Over the last 6 months there has been a lot of activity in the market with cloud-based offerings from players such as Microsoft, IBM and Cisco. Microsoft & IBM are bringing their collaboration & productivity suites online with Microsoft Online services and LotusLive services. Both players are making investments in infrastructure as well as channel & support readiness to push these solutions to the market and slowly bringing them to the different markets in Asia Pacific. In November 2009, Cisco announced their decision to play in the Email market with a cloud-based solution called Webex Mail (based on the PostPath acquisition).
Enterprise communications moving to the cloud is a clear trend in the industry, as demonstrated by the fast growth of conferencing services industry in Asia Pacific (the market is over $340 million in 2009, and growing at healthy double digit growth rates, based of Frost & Sullivan) and also discussed in my previous blog post on UC trends in 2010, and also . Driven by the larger trend of cloud services & renewed interest in opex models and lower TCO propositions (thanks to the economic recession), the Hosted Email market is rejuvenating and looking ready for a second innings.
In the past the Hosted Email market has been dominated by local service providers, internet service providers and web-hosting players. The local SPs & ISPs would host an email system (either MS Exchange, or some Unix-based system) in their data center, and offer a hosted email service to their SMB customers. The web-hosting players really targeting the small-end of the market (less than 50 mailboxes) would see success by throwing in mailboxes with website hosting services for free or minimal cost. The price points for Hosted Email were very competitive when compared the on-premise options of Microsoft Exchange and IBM Lotus Notes. Despite this, Hosted mailboxes as a % of total mailboxes in Asia Pacific is less than 10%. The Hosted Email services offered by the SPs, ISPs & Web-hosting players were not regarded as enterprise-grade. Issues with data security, reliability of the the service, and loss of control with an outsourced model were top challenges that led to the limited growth in the past. Large enterprises were rarely even considering Hosted email as an option and continued to invest in on-premise email solutions.
With the entry of Microsoft, IBM and Cisco in the Hosted email services market, one can expect the consideration rate for Hosted Email by large enterprises to increase substantially. The impact of Google's launch of Gmail in 2004-05 with an infinite mailbox starting at 1 GB for consumers is being felt now in enterprise email user requirements. Enterprise users like the larger mailbox sizes, and IT teams are looking for ways to reduce software license, maintenance & support costs.
Based on some recent interactions with enterprise CIOs, it is clear that if there is a smooth migration path that can be offered to take their On-premise Email to a Hosted model in a secure and reliable manner then many enterprises would be willing to make a switch. Microsoft & IBM dominate more than 75% of the CPE email market in Asia Pacific, and hence having a cloud services option by these two vendors would definitely help drive this market. Apart from these two biggies, networking & telephony giant Cisco is also offering Hosted email service called Webex Mail. Cisco has a large installed base of large enterprise customers that use Cisco's Unified Communications applications as well as Webex conferencing service. Having a Hosted email option bundled as part of the larger UC deal could be considered by some enterprises. All this will not happen in 2010, and it is also clear that not all large enterprises and not all users (within a large enterprise) would migrate to the Hosted option, but one can definitely expect the penetration of Hosted Email in the large enterprise segment to grow strongly in the next 2-3 years. Vertical industries such as Education, Manufacturing, Professional Services & Hi-Tech are possibly the early adopters. Many of these verticals have deskless workers and part-time workers and these would be sweetspot for deploying a cost-efficient, scalable & flexible Hosted email solution, before rolling it out within the larger enterprise. Cisco, Microsoft & IBM can be expected to drive market education efforts to increase the awareness of Hosted Email services and its benefits, and help clear some of the perceived concerns about reliability, security & control.
In 2009, more than 500 mailboxes segment contributed less than 10% of the total Hosted Email opportunity in Asia Pacific in 2009, with most of the action happening in the 100 - 250 mailbox segment. Microsoft, IBM and Cisco are focused across all horizontal market segments for their Hosted Email offerings, however, one can expect Microsoft, IBM, Cisco to drive adoption from mid-to-large enterprises, while players like Google and Zimbra drive the mid-market enterprise (100-500 mailboxes) segment, except the Government & Education vertical. The small end of the market will continue to be dominated by web-hosting players, local SPs & ISPs.
With the contribution from the large enterprise segment expected to increase while the rest of market continues to grow, the Hosted Email market in Asia Pacific is set to see a strong CAGR of close to 20% over the next 4-5 years.
Showing posts with label Cisco. Show all posts
Showing posts with label Cisco. Show all posts
Tuesday, February 23, 2010
Friday, January 22, 2010
Collaboration = UC
The Unified Communications (UC) market has now been around for 4 years, since the term became popular in 2006. I can safely say that the UC market has not lived upto its promise of delivering a seamless communications experience through the unification of different communication media and devices. The promise of that seamless experience improving user productivity, which would improve the ability to respond quicker, and ultimately embedding that communication capability into key business processes to make the enterprise more agile.
The problem never was the technology, but the deployment of the technology. The biggest competitor for the UC market was the existing communications market. Heterogeneity is many a times underestimated by our industry. Heterogeneous environments created significant barrier for the adoption of UC. To create that seamless communications experience enterprises needed to change/upgrade/migrate their existing investments into a UC-ready environment, and do that for all communication devices at the same time. That clearly did not happen.
We are in 2010, and we still see adoption of UC as a silo-ed & phased approach towards building a UC infrastructure. Enterprises chose to change/upgrade/migrate in phases, starting either with their telephony infrastructure or Email infrastructure, then adding applications that can integrate with these systems. So in effect, today, UC is no longer "a thing" enterprises are buying and deploying, but it is a "journey" that IT teams are embarking on, checking milestones one after one.
From that promise of UC in 2006, where click-to-call was the big buzz application, enterprises and vendors have come to realize the importance of the larger underlying market need of Collaboration. The promise of UC is beginning to take shape in the form a real market need of Collaboration. As enterprises embark on their UC "journey", and they already have Telephony systems and Email infrastructure. The next application that majority of enterprises are interested in is Conferencing & Collaboration.
Based on a survey of CIOs in Asia conducted by Frost & Sullivan, Collaboration ranked as the top application enterprises are looking to invest in as part of their UC deployments in the next 12-24 months. This is a significant insight. The insight is that for enterprises who already have telephony & email (which is a vast majority), the next step towards UC for them is Collaboration; which means that for these set of enterprises, moving to UC is equivalent to deploying Collaboration technologies i.e. Collaboration = UC.
Please note that I am not saying that UC = Collaboration. There is a slight difference. UC = Collaboration would mean that UC is only about Collaboration, but that is not true. UC has an even higher purpose, of collaboration, of mobility, of communication-enabling the business.
But from the enterprise-view, if Collaboration = UC is true, it means that vendors need to direct their efforts accordingly. We already see Cisco doing that in a big way. Cisco's acquisition over the last 2-3 years have demonstrated their seriousness about this market, their focus on completing a true UC portfolio, and their understanding of the larger Collaboration opportunity.
IBM has always talked about UC as UC squared i.e. UC & Collaboration. Microsoft also had a Collaboration-centric message. But other vendors such as Avaya, Siemens, Mitel, NEC, Aastra need to get their messages and importantly their solutions aligned as well.
Collaboration = UC would be the mega trend in the communications industry for atleast the next 24-36 months. Now, that's not a promise.
The problem never was the technology, but the deployment of the technology. The biggest competitor for the UC market was the existing communications market. Heterogeneity is many a times underestimated by our industry. Heterogeneous environments created significant barrier for the adoption of UC. To create that seamless communications experience enterprises needed to change/upgrade/migrate their existing investments into a UC-ready environment, and do that for all communication devices at the same time. That clearly did not happen.
We are in 2010, and we still see adoption of UC as a silo-ed & phased approach towards building a UC infrastructure. Enterprises chose to change/upgrade/migrate in phases, starting either with their telephony infrastructure or Email infrastructure, then adding applications that can integrate with these systems. So in effect, today, UC is no longer "a thing" enterprises are buying and deploying, but it is a "journey" that IT teams are embarking on, checking milestones one after one.
From that promise of UC in 2006, where click-to-call was the big buzz application, enterprises and vendors have come to realize the importance of the larger underlying market need of Collaboration. The promise of UC is beginning to take shape in the form a real market need of Collaboration. As enterprises embark on their UC "journey", and they already have Telephony systems and Email infrastructure. The next application that majority of enterprises are interested in is Conferencing & Collaboration.
Based on a survey of CIOs in Asia conducted by Frost & Sullivan, Collaboration ranked as the top application enterprises are looking to invest in as part of their UC deployments in the next 12-24 months. This is a significant insight. The insight is that for enterprises who already have telephony & email (which is a vast majority), the next step towards UC for them is Collaboration; which means that for these set of enterprises, moving to UC is equivalent to deploying Collaboration technologies i.e. Collaboration = UC.
Please note that I am not saying that UC = Collaboration. There is a slight difference. UC = Collaboration would mean that UC is only about Collaboration, but that is not true. UC has an even higher purpose, of collaboration, of mobility, of communication-enabling the business.
But from the enterprise-view, if Collaboration = UC is true, it means that vendors need to direct their efforts accordingly. We already see Cisco doing that in a big way. Cisco's acquisition over the last 2-3 years have demonstrated their seriousness about this market, their focus on completing a true UC portfolio, and their understanding of the larger Collaboration opportunity.
IBM has always talked about UC as UC squared i.e. UC & Collaboration. Microsoft also had a Collaboration-centric message. But other vendors such as Avaya, Siemens, Mitel, NEC, Aastra need to get their messages and importantly their solutions aligned as well.
Collaboration = UC would be the mega trend in the communications industry for atleast the next 24-36 months. Now, that's not a promise.
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