At Avaya’s recent analyst conference, much of the talk centered around communications-enabled business processes. The vendor was among the fist to start touting the value of CEPB and the fact that it’s changing how business gets done, and this year CEO Lou D’Ambrosio said the trend is going to be as big as the transition from TDM to IP.

But it’s not that simple. The move from TDM to IP was a technology change; CEPB is about, well, business processes—and we all know how hard it is to change those.

For starters, to change business processes you have to know what they are in the first place. That’s not always easy, and it requires experts with deep knowledge of either vertical businesses or horizontal applications (or both). To that end, Avaya is aggressively seeding its CEBP sales team with business experts, many of who come from the contact center, where reducing latency and improving processes is par for the course (at least in theory). The company had to change its sales process, because CEBP requires selling to a line of business manager (which may be IT, but only insofar as IT is the group whose processes you’re trying to change).

Avaya reports more than 50 ongoing customer engagements, but they require a long sales and services cycle and are in various stages of deployment. Services equal anywhere from 50%-400% of the software sale—no wonder the vendor is ramping up its services business at breakneck pace.

According to Lawrence Byrd, Director of CEBP, Avaya is also focusing initially on those processes that have a clear ROI case to be made—otherwise, he said, “you’re just implementing technology for technology’s sake.” The examples D’Ambrosio gave were all about customer support and interaction—a shipping company that tells a customer pro-actively where their package is, whether it needs a signature, what time they should deliver to get the feedback they need, etc. Or a financial services company that monitors customer activity on a web site to see what they’re interested in, then offers them new services via phone or IM.

Other low-hanging fruit includes business processes that already embed some kind of communication (typically an e-mail or SMS alert) and improving upon that communication to make it more specific to the recipient’s status and needs ( a conference call or web session where appropriate instead of a static message, for instance); and finding the gaps in existing processes where communication is required but confused, reducing the human latency therein.

And how’s this for a new business process (that has nothing to do with real-time enablement, mind you)? Avaya SVP Stuart Wells talked about using a content management system to locate expertise in the organization by tracking e-mails for certain keywords and content, so that when someone calls in to ask for that expertise you know who has it. That’s a pretty interesting idea, because individuals aren’t all that great at self-defining their true skill sets and areas of knowledge. But it’s a little scary, too, to think that companies would know more about what I know than I do.

Finally, for all their business value, UC applications won’t solve all our communications problems; at the end of the day, sometimes people just aren’t available to communicate. At the Avaya conference, both the cellular service and wireless connection were unreliable. The problem isn’t unusual, but it’s also non-negligible for a business that is going to redesign its processes around communications.

One of the arguments for adoption of collaboration products such as web conferencing and video conferencing is that they make meetings more effective.  By eliminating the time spent taking attendance, ensuring that all participants have the right version of a file, and making sure that everyone is on the same page of a presentation, meetings should in theory be more effective, and potentially even shorter.  Furthermore, tools such as shared whiteboards, instant message systems, and perhaps even video should all contribute to making meeting via web conferencing more effective than the plain old audio bridge.  Video solutions such as telepresence are marketed as a way to improve the effectiveness of meetings that in-person meeting requirements can be reduced.

But what about doing something to reduce the sheer number of meetings?  In a chat I had this week with an IT executive he argued that the real goal of an effective collaboration strategy ought to be to not just make meetings better, but to figure out how to eliminate the need for meetings altogether.   Based on my own experiences, as well as the concerns over meeting overload I constant hear from other individuals, I find it hard to argue against his point.

So how can we use collaboration tools to reduce meeting overload?  I’d argue the first step is look at the kinds of meetings that you hold.  Can project status checks be replaced with a project management system that allows team members to easily update the status of their tasks?   Or, can team leaders simply use instant messaging to ping team members to compile status updates that can then be posted to a non-real-time collaborative environment? Can shared workspaces, wikis, or other collaborative environments enable the free exchange of ideas in non-real-time that typically occurs during brainstorming sessions?  Look at the culture of your organization?  Is the first task of a new project manager the scheduling of a weekly or bi-weekly call?  If so, look for opportunities to change that culture by requiring the use of project management and collaboration tools rather than the weekly status checks.

So far we haven’t seen collaboration vendors marketing the potential of their offerings to reduce meetings rather than simply make them more effective.  Perhaps the opportunity to sell enterprises on the opportunities to eliminate the volume of meetings required for most project and team tasks offers more potential for enterprise benefit then just improving the meeting experience itself?

Avaya threw a party this week, inviting more than 100 analysts worldwide. During the show, the vendor highlighted the release of OneX Mobile, the mobile client for UC applications and new Unified Communications Editions packages.Avaya threw a party this week, inviting more than 100 analysts worldwide to meet, greet and eat in Boston over two days of keynotes, breakouts and one-on-one meetings. Plus, we got to see Todd English cook (the demo was fun, the food less so, but thats for a different blog).

During the show, the vendor highlighted two key products in the UC arena:

1. The release of OneX Mobile, the mobile client for UC applications.
2. New Unified Communications Editions packages, eliminating one (Professional) and delivering more in the others.

The OneX Mobile client will be attractive to road warriors mainly for the telephony features that mimic those of a desktop phone. It also offers the potential for significant savings on cellular minutes (via lowest-cost routing and other neat tricks). But conferencing capabilities arent due until at least the next release, making it not so much a unified communications client as a landline extension client. Still, it looks good, and its free with Avayas Unified Communications Standard Edition, so who can quarrel with that?

Speaking of those Editions, say goodbye to the Professional version, launched last year. Avaya now offers three flavors: Essential, Standard and Advanced. All three now include speech access (to help the company leverage its above-par speech access technology in the face of competitors offerings), and Standard and Advanced support the video that used to be available only in Professional (video conferencing, in case you havent heard, is the hot communications technology, redux).

The Essential Edition is an entry-level option for new Avaya customers (existing customers presumably have all it includes already), and despite the name, it is not a UC offering; its VoIP with related capabilities (unified messaging, personal assistant, find-me/follow-me) thrown in. Avaya is trying to move the bulk of its customers onto the Advanced Edition, which includes a virtual laundry list of features, including integration with Microsoft and IBM UC products, presence, and the option to deliver functionality to users via any of four clients (thick, thin, mobile and OCS or Sametime). But technically its not a full UC offering either, because it does not include audio conferencing (although it does support the now-seemingly-universal 6-way calling) or web conferencing. For those, customers must deploy the Advanced Edition.

Prices arent cheap for the bundlesEssential lists for $315 for 1,000-plus seats; add $142 for Standard and another $100 for Advancedbut they do deliver significant savings over buying the applications on an a la carte basis. The company also charges a comparatively high 21% annual maintenance fee.

How much success the company has with these bundles remains to be seen. The first set was announced a year ago, and have been generally available since April, but by all accounts have received very little uptake among Avayas customers, new or old. Furthermore, several Avaya reps told me that they still see most companies planning to deploy UC on a stepped basis, deploying one component at a time over a period of several years (first VoIP, then maybe IM and presence, then on-premises conferencing, for instance). Those customers could conceivably benefit from the Editions packaging and still not opt to deploy them for initial cost and priority reasons.

Here’s an interesting story from the KPMG Digital Insider site that deals with security concerns around Web 2.0 tools entering the workplace. They story includes some interesting data points:

“According to an upcoming KPMG survey of corporate executives on Web 2.0, 86 percent of respondents “agreed” or “strongly agreed” that Web 2.0 tools will help their companies share knowledge more efficiently; 75 percent believe it will help to foster innovation.”

Sounds good. 86% is actually a higher number than I would expect. And the next part:

“But 51 percent of respondents felt that security is the chief barrier to Web 2.0 adoption at their organizations. Just 47 percent are creating governance programs to guard data from unauthorized external access.”

I’m not surprised by this number but would be curious to see what the other responses were. I wonder if their survey asked about user adoption. I would assume user adoption would top the list but apparently not.

Over the past few months I’ve struggled to get my arms around Microsoft Office SharePoint, Microsoft’s “über” platform for asynchronous collaboration.

Is SharePoint a Web 2.0 platform? Is SharePoint a content management system? Is SharePoint a workflow manager? Is SharePoint a social computing platform? Or is SharePoint a portal to other applications?

Well…the answer to all of these questions is a conditional “yes.” SharePoint does have the capabilities to function in all these roles. SharePoint supports Web 2.0 capabilities such as blogs and wikis, as well as user customizable data to enable searches based on meta tags. SharePoint’s content management capabilities enable users to manage documents and other files, assigning permissions, controlling modification, and establishing a trail of changes. SharePoint’s workflow capabilities allow users to assign tasks to document or workspaces, enabling SharePoint to become a project management tool. SharePoint supports extensive capabilities for users to customize their information and share it with others, essentially allowing users to create their own private LinkedIn-style information systems. And finally, SharePoint provides either its own portal system, or the ability to integrate with other portals such as SAP.

When one reads through the list of SharePoint capabilities they might be taken aback by the sheer number of things that SharePoint can do well. Common sense dictates that by trying to be all things to all people, it’s very difficult to be best of breed in all areas. Microsoft recognizes this and has established a number of partnerships to integrate best of breed functions with SharePoint.

For example, Microsoft recently announced strategic partnerships with companies such as Atlassian to support integration of Atlassian’s “Confluence” wiki with SharePoint for those users who need a more robust wiki solution than SharePoint provides. Socialtext’s SocialPoint provides similar capabilities. For advanced RSS capabilities Microsoft partners with Newsgator to bring Newsgator SocialSites to SharePoint users, enabling easy integration of RSS feeds into SharePoint services.

As enterprises create their SharePoint strategy it makes sense to look beyond the core capabilities of SharePoint when those capabilities don’t meet your needs. Microsoft’s ecosystem for bringing best-of-breed services into the SharePoint ecosystem continues to grow, meaning that rather than viewing SharePoint as the be-all-end-all of enterprise collaboration, it is instead wiser to view SharePoint as the platform that can support both internal capabilities as well as leverage external best-of-breed products to fully meet enterprise requirements.

I’ve gotten a lot of feedback on my posting last week in which I talked about the size of the unified communications market. A few vendors complained that surely I had mistyped when I wrote that the current market is less than $10 million. But that’s exactly what I meant. The reason goes back to how we define UC applications.I’ve gotten a lot of feedback on my posting last week, in which I talked about how we at Frost & Sullivan are sizing the unified communications market. A few vendors complained that surely I had mistyped when I wrote that the current market is less than $10 million. But that’s exactly what I meant.

The reason goes back to how we define UC applications: Voice, presence, chat and audio/video/web conferencing integrated in a single application. Companies using VoIP with telephony presence information, or IM and Web conferencing, are not using unified communications applications, and therefore whatever they spend on that technology does not count as part of the UC market.

Take Microsoft as an example. We estimate there are around 16 million LCS licenses in the enterprise. But LCS is not a UC application—its an IM application. So that revenue counts as part of the IM market, not as part of the UC market. In fact, Microsoft released a true UC product—Office Communications Server—only last month. At the time of that release, a spokesperson claimed around 150 customers for the product, but he admitted that the number of users within each customer organization is small—most under 100.

Let’s assume that’s 15,000 licenses bought—at $97 each (list), that’s a total of about $1.5 million. Throw in 150 servers at around $3,000 a pop, and you add almost another half-million dollars—bringing the total to $2 million. That’s nothing to sneeze at for a product that’s less than a month old, but it doesn’t get us to an overall market above $10 million (let alone the “billions” one vendor claimed) for 2007.

Another question that was raised by a few people was the issue of communications-enabled business processes (CEBP), which some analysts and many vendors are touting as the real value of UC. That may be, but CEBP is not a part of the UC market, except, perhaps, insofar as companies spend money on integrating UC software with their back-office applications (and no one is spending money on that in 2007). CEBP is not UC. Indeed, plenty of companies have been using CEBP for years—anyone who’s ever received an e-mail or text message from a corporate application or data system knows this.

Unified communications can significantly improve the value of CEBP because the presence-based real-time technology reduces human latency, and that, in turn reduces the time it takes to complete the business process at hand. But still, you’re looking at improving the “communications” part of communications-enabled business processes; you’re not inventing CEBP.

Clearly, this is a hot topic. I look forward to hearing more thoughts on this—please keep them coming via email or posting below.

Melanie Turek is Principal Analyst, Frost & Sullivan

Today Ross Mayfield wrote that he had stepped down from the CEO role at Socialtext to make room for someone new. Back in July Ross announced his intention to move into the Chairman and President role and seek “CEO 2.0″ a person he described as someone who “will bring a strong operations background and have a mandate to grow the bottom line.”

CEO 2.0 is Eugene Lee, a seasoned executive with a career in technology reaching back to the mid-eighties. According to LinkedIn, Eugene has spent time at Adobe, Cisco, Banyan and Beyond Inc., a company he co-founded in 1996 and sold to Banyan in 2004.

On the Socialtext blog, Eugene writes “I’ve spent my whole career working at the intersection of people, software, and networks. I’ve always had the most fun working with really smart, enthusiastic, passionate people, going after big ideas, creating and innovating new approaches, and leading teams to deliver value to customers.”

Perhaps these changes taking place at Socialtext are a sign that the social software industry is growing up. In any case, Ross has been (and I’m sure will continue to be) a fantastic evangelist for wikis, social software and the entire Enterprise 2.0 revolution. I wish Ross, Eugene and the Socialtext team well in this new era for Socialtext.

One of the biggest issues facing the unified communications market today is how to size it. It’s still early days—the 2007 UC market is valued at well under $10 million—but it’s important for vendors to have a solid understanding of what sales count as “unified communications” revenue. And that’s not as simple as it sounds.

One of the biggest issues facing the unified communications market today is how to size it. It’s still early days—the 2007 UC market is valued at well under $10 million—but it’s important for vendors to have a solid understanding of what sales count as “unified communications” revenue. And that’s not as simple as it sounds.

Companies today and in the future will have three options when it comes to deploying UC technology:

• Integrated best-of-breed on premises applications from a variety of vendors, which could include a vendor to deliver IM and PC presence, another to deliver audio/video/web conferencing, and a third to deliver VoIP, telephony presence and related services, such as unified messaging.
• An all-in-one application from a single vendor to deliver all presence information, chat, conferencing and voice capabilities.
• A hosted service around UC.

Sales of all-in-one applications and hosted UC services have a price tag, and those revenues clearly count as UC (even if end users don’t take advantage of all the included capabilities, their companies paid for them). The trick is in how to count revenues for integrated best-of-breed products, since those are often purchased separately as stand-alone applications, then integrated on the back end before they’re deployed within an organization. That requires a blending of supply-side and demand-side research, which starts to complicate matters—you need to know not just the number of licenses sold by the vendors, but also what buyers plan to do with them immediately after purchase.

More problematic is the fact that today, very few companies are in fact purchasing UC components from multiple vendors, then integrating them for a true UC application; those that are number in the hundreds, not the thousands—and among those companies, we’re looking at hundreds, not thousands, let alone millions, of users. Much more typical are companies that are taking a stepped approach to their UC deployments: They’re buying VoIP or IM or conferencing applications and services today, and intend to unify them in two or three or five years.

That’s a perfectly valid plan, but it doesn’t help those vendors that want to jump-start the size of today’s UC market (and, of course, look like leaders in the space). That’s because it isn’t okay to count today’s stand-alone VoIP sales as UC revenue, even if those customers tell us they intend to make that VoIP purchase part of a UC environment in the future. For one thing, there’s that old saw about the best laid plans. There’s no way to know for certain that the company will, in fact, deploy a UC solution, or that when it does the solution will include those purchased VoIP licenses. But on a more basic level, there’s still a very viable VoIP market out there—indeed, some analysts would say that market is only now starting to mature. There’s no reason to count VoIP sales as UC sales; they’re VoIP sales (or IM, or conferencing—plug in your favorite UC component here).

(Once several stand-alone applications are integrated on the customer site, any services that support that integrations would, of course, count as UC services, and be considered part of the overall UC market.)

Take Cisco, for example. The vendor sells VoIP technology (Unified Communications Manager/CallManager); conferencing services and on-premises conferencing software (WebEx and Cisco Unified MeetingPlace, respectively); unified messaging (Cisco Unity Connection); a presence server (Unified Presence); and a UC client called Cisco Unified Personal Communicator that brings them all together on the front end. To enable a true UC environment, a company would need to deploy the client (UPC) and at least four back-end servers (Communications Manager/CallManager, Unified Meeting Place, Unity Connection and Unified Presence). If a company were to do that, all five purchases would be considered part of the UC market. However, if a company deploys just CallManager and Unified MeetingPlace today as stand-alone applications, even if it intends to deploy UPC, Presence and Unity Connection down the road, those purchases would count as VoIP and conferencing revenue, respectively.

I can tell you that most of the leading UC vendors would like to include everything from VoIP to IM sales in their UC numbers. There are at least two problems with that:

1. Unified communications requires a complete set of integrated technologies in order to be considered unified communications: Presence, point-to-point voice, chat, audio/video/web conferencing, and basic call-control features such as unified messaging and find-me/follow-me capabilities. To say a company that buys VoIP technology is buying UC is simply incorrect.
2. All the leading UC vendors also sell other communications technologies as stand-alone products. If we count those sales as “UC” revenue, we’re simply moving money from one bucket into another. That may have marketing appeal, but it’s not defining a new revenue stream so much as redefining an old one. Any real value it has is as an illusion.

Analogies are hard to come by, but think of it like this. If you buy a car today and intend to use it as a taxi in three years, the money you paid for it counts as “personal car” revenue; it doesn’t count as “taxi” revenue. Taxi revenue requires that the car you buy come complete with, at the very least, a “taxi” light on top, a meter, and a nifty yellow paint job. Now, should you make good on your intention and convert that car into a taxi in three years, whatever you spend on after-market services (for that light, meter and yellow paint) will count as “taxi” (services) revenue. But in 2007, what you bought was a car, and that’s how the money you spent gets counted. (Can you tell that I don’t cover the auto market?)

So how big will the unified communications market be? At Frost & Sullivan we consider the addressable market to be roughly equal to the number of e-mail licenses in the enterprise. Today, that translates into about 320 million seats; we’d expect about 80% of those same users to be given a UC application (integrated with e-mail, but purchased separately). For more details on how much we expect those licenses to sell for, as well as other elements we expect to contribute to the overall UC market, please e-mail me. We’ve just published the Frost & Sullivan North American Unified Communications 2007 Market Insight, and I’d love to discuss our key findings.

Last week, I had the pleasure of delivering a keynote address at the Polycom User Group conference. At the event, Polycom made two announcements that show the continued development and maturity of video conferencing around two key areas: telepresence and high definition.

Polycom’s new Telepresence Experience High Definition (TPX HD 306M) system is designed to be a more versatile, and less expensive, telepresence option. I demoed the system, and it looks pretty good—not as realistic as the company’s RealPresence Experience (RPX) technology, but good enough to serve the needs of most enterprises—for a smaller price tag ($199,000 list), and in a room that can double as an in person conference room for meetings the old fashioned way. (If you’re interested in learning more about the benefits of telepresence, as well as what industries and job roles it’s especially well suited for, please download two whitepapers I recently wrote on the topic.

Polycom also introduced the HDX 8000 series of high definition systems designed to deliver what the vendor calls “UltimateHD” (to include audio and data as well as video quality) to small and medium-sized conference rooms. The company’s new patent-pending Lost Packet Recovery technology provides QoS for IP networks, ensuring that calls don’t lose quality, or stop working altogether, as packets get dropped over the network. The goal is to make video conferencing more viable for home office workers, remote offices and field applications. HDX Version 2.0 also enables HDX 9004 and 9002 systems with embedded multipoint capability to deliver HD continuous presence multipoint for up to eight sites.

Meanwhile, my keynote at PUG was on a slightly different topic—the changing face of video conferencing—and the audience of several hundred attendees were especially interested in learning more about how to support a dispersed employee base; almost two thirds of them describe their organization as being a “virtual workplace.” And after my session ended, several IT managers approached me, all with the same question: “How do I integrate my unified communications applications, my video infrastructure and my business applications?”

It’ a good question—and one we’ll all be addressing on this blog in the weeks and months to come. Today, HDX Version 2.0 enables integration with the Avaya Video Telephony Solution and Microsoft LCS 2005, making Polycom video collaboration capabilities instantly accessible within these UC environments. But the market is changing literally every week… which keeps things interesting, at least.

Most discussion these days of enterprise use of social networking looks at the internal perspective, e.g. how can enterprise organizations leverage the concepts of social networking to improve the ability of the organization to better collaborate. I think its also important that enterprises look outwardly at leveraging social networking for the benefit of their organization.

Social networking sites now dominate the Internet, with YouTube, MySpace, Facebook, and Orkut comprising four of the ten most visited sites in the world according to web ranking service Alexa, and four of the ten most visited sites in the United States (with Craigslist replacing Orkut in the US top ten). Still, many organizations spend far more time trying to fight their employees use of such sites rather than figure out how they use such sites to improve both external and internal organizational communications.

On the external side, organizations should adopt two approaches. First, they should create a presence for themselves in popular social sites such as Orkut, Facebook, and MySpace, creating groups or pages for customers and interested parties to congregate, exchange tips and information, and enjoy a direct link back to the organization. Presence on social networking sites should be actively promoted and offers the opportunity to reduce support costs by enabling users to organize among themselves to solve problems.

Enterprises should actively participate in social communities that are directly related to their products and services. For example, a company that manufactures audio-video gear should have support personnel participate in places like the AVS Forum, one of the premier social sites for A/V enthusiasts. By participating in these types of forums, enterprises can directly reach their customers, leverage support opportunities, and demonstrate a willingness to have free and open communications with the outside world. Be warned that entering these sites with a sales-centric viewpoint is likely a bad business move. Instead, strive to make your organization an integral contributor to the community at large.

Secondly, larger enterprises should consider creating their own on-line communities to enable customers to support each other. For example, imagine if automakers had community forums where buyers and owners could ask questions and receive immediate answers from other owners, as well as company representatives. Would the average buyer be more likely to buy a big ticket item from a company offering such as direct support/community building model? I know I would. Can such sites be leverage to get instant feedback and input from customers about future business plans? They sure can.

In exploring the opportunities for external leverage of social networking sites and concepts, it becomes more an exercise in marketing than an exercise in technology. Still, its up to the technology folks to work with their marketing, sales, and support organizations to help them understand the opportunities presented by social networking, but how those opportunities can be leveraged to meet bottom line objectives of improving sales, customer loyalty, service, and support.