growth of broadband and mobile telephony subscribers in the region; 3) Main service providers in the region recognize convergence as a key growth strategy; 4) Growing demand for mobile services “always on”; 5) Need for simple and cost-efficient business solutions. However, there are some restraints for a larger deployment of converged services: 1) restrictive regulatory framework in the countries of Latin America, especially Brazil, Mexico and Argentina for IPTV and also regulation by technology and not by service; 2) Fixed networks remain existing as independent structures from mobile networks in several Latin American markets; 3) Perception of complexity in the service; 4) Lack of dual-mode devices and their high cost; 5) Concern with quality of service. It is expected that new initiatives are undertaken along the integration process of fixed and mobile operations of América Móvil and Telefónica Group in the countries of the region, as well as alternative operators, such as GVT in Brazil, Telsur in Chile and Maxcom in Mexico, just to name a few. There is a strong trend for multiple play offerings in Latin America, and the competition will focus on the best deals around "one stop shop" for each customer profile. This trend will be accelerated to the extent that regulatory restrictions in some countries are eliminated, and the solutions gain a commercial scale. By Renato Pasquini, article published in Chilean magazine GERENCIA on April 2011 (http://www.emb.cl/gerencia)

The concept of "social" is everywhere in consumer markets and after social networking gained immense popularity there social tools have leapt into the enterprise. There's a lot of confusion in the market about the difference between social media and social business, which is far from synonymous. A social business strategy can employ social media capabilities, yet integrating or incorporating consumer social media outlets (e.g., Facebook, LinkedIn, Twitter) into the professional environment isn't a requirement for social business. Social business software comprises interactive communications applications, provides visibility into resources and content, and orchestrates the flow of information among users, groups and organizations. In this respect, enterprise social software strives to leverage the principles of social media for business purposes. The shift to become a social business is part of an organization’s larger business transformation plan. It requires a shift in user habits, business culture and practices. It requires a shift from traditional, centralized, unidirectional, top-down corporate communications, reporting and organizational structures. Whereas traditional enterprise software and business systems are typically structured for specific pre-determined data-driven use cases, enterprise social software encourages each business and user to create their own relationships between data, content and knowledge. These multi-faceted relationships help to break down the silos and flatten the hierarchy of an organization’s information flow. Social business also requires a critical mass of employee engagement. Successful deployments require that enough relationships exist to remove latency in processes and responsiveness that characterize “traditional” information and reporting hierarchies. The fluid relationships the flexibility and agility to be proactive, as well as more responsive to both fast and slow moving changes. Becoming a social business should not entail reinventing the wheel. Like any business transformation plan, becoming a social business is best achieved by leveraging existing assets and resources. By introducing new tools, organizations can bring about new and improved ways of working to support and strengthen existing business processes and goals. Process enhancement is achieved through effective collaboration, streamlined workflows, organized documentation, accessible information and accelerated decision making. Tools are important (i.e., user follows/networking, groups/communities, profiles, activity streams, wikis, presence, blogs, microblogs, etc.) but social business provides the relationships that can help organizations tackle their foremost challenges of improving access to information, collaboration, customer service, employee engagement, enhancing processes, and driving innovation.