We love our smartphones. It’s understandable, this unique attachment we have to our intelligent devices. The familiar, comforting glow of the LCD screen. The soothing pulse of a blinking message light. Smartphones have become indespensible for both consumer and business use.
I use mine as an alarm clock, a GPS system, a camera, a video camera, an MP3 player, a calendar, oh, and I even place and receive calls with it. I check and respond to text messages, voicemail, email, Facebook and Twitter. I won’t even mention the available smartphone apps. We all know there’s an app for everything, if not, it’s coming soon. Check back tomorrow.
For personal use, they are indispensible. As a business tool, these pocket-sized powerhouses equip on-the-go employees with the power of a laptop. People not only use smartphones to access multimodal messages, they use smartphones to store and retrieve valuable records and files.
The smartphone won’t push the laptop into extinction any time soon, primarily because of its size. However, with Bluetooth and USB keyboard add ons and wireless connectivity to a larger external display, such as a hotel TV, smartphones could be accountable for dustier laptops in the near future.
Smartphone security becomes a bigger issue as employees use smartphones as an adjunct to the laptop or PC, as does the management of these mobile devices. Remote lock/wipe functions are available for lost or stolen phones. Anti-virus client applications, firewalls and back up can help safeguard proprietary or sensitive data. Fingerprint sensors are becoming increasingly popular as an added measure of security.
Cisco Systems’ acquisition of videoconferencing vendor Tandberg is driving Cisco’s rivals to Polycom, just as we expected.
When we reported on the Cisco-Tandberg deal in October, Ira Weinstein, senior analyst with Wainhouse Research, told us that the acquisition would force other unified communications and telephony vendors to embrace Polycom in an effort to differentiate their own enterprise video strategies.
Siemens Enterprise Communications made its move this month, announcing a new videoconferencing alliance with Polycom. As Mike Vizard at CTOEdge pointed out, Tandberg had been Siemens’ go-to partner on video solutions prior to the Cisco-Tandberg deal. Siemens will continue to support Tandberg products with its OpenScape UC products, but Polycom is now its preferred partner.
Yesterday, Polycom picked up an infrastructure partner, too, when it announced a deal with Juniper Networks. In mid-2010, the two companies will release updates to their products that will allow service providers to optimize their networks for Polycom videoconferencing products.
Stacey Higginbotham over at GigaOM says that Juniper’s partnership with Polycom won’t work.
I’m not sure that Juniper and Polycom are an ideal match, mostly because tying the product to the networking gear is a strategy that ultimately follows along with Cisco’s aims. As a smaller rival to Cisco, Juniper can’t win by playing by the same rules as the larger company — it needs to break them.
Regardless of whether Juniper and Polycom’s new alliance works, it’s clear that Cisco’s acquisition of Tandberg has Cisco’s rivals in multiple markets looking to work with Polycom. Not only are other UC and telephony vendors embracing Polycom. Rival network infrastructure vendors are cuddling up to them as well. Competition in the videoconferencing market is alive and well.
While little is recession proof, unified communications (UC) has managed to skirt ground zero of the global economic free fall. In a survey recently conducted by SearchUnifiedCommunications.com, over 50% of respondents expect to spend more on UC in 2010 than they did last year.
Newly published research from Infonetics Research show businesses are investing in communications with shipments of communicator clients increasing almost 1,000% between the first half of 2008 and the first half of 2009.
According to our survey, the top drivers for UC adoption are:
- Increased productivity
- Operational and business process improvement
- Real-time connectivity
- Providing mobile support to employees
Though budget is consistently an obstacle to deploying new technologies, our survey respondents also reported that they simply don’t know enough about available UC options to move forward. While we can’t augment your budgets, we can provide you with the resources you need to better understand unified communications technologies and help you map out a solid ROI strategy.
For starters, here are the top five unified communications issues you can expect in 2010.
Blogger Greg Ferro (Etherealmind.com) claimed last week that the days of the IP PBX are numbered. It’s hard to argue with him. The IP PBX – all PBXes, really – will go away. The only question is when?
As Ferro points out, the original value proposition of the PBX is losing its appeal.
The PBX, or Private Branch eXhange, was designed to save a company money. It allowed employees to call other desks in a company without routing the call through the telecom provider’s network. The PBX also made people more productive by allowing them to communicate and collaborate more freely.
Nowadays, how often do you pick up your deskphone and call someone else in your office? Wouldn’t you rather send them an email or an IM or open up a video chat with them?
Heck, I don’t even give out my office number anymore. I hand my Google Voice number and set it to ring wherever I am (office, home, iPhone). The only “value” I get from my PBX is voicemail. And I’d prefer to receive voicemails in my email inbox rather than dial into the PBX.
Ferro points out that the future of the PBX is as a presence server. Rather than routing phone calls, the presence server will tell users whether people are available for a conversation and how you can reach them (email, IM, phone, etc). The server will also hold all your message, regardless of the medium.
Most vendors clearly see that this is on the horizon. See Cisco’s acquisition of Jabber, Microsoft’s Office Communications Server strategy and IBM’s Sametime strategy.
In my view, it’s not a question of if the PBX will go away, but when. Any shift away from the PBX paradigm will lead to a broader and deeper dependence on mobile phones. And mobile phones are still relatively expensive in the United States. I spend four or five hours a day on the phone. If I did all that on my iPhone, I’d blow up my minutes.
So this would require not just a big technological shift, but also a philosophical shift for business leaders. Most enterprises still adhere to the strategic deployment of mobile devices. They hand BlackBerrys to sales teams and top executives and leave the rest of the company tied to their desks.
A world without PBXes would require a big shift in thinking, and this will take time. Have you ever tried to convince the CFO that you need to give the mail room manager an iPhone?
Unless you’re a Mitel customer or a Canadian, you’re probably not all that interested in Mitel’s plans for a $230-million initial public offering. However, if the IPO goes well, Ottawa-based Mitel could have some capital to make some moves in 2010 and beyond. Mitel will use capital from the IPO to settle some debts, but the company said it will also look to make some acquisitions with the money.
Avaya’s acquisition of Nortel’s enterprise division means that a lot of enterprises are re-evaluating their voice and UC infrastructure these days. Cisco and Avaya remain at the top of the heap, but smaller players like Siemens and Mitel will undoubtedly try to take advantage of the inevitable churn that will follow Nortel’s exit from the market. For the first time in many years, Nortel customers are shopping for a new vendor. Nortel customers will be wined-and-dined at VoiceCon Orlando in a couple months, that’s for sure.
With that in mind, it’s worth looking at some highlights of what Mitel has been up to in the world of UC in recent years.
- Last June Mitel announced a strategic collaboration with VMware to make its UC products “VMware-ready.” To date, not many companies feel comfortable with virtualizing their voice and communications infrastructure, but the desire is there. Avaya and Alcatel-Lucent are also making strong progress here.
- Mitel has been collaborating with Sun Microsystems for a couple of years on integrating its UC applications with Sun’s Sun Ray thin client technology. By OEMing Sun Ray, Mitel offers companies the ability to mobilize employees within a corporate campus. Users can use a smart card to plug into any thin client on a campus and get full UC functionality wherever they go.
- Last spring Mitel advanced its fixed-mobile convergence capabilities with a new “hot-desking” feature in its Series X UC application portfolio, giving it a offering comparable to leaders like Avaya and Cisco.
- In 2007, Mitel bought Inter-Tel, a Delaware-based provider of managed network and communications services. This $700-million deal boosted Mitel’s market presence in North America significantly.
Cisco finally managed to win over enough of Tandberg’s shareholders to complete its takeover of the enterprise video company. Cisco had stipulated that it would only move ahead with the acquisition if it could gain 90% of Tandberg’s stock, apparently because Norwegian law requires all shareholders to sell once 90% of the shares have been voluntarily sold to a buyer.
- Why was this deal so hard for Cisco to close? Answer: It’s complicated. Reuters’ DealTalk has a nice rundown on the confluence of complicated factors that nearly scuttled this deal. For one thing, there were cultural issues. Apparently Scandinavian investors (Tandberg is a Norwegian company) are not bashful about kicking up a fuss when they feel aggrieved. And Cisco might have overplayed its hand by talking up the so-called synergies and business opportunities that a combined Cisco-Tandberg would enjoy. This talk may have prompted the holdout shareholders to demand more money. On the other hand, Peter Germonpre of Panta Capital told Reuters that Cisco may have been clever and low-balled Tandberg early on in an effort to keep the final price low. Also, many Tandberg shareholders were reluctant to give up their shares because they like the diversity in their stock portfolio that a successful local tech company represents. Folketrygdfondet, a Norwegian company that manages the the investments of the government’s employee pension funds, was a major holdout. Pension fund investors love diversity.
- The U.S. Justice Department is now looking at the Cisco-Tandberg transaction from an antitrust perspective. I’m not sure that this investigation will go anywhere. Cisco’s videoconferencing business was limited to the very high end with its Telepresence products. Yes, it has bought a telepresence competitor, but Tandberg is not a telepresence company. It is an enterprise video company. There were two major players in enterprise video before this deal (Tandberg and Polycom) and there are two major players in the market after this deal (Cisco and Polycom).
- A tax shelter for Cisco? As the New York Times Dealbook blog notes, Cisco has piles of cash sitting overseas with its international subsidiaries. Dealbook says that by buying Tandberg, Cisco gets to avoid paying taxes on the $3.4 billion it spent in the deal. I’m not a tax lawyer, so I don’t know how it works. But avoiding paying taxes on $3.4 billion seems like a good deal for Cisco, not so much for the U.S. Treasury.
Dear Tandberg shareholders: Will you or won’t you make Cisco the happiest and most powerful videoconferencing vendor in the world?
This acquisition of Tandberg sure has drama, doesn’t it? Here it is, early evening on Dec. 3 and there’s still no word as to whether Cisco has acquired the requisite number of shares it set for itself to close the deal. Cisco’s agreement to buy Tandberg includes the provision that the deal can only happen if Cisco can get hold of 90% of Tandberg’s stock. As of yesterday, Cisco had only managed to collect commitments from shareholders to take over 84% of the stock. If Cisco can’t get to 90%, the deal won’t happen and Cisco will walk away. Cisco has extended the deadline for reaching the 90% threshold a coulpe of times, but it said yesterday that tdoay was the final extension. The clock was to run out at 5:30 PM CET (Central European Time), which passed us by hours ago.
Yet we have no news. Cisco and Tandberg have been silent on whether they were able to get this done. We haven’t heard much at all since Cisco upped its offer from $3 billion to $3.41 billion to entice some holdout shareholders who felt the original offer undervalued Tandberg.
Here we are, with not a peep from Cisco and Tandberg. Are executives working the phones, trying to figure out whether this deal? Or have they decided to let the silence speak for itself and the deal is dead. We shall see.
Is the term “unified communications” already dated? Don Van Doren over at Unified Communications Strategies notes Cisco seems to be pushing lately for “collaboration,” and while it’s fortunately less of a mouthful, the UC terminology war is only confusing enterprises.
Pulling no punches, he lays into vendors for soiling UC’s good name:
First, UC has come to be associated with the voice and voice-substitute (e.g., IM) components of communications. This emphasis has been especially prevalent from the legacy telephony equipment suppliers, many of whom tend to see things through a voice filter. In my opinion, voice will increasingly be augmented by other forms of unified communications, which can offer deliver better information more rapidly or accurately.
Meanwhile, he adds, confusing customers does no one any favors:
The risk is that when there is confusion, people tend either to sit on their wallets, or to reflexively purchase tried-and-true, like-for-like functionality. The impact is that too many enterprises will delay the realization of the compelling benefits that UC can enable by failing to grasp the impact of the industry changes that are underway.
Cisco’s newly revised $3.41 billion offer for Tandberg represents a total capitulation to the demands of several holdout Tandberg shareholders who were asking for more money.
Cisco originally offered $3 billion for the Norwegian videoconferencing vendor, but the deal was contingent on 90% of Tandberg shareholders accepting the price. The deal appeared in trouble when a cadre of shareholders who owned about 24% of the company’s stock demanded an 11% increase over Cisco’s original offer.
Today Cisco has come through with that. Its $410 million bid increase is about $80 million more than the holdout shareholders were asking for. This deal looks like it’s going to happen.
Lost in the hoopla from last week’s news that HP bought 3Com was a much smaller deal in the high definition (HD) videoconferencing market. PC accessory company Logitech has bought LifeSize Communicaitons, a six-year-old vendor of HD desktop videoconferencing and room-based telepresence products for $405 million.
Logitech is best known as a manufacturer of peripheral devices for PCs, especially keyboards and mice. With only a line of standard-definition webcams, Logitech’s specialty is not enterprise video.
With LifeSize, Logitech graduates from selling peripheral devices to consumers and small businesses to selling an enterprise solution. It’s a whole different ballgame. In addition to endpoint devices, LifeSize sells HD videoconferencing infrastructure, such as multipoint control units (MCUs), gateways and security devices.
In the wake of Cisco’s attempt to acquire Tandberg (a deal which might be collapsing), LifeSize probably recognized that competing in the enterprise video market will require the backing of a larger corporate partner. Logitech might have the money to boost LifeSize’s marketing budget, but it doesn’t bring the right sales channel to the table.
The most logical next step for Logitech will be to approach key unified communications competitors to Cisco like Avaya, Siemens and Microsoft to build up video interoperability partnerships.