UNIFIED COMMUNICATIONS

U

NIFIED

C

OMMUNICATIONS

Transforming the Enterprise Communication Landscape

July 2015

Market Analyst, LLC

1069 West Broad Street, Suite 764

Falls Church, VA 22046

+1 703 740-9172

Table of Contents

1. Introduction ...3 2. UC Enablers ...3 2.1 Internet Protocol ...3 2.1.1 SIP ...3 2.1.2 IMS ...4 2.2 Software-Defined Networks ...4 2.3 High-Speed Networking ...5 2.3.1 Landline Networks ...5 2.3.2 Mobile Networks ...5 2.3.3 Wi-Fi ...6 3. UC Benefits ...6 4. UC vs. Unified Messaging ...7 5. UC Deployment Models ...7

5.1 On Premise Private Cloud ...7

5.1.1 Private Cloud Advantages ...8

5.1.2 Private Cloud Disadvantages ...8

5.2 Hosted Public Cloud ...8

5.2.1 Public Cloud Configurations ...8

5.2.2 Public Cloud Advantages ...8

5.2.3 Public Cloud Disadvantages ...8

5.3 Hybrid Cloud ...9

6. Challenges facing UC ...9

7. Competitive Landscape ...9

1.

Introduction

Broadly, Unified Communications (UC) represents the integration of various forms of communication. A UC solution is made up of an assortment of offerings that have been coalesced for consistent user experience across multiple devices and media types.

2.

UC Enablers

2.1 Internet Protocol

One of the enablers of UC is the Internet Protocol (IP) that not only supports disparate

applications such as e-mail, SMS,1 telephone or facsimile but allows them to interconnect and interact. As the dominant protocol for voice and data traffic, IP allows for the standardization of user interfaces, applications and network interfaces.

IP enables the creation of simplified heterogeneous network infrastructures in which best-of-breed products from multiple vendors are combined to produce cost-effective and compelling solutions. It allows enterprises to leverage economies resulting from standardization and convergence.

Two IP-based standards that are particularly important in the context of UC are IP Multimedia Subsystem (IMS) and Session Initiation Protocol (SIP).

2.1.1 SIP

SIP is a signaling protocol for initiating interactive multimedia user sessions. It is used to create, manage and terminate sessions over an IP network. The SIP server allows for user

authentication, redirect and registration services.

SIP trunking is the use of voice over IP (VoIP) to connect a private branch exchange (PBX) to the Internet. The Internet connection replaces the conventional telephone trunk, allowing

communication across fixed and mobile networks. A prerequisite to such a connection is a gateway that serves as the interface between the PBX and the Internet telephony service provider.

SIP combines data, voice and video in a single line, thereby eliminating the need for separate physical media for each mode. This reduces overall cost and increases reliability for multimedia services.

SIP supports time-of-day routing and call forwarding based on the geographical location of the called party. By supporting personal mobility it allows:

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 A user to access telecommunications services at any terminal on the basis of a personal identifier

 A network to provide telecommunications services in accordance with the user's service profile

SIP allows service providers to integrate basic IP telephony with web and e-mail services. The sessions enabled by SIP encompass two-way telephone calling, audio/videoconferencing, interactive gaming, and collaborative multimedia conference sessions. SIP allows for the implementation of services such as click-to-dial from a web page, events notification, and IM with buddy lists and presence.

2.1.2 IMS

IMS is a set of specifications that define the architecture of Next Generation Networking (NGN), and it was developed to implement IP-based telephony and multimedia services. IMS builds on SIP to enable the use of IP for packet communication over wireless or landline networks. IMS furnishes a framework for the integration of voice, data, and video over an IP-based infrastructure. By providing a common IP interface, IMS allows subscribers to connect to the network using multiple mobile and fixed devices, regardless of underlying technologies. IMS supports voice telephony, Voice over IP (VoIP), facsimile, e-mail, instant messaging (IM), Internet access, web services, videoconferencing, and video on demand (VoD). It allows for multiple sessions, each using separate applications, and often running concurrently.

IMS fulfills the need to seamlessly integrate a variety of emerging applications such as gaming and video. It supports multimedia sessions and presence information.

2.2 Software-Defined Networks

Software-Defined Networks (SDN) represent an emerging architecture that is dynamic, cost-effective, and adaptable. It represents a transition from the static architecture of conventional networks that is ill-suited to today’s computing and storage needs. SDN, on the other hand, is ideal for the high-bandwidth and dynamic nature of today's applications.

The key characteristics of an SDN are as follows:

 Functional separation: SDN decouples network control from physical infrastructure. In such a network, an administrator can direct and configure the flow of traffic from a centralized console without having to physically touch individual switches. As a result, services can be delivered wherever they are needed, without regard to the specific devices a server or another device may be connected to. This allows network administrators to respond rapidly to changing business requirements.

 Network virtualization: Virtualization is essentially the creation of a virtual version of an operating system, a server, a storage device or network resources. Network virtualization makes it possible to run multiple operating systems and applications on the same server at the same time. It automates operations, improves performance and availability, and lowers costs. Virtualization is transforming the information technology (IT) landscape by fundamentally changing the way that people utilize technology.

2.3 High-Speed Networking

Because of the growing need for higher network speeds, UC capabilities have been growing in sync with the deployment of next-generation transport technologies, both wireless and wireline. Increased access to high-speed mobile networks (3G+/4G2) and wireless LANs3 (802.11n/ac) have significantly expanded mobile UC support.

2.3.1 Landline Networks

In recent years, landline networks have seen a spike in their data rates. Gigabit Ethernet supports 1 Gb/s over optical fiber, shielded balanced copper cable, or four pairs of Category 5 unshielded twisted pair.

The cable modem standard, DOCSIS4 2.0, supports usable 38 Mb/s downstream and 27 Mb/s upstream links on coaxial cable. DOCSIS 3.0 goes further and binds together multiple channels to increase performance. There is a 4-channel minimum requirement for DOCSIS 3.0 approved hardware.

For fiber optics, the IEEE standard, 10G-EPON,5 supports asymmetric and symmetric data transport. The asymmetric data rates are 10 Gb/s for downlink and 1 Gb/s for uplink, and are best suited for applications such as IP video services that use higher bandwidth in the downlink. The symmetric data rates are 10 Gb/s in both directions.

2.3.2 Mobile Networks

In the mobile realm, 425 LTE6 networks have been deployed in 145 countries. The LTE

specification specifies theoretical data rates of 300 Mb/s for downlink and 75 Mb/s for uplink. The specification uses contiguous blocks of frequencies up to 20 MHz wide.

With the maturation of LTE-Advanced standard, deployments of this enhanced version of LTE are now in full swing. The technology is currently deployed in 69 networks in 39 countries. By

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Third Generation plus and Fourth Generation

3

Local Area Networks

4

Data Over Cable Service Interface Specification

5 _{Ethernet Passive Optical Network} 6

combining five non-contiguous 20 MHz carriers, LTE-Advanced achieves downlink data rates of 3 Gb/s and uplink data rates of 1.5 Gb/s.

2.3.3 Wi-Fi

Mobile operators are increasingly coupling Wi-Fi with their core networks, allowing users to make voice and data calls over Wi-Fi. The relatively low cost architecture and usage model of Wi-Fi make it an attractive option for mobile operators to fulfill consumers’ immediate data demands.

Metropolitan areas are blanketed with Wi-Fi hotspots, many of which are operated by the mobile operators. By letting users circumvent their mobile networks through the use of Wi-Fi, operators are able to reduce network congestion and offer higher quality connections. 802.11ac, the Wi-Fi specification currently being deployed, has a theoretical maximum of 7 Gb/s over a 40 MHz channel but it uses 80 MHz and 160 MHz channels for even higher data rates. 802.11n operates on either the 5 GHz frequency at a theoretical maximum speed of 300 Mb/s or the 2.4 GHz frequency in "mixed mode" which supports systems that are only capable of using 802.11b or 802.11g.

Because 802.11ac uses only the 5 GHz band, 802.11n will continue to be in existence for several years. 802.11ac is backward compatible to 802.11n as 802.11n offers the fallback option to serve 802.11b/g and 802.11a clients.

3.

UC Benefits

IP has transformed the telephone into yet another computer on the network, allowing advanced features and applications to be uploaded when needed. However, UC extends beyond the telephone to any device connected to the network.

UC blends real-time communication (such as IM,7 presence information, video conferencing, IP telephony, and desktop sharing) with non-real-time communication (such as messaging, voice mail, and e-mail, and facsimile). UC enables the sending of a message on one medium (such as telephone) and the receipt of that message on another medium (such as e-mail).

UC fulfils a critical need for cross-platform compatibility. Such compatibility is particularly required due to increasing mobility of the workforce and the rising trend to “Bring Your Own Device” in work environments. UC allows enterprises to support not only desk-based devices but also laptops, smartphones, and tablets, often using dissimilar operating systems, and it helps manage their reliable and secure integration into the enterprise.

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The availability of higher networking speeds allows for the accommodation of greater UC traffic, spurring the uptake of solutions requiring higher data rates such as high-definition voice and interactive video. UC allows high-quality audio and video conferencing and expeditious sharing of valuable data.

UC is driving additional value for organizations by increasing collaboration, by supporting linkages to social media, and by facilitating rich customer interactions, locally and remotely. By combining a broad range of features into a complete UC solution and integrating it with

business processes, an enterprise is able to significantly boost its operational effectiveness. Enterprises are using UC to transform their business processes. UC enables robust collaboration tools, and it provides superior access to corporate applications. By accelerating

decision-making, UC offers enhanced productivity. It helps enterprises reduce operational expenditures by lowering communication costs and cutting down transportation expenses.

The concept of “presence” is a key component of UC. Using the presence feature with IM, a user can see if a collaboration partner is online, engage in IM with the partner, and if needed, escalate the session to a voice or video call. However, the presence feature when used with UC can go beyond that, helping locate and connect with people having certain skills or capabilities.

4.

UC vs. Unified Messaging

Unified messaging is non-real-time delivery of communication. It is clearly distinct from UC which is both real-time and non-real-time. Unified messaging culls messages from multiple sources (such as e-mail, voice mail and facsimiles), but stores these messages for retrieval at a later time. UC, on the other hand, allows for the retrieval of e-mail or voice-mail from any communication device configured for the purpose.

5.

UC Deployment Models

There are two primary UC deployment models – on premise deployment using the private cloud and hosted deployment using the public cloud. As an enterprise grows, the cloud needs to correspondingly expand. Moreover, the cloud needs to be in step with technological developments, incorporating state-of-the-art technologies. With UC, the role of the cloud will continue to grow because it not only enables the cloud-as-a-service model but also lends itself to applications integration.

5.1 On Premise Private Cloud

The private cloud is implemented within the corporate firewall under the control of the IT department.

5.1.1 Private Cloud Advantages

A private cloud provides enterprises with complete control over their communication

infrastructure. If needed, the infrastructure can be rapidly adapted to changing business needs. A private cloud gives enterprises full control over their corporate data and its security.

5.1.2 Private Cloud Disadvantages

Since an enterprise implementing a private cloud is responsible for its deployment and implementation, it incurs significant upfront expenses in doing so. The enterprise has the responsibility for the day-to-day running of the private cloud as well as for managing the needed resources.

5.2 Hosted Public Cloud

A public cloud is a hosted service provided by a service provider, and it is also known as UC as a Service (UCaaS).

5.2.1 Public Cloud Configurations

The hosted public cloud can take three forms: UC Software as a Service (UCSaaS), UC Platform as a Service (UCPaaS) model, and UC Infrastructure as a Service (UCIaaS).

The solution can be packaged in a number of ways, depending on the following:

 Size of end-user: Large enterprise or small/medium enterprises (SMEs)

 Type of the end-user: Public sector or private sector

 Industry of the end-user: Retail, hospitality, transportation, etc.

There is no one homogenous UCaaS offering. Depending on the specific needs of the enterprise, UCaaS offerings can take various forms, combining contact center, telephony, collaboration, etc., in several permutations.

5.2.2 Public Cloud Advantages

Since the hosted cloud is provided by the service provider, there is no need for equipment at the enterprise premises. Other advantages of hosted UC solutions include:

 Obviate the need for significant up front expenditures on new equipment

 Allow for upgrades to be made and new features to be added as they become available

 Offer scalability and rapid deployment capability

 Allow enterprises to move to usage-based operating expense models

5.2.3 Public Cloud Disadvantages

With a public cloud, enterprises do not have complete control over corporate data. This dissuades some enterprises, particularly those with sensitive operations or private data repositories, from adopting the public cloud.

5.3 Hybrid Cloud

Some enterprises want to take advantage of benefits of both public and private clouds. A configuration that combines public and private clouds is known as a hybrid cloud.

In a hybrid configuration, enterprises use the private cloud for sensitive operations or to store classified information. The private cloud gives enterprises the ability to better control and manage their UC infrastructure. It also gives them complete control over the security of their system.

The public segment of the hybrid cloud is used by enterprises for their non-sensitive operations. The public segment offers scalability, cost-effectiveness, and rapid deployment capability.

6.

Challenges facing UC

UC systems have made significant technological strides, but they still face some notable limitations. These include:

1. Poor interoperability between products, particularly with regard to IM and presence. 2. Access to only a partial subset of communication and collaboration tools

3. Lack of fully mobile-centric approach to UC

These limitations have served as an impediment to large-scale adoption of UC. A vendor that makes a breakthrough in terms of surmounting these limitations can not only get a leg up on competition, but potentially disrupt the UC market.

Other possible enhancements that could positively impact the uptake of UC systems include tools that enable deep business process integration, particularly in the context of applications such as CRM8 and ERP.9 These tools not only have to be available, but readily usable by enterprises. Moreover, UC systems need to deliver an end-user experience that is intuitive, cohesive and integrated.

7.

Competitive Landscape

Traditional communication vendors were slow to recognize the potential of UC, leading to the entry of non-traditional players in this space. These non-traditional players include Avaya, BroadSoft, Genband, Metaswitch Networks, Polycom, and ShoreTel.

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Avaya, BroadSoft, Polycom, and ShoreTel are publicly held. Genband and Metaswitch are privately held. Unify (formerly Siemens Enterprise Communications) is a joint venture of Siemens AG and Gores Group, a U.S. private equity firm.

The UC market has also seen the entry of major equipment vendors and solutions providers such as Alcatel-Lucent, Cisco, Ericsson, Huawei Technologies, Microsoft, NEC, Panasonic and Unify.

Canadian equipment vendor, Mitel Networks, based in Kanata, Ontario, is also a player in the UC market. By acquiring two of its UC competitors, Aastra Technologies and Mavenir Systems, Mitel has strengthened its position in the market.

Cisco and Microsoft have emerged as dominant players in the UC market, but they are being challenged not only by major vendors, but also by non-traditional players.

OTT10 providers such as RingCentral and 8x8 compete in this market as well. Rather than going head-to-head with equipment vendors, these companies compete directly with service

providers in offering UC capabilities to enterprises.

In some cases, vendors partner with one another to add value to their product portfolio. For instance, Mitel’s MiVoice MX-ONE telephony server and its MiVoice Office 400 communication system have been certified through the Microsoft Partner Program to ensure interoperability and tight integration with Microsoft UC software.

8.

Conclusion

UC is still an emerging technology that is being adopted by enterprises for optimizing their business processes. Pervasive mobility, which is altering the working patters of workers, is one of the drivers of UC. The emergence of cloud solutions has increased the attractiveness of UC, particularly because the costs incurred in implementing these solutions, are offset by savings derived from increased productivity.

As UC market evolves, integrated unified messaging, IM, and presence are giving way to real-time data sharing, voice, and video. Communication methods such as IP facsimile and unified messaging that were once on the cutting edge are becoming default offerings. On the other hand, vendors are differentiating themselves on the basis of mobile offerings as well as application/platform integration capabilities. There is a push to tailor UC solutions to specific customer requirements.

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UC is significantly impacting the market for business communication systems and software. It is undergoing enhancements with increasing involvement and input of developer communities. UC applications are undergoing constant refinements, making UC more and more attractive for enterprise adoption. Moreover, the types of applications that fall under the umbrella of UC are growing.

UC products from different vendors are inoperable, something that is being tackled by the Unified Communications Interoperability Forum (UCIF) formed in May 2010. UCIF has established best practices for interoperability between UC products and existing

communication and business applications. It creates and tests interoperability profiles, and it institutes implementation guidelines.

The demands of mobile workforce and the trend to Bring Your Own Device (BYOD) within enterprise firewalls are serving as drivers for mobile UC offerings. This is being accompanied by the uptake of interactive video and data sharing.

As foundational UC capabilities become the norm, focus will shift to UC’s deeper integration with key business apps and processes. In the next few years, UC solutions will be widely adopted by enterprises, both big and small. In the process, UC will transform the enterprise communication landscape.