Predictions for the Asia Pacific Contact Center Market in 2011
2010 was an interesting year for the contact center industry in Asia Pacific. The first half of the year was slow and saw limited growth in investment in technology and seat expansions. However, the second half seemed to be much better and pushed the entire year into steady positive growth. Despite several trends being subdued as enterprises made a cautious return from the global financial crisis, we saw increased activity in the areas of Self-service, Analytics and leveraging Social Media for customer service. As we enter the new decade, Frost & Sullivan believes that these trends will be the driver for increased investment in Contact Center Applications.
This insight attempts to discuss the top industry trends in 2011 that are impacting contact centers across the world and especially in Asia Pacific.
1. Return to Customer Acquisition
The theme of customer acquisition will drive investments from contact centers in the region in 2011. This could lead to simply expanding contact center seats, to investing in advanced outbound dialers, or investing in Analytics to help fine-tune sales strategies.
While 2009 & 2010 were dominated by the “More with Less” or like I would put it “More with Lesser” theme, Frost & Sullivan believes that decisions on technology in 2011 will be determined by the need to grow faster and acquire more customers. This does not mean that contact centers will suddenly find an extra pot of cash and hence the need to optimize operations goes away, but the priority of investment will shift towards growth-aiding technologies or processes.
2. Analytics
Reporting has always been a key element of the contact center. Analytics is the next step for contact centers to improve operations and drive customer satisfaction. Contact Centers are struggling to keep up with the changing customer expectations and maintaining satisfaction levels. Analytics promises to deliver improvements in operations, quality processes and customer satisfaction. The bigger promise in my opinion is that Analytics gives the contact center the rare chance to be a Strategic part of the organization, not just a Profit center or Cost center.
Speech analytics technology is maturing and we are beginning to see deployments in Asia Pacific. Though most deployments are still for the English language, we are beginning to see some pilots for non-English languages as well.
Using a combination of speech analytics with data & screen capture analytics, contact centers can not only identify root cause for certain operational bottle-necks or hone directly into the “bad” calls which led to customer churn, but also deliver insights back to the enterprise on competitive deals, product enhancements and marketing effectiveness. Life no longer is about “90% of calls in 30 seconds” but instead looking at the top reasons for customer churn, hence, shifting the image of the contact center to a Strategic part of the enterprise.
3. Contact Center in the Cloud
The last 18 months has seen a significant increase in interest from enterprises to look at Cloud-based alternatives for many IT applications and systems. The value proposition of Cloud-based Contact Center Applications is just as valid as it is for Business Applications such as CRM and Salesforce Automation.
Hosted Contact Centers have been around in Asia Pacific for a few years, and have seen limited success so far. By the end of 2010, we expect over 93,000 hosted seats in the Asia Pacific region. There is strong interest from Telecom Service Providers to offer Hosted Contact Center solutions, and offer bundled packages of Communications & Network Services with Contact Center Application Delivery. Telecom Service Providers in many markets have shown interest and already have a Hosted Contact Center offering. The demand for such services so far has been lukewarm due to the lack of good case studies on the success of such a model and perceived issues with security and lack of control.
The push towards Cloud-based services across Software-as-a-Service, Platform-as-a-Service and Infrastructure-as-a-Service, and the strong benefits that many enterprises are realizing by moving to such a model coupled with the strong validation of the Cloud model by vendors such as Microsoft, IBM, Cisco, Salesforce.com is making CIOs consider Cloud alternatives for a portion of their IT investments.
Apart from local Telcos and Global Service Providers such as BT, some large System Integrators are also looking to start a Cloud service practice and offer a Cloud-based Contact Center solution. In 2011, we expect the momentum for such services to pick up, and drive adoption especially in the markets of Australia, India, Japan, Taiwan and parts of South-East Asia.
4. More Self-Service
Self-service as a trend is more pronounced amongst Generation Y, and given that Asia Pacific has large Gen-Y population, the need to have good self-service channels is critical for most contact centers. The trend towards Self-service is not limited to just IVRs (Integrated Voice Response), but focused increasingly on Web self-service and Mobile self-service.
There is a strong push towards using IVR as a call resolution platform instead of just a call routing tool. There is strong growth in consulting services to identify processes and transactions that can be pushed to an IVR. Markets such as India, China, and Indonesia are expected to see strong growth in IVR adoption.
2011 will continue to see investments in IVRs and Voice Portals, and we expect the IVR market to grow at double digit growth rate in 2011 in the Asia Pacific region.
5. Mobile Customer Care
Smart phone adoption has sky-rocketed in the Asia Pacific region. Mobile Broadband is changing the way consumers are accessing information, using the internet and expecting service. Mobile Applications is redefining customer expectations and is creating yet another degree of separation between the customer and the traditional call center.
In 2011, we expect to see leading enterprises in the Asia Pacific region launch Mobile Applications to deliver differentiated customer experience, and link it with the rest of the contact center.
6. Investments will begin to trickle in for Social Media Applications
2010 was the year of experimentation with social media for customer service. Telcos, Banks and Hotels setup small teams of 3-7 people who would spend their time “listening” to the different social channels, and “selectively responding” to customers. Some companies took a physical world view to the web 2.0 world by operating their twitter responses from 9 AM to 5 PM. Others chose to just listen in and not respond, while very few took a holistic approach to listening, participating and being pro-active on this channel.
Due to the experimental nature, there was little if any investment on social media tools. In 2011, however, as companies get more serious about Social Media and as the trend of Social media continues to be strong, we expect more effort from contact centers in trying to manage this new channel for customer engagement.
There are still many issues with adoption – who should take ownership (is it Marketing or Customer Service?), who decides what to write on behalf of the organization (any legal implications?), what will be the volume of interactions that I need to handle on social, how do I operationalize this new channel with the rest of the contact center, or just plain fear that once you get in, you can’t get out! Efforts on educating the market will need to continue, and we expect real investment on social media tools to begin in 2011.
7. Multi-Channel
Perhaps very Old School for many markets, but given the diverse nature of Asia Pacific we believe that there is still going to good amount of investment in offering a multi-channel service to customers. Markets such as Indonesia, Vietnam, Thailand, India and China will see good investment in this area.
More mature markets such as Australia, and parts of the Indian contact center industry will look at ways to better integrate the different channels and provide a seamless and consistent experience across the different channels.
Investments in SMS based notifications, Email and Web Chat will continue to be strong in 2011.
8. Domestic Outsourcing
The strong growth in the Asia Pacific Contact Center industry in the past decade was fueled in a large part by the trend of offshoring and offshore outsourcing. Markets of India and Philippines have seen significant growth over the last decade on the back of this trend.
Although offshore contact center outsourcing still dominates the market in India, the last 24 months has seen a strong growth in domestic outsourcing i.e. companies in India outsourcing their contact center work to Indian outsourcers. This trend is not limited to India, but is also happening across Australia, China, Indonesia and Japan.
The shift from Offshore Outsourcing to Domestic Outsourcing has implications on the cost per seat and hence the cost of technology that these outsourcers will be able to afford, however, given the large scale of business, there is a strong upside in the market due to increased investment from Outsourcers driven by the opportunity in the domestic markets of Asia Pacific.
9. Extension into the Enterprise
There are two ways in which we are seeing the extension of the contact center into the enterprise.
A) Leveraging the larger enterprise workforce as part of the customer service process. This could include enterprise experts who are more empowered than agents to help with call resolution, or leveraging branch workers and remote workers as contact center agents during certain downtimes at the branches. Unified Communications tools such as Presence, Instant Messaging (IM) and Conferencing are being deployed in order to enable such capabilities.
In 2010, the adoption of Unified Communication applications in the Contact Center was in early stages, however, as Banks, Telcos, Retail companies begin to deploy Unified Communications in their enterprise, extending those applications and capability to the Contact Center will also become important.
Apart from extending to enterprise experts, in 2011, the trend towards remote agent is expected to show some growth in select markets of the region, especially Australia.
B) Extending Optimization tools to the Back-office. The contact center has invested significantly over workforce management & performance management tools that have led to increased efficiency in the contact center. The back-office operations in the enterprise have similar operational challenges as the contact center, and are beginning to see merit in adopting Workforce Optimization tools that are used in the Contact Center, for their back-office operations.
In 2011, we expect to see more adoption of such tools in the back-office coupled with work flow management applications as well.
10. Video in the Contact Center
I thought for a while before I decided to include Video as one of the key trends in 2011. As of 2010, the vision of a Video Contact Center was barely existent in the Asia Pacific region with the exception of a couple of deals in markets such as Korea. In 2011, we still do not expect any significant investment in video yet. However, we will begin to see video applications on smart phones and tablets begin to emerge which will require Heads of Customer Service to rethink their stance on a Video-based customer service models.
With 3G penetration rising in Asia Pacific and more smart phones and tablets with 2-way video capability, the chances of having a customer service application that incorporates video capability is not too much of a stretch. However, any main stream adoption for video in the contact center might not happen until the second half of 2012 or 2013.
In 2011, Frost & Sullivan expects the Asia Pacific Contact Center industry to have close to 30,000 contact centers with more than 2.4 million seats, and the Contact Center Applications market to grow in the range of 9 – 11 % to reach close to US$ 800 Million in revenues.
Tuesday, January 25, 2011
Tuesday, February 23, 2010
Why large enterprises will spend on Hosted Email ...
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.
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.
UC Trends in 2010
Unified Communications (UC) entails unifying the different communication applications such as voice, email, instant messaging, conferencing & collaboration to deliver productivity gains for the users, better team collaboration and increased agility for the enterprise.
The ultimate aim of unified communications is to embed communications into business processes to deliver quicker and better decision making, enhanced collaboration across geographically diverse teams, and to improve overall efficiency in the business process to make the enterprise more agile and competitive. In order to achieve this, the multiple communication applications that operate in complete silos need to be integrated with one another, and also integrated with business applications.
Key Highlights for UC Market in 2009
From the get-go it was clear that 2009 was going to be a tough year for most industries, and the Unified Communications market was no exception. Given the recession and lower IT spending by enterprises, the Unified Communications market expecting a decline of 6.6 percent over 2008.
2009 saw a significant drop in spending on telephony infrastructure, with the telephony market expected to decline by over 30 percent over 2008. Apart from a slowdown in spending, price erosion also contributed to the overall revenue decline in that market.
The year saw creative financing schemes, attractive migration programs, aggressive application bundling and competitive pricing in the market. While many enterprises did bite into these vendor initiatives, others decided to put some of their infrastructure decisions on hold or delay them by a few quarters.
The silver lining for the Unified Communications industry was the Conferencing & Collaboration market is expected to see a strong growth of 13.1 percent in 2009. The recession brought along with it travel budget cuts which meant more investment in collaboration software and services.
As predicted last year, consolidation in the vendor landscape continued in 2009 with Avaya acquiring Nortel Enterprise, and more recently Logitech-LifeSize, and Cisco-Tandberg. The impact of all of these acquisitions will be felt in 2010.
Predictions for UC Market in 2010
2010 is expected to show some recovery and enterprises are expected to refresh their communications infrastructure and adopt Unified Communications. Frost & Sullivan expects the Unified Communications market in Asia Pacific to grow by 4.4 percent in 2010.
We believe that communications in 2010 and beyond will be increasingly:-
•Rich Communications – Communications in 2010 will be increasingly rich with Video. Growth in Video is expected to be in excess of 16 percent in 2010. Adoption of video conferencing has been on the rise in the Asia Pacific region. TelePresence market has shown good take-up from large enterprises, while boardroom and desktop video solutions are also seeing penetration across enterprises.
•Collaborative Communications – Collaboration is a top-of-mind priority for most CIOs and investments in technology that enables their enterprise to be more collaborative, and agile are of high interest. Web conferencing has seen strong growth over the last few years, and is expected to see a growth over 25 percent in 2010. For most enterprises, moving towards Unified Communications entails embracing a more collaborative communications environment, be it via audio conferencing, web conferencing or simple the ability to connect with the person at the right time on the right device through their Presence status. Enterprise Instant Messaging application is also expected to see continued growth in 2010. Solutions such as Google Wave, which brings together elements of Email, Instant Messaging and Collaboration, will make some impact on the market in 2010, although mainstream adoption of such solutions would only be in a 2011-2012 time frame.
•Social Communications – A more recent trend driven by consumer adoption of web 2.0 applications such as social networking. The idea of having a Facebook-like application for the enterprise was being discussed for the last 12-18 months, and in recent weeks we have seen announcements by vendors such as Cisco and Salesforce.com to offer enterprise social networking based collaboration platforms. Players such as IBM, Cisco and Salesforce.com, as well as other niche players are participating in this new market place.
Using social media for customer communications and customer service is expected to gain traction in 2010. Given the nascent stage of the market, the adoption of enterprise social collaboration platforms might be limited in 2010, however awareness and education amongst enterprises is expected to increase. Leveraging social media for customer service is expected to see some traction in 2010.
•Cloud-based Communications – Communications is increasingly moving to the cloud. Adoption of UC-as-a-Service picked up steam in 2009. Local as well as Global Service Providers have become aggressive with their hosted communications service offerings such as Hosted PBX, Hosted Conferencing and Hosted Messaging. Pure play conferencing service providers such as Intercall, Cisco Webex, Premier Global Services have seen good growth in 2009, and are continuing to see interest from enterprises. Hybrid deployment models of On-Premise and In-the-Cloud will emerge in 2010 and enterprises will choose which applications will be on-premise and which ones should be in the cloud. Vendors such as Cisco, Avaya, Alcatel-Lucent, Mitel are working with service providers to deliver their solutions on a hosted basis. Microsoft is expected to launch Microsoft Online in Asia Pacific in 2010, further spurring the market place.
•On-the-go Communications – Mobility continues to be a business need and adoption of mobility solutions is expected to continue in 2010. Solutions that provide the ability to access all forms of communications from the mobile device are expected to grow in 2010. Soft phone clients on mobile devices, to mobile collaboration clients and mobile email are seeing good traction in the market. As the end-point evolution continues from analog phones to digital phones to IP phones, today the user has the option for a hard IP phone on the desk, soft phone on the desktop and soft phone client on the mobile. While the hard phone on the desk might still be prevalent for the next 2-3 years, the adoption of soft phones is seeing strong growth in Asia Pacific.
Core communication applications such as IP telephony and Email will see flat to marginal growth in 2010. IP migration projects will renew in 2010, and growth is expected to return to the IP telephony market, but price points would still be under pressure. Commoditization of these core communication applications will continue in 2010, and focus on applications will be important.
According to Frost & Sullivan, the Unified Communications Market Opportunity* in 2010 is expected to be worth slightly over US $4.45 Billion, growing at 4.4 % over 2009.
*Note: UC Market Opportunity includes Enterprise Telephony, Email, Instant Messaging (Unified Client), Unified Messaging, Conferencing & Collaboration (Audio, Video & Web), Mobility, Presence & Integrated UC Applications, and Core Contact Center Applications.
The ultimate aim of unified communications is to embed communications into business processes to deliver quicker and better decision making, enhanced collaboration across geographically diverse teams, and to improve overall efficiency in the business process to make the enterprise more agile and competitive. In order to achieve this, the multiple communication applications that operate in complete silos need to be integrated with one another, and also integrated with business applications.
Key Highlights for UC Market in 2009
From the get-go it was clear that 2009 was going to be a tough year for most industries, and the Unified Communications market was no exception. Given the recession and lower IT spending by enterprises, the Unified Communications market expecting a decline of 6.6 percent over 2008.
2009 saw a significant drop in spending on telephony infrastructure, with the telephony market expected to decline by over 30 percent over 2008. Apart from a slowdown in spending, price erosion also contributed to the overall revenue decline in that market.
The year saw creative financing schemes, attractive migration programs, aggressive application bundling and competitive pricing in the market. While many enterprises did bite into these vendor initiatives, others decided to put some of their infrastructure decisions on hold or delay them by a few quarters.
The silver lining for the Unified Communications industry was the Conferencing & Collaboration market is expected to see a strong growth of 13.1 percent in 2009. The recession brought along with it travel budget cuts which meant more investment in collaboration software and services.
As predicted last year, consolidation in the vendor landscape continued in 2009 with Avaya acquiring Nortel Enterprise, and more recently Logitech-LifeSize, and Cisco-Tandberg. The impact of all of these acquisitions will be felt in 2010.
Predictions for UC Market in 2010
2010 is expected to show some recovery and enterprises are expected to refresh their communications infrastructure and adopt Unified Communications. Frost & Sullivan expects the Unified Communications market in Asia Pacific to grow by 4.4 percent in 2010.
We believe that communications in 2010 and beyond will be increasingly:-
•Rich Communications – Communications in 2010 will be increasingly rich with Video. Growth in Video is expected to be in excess of 16 percent in 2010. Adoption of video conferencing has been on the rise in the Asia Pacific region. TelePresence market has shown good take-up from large enterprises, while boardroom and desktop video solutions are also seeing penetration across enterprises.
•Collaborative Communications – Collaboration is a top-of-mind priority for most CIOs and investments in technology that enables their enterprise to be more collaborative, and agile are of high interest. Web conferencing has seen strong growth over the last few years, and is expected to see a growth over 25 percent in 2010. For most enterprises, moving towards Unified Communications entails embracing a more collaborative communications environment, be it via audio conferencing, web conferencing or simple the ability to connect with the person at the right time on the right device through their Presence status. Enterprise Instant Messaging application is also expected to see continued growth in 2010. Solutions such as Google Wave, which brings together elements of Email, Instant Messaging and Collaboration, will make some impact on the market in 2010, although mainstream adoption of such solutions would only be in a 2011-2012 time frame.
•Social Communications – A more recent trend driven by consumer adoption of web 2.0 applications such as social networking. The idea of having a Facebook-like application for the enterprise was being discussed for the last 12-18 months, and in recent weeks we have seen announcements by vendors such as Cisco and Salesforce.com to offer enterprise social networking based collaboration platforms. Players such as IBM, Cisco and Salesforce.com, as well as other niche players are participating in this new market place.
Using social media for customer communications and customer service is expected to gain traction in 2010. Given the nascent stage of the market, the adoption of enterprise social collaboration platforms might be limited in 2010, however awareness and education amongst enterprises is expected to increase. Leveraging social media for customer service is expected to see some traction in 2010.
•Cloud-based Communications – Communications is increasingly moving to the cloud. Adoption of UC-as-a-Service picked up steam in 2009. Local as well as Global Service Providers have become aggressive with their hosted communications service offerings such as Hosted PBX, Hosted Conferencing and Hosted Messaging. Pure play conferencing service providers such as Intercall, Cisco Webex, Premier Global Services have seen good growth in 2009, and are continuing to see interest from enterprises. Hybrid deployment models of On-Premise and In-the-Cloud will emerge in 2010 and enterprises will choose which applications will be on-premise and which ones should be in the cloud. Vendors such as Cisco, Avaya, Alcatel-Lucent, Mitel are working with service providers to deliver their solutions on a hosted basis. Microsoft is expected to launch Microsoft Online in Asia Pacific in 2010, further spurring the market place.
•On-the-go Communications – Mobility continues to be a business need and adoption of mobility solutions is expected to continue in 2010. Solutions that provide the ability to access all forms of communications from the mobile device are expected to grow in 2010. Soft phone clients on mobile devices, to mobile collaboration clients and mobile email are seeing good traction in the market. As the end-point evolution continues from analog phones to digital phones to IP phones, today the user has the option for a hard IP phone on the desk, soft phone on the desktop and soft phone client on the mobile. While the hard phone on the desk might still be prevalent for the next 2-3 years, the adoption of soft phones is seeing strong growth in Asia Pacific.
Core communication applications such as IP telephony and Email will see flat to marginal growth in 2010. IP migration projects will renew in 2010, and growth is expected to return to the IP telephony market, but price points would still be under pressure. Commoditization of these core communication applications will continue in 2010, and focus on applications will be important.
According to Frost & Sullivan, the Unified Communications Market Opportunity* in 2010 is expected to be worth slightly over US $4.45 Billion, growing at 4.4 % over 2009.
*Note: UC Market Opportunity includes Enterprise Telephony, Email, Instant Messaging (Unified Client), Unified Messaging, Conferencing & Collaboration (Audio, Video & Web), Mobility, Presence & Integrated UC Applications, and Core Contact Center Applications.
Building Blocks for a Social Media Customer Engagement Strategy
...Continued from previous post - Press 1 for Twitter
Building a Social Customer Engagement strategy is becoming increasingly important for enterprises, however, enterprises need to be wary of the challenges that come with a social media customer service channel. Social Customer Engagement is fairly new, and is unlike the other customer service processes where we have metrics, benchmarks and best practices to improve our processes. Including Social Media channels as part of the customer service process requires a thorough assessment of the customer base & existing customer contact processes, and the need to build a new set of processes & programs.
Key building blocks for a social media customer engagement strategy would include:-
a) Define Objectives
It is important to clearly state the objective for having a social media customer engagement strategy. Is it to disseminate information, engage with customers in conversations, pro-actively offer support or collaborate on ideas? Once we define the objectives, then the other aspects of the strategy can be explored.
b) Identify Social Channel
An assessment of the customer base and the objectives should define which social channels should be used. Different social channels serve different objectives. Twitter is good for broadcasting messages, promoting discount offers, and quick in-the-moment customer support. So Twitter is a good channel if you have a customer or partner community to broadcast pertinent information, and also respond to customer queries and conversations. Facebook on the other hand is better for customer collaboration and rich media sharing. If the objective is to engage with customers and collaborate with them on ideas, then a channel like Facebook is more apt. The option of creating your own social network or social platform for customers to communicate with one another & with the enterprise also serves the same objective. Using channels such as Youtube is good either in tech support environments where product demos, or troubleshooting videos can be shared. The objective in this case would be product support & training. Other social channels such as Wikis & Blogs are also effective, if the customer requires more deeper information into the query.
Like the multi-channel approach in today's contact center, the best approach for social channels would also be to choose a few channels rather than one channel, and target different customer groups.
c) Define Social Media Engagement Process
Any social media customer engagement strategy will require active participation on social channels. In order to ensure active participation, there needs to be clarity on (1) Content Creation process and (2) the Social Participation policy.
Content Creation process involves deciding who creates the content that needs to be posted on social channels to respond and engage with customers. Should the PR teams be involved, or is Marketing supposed to take the lead if it is product specific, or should there be a separate team within the contact center that is empowered to respond to social media queries/issues? It is important to have a process that can deliver quick responses to these queries. While social media is not like a live voice call with a 2-5 minute response time, the expectation of response time on social channels would be within a day, if not a few hours (depending on the nature of the query; the process of screening mentioned above will also help determine the urgency of response). Including Training & Knowledge base for social media responses to help expedite the response process would also be critical.
Social Participation policy, similar to the content creation process, is about identifying who is authorized to post/participate on behalf of the enterprise - Is there a need to have a separate pool of empowered agents for this task or would the PR team be involved? The creation of a consistent social front for the enterprise i.e. a twitter account, facebook page, youtube channel, etc. would also be part of this process.
d) Participate - Listen, Screen & Engage
Once the social channels have been established, the next step is to participate in conversations. The recommendation here is to first listen to what are customers talking about, what are the negatives & positives, what products/services are in discussion, which customer segments are active, etc. Once we Listen to these conversations, the next step would be to Screen which conversations require participation - which customer segments, which negatives, which product/service areas, etc. After the screening process, comes the important step of Engaging with the customer. In order to Engage, the enterprise should be able to respond to comments directly, post messages on social networking sites, and provide a regularly updated blog/wiki for future references.
This process of Listen, Screen & Engage is being enabled by several emerging technologies that can be embedded into existing contact center environments of some leading vendors. The ability to have a queue of social media queries or cases, and being routed to available agents can be achieved by emerging technologies. However, as is the case with most innovations, the barrier is not the technology but the process.
e)Measure & Monitor
The last and very important step is measuring the impact of social interactions and monitoring the feedback, revenues or other target metrics. ROI for social media is a topic of high interest these days. Different enterprises enter social media for different reasons, and hence their approach to justify the time and resources is very different. Some ways of measuring success of a social media engagement strategy can be (i) measuring the extended customer reach & community (i.e. number of followers or fans), (ii) track increase in search engine volumes, (iii) track the success of promotions that are delivered via the social channels, (iv) track user comments to see shift in customer perception of the enterprise brand.
It is important to have a clear idea on the objectives so that one can work towards measuring & monitoring whether the objectives are being met or not. There are several free and paid tools available to monitor activity on social channels that can be used to help enterprise contact centers monitor social media customer engagement & interactions.
These building blocks will help define a clear strategy for social media engagement with customers. As enterprises embark on their very first journey of engaging with customers on social channels, one must be aware some of the challenges that exist today:-
1) Many Social Channels - There are many social channels, and hence the need to integrate the channels, and use different channels for different customer segments & functions. Focus on core social channels that are applicable to your customer base.
2) Half-Hearted Approach - There are quite a few enterprises who are embarking on social media customer engagement strategies only because "everyone else is on it". A half-hearted approach could have a severe backlash as well. Once a social channel for customer interaction has been established, quick response and frequent updates are critical to sustain the channel.
3) Silo-ed Approach to Social Media - Discussion of embarking on social media is happening by different teams within the same enterprise. The Marketing team, the Corporate Communications/Public Relations (PR) team, as well as the Customer Service/Contact Center team are all looking to experiment with social media. If this social channel is opened by any of these teams, it has an impact on the other team as well. Despite that, these teams are not actively talking to each other to bring forth a common social media strategy.
4) Early Days, Lack of Standards - Social media is a recent phenomena, and there are no standards that have been set in terms of technology or processes. Hence, one can expect some teething trouble for enterprises that embark on this journey.
Having a Social Media Customer engagement strategy will no longer be a choice in 2011-2012. Early adopters have already embarked on this journey in 2009. In the Asia Pacific region as well, enterprises have started to use social media to connect & engage with their customers. 2010 will definitely see more activity from enterprises to experiment with social channels, and by 2011-2012 one can expect best practices and standard technology applications to emerge that will drive the industry forward.
Building a Social Customer Engagement strategy is becoming increasingly important for enterprises, however, enterprises need to be wary of the challenges that come with a social media customer service channel. Social Customer Engagement is fairly new, and is unlike the other customer service processes where we have metrics, benchmarks and best practices to improve our processes. Including Social Media channels as part of the customer service process requires a thorough assessment of the customer base & existing customer contact processes, and the need to build a new set of processes & programs.
Key building blocks for a social media customer engagement strategy would include:-
a) Define Objectives
It is important to clearly state the objective for having a social media customer engagement strategy. Is it to disseminate information, engage with customers in conversations, pro-actively offer support or collaborate on ideas? Once we define the objectives, then the other aspects of the strategy can be explored.
b) Identify Social Channel
An assessment of the customer base and the objectives should define which social channels should be used. Different social channels serve different objectives. Twitter is good for broadcasting messages, promoting discount offers, and quick in-the-moment customer support. So Twitter is a good channel if you have a customer or partner community to broadcast pertinent information, and also respond to customer queries and conversations. Facebook on the other hand is better for customer collaboration and rich media sharing. If the objective is to engage with customers and collaborate with them on ideas, then a channel like Facebook is more apt. The option of creating your own social network or social platform for customers to communicate with one another & with the enterprise also serves the same objective. Using channels such as Youtube is good either in tech support environments where product demos, or troubleshooting videos can be shared. The objective in this case would be product support & training. Other social channels such as Wikis & Blogs are also effective, if the customer requires more deeper information into the query.
Like the multi-channel approach in today's contact center, the best approach for social channels would also be to choose a few channels rather than one channel, and target different customer groups.
c) Define Social Media Engagement Process
Any social media customer engagement strategy will require active participation on social channels. In order to ensure active participation, there needs to be clarity on (1) Content Creation process and (2) the Social Participation policy.
Content Creation process involves deciding who creates the content that needs to be posted on social channels to respond and engage with customers. Should the PR teams be involved, or is Marketing supposed to take the lead if it is product specific, or should there be a separate team within the contact center that is empowered to respond to social media queries/issues? It is important to have a process that can deliver quick responses to these queries. While social media is not like a live voice call with a 2-5 minute response time, the expectation of response time on social channels would be within a day, if not a few hours (depending on the nature of the query; the process of screening mentioned above will also help determine the urgency of response). Including Training & Knowledge base for social media responses to help expedite the response process would also be critical.
Social Participation policy, similar to the content creation process, is about identifying who is authorized to post/participate on behalf of the enterprise - Is there a need to have a separate pool of empowered agents for this task or would the PR team be involved? The creation of a consistent social front for the enterprise i.e. a twitter account, facebook page, youtube channel, etc. would also be part of this process.
d) Participate - Listen, Screen & Engage
Once the social channels have been established, the next step is to participate in conversations. The recommendation here is to first listen to what are customers talking about, what are the negatives & positives, what products/services are in discussion, which customer segments are active, etc. Once we Listen to these conversations, the next step would be to Screen which conversations require participation - which customer segments, which negatives, which product/service areas, etc. After the screening process, comes the important step of Engaging with the customer. In order to Engage, the enterprise should be able to respond to comments directly, post messages on social networking sites, and provide a regularly updated blog/wiki for future references.
This process of Listen, Screen & Engage is being enabled by several emerging technologies that can be embedded into existing contact center environments of some leading vendors. The ability to have a queue of social media queries or cases, and being routed to available agents can be achieved by emerging technologies. However, as is the case with most innovations, the barrier is not the technology but the process.
e)Measure & Monitor
The last and very important step is measuring the impact of social interactions and monitoring the feedback, revenues or other target metrics. ROI for social media is a topic of high interest these days. Different enterprises enter social media for different reasons, and hence their approach to justify the time and resources is very different. Some ways of measuring success of a social media engagement strategy can be (i) measuring the extended customer reach & community (i.e. number of followers or fans), (ii) track increase in search engine volumes, (iii) track the success of promotions that are delivered via the social channels, (iv) track user comments to see shift in customer perception of the enterprise brand.
It is important to have a clear idea on the objectives so that one can work towards measuring & monitoring whether the objectives are being met or not. There are several free and paid tools available to monitor activity on social channels that can be used to help enterprise contact centers monitor social media customer engagement & interactions.
These building blocks will help define a clear strategy for social media engagement with customers. As enterprises embark on their very first journey of engaging with customers on social channels, one must be aware some of the challenges that exist today:-
1) Many Social Channels - There are many social channels, and hence the need to integrate the channels, and use different channels for different customer segments & functions. Focus on core social channels that are applicable to your customer base.
2) Half-Hearted Approach - There are quite a few enterprises who are embarking on social media customer engagement strategies only because "everyone else is on it". A half-hearted approach could have a severe backlash as well. Once a social channel for customer interaction has been established, quick response and frequent updates are critical to sustain the channel.
3) Silo-ed Approach to Social Media - Discussion of embarking on social media is happening by different teams within the same enterprise. The Marketing team, the Corporate Communications/Public Relations (PR) team, as well as the Customer Service/Contact Center team are all looking to experiment with social media. If this social channel is opened by any of these teams, it has an impact on the other team as well. Despite that, these teams are not actively talking to each other to bring forth a common social media strategy.
4) Early Days, Lack of Standards - Social media is a recent phenomena, and there are no standards that have been set in terms of technology or processes. Hence, one can expect some teething trouble for enterprises that embark on this journey.
Having a Social Media Customer engagement strategy will no longer be a choice in 2011-2012. Early adopters have already embarked on this journey in 2009. In the Asia Pacific region as well, enterprises have started to use social media to connect & engage with their customers. 2010 will definitely see more activity from enterprises to experiment with social channels, and by 2011-2012 one can expect best practices and standard technology applications to emerge that will drive the industry forward.
Monday, February 15, 2010
Press 1 for Twitter, Press 2 for Facebook ...
Social Media has been a leading phenomena in the last 3-4 years. Facebook has grown from some 12 million users in 2006, to nearly 400 million in early 2010. Don't even try calculating the growth on that. Its BIG! There are lots of such data points that suggest that social media is beyond hype, and is becoming very much the manner in which people are interacting, communicating and participating on the web.
I discussed about Social Networking in the Enterprise in my previous blog post. Enterprise Social Networking is still in its infancy, and such solutions will need to pass the test of the CIO, the CFO and ofcourse time. But there is one aspect of social media & social networking that will and is increasingly being accepted by the Enterprise today - Using social media for customer engagement.
There are many definitions for social media, so let me add one more - Social media is an online platform for users to share, participate and engage in conversations (both monologues & dialogues) with friends, like-minded individuals and everybody else. With social media, it is as easy to create content, as it is to consume it.
Social Media brings about a distinct shift in the Customer service world. This shift is rooted in the definition stated above. In a traditional customer service environment, either the customer calls the contact center i.e. the customer gets in touch with the enterprise to complain, ask or notify or the contact center calls the customer i.e. the enterprise gets in touch the customer to notify, request/threaten or upsell. It is foolish to think that this communication is the only communication that a customer has about the enterprise. Before calling the contact center, most customers would either have "googled" the query, discussed with their peers (increasingly over the web), or shared their frustrations with the world (most likely on some form of social media). Imagine a frustrated passenger, who had to search for the lost baggage claim process on google, then ask his friends on facebook if they knew the call center number for lost baggage, and then tweeted about how bad his flight experience has been. After all this, he calls the contact center - the happy agent on the other end does not have the slighest clue what is coming his way when he picks up that call. Social Media changes this. Social Media enables enterprises to hear, engage and participate in customer conversations that are not happening only when the customer calls the contact center, but happening the other 90% of the time when the customer talks about your enterprise with friends, like-minded individuals or everybody else.
In today's social web world, neither does the customer need to get in touch with the enterprise, nor does the enterprise need to get in touch with the customer to hear the customer. The power of social media provides enterprises the ability to listen to customer conversations, and pro-actively offer support, way before the call reaches the contact center.
Social Media is on the rise in Asia. Of the top 30 countries with most Facebook users, 7 were from Asia Pacific (Australia, Indonesia, India, Philippines, Hong Kong, Malaysia and Singapore). Despite the growth, some enterprises in Asia & Worldwide are still questioning why social media is important for customer service. The popularity of "United Breaks Guitars" is a clear reminder of the impact that social media can have on the reputation and business of an organization. In the words of Jeff Bezos, customers now use the internet as a "mega phone" to tell everyone what they think about our product & services.
A Social Customer Engagement strategy can be beneficial in many ways to the contact center:-
a) Ability to provide Pro-active Customer Care, hence improve Customer Satisfaction
b) Connect with the customer using the channel they use most, similar to the principle used in the multi-channel approach with voice, email, web chat, etc.
c) Make customers your service agents, by getting customers to respond to customer queries on the social web
These benefits lead to a strong value proposition for the enterprise:-
a) Create customer communities to increase stickiness & loyalty
b) Monetize social channels to deliver promotions & targeted campaigns
c) Disseminate information to a wider or targeted audience in real-time & cost effective manner
Building a Social Customer Engagement strategy is becoming increasingly important for enterprises, however, enterprises need to be wary of the challenges that come with a social media customer service channel. Social Customer Engagement is fairly new, and is unlike the other customer service processes where we have metrics, benchmarks and best practices to improve our processes. Including Social Media channels as part of the customer service process requires a thorough assessment of the customer base & existing customer contact processes, and the need to build a new set of processes & programs.
More on the building blocks for a social media customer engagement strategy in my next post...
I discussed about Social Networking in the Enterprise in my previous blog post. Enterprise Social Networking is still in its infancy, and such solutions will need to pass the test of the CIO, the CFO and ofcourse time. But there is one aspect of social media & social networking that will and is increasingly being accepted by the Enterprise today - Using social media for customer engagement.
There are many definitions for social media, so let me add one more - Social media is an online platform for users to share, participate and engage in conversations (both monologues & dialogues) with friends, like-minded individuals and everybody else. With social media, it is as easy to create content, as it is to consume it.
Social Media brings about a distinct shift in the Customer service world. This shift is rooted in the definition stated above. In a traditional customer service environment, either the customer calls the contact center i.e. the customer gets in touch with the enterprise to complain, ask or notify or the contact center calls the customer i.e. the enterprise gets in touch the customer to notify, request/threaten or upsell. It is foolish to think that this communication is the only communication that a customer has about the enterprise. Before calling the contact center, most customers would either have "googled" the query, discussed with their peers (increasingly over the web), or shared their frustrations with the world (most likely on some form of social media). Imagine a frustrated passenger, who had to search for the lost baggage claim process on google, then ask his friends on facebook if they knew the call center number for lost baggage, and then tweeted about how bad his flight experience has been. After all this, he calls the contact center - the happy agent on the other end does not have the slighest clue what is coming his way when he picks up that call. Social Media changes this. Social Media enables enterprises to hear, engage and participate in customer conversations that are not happening only when the customer calls the contact center, but happening the other 90% of the time when the customer talks about your enterprise with friends, like-minded individuals or everybody else.
In today's social web world, neither does the customer need to get in touch with the enterprise, nor does the enterprise need to get in touch with the customer to hear the customer. The power of social media provides enterprises the ability to listen to customer conversations, and pro-actively offer support, way before the call reaches the contact center.
Social Media is on the rise in Asia. Of the top 30 countries with most Facebook users, 7 were from Asia Pacific (Australia, Indonesia, India, Philippines, Hong Kong, Malaysia and Singapore). Despite the growth, some enterprises in Asia & Worldwide are still questioning why social media is important for customer service. The popularity of "United Breaks Guitars" is a clear reminder of the impact that social media can have on the reputation and business of an organization. In the words of Jeff Bezos, customers now use the internet as a "mega phone" to tell everyone what they think about our product & services.
A Social Customer Engagement strategy can be beneficial in many ways to the contact center:-
a) Ability to provide Pro-active Customer Care, hence improve Customer Satisfaction
b) Connect with the customer using the channel they use most, similar to the principle used in the multi-channel approach with voice, email, web chat, etc.
c) Make customers your service agents, by getting customers to respond to customer queries on the social web
These benefits lead to a strong value proposition for the enterprise:-
a) Create customer communities to increase stickiness & loyalty
b) Monetize social channels to deliver promotions & targeted campaigns
c) Disseminate information to a wider or targeted audience in real-time & cost effective manner
Building a Social Customer Engagement strategy is becoming increasingly important for enterprises, however, enterprises need to be wary of the challenges that come with a social media customer service channel. Social Customer Engagement is fairly new, and is unlike the other customer service processes where we have metrics, benchmarks and best practices to improve our processes. Including Social Media channels as part of the customer service process requires a thorough assessment of the customer base & existing customer contact processes, and the need to build a new set of processes & programs.
More on the building blocks for a social media customer engagement strategy in my next post...
Friday, January 29, 2010
The New Avaya - Insights into the Avaya-Nortel Product Roadmap
The year 2009 ended with the completion of a significant acquisition in the enterprise communications industry - The acquisition of Nortel Enterprise Solutions by Avaya. Nortel and Avaya have a large installed base in the industry for telephony systems (for both TDM and IP). The combined entity becomes a clear market leader in the telephony market, both globally as well as in the Asia Pacific region, with the largest installed base in the market for any single vendor and revenues in the vicinity of $5.5 Billion. The acquisition brings together two sales teams, a large channel infrastructure and popular industry products. While there was some loss of market share for Nortel over the last 12 months and Avaya's UC story in the past had not been strong, one cannot rule out the potential opportunity that the new Avaya can create with this acquisition.
Avaya's announcement of its combined product roadmap within 30 days of the completion of the acquisition is highly commendable. What stands out when you look at the roadmap & announcements made last week is that (a) the roadmap is largely non-disruptive for customers (both existing Avaya & Nortel customers), (b) it offers a evolutionary roadmap to a single platform viz. Avaya Aura, and (c) It incorporates Nortel’s data portfolio to strengthen Avaya’s branch and SME solutions
This blog is based on Avaya announcements and discussions with Avaya executives at an Avaya Business Partner conference in Beijing in end of January. The insights are more relevant to the Asia Pacific region, unless stated otherwise.
Key highlights from the Avaya roadmap announcement:-
- Avaya Aura is central to the entire future roadmap of Avaya. All products from both Nortel & Avaya, and from both sectors UC and CC, would merge into the Avaya Aura's SIP based architecture. Avaya CM and the Nortel CS1k telephony platforms would evolve into the Avaya Aura platform in the future. This does not come as a surprise. Due to its SIP-based architecture, Avaya Aura can connect and integrate with Nortel CS1k and offer an evolutionary and migratory path to customers, rather than a rip & replace option.
- Large enterprise customers of Nortel do not have to make quick & hasty decisions on their existing telephony infrastructure (Nortel CS1k). Avaya will continue to invest in the CS1k platform with new versions and releases expected in 2010. While Avaya wants to eventually migrate all these customers to the Avaya Aura platform, by continuing to invest in & support the Nortel CS1k platform it has given itself the opportunity to retain the Nortel large enterprise customer base, tap onto the latent demand in the Nortel base that has not taken any upgrade/migrate decisions over the last 12 months, and resist competitive scenarios if Avaya can execute well on their channel strategy.
- Avaya has picked IP Office as the SME platform of choice for the future that will incorporate elements from the BCM solution and will interoperate with select Nortel phones. However, like the CS1k, Avaya will continue to sell the BCM solution. Avaya has committed to no end of sale announcements for the SME Nortel products for the remainder of the 2010 fiscal year. In addition, Avaya commits to a minimum of nine months notice before any effective end of sale date. Avaya has committed to an additional release of BCM later this year and plans to add features from BCM into IP Office. Also they have promised 3 years service and an additional 3 year hardware support period for end-of-life announcements which should give comfort to those customers. Taking a single server approach, the sweet spot for the IP office solution would be the less than 250 user segment.
- In the Contact Center portfolio, , the Nortel CC 7.0 solution will now be re-positioned as a mid-market solution, and the Avaya CC Elite would be the large enterprise solution. The declaration of the Nortel CC 7.0 solution as a mid-market solution was definitely a surprise, not because it cannot service that segment, but because it was meant to be a large enterprise solution when it was part of the Nortel portfolio. Avaya talks about the Next Generation Contact Center (placeholder name) which will be based on components of Nortel’s products as well as components of Avaya CC solutions. This will accelerate customers to the next generation CC platform, enabling both Nortel and Avaya customers to simply upgrade to get themselves there. The NGCC will inherently be multi-modal, multi-channel and conferencing-oriented.
- Nortel's ACE (Agile Communication Environment) will become an integral of application enablement helping in integrating different business applications (such as Sales force automation, ERP, etc.) and delivering what Avaya calls a "communications-enabled business system"
- The Data Solutions portfolio of Nortel is also now part of Avaya's product portfolio. Avaya's focus here will be to complement and create more competitive, compelling and complete UC & CC solutions with the help of the Data portfolio. This would come in handy especially in branch solutions where single box solutions with integrated data and voice functionality can be offered.
- Based on Avaya’s roadmap announcements and product roadmap, there is a recognition of the growing importance of video as part of the Unified Communications & Collaboration play. In a bid to capitalize on this growing trend, Avaya is expected to make announcements around its video capabilities and offerings that tie back to Unified Communications and deliver improved user productivity.
- Avaya also acknowledged the need for a software client that can deliver the complete Unified Communications experience to drive user acceptance and meet user communication needs through a single client.
With the acquisition of NES, there are a few things that are working in favor of Avaya:-
- There is a limited overlap between Avaya & Nortel top customers, hence adding marquee customers to its installed base
- There is limited overlap between Avaya & Nortel channels, hence adding much more coverage in the market. This is especially pronounced in the Asia Pacific region.
- Expertise in verticals that were strengths of Nortel especially Government, and Manufacturing sectors
Based on our discussions with the Avaya executives, it was clear that with their roadmap in place, the focus is going to be on execution. Avaya's growth will be driven through upgrades & migration of its large installed base, increased focus on SMB, Government & other specific verticals.
Challenges that still will continue to bother Avaya:-
1) The Collaboration story remains weak and disjointed. Avaya Aura will become the platform for collaboration centric, multi-modal, multi-channel communications and feature set from the MCS5100 will also get incorporated in the future. However, the current portfolio still lacks a solid collaboration play. Hence, future announcements from Avaya on the Collaboration front will be critical in tying together a solid Collaboration story, and create more buzz in the UC market.
2) While Avaya Aura is the next telephony platform for both existing Avaya & Nortel customers, it is critical for Avaya to tread this path carefully. Competitors such as Cisco, Siemens, Alcatel-Lucent, Mitel, Shoretel, Microsoft will be aggressive on their Nortel base acquisition strategy. The roadmap does offer an evolutionary path for customers, but Avaya and its channels need to position that correctly, without trying to disrupt the pace or scale of migration. For example, the ability to reuse the telephony end-points for customers migrating from a Nortel Meridian solution might be key, and if the focus is on positioning Avaya Aura that might jeopardize the ability to reuse existing end-points that might open the doors for competition. While the roadmap discusses plans for Avaya Aura to interoperate with Nortel end-points, adding phone shipments adds sizeable top-line revenue for the channels/system integrators that are selling to the customer.
3) Managing the new larger Channel base is the cornerstone of Avaya's execution strategy. Avaya's go-to-market strategy of "High Touch Channel Centric" is principally correct. One has to note that Nortel had a challenging year in 2009, and hence the Nortel partners also suffered. The ability of Avaya to retain, support and train the Nortel channels on the Avaya solutions and the new roadmap will determine their success. Avaya has launched their new channel program called "Avaya Connect" in February with focus on making it simpler & easier to do business with Avaya, determine pricing, and increase channel competency.
4) Communication with their installed base with the new roadmap and story is also important for Avaya to remove any FUD (Fear, Uncertainty and Doubt) in the market about its roadmap, product support and future. This is something that Avaya would need to do on a war-footing to retain its newly acquired & existing installed base. Avaya has done a good job of reaching out to its partners in a short time frame after the acquisition with a new roadmap, and it needs to continue that momentum as the message is brought to the customers.
In summary, Avaya has delivered a good roadmap, given the time, the economic environment and its position in the market. It still lacks some steam on the Collaboration front, for which steps seem to be taken and announcements are to be expected in the coming months. Avaya seems focused on their channel-driven execution strategy, with the launch of their new channel program and investments in a partner relationship management (PRM) solution. The presence of more than 400 channel partners at the recent Asia Pacific Business Partner conference in Beijing in the last week of January indicates that Avaya is beginning to build good momentum. The next step is taking this strategy and momentum to their customers.
Like A.G. Lafley (ex-Chairman & CEO of Proctor & Gamble) said - "Execution is the only strategy that the customer sees"
Avaya's announcement of its combined product roadmap within 30 days of the completion of the acquisition is highly commendable. What stands out when you look at the roadmap & announcements made last week is that (a) the roadmap is largely non-disruptive for customers (both existing Avaya & Nortel customers), (b) it offers a evolutionary roadmap to a single platform viz. Avaya Aura, and (c) It incorporates Nortel’s data portfolio to strengthen Avaya’s branch and SME solutions
This blog is based on Avaya announcements and discussions with Avaya executives at an Avaya Business Partner conference in Beijing in end of January. The insights are more relevant to the Asia Pacific region, unless stated otherwise.
Key highlights from the Avaya roadmap announcement:-
- Avaya Aura is central to the entire future roadmap of Avaya. All products from both Nortel & Avaya, and from both sectors UC and CC, would merge into the Avaya Aura's SIP based architecture. Avaya CM and the Nortel CS1k telephony platforms would evolve into the Avaya Aura platform in the future. This does not come as a surprise. Due to its SIP-based architecture, Avaya Aura can connect and integrate with Nortel CS1k and offer an evolutionary and migratory path to customers, rather than a rip & replace option.
- Large enterprise customers of Nortel do not have to make quick & hasty decisions on their existing telephony infrastructure (Nortel CS1k). Avaya will continue to invest in the CS1k platform with new versions and releases expected in 2010. While Avaya wants to eventually migrate all these customers to the Avaya Aura platform, by continuing to invest in & support the Nortel CS1k platform it has given itself the opportunity to retain the Nortel large enterprise customer base, tap onto the latent demand in the Nortel base that has not taken any upgrade/migrate decisions over the last 12 months, and resist competitive scenarios if Avaya can execute well on their channel strategy.
- Avaya has picked IP Office as the SME platform of choice for the future that will incorporate elements from the BCM solution and will interoperate with select Nortel phones. However, like the CS1k, Avaya will continue to sell the BCM solution. Avaya has committed to no end of sale announcements for the SME Nortel products for the remainder of the 2010 fiscal year. In addition, Avaya commits to a minimum of nine months notice before any effective end of sale date. Avaya has committed to an additional release of BCM later this year and plans to add features from BCM into IP Office. Also they have promised 3 years service and an additional 3 year hardware support period for end-of-life announcements which should give comfort to those customers. Taking a single server approach, the sweet spot for the IP office solution would be the less than 250 user segment.
- In the Contact Center portfolio, , the Nortel CC 7.0 solution will now be re-positioned as a mid-market solution, and the Avaya CC Elite would be the large enterprise solution. The declaration of the Nortel CC 7.0 solution as a mid-market solution was definitely a surprise, not because it cannot service that segment, but because it was meant to be a large enterprise solution when it was part of the Nortel portfolio. Avaya talks about the Next Generation Contact Center (placeholder name) which will be based on components of Nortel’s products as well as components of Avaya CC solutions. This will accelerate customers to the next generation CC platform, enabling both Nortel and Avaya customers to simply upgrade to get themselves there. The NGCC will inherently be multi-modal, multi-channel and conferencing-oriented.
- Nortel's ACE (Agile Communication Environment) will become an integral of application enablement helping in integrating different business applications (such as Sales force automation, ERP, etc.) and delivering what Avaya calls a "communications-enabled business system"
- The Data Solutions portfolio of Nortel is also now part of Avaya's product portfolio. Avaya's focus here will be to complement and create more competitive, compelling and complete UC & CC solutions with the help of the Data portfolio. This would come in handy especially in branch solutions where single box solutions with integrated data and voice functionality can be offered.
- Based on Avaya’s roadmap announcements and product roadmap, there is a recognition of the growing importance of video as part of the Unified Communications & Collaboration play. In a bid to capitalize on this growing trend, Avaya is expected to make announcements around its video capabilities and offerings that tie back to Unified Communications and deliver improved user productivity.
- Avaya also acknowledged the need for a software client that can deliver the complete Unified Communications experience to drive user acceptance and meet user communication needs through a single client.
With the acquisition of NES, there are a few things that are working in favor of Avaya:-
- There is a limited overlap between Avaya & Nortel top customers, hence adding marquee customers to its installed base
- There is limited overlap between Avaya & Nortel channels, hence adding much more coverage in the market. This is especially pronounced in the Asia Pacific region.
- Expertise in verticals that were strengths of Nortel especially Government, and Manufacturing sectors
Based on our discussions with the Avaya executives, it was clear that with their roadmap in place, the focus is going to be on execution. Avaya's growth will be driven through upgrades & migration of its large installed base, increased focus on SMB, Government & other specific verticals.
Challenges that still will continue to bother Avaya:-
1) The Collaboration story remains weak and disjointed. Avaya Aura will become the platform for collaboration centric, multi-modal, multi-channel communications and feature set from the MCS5100 will also get incorporated in the future. However, the current portfolio still lacks a solid collaboration play. Hence, future announcements from Avaya on the Collaboration front will be critical in tying together a solid Collaboration story, and create more buzz in the UC market.
2) While Avaya Aura is the next telephony platform for both existing Avaya & Nortel customers, it is critical for Avaya to tread this path carefully. Competitors such as Cisco, Siemens, Alcatel-Lucent, Mitel, Shoretel, Microsoft will be aggressive on their Nortel base acquisition strategy. The roadmap does offer an evolutionary path for customers, but Avaya and its channels need to position that correctly, without trying to disrupt the pace or scale of migration. For example, the ability to reuse the telephony end-points for customers migrating from a Nortel Meridian solution might be key, and if the focus is on positioning Avaya Aura that might jeopardize the ability to reuse existing end-points that might open the doors for competition. While the roadmap discusses plans for Avaya Aura to interoperate with Nortel end-points, adding phone shipments adds sizeable top-line revenue for the channels/system integrators that are selling to the customer.
3) Managing the new larger Channel base is the cornerstone of Avaya's execution strategy. Avaya's go-to-market strategy of "High Touch Channel Centric" is principally correct. One has to note that Nortel had a challenging year in 2009, and hence the Nortel partners also suffered. The ability of Avaya to retain, support and train the Nortel channels on the Avaya solutions and the new roadmap will determine their success. Avaya has launched their new channel program called "Avaya Connect" in February with focus on making it simpler & easier to do business with Avaya, determine pricing, and increase channel competency.
4) Communication with their installed base with the new roadmap and story is also important for Avaya to remove any FUD (Fear, Uncertainty and Doubt) in the market about its roadmap, product support and future. This is something that Avaya would need to do on a war-footing to retain its newly acquired & existing installed base. Avaya has done a good job of reaching out to its partners in a short time frame after the acquisition with a new roadmap, and it needs to continue that momentum as the message is brought to the customers.
In summary, Avaya has delivered a good roadmap, given the time, the economic environment and its position in the market. It still lacks some steam on the Collaboration front, for which steps seem to be taken and announcements are to be expected in the coming months. Avaya seems focused on their channel-driven execution strategy, with the launch of their new channel program and investments in a partner relationship management (PRM) solution. The presence of more than 400 channel partners at the recent Asia Pacific Business Partner conference in Beijing in the last week of January indicates that Avaya is beginning to build good momentum. The next step is taking this strategy and momentum to their customers.
Like A.G. Lafley (ex-Chairman & CEO of Proctor & Gamble) said - "Execution is the only strategy that the customer sees"
Friday, January 22, 2010
EnterpriseBook - Facebook for the Enterprise?
Imagine that a Sales Manager gets a notification that says "Opportunity X has moved to the next level. $250K". The Sales Manager "comments" on that update asking for some details. The "comment" gets sent to the sales person who entered that opportunity X, and can then address those questions. Based on the responses, the sales manager also "recommends" a "group" that focuses on such specific deals. The Country Manager "likes" the update to keep the sales person motivated and also subtly informing him that he is aware and can make himself available if the need arises. The Country Manager can also "follow" this opportunity so that he gets any updates to this particular deal.
You get the idea. Taking Facebook & Twitter and creating an Enterprise focused social networking solution. There are many questions that come to mind when you think of such a solution -
does it replace email, instant messaging or team workspaces or is it a new medium altogether?,
will it improve productivity or reduce it?,
with so many emails to respond to already does this application require me to update-on/respond to/take-note-of all "updates" and activities?,
would this only be restricted to the enterprise, or can partner companies also join the network?,
what impact does it have on storage needs, security needs, content management, etc?
Instead of trying to address all these questions, lets evaluate the potential benefits of such an application. In order to do that, let's analyze what happened in the consumer world with Facebook & Twitter. What benefits did Facebook bring to consumers, what existing communication channels did it replace? I don't think Facebook replaced Email but yes, it definitely would have replaced the number of emails that people sent to their friends & family. I don't think Facebook replaced Instant Messaging, but Facebook realized that it is a complimentary communication channel and it has added that capability to its website. Facebook did definitely challenge a Flickr, as many people just upload their photos to Facebook now instead of doing it separately to Picassa or Flickr. Facebook improved our ability to "connect" with our friends, even though we could not meet often in the real world. Facebook gave users the ability to know what was happening in their friends life, and they could just share their life-happenings on Facebook knowing that their family & friends would get to see/read about it (maybe reducing some IDD phone calls here). Facebook didn't replace blogs, but made it a feature for users to be able to share "notes". In a nutshell, Facebook did a bit of everything and provided a single platform that was social in nature, and could be viewed by friends & family.
If we take this to the Enterprise, a Facebook-like application or what we might call an Enterprise Social Networking solution would not necessarily replace Email, Instant Messaging or Workspace. But it could become either a platform through which all these can either be accessed and complimented by the features such as status updates, rating/tagging, etc. or a platform that can be used to offer a Email-like, IM-like, Workspace-like environment. The important thing in both scenarios will be that this platform will be a "social" platform.
The obvious benefits of such a solution would be better information sharing across teams in the enterprise, better knowledge of what's happening in the enterprise, better connect with employees (especially in geographically dispersed teams) improving collaboration amongst teams, and providing a communications platform that is social, increasingly popular and partly informal.
An Enterprise Social Networking (ESN) solution could possibly be an addition to the existing communication channels that exist within an enterprise. What I believe will become important for ESN is that it could become an integration portal or access portal for other communication channels, a bit like IM on Facebook, Messages (Email) on Facebook, etc. It doesn't take a rocket scientist to figure that you could add voice capability & web conferencing as an application to ESN as well. What could start as a new communication channel, eventually has the potential to be a communication platform that can truly connect the other communication channels and deliver a quasi-UC (Unified Communications) experience.
Whether or not ESN will become popular in the enterprise can only be decided once the solutions from players such as Cisco, Salesforce.com, IBM, etc. get into the market, and how enterprise CIOs react to these. There is a bit of a precedence for ESN in the way Instant Messaging is becoming popular in the enterprise now. Starting as a consumer communication channel, IM has now become an enterprise solution, and it took a good 3-5 years after IM was already in the consumer world, that it reached the enterprise, and another 3-4 years before it became mainstream. Even if you improve that rate of adoption, one should not expect ESN to become popular before 2012.
My biggest worry is what will happen when my boss "pokes" me about some deliverables? Is "Super Poke" the new micro-managing tool?
You get the idea. Taking Facebook & Twitter and creating an Enterprise focused social networking solution. There are many questions that come to mind when you think of such a solution -
does it replace email, instant messaging or team workspaces or is it a new medium altogether?,
will it improve productivity or reduce it?,
with so many emails to respond to already does this application require me to update-on/respond to/take-note-of all "updates" and activities?,
would this only be restricted to the enterprise, or can partner companies also join the network?,
what impact does it have on storage needs, security needs, content management, etc?
Instead of trying to address all these questions, lets evaluate the potential benefits of such an application. In order to do that, let's analyze what happened in the consumer world with Facebook & Twitter. What benefits did Facebook bring to consumers, what existing communication channels did it replace? I don't think Facebook replaced Email but yes, it definitely would have replaced the number of emails that people sent to their friends & family. I don't think Facebook replaced Instant Messaging, but Facebook realized that it is a complimentary communication channel and it has added that capability to its website. Facebook did definitely challenge a Flickr, as many people just upload their photos to Facebook now instead of doing it separately to Picassa or Flickr. Facebook improved our ability to "connect" with our friends, even though we could not meet often in the real world. Facebook gave users the ability to know what was happening in their friends life, and they could just share their life-happenings on Facebook knowing that their family & friends would get to see/read about it (maybe reducing some IDD phone calls here). Facebook didn't replace blogs, but made it a feature for users to be able to share "notes". In a nutshell, Facebook did a bit of everything and provided a single platform that was social in nature, and could be viewed by friends & family.
If we take this to the Enterprise, a Facebook-like application or what we might call an Enterprise Social Networking solution would not necessarily replace Email, Instant Messaging or Workspace. But it could become either a platform through which all these can either be accessed and complimented by the features such as status updates, rating/tagging, etc. or a platform that can be used to offer a Email-like, IM-like, Workspace-like environment. The important thing in both scenarios will be that this platform will be a "social" platform.
The obvious benefits of such a solution would be better information sharing across teams in the enterprise, better knowledge of what's happening in the enterprise, better connect with employees (especially in geographically dispersed teams) improving collaboration amongst teams, and providing a communications platform that is social, increasingly popular and partly informal.
An Enterprise Social Networking (ESN) solution could possibly be an addition to the existing communication channels that exist within an enterprise. What I believe will become important for ESN is that it could become an integration portal or access portal for other communication channels, a bit like IM on Facebook, Messages (Email) on Facebook, etc. It doesn't take a rocket scientist to figure that you could add voice capability & web conferencing as an application to ESN as well. What could start as a new communication channel, eventually has the potential to be a communication platform that can truly connect the other communication channels and deliver a quasi-UC (Unified Communications) experience.
Whether or not ESN will become popular in the enterprise can only be decided once the solutions from players such as Cisco, Salesforce.com, IBM, etc. get into the market, and how enterprise CIOs react to these. There is a bit of a precedence for ESN in the way Instant Messaging is becoming popular in the enterprise now. Starting as a consumer communication channel, IM has now become an enterprise solution, and it took a good 3-5 years after IM was already in the consumer world, that it reached the enterprise, and another 3-4 years before it became mainstream. Even if you improve that rate of adoption, one should not expect ESN to become popular before 2012.
My biggest worry is what will happen when my boss "pokes" me about some deliverables? Is "Super Poke" the new micro-managing tool?
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