Enterprise IP Telephony Vendor Landscape - Info-Tech Research Group

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Enterprise IP Telephony Vendor Landscape Publish Date: September 9, 2009

Enterprises exploring IP Telephony and the business communications market should carefully assess the individual strengths and challenges associated with potential vendors and solutions. While the major players all offer a comprehensive set of core features, their approaches to software, services, and collaboration are becoming key differentiators.

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Executive Summary Info-Tech Research Group has recently conducted an analysis of IP Telephony (IPT) vendors. The communications space has seen rich product innovation and a high level of vendor consolidation in recent years and enterprises are certain to find it much different than when they last evaluated it. This Vendor Landscape research note examines the following vendors: »

3Com

»

Alcatel-Lucent

»

Avaya

»

Cisco

»

Mitel

»

NEC Unified Solutions

»

Nortel

»

ShoreTel

»

Siemens Enterprise Communications

Enterprises exploring IPT and the broader business communications market should carefully assess the individual strengths and challenges associated with potential vendors and solutions.

Product Comparison Enterprise IP Telephony Vendor Landscape

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Market Overview As explored in the ITA Premium research note, “IP Telephony Vendor Selection Strategy,” with the continued attrition of TDM-based PBX gear, more enterprises are finding themselves in a position to assess IP Telephony (IPT). Past performance issues have largely been addressed by technology standardization and the development and validation of best practices for implementation and operation. An eventual transition from digital and analog environments to IPT, and ultimately towards Unified Communications (UC), is now clear to most organizations. The criteria for selecting a telephony vendor, however, have changed with the advent of VoIP and software-based communications platforms. While voice remains a mission critical service, UC (examined in the ITA Premium Impact Research report, “Driving Efficiency with Unified Communications”) represents opportunities for broader and faster multi-modal enterprise collaboration. Through tighter application and business process integration, leading voice vendors now aim to be the end-to-end enablers of all real-time and non-real-time, fixed and mobile, business communications functions. IT leaders must evaluate how potential vendors will fit within a broader collaboration strategy and focus on those that deliver the solutions, flexibility, stability and direction to best meet business needs.

Key Evaluation Criteria The following key evaluation criteria form the basis for this IP Telephony Vendor Landscape: 1. Value. The ability of the vendor to offer a cost effective solution set at a competitive price point, as well as its ability to help an enterprise manage and optimize ongoing communications costs. 2. Core Features. The depth and quality of the core voice and messaging features provided by the vendor, including its high availability and management options, as well as overall ease of use and administration. 3. Extended Portfolio. The span of additional features and related solutions available from the vendor that appeal to many prospective customers, including network and security infrastructure, contact center, and vertical solutions. 4. Flexibility & Fit. The ability of the vendor to integrate its solutions within an existing IT environment, including its ability to interoperate with leading solutions from other vendors and promote and facilitate third party development. 5. Strength & Vision. The overall market presence of the vendor, reflecting not only revenue and profitability but also its focus and commitment to developing and furthering its enterprise UC objectives.

Product Comparison Enterprise IP Telephony Vendor Landscape

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6. Channel Support. The ability of the vendor over the long term to maintain, grow and support a quality channel of global resellers and partners; critical given that the vast majority of customers purchase through the indirect path.

Vendor Scorecard Table 1. Enterprise IP Telephony Vendor Landscape Vendor

Follower

Competitor

Leader

Avaya



Cisco



Alcatel-Lucent



Mitel



NEC Unified Solutions



ShoreTel



Siemens Enterprise Communications



3Com



Nortel



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Table 2. Key Evaluation Criteria by Vendor Vendor

Value

Core Features

Extended Portfolio

Flexibility & Fit

Strength & Vision

Channel Support

Rank

Avaya

Med

High

High

High

Med

High

Leader

Cisco

Med

High

High

Med

High

High

Leader

AlcatelLucent

Low

Med

High

Med

Med

Low

Competitor

Mitel

High

Med

Med

Med

Med

Med

Competitor

NEC

Med

Med

Med

Med

Med

Med

Competitor

ShoreTel

High

Med

Low

Med

Med

Low

Competitor

Siemens

Med

High

High

High

Med

Low

Competitor

3Com

Med

Low

Med

Low

Low

Med

Follower

Nortel

Med

High

High

Med

n/a

n/a

Follower

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Leader Landscape Avaya Vendor

Avaya

Platform

Aura Communication Manager

Overview

Avaya remains a major player in the enterprise IPT market, with a large installed base, solid track record, and both an innovative product portfolio and practical legacy customer migration strategy. Although the vendor has experienced considerable organizational change in recent years, Avaya is well positioned to lead in the evolving enterprise communications space. For more background, refer to the ITA Premium research note, “Enterprise IP Telephony Vendors: Avaya.”

Product Offering

Strengths »

Exceptional communications and customer contact track record and has successfully transitioned to software-based solutions.

»

Full featured communications portfolio, able to meet end-to-end requirements for even the largest enterprises.

»

Very strong commitment to supporting multi-vendor environments and third party development.

Challenges »

Still adapting to major strategic and organizational changes following its privatization in 2007.

»

Does not have the overall size or technology footprint of major competitors in the UC space, namely Cisco and Microsoft.

»

Smaller and mid-sized organizations will have difficulty justifying best-of-breed pricing given other competitive options.

Product Comparison Enterprise IP Telephony Vendor Landscape

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Cisco Vendor

Cisco

Platform

Unified Communications Manager

Overview

Cisco has a dominant presence in IPT, having seized considerable market share in recent years by leveraging its size, existing networking footprint, and broad partner base. An aggressive acquisition and R&D strategy have helped it to significantly broaden and enhance its own endto-end collaboration portfolio, positioning Cisco as a leader in the enterprise communications space. For more background, refer to the ITA Premium research note, “Enterprise IP Telephony Vendors: Cisco.”

Product Offering

Strengths »

Among most comprehensive product portfolios with respect to IPT and end-to-end enterprise collaboration.

»

Very strong overall performance in IP-based communications across multiple customer segments and verticals.

»

A leading enterprise IT vendor, with a very large partner network and support/skills base for its solutions.

Challenges »

Despite significant software advances, still has limited experience and customer trust as an application vendor.

»

Lack of practical migration paths for legacy PBX customers to retain their existing digital equipment/devices.

»

As one of the more expensive vendors in the space, its product line is unsuited to those with only basic telephony needs.

Product Comparison Enterprise IP Telephony Vendor Landscape

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Competitor Landscape Alcatel-Lucent Vendor

Alcatel-Lucent

Platform

OmniPCX Enterprise

Overview

Alcatel-Lucent, headquartered in Paris, France, is one of the largest telecommunications suppliers in the world, serving both carrier and enterprise markets. Although its Enterprise division offers a very comprehensive and competitive communications solutions portfolio, the poor fiscal performance of the larger entity raises concerns around continued product innovation and its overall ability to compete. For more background, refer to the ITA Premium research note, “Enterprise IP Telephony Vendors: Alcatel-Lucent.”

Product Offering

Strengths »

Exhibits innovative communications and collaboration solutions and streamlined migration paths for existing customers.

»

Offers a complete UC portfolio, including network and communications infrastructure and end user applications.

»

Its strong standing as a global telecom and professional services provider helps sustain key partnerships and alliances.

Challenges »

Poor corporate financial performance impacts Enterprise division and potentially its investments in future UC solutions.

»

Given weak North American presence and financial struggles, against odds to ever emerge as a leader in the market.

»

Primary focus is on highly competitive large enterprise space, where it faces an uphill battle against more profitable market leaders.

Product Comparison Enterprise IP Telephony Vendor Landscape

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Mitel Vendor

Mitel

Platform

3300 IP Communications Platform

Overview

Mitel has a long history in business communications, dating back to the release of its first digital PBX in 1984. As an experienced vendor with a global sales and services presence, sizeable installed base, and mature vertical solutions, Mitel has realized strong results through its transition to IPT and UC. However, while a solid mid-market player, it faces stiff competition in the large enterprise space against much bigger vendors. For more background, refer to the ITA Premium research note, “Enterprise IP Telephony Vendors: Mitel.”

Product Offering

Strengths »

Highly experienced and proven business communications vendor that is deftly adapting to software and UC.

»

Offers a complete communications product portfolio and continues to innovate through new solutions.

»

Strong technology partnerships with major IT market influencers, including Microsoft and VMware.

Challenges »

Recent signs of financial difficulties threaten longer term ability to compete against larger players in enterprise UC space.

»

Too early to judge the market success of efforts to integrate and address product/technology overlap following its 2007 acquisition of competitor Inter-Tel.

»

Given its accelerated evolution to software-based solutions, must ensure that key channel partners also adapt.

Product Comparison Enterprise IP Telephony Vendor Landscape

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NEC Unified Solutions Vendor

NEC Unified Solutions

Platforms

UNIVERGE SV8500, SV8300, SV8100

Overview

Dating to the digital PBX era, NEC Unified Solutions has been a competitive business communications player, with noted vertical market strengths. In recent years, the vendor has transitioned to a more versatile, IP-based approach with good success. However, NEC and many of its channel partners still lack strong recognition in the software communications space. For more background, refer to the ITA Premium research note, “Enterprise IP Telephony Vendors: NEC Unified Solutions.”

Product Offering

Strengths »

Large vendor with strong backing from multinational parent and access to complementary IT assets, including network and security solutions.

»

Committed to providing compelling customer migration paths from previous generation NEC systems.

»

Exceptional vertical market strengths and continued focus on solutions for Hospitality, Healthcare, Education, and Government.

Challenges »

Faces heated competition in the enterprise UC space from market leaders in IP voice and UC software.

»

Despite recent investments in software development and overall portfolio rationalization, still challenged to support a broad and fragmented legacy solution base.

»

UC success hinges on ability of key channel partners to transition legacy customers – and themselves – to NEC’s software roadmap.

Product Comparison Enterprise IP Telephony Vendor Landscape

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ShoreTel Vendor

ShoreTel

Platform

ShoreTel 9

Overview

Founded in 1996, ShoreTel saw early success with its unique system architecture and robust telephony features. Since becoming a publiclytraded company in 2007, the vendor has continued to perform strongly, with an innovative product set and emphasis on ease of use. However, as one of the smaller players in the space, it may lack the resources to compete with larger, multifaceted vendors over the long term. For more background, refer to the ITA Premium research note, “Enterprise IP Telephony Vendors: ShoreTel.”

Product Offering

Strengths »

Exclusive corporate focus on IP communications solutions for business continues to drive product innovation.

»

Distributed architecture offers valuable flexibility and cost effective redundancy for multi-site enterprises.

»

Platform designed for streamlined deployment and day-to-day administration offers high usability.

Challenges »

A smaller vendor competing against major industry players in a highly competitive and consolidating market.

»

Lags key competitors with respect to an end-to-end UC software portfolio – heavily reliant on partners.

»

Difficult to economically scale its switch-based architecture to larger enterprise deployments.

Product Comparison Enterprise IP Telephony Vendor Landscape

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Siemens Enterprise Communications Vendor

Siemens Enterprise Communications

Platforms

HiPath 4000, OpenScape Voice

Overview

Siemens Enterprise Communications (SEN) is now the cornerstone of the SEN Group, a recently launched joint venture between Siemens AG and The Gores Group. The vendor has successfully transitioned to software-based communications this decade, with a strong commitment to application development and open standards. However, it faces tough competition from market leaders, particularly given its past struggles to grow in North America. For more background, refer to the ITA Premium research note, “Enterprise IP Telephony Vendors: Siemens Enterprise Communications.”

Product Offering

Strengths »

Large communications vendor with a solid track record and newly rebooted with significant financial backing.

»

Offers an innovative, standards-based portfolio and a compelling migration path for existing voice customers.

»

Now able to bundle IPT and UC products with complementary solutions from SEN Group partners, including Enterasys Networks.

Challenges »

Faces significant hurdles in recovering customer trust and industry standing after several years of languish.

»

Will need to successfully integrate and coordinate with SEN Group partners in order to be viable at enterprise level.

»

Late timing of joint venture and past lack of success in North America will make it very difficult to catch up to market leaders.

Product Comparison Enterprise IP Telephony Vendor Landscape

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Follower Landscape 3Com Corporation Vendor

3Com Corporation

Platform

VCX Enterprise

Overview

3Com Corporation, a major IT industry player since the early days of LAN technology, has been revitalized in recent years by the success of its H3C enterprise networking division. However, the vendor still lags its key competitors when it comes to presenting a comprehensive business communications portfolio and it is not viewed as an innovator in the IPT and UC spaces. For more background, refer to the ITA Premium research note, “Enterprise IP Telephony Vendors: 3Com.”

Product Offering

Strengths »

Diversified enterprise IT vendor with networking, security, and communications strengths.

»

Can offer the complete enterprise UC solution stack, from network infrastructure to end user applications.

»

Highly robust, standards-based call control platform that meets mission-critical enterprise needs.

Challenges »

Competing at both top and low ends of UC market will be difficult against the resources of larger global players.

»

Lags competitors in overall UC innovation by being late to market in key areas, notably mobility solutions and Microsoft UC integration.

»

Still faces a significant lack of customer awareness and mindshare in the enterprise communications space.

Product Comparison Enterprise IP Telephony Vendor Landscape

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Nortel Vendor

Nortel

Platforms

Communications Server 1000, Software Communications System

Overview

Nortel, a longtime leader in the telecommunications space, suffered a high profile financial collapse this decade. This culminated with its filing for Chapter 11 bankruptcy protection in early 2009 and subsequent announcement of an auction bidding process for its remaining divisions. Nonetheless, its Enterprise Solutions division remains a highly sought asset, given Nortel’s significant global installed base and a broad technology portfolio that its eventual buyer will undoubtedly leverage towards future solutions.

Product Offering

Strengths »

Rich technology portfolio that includes communications and collaboration solutions, network and security infrastructure, and contact center applications.

»

The accelerated development of its open standards-based Software Communications System solution provides it with a very comprehensive, marketable, and cost effective all-in-one UC platform.

Challenges »

Although acquisition by a competitor or private equity is now inevitable, retaining an eroding base of Nortel channel partners will be a considerable challenge.

»

Prospective customers are extremely wary of engaging with a vendor with poor financials, let alone one that is insolvent.

Product Comparison Enterprise IP Telephony Vendor Landscape

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Key Takeaways 1. Consolidation and innovation have changed the playing field. Recent market activity has reduced the total number of vendors that enterprises will realistically consider when exploring IPT platforms. However, maturing approaches to UC and the growing presence of leading collaboration software vendors Microsoft and IBM are now having a clear impact on enterprise communications strategy. 2. Software and services are becoming the new differentiators. Given the minimal disparity in core features among leading IPT providers, the ability of vendors and their partners to deliver compelling applications and help facilitate integration with business processes are becoming key differentiators. 3. Interoperability should be a priority. Enterprises should focus on vendors that offer flexibility with respect to third party hardware, software, and services. The ability to leverage existing infrastructure elements, rather than having to perform a wholesale upgrade, can also help enterprises control overall project costs.

Bottom Line Enterprises exploring IP Telephony and the business communications market should carefully assess the individual strengths and challenges associated with potential vendors and solutions. While the major players all offer a comprehensive set of core features, their approaches to software, services, and collaboration are becoming key differentiators.

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