During my travels to and from VoiceCon last week, I missed this little nugget about Gores Group approaching Polycom for a possible merger with Siemens-Enterasys.
Citing “people familiar with the situation,” the Financial Times reports that the private equity firm Gores Group has approached Polycom (again) about acquiring the videoconferencing vendor and combining it with Siemens Enterprise Networks, the company Gores formed when it acquired a majority stake in Siemens Enterprise Communications in 2008 and merged it with Enterasys Networks.
Gores first approached Polycom in October, the Times says, but its overtures were politely declined. Gores has come calling again because it heard that another private equity firm, Apax Partners, is also in the hunt for Polycom.
When Cisco Systems announced its plan to buy Tandberg, Polycom’s primary rival, last October, industry experts told us that Cisco’s rivals in IP telephony, unified communications and networks would gravitate toward Polycom, forming tight partnerships with the enterprise video company in order to offset the broadened product portfolio Cisco would have to offer in unified communications. That’s definitely been borne out by what we’ve seen this year. Polycom announced partnerships with Siemens and Juniper in January. At VoiceCon Polycom and HP unveiled a new relationship that includes marketing and sales cooperation and some future joint technology development.
Now Gores Group wants to take things past the “friends” stage and establish a true marriage of companies. It makes sense from a technology perspective. Siemens puts out a quality UC and IP telephony product. Its OpenScape UC Server 2010 won Best of VoiceCon last week. The Enterasys division of Siemens is also well-respected for its technology. Its customers tend to be loyal.
But would Polycom want to tie itself to a company with such a small North American presence? Siemens has a sturdy international business, but its still just a small timer in the United States. And Enterasys is such a small part of the IP networking industry in general. One would think that if Polycom were interested in merging with a UC and/or networking vendor, it would set its sites one someone like HP ProCurve or Avaya, both of whom are a much “bigger deal.” Avaya was billing itself as the number one vendor in unified communications at VoiceCon, a claim it can now make since it closed the deal on Nortel Enterprise Solutions. HP ProCurve is the number two enterprise networking vendor out there and its a division of HP, one of the biggest IT vendors in the world. Both companies would bring good technology and good market opportunities to the table in a Polycom merger.
On the other hand, Gores Group might present the best option Polycom has for a strategic merger rather than a straight-up acquisition. We haven’t heard any rumors from HP about it being on the hunt for a video vendor. It’s sole participation in the videoconferencing space is its Halo service. Silver Lake Partners, the private equity firm that owns Avaya, may not be in an acquisitive mood after spending $900 million on the Nortel deal. The Times says the Apax-Polycom have put Polycom’s possible price tag at $3 billion or so. If Gores is prepared to spend that kind of money, it could lead to some interesting things for both Siemens and Polycom customers.
As Leigha noted, TechWeb is retiring the VoiceCon conference name this year, renaming its 20-year-old conference EnterpriseConnect. This is meant to reflect the changing nature of the conference. It’s pretty clear that VoiceCon isn’t just an enterprise voice show anymore. Unified communications, video, messaging, and collaboration are all hot topics at the show and on the exhibition floor.
Is this conference be defined by the vendors who are pushing the envelope or by the technology professionals who are hear to learn?
I was chatting with Adam Boone, vice president of marketing for Sipera Systems yesterday (Sipera specializes in securing unified communications, especially voice). He noted that enterprises have only spent about 1/3 of the total projected global enterprise spend on IP telephony thus far. That means there are thousands of companies which are either still waiting to migrate to IP telephony or are still int he process of doing so. With that many people focused still on moving away from legacy voice, does the concept of EnterpriseConnect speak to them?
I spoke to one voice project manager whose organization moved to IP voice four or five years ago. She was at VoiceCon to learn about UC, to figure out how to win budget to deploy UC. Her day-to-day working life is still focused almost 100% on voice and voice alone, but she is thinking about UC. I think this is the typical VoiceCon attendee today. Many of them are still very much voice professionals who are interested in learning about what they can do next with UC. VoiceCon is their show. A show for voice professionals who aspire to something more.
The organizational impact of unified communications has interested me for a few years, ever since I heard a couple network engineers at Interop joking about how useless and difficult traditional telecom engineers are. I’ve since heard those sentiments echoed, perhaps a little more politely, many times over the years. If network pros and telecom pros feel this way about each other, who are they going to work together when voice converges on IP networks?
At VoiceCon this week I attended a coffee talk roundtable discussion on the organizational impacts of unified communications to hear about what progress (or lack thereof) unified communications managers have made. Here are the two major problems I heard them discuss.
1. UC managers are still struggling with integrating their organizations. It’s not just about integrating telecom engineers into an IP networking team. One manager noted that video poses a new problem. The teams that support and maintain legacy videoconferencing technology in many companies report into the facilities management organization. That’s bound to present cultural problems during integration. Also, other organizations are starting to realize that voice is becoming “just another applications” on the network, and voice and UC is starting to integrate with critical business applications. This means that UC organizations need to start collaborating with the admins of those enterprise applications. One UC manager noted that unified messaging, with voicemail feeding into email inboxes, forces the telecom team to talk to the “Exchange guys.” Sounds awful!
2. Nimbleness is another major organizational challenge for UC managers. With enterprises bringing personal smartphones to work and using consumer services like Twitter and Google Voice, UC managers are struggling to provide comparable enterprise-grade communications and collaboration tools quickly enough. Users adopt the consumer tools they believe will help them do their job better as soon as they identify them. Unlike UC managers, end users don’t have to get budget for these consumer tools, go through an RFP process, nor integrate the tools into the UC environment. They just download the thing or sign up for it and start using it.
It probably won’t surprise you that no one came up with a panacea solution to these challenges during the session. It was more of an opportunity for UC managers to compare their organizational challenges with those with their peers. Hopefully the discussion will help them figure out the solutions on their own after they head home at the end of this week.
This is VoiceCon’s last year as VoiceCon. On this — the 20th anniversary of the VoiceCon conference — Fred Knight, GM/co-chair of VoiceCon, and the publisher of NoJitter.com, announced this morning that VoiceCon will henceforth be called Enterprise Connect.
Though VoiceCon’s name change won’t improve the way you do business or help you do your job better, it is indicative of a geniune shift in how we communicate both professionally and personally.
Communications has become an omnipresent force — the likes of which we haven’t seen…since the Internet. We no longer merely consider the multi-modal ways to reach out to one another, we’re locking available technologies into the natural order of our lives and are proactively seeking out new, innovative communications tools to meet both professional and personal obligations. Even my nine-year old asks me, “Isn’t there an app for that?”
As Fred pointed out, communications are transforming business and he and his team are confident they’ve picked the right name and one that will last. I think they’re right.
At VoiceCon this morning I had breakfast with Siemens and VMware in advance of their announcement of a new partnership for the virtualization of real-time communications applications.
The Siemens-VMware strategic partnership will aim for the virtualization all of Siemens’ UC technologies: OpenScape Voice, Unified Communications and Contact Center.
Mitel has had a slight lead in this area so far. It has had a tight partnership with VMware for about two years and last month it announced that a virtualized version of its call control control applications (Virtual Mitel Call Director) is in production with several companies.
Adrian Brookes (Siemens Vice president in the office of the CTO), told the breakfast table this morning that while competitors have focused on virtualizing specific applications, Siemens is focused on virtualizing its entire real-time communications portfolio. He also said Siemens will be hardware agnostic. It will not tell customers which vendors’ servers to use (a slight knock at Cisco and its Unified Computing System server platform).
He also said Siemens virtualization efforts are based completely on open standards, which will enable customers to choose any hypervisor (once those hypervisor vendors are ready to support real-time communications). As Brian Riggs, research director at Current Analysis, noted, Citrix/Xen is on its way to being ready to support real-time communications but Microsoft’s Hyper-V technology is a much further behind in this area.
Virtualization has become a reality for unified communications and voice thanks in part to VMware’s latest version of vSphere, which the vendor spent the last two years optimizing for real time communications and also the latest Intel Nahalem processor, which gives servers the computing power they need to make these applications work in a virtualized environment.
Aside from taking in most of the keynotes, meeting with vendors and chatting up attendees to learn about what they’re working on, I’ve picked out a handful of sessions that I think relate to key trends in the industry right now. I’m going to attend as many of them as I can.
1. Integrating Group Video with PBX and UC
Tuesday at 2pm, Brent Kelly of Wainhouse Research
For the last few years vendor keynotes at VoiceCon have invariably featured demos of simple, one-click video conferencing from within desktop UC clients. They make it looks so easy, but all of know that it isn’t always that simple. I think Brent’s session on integrating video with PBX and UC environments should be interesting. I look forward to the Q&A session.
2. Organizational Impacts of Convergence
Tuesday at 4pm with Don Van Doren of UniComm Consulting
I’ve attended sessions on this subject in the past and it always generates good discussion. Unified communications, for those who dive really deep into it, can create some headaches for an organization for a number of reasons. First of all, many organization are still consolidating their networking and telecommunications team in the wake of the transition to IP telephony. Then there’s the rise things like communications-enabled business processes, which will force new types of collaboration with enterprise application managers. Also, enterprises need to rethink their help desk when they dive into UC. Tier 1 support too often elevates every trouble ticket to the top because they don’t understand the technology well. Many UC and network management vendors are trying to address this one specific problem. Which leads me to…
3. Network Test Tools for Voice and Video
Wednesday at 8am, Moderated by John Bartlett of NetForecast with a panel of representatives from CA, Integrated Research (making of PROGNOSIS), Psytechnics and Apparent Networks.
I still don’t get the sense that many enterprises are properly testing and monitoring their IP telephony and video deployments, perhaps because this requires investment in tools they’re not necessarily familiar with. It’s simply tough to know how well your VoIP system is performing unless you get complaints from your users. These vendors are sort of pushing beyond that and I like to keep tabs on this market.
4. User Forum
Wednesday at 10am, moderated b Eric Krapf of NoJitter and Zeus Kerravala of Yankee Group.
For me this one is all about the panelists. I like to hear straight from these guys what exactly they’re doing with UC. This panel features Donna Zett, CIO of Serta International; Jason Norton, director of operations and telecom at Scripps Networks; Duane Longhofer, telecom manager at AccuQuote; Darrius Jones, executive director of channel management and technical fellow at USAA; and Saustrup Arne, computer operations manager at Alamo Community College District.
5. SIP Trunking Case Studies
Wednesday at 1pm, moderated by Sorrell Slaymaker of Unified IT systems.
Everyone seems to be wondering aloud about whether and/or when SIP trunking services will become mainstream. Vendors like Acme Packet will tell you that time is very near. I’m sure we’ll hear a lot about SIP trunking from vendors and carriers at the show this year, but I’m most interested in hearing from enterprises who are actually doing it. That’s why I’ll try to attend this session, which will feature engineers Steve Blair of the University of Pennsylvania and Larry Riba of Alpine Access.
6. Challenges in Achieving the Promise of Presence
Wednesday at 3:15pm, moderated by Don Van Doren
I think everyone is intrigued by the idea of presence, but I haven’t talked to a great deal of people who are actually doing much with it yet. Vendor offerings in this area are very uneven. I think this should be an interesting panel discussion simply because of who is on the panel. It features representatives of Cisco, Avaya, IBM and Microsoft, all major players in the UC space. Some of them have excellent presence products. Others, not so much.
Gawker is musing that terrorists prefer video chat to email or Twitter when it comes to communicating with their operatives. Evidence? Exhibit number 1 is the experience of writer John Battelle, who was told to stop using in-flight Wi-Fi to video chat with his wife and kids while flying on United Airlines yesterday.
When he pressed the flight attendant on why he couldn’t use iChat to talk to his family, the attendant suggested that he could “communicate with a terrorist on the ground.” I suppose that’s true, but couldn’t he use IM, email, Twitter, Facebook or any other countless apps to do the same thing?
The visionaries and the evangelists at vendors like Cisco, Polycom, HP Halo et al would have you believe that the immersive experience of telepresence videoconferencing will eliminate some if not almost all of the need for business travel as the technology is adopted more broadly across the globe. The need for face-to-face meetings among business partners and between corporate branches will decrease as companies realize that telepresence is a feasible alternative to face-to-face meetings in many if not most circumstances.
The notion that telepresence could reduce business travel should be bad news to the travel industry, right? Business travel is bread and butter for airlines and hotels.
And yet, hotel chains appear to be embracing the technology. Both Marriott International and Starwood Hotels and Casinos have opened public telepresence rooms in a couple of pilot locations this month, both using Cisco’s TelePresence technology. Mariott has opened rooms in New York City and Bethesda, Md., and plans to open at least a dozen more across the U.S. and Europe, China and Brazil. Starwood opened rooms at its W Chicago City Center and at its Sheraton on the Park in Sydney, Australia. It has plans to open more rooms in New York, Toronto and Los Angeles this summer.
Mary Casey, vice president of corporate global sales at Starwood, told me her company was prompted to install telepresence rooms in its hotels after speaking with large corporate customers who were looking to reduce their travel costs. She said one of Starwood’s largest customers in Chicago said told her that it had been investing in telepresence rooms across the world, but there were certain regional hubs where it wasn’t practical for the company to make an investment in the technology because a company-owned telepresence room in such locations wouldn’t be used enough to justify the investment.
Casey says that large corporate clients, especially those who have invested in telepresence in certain locations, are the main targets of her hotels’ telepresence rooms. She said smaller companies haven’t expressed much interest in such services yet. However, she thinks that might just be a matter of educating the market on the experience the technology can offer. She also expects some non-corporate clients to use the technology, based on what she’s heard from Tata Communications, Starwood’s technology services partner in the telepresence venture.
“If we listen to our partners at Tata, they’re beginning to see their public telepresence offerings used by different segments, such as suites used by families who are spread around the world, who want to celebrate events like a birthday party,” she said.
Casey and Starwood clearly see telepresence as an opportunity, not a threat. Perhaps someday some hotels will have just as many telepresence rooms as they do beds.
Now airlines, on the other hand — I don’t see them adapting quite as well.
The Cisco/Tandberg acquisition catapulted the video conferencing and telepresence market into a competitive frenzy. Don’t expect this rivalrous race to slow down any time soon.
Shortly after Cisco brought Tandberg into the fold, Logitech acquired LifeSize, and earlier this month, Radvision announced plans to acquire Aethra.
Incumbent Polycom quickly mobilized with a counteroffensive play, hyper-focusing on a strategy to retain their current market share and pull customers away from the monolithic Cisco. Forging new partnerships, cultivating deep alliances with existing partners and an aggressive focus on product development is Polycom’s core strategy.
Agito Networks is mostly known for its dual-mode fixed-mobile convergence solutions, helping enterprise get their mobile phones off the cellular network and tied into a corporate PBX via Wi-Fi networks.
This week Agito came out with something slightly new that is targeted at a very specific, yet pricey problem faced by many companies which do international business.
Many corporate telecom and mobility managers today probably support executives who travel internationally and need to buy a temporary international roaming plan for their smartphones while on the road. These short-term voice roaming minutes are pricey. We’re talking more than $1 per minute in many cases. If you have a lot of guys on the road, this can get out of hand fast.
This week Agito announced Agito Global Enterprise, a feature in the 4.0 release of its RoamAnywhere routers and clients. This feature will automatically handover voice calls from an international cellular voice network and convert it into a VoIP call over a 3G data connection. Since most short-term international roaming plans offer relatively lower flat fees in the range of $20 or $30 for a unlimited data, this could be a huge savings for mobile employees who are traveling overseas. A $20 flat fee is a bargain compared to the $300-$400 a worker might rack up in talk time with a typical arrangement.
Late last month Pejman Roshan, founder and chief marketing officer for Agito, visited my office and gave me a demo of the cellular to VoIP handover on both a BlackBerry 9700 and an iPhone, both of which Agito also now supports as of this week. The voice quality was on par with what you might expect from either device, although there was a probably a half-second of latency in the call. Roshan attributed this to the fact that we were using a custom built demo version. The production version won’t be available until next month.
Image from Technodorm.com