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Rich Tehrani’s (News - Alert) ’s Executive Suite is a monthly feature in which leading executives in the VoIP and IP Communications industry discuss their company’s latest developments with TMC (News - Alert) president Rich Tehrani, as well as providing analysis on industry news and trends.

recently spoke to Mitel's Vice President of Strategic Marketing Simon Gwatkin, who explained the importance of understanding the benefits of unified communications before selecting a solution, as well as Mitel’s thoughts on the potential impact of unified communications.

Simon Gwatkin


Simon Gwatkin


Simon Gwatkin, Vice President of
Strategic Marketing, Mitel

Despite still being in its infancy, the unified communications movement is steadily gaining momentum, both from the provider side as well as from adopters of the technology. However, as with any new solution, the initial groundwork must be laid out and potential users must understand the benefits of the new solutions they are contemplating.

Mitel has a long history of success in IP communications, and has the expertise to lend to businesses looking to enhance their productivity through unified communications.

RT: Tell me about Mitel’s thoughts on unified communications.

SG: We have been very prolific in the development around unified communications. We started initially with our end product, Mitel’s Your Assistant, which is a full collaboration tool, including conferencing, presence enablement, workflow management, knowledge management as well. Back in 2004, we then entered into the Microsoft (News - Alert) Technology Partnership agreement, and started developing around their platform as well, around the LCF office communicator platform. In essence, we’re pretty well the first to market with those kinds of solutions.

Our view has been not just to do a generic implementation of LCF, or OCF, but to actually add value above and beyond what Microsoft brings. Examples include the integration of our quick conference capability within one of the Microsoft tabs, and also our new messaging and mobile extension capabilities, with tabs on the office communicator window.

RT: You seem fairly well embedded with Microsoft. How long have you been working with the company? How long have you been integrating your products into Microsoft’s?

We commenced in 2004 and we came to market later in 2005, but, obviously, we need customers. We now have customers around the world, in Australia, North America, Europe, and in the South Pacific. And they range from small businesses to very, very large businesses. We have some very significant roll-outs happening in Europe.

We see this as an expanding market, and we also see it as a differentiator above and beyond just normal telephony. We’re integrating presence not just at the office communicator level, but into messaging products, whether they are voice mail, unified messaging, or contact center products. It’s very useful for a customer because, for example, why would I call you if I know you are on the phone? There wouldn’t be much point, but sending you an IM to say, “When you get off the phone, give me a call,” can be an effective way of communicating.

Particularly with our call center portfolio, we adhere to the notion of federation. For instance, if, as an agent, a call was to come in to me and I was not able to handle that first call resolution ¬— which would be my key objective — I would be able to see the status of a subject matter expert who might be outside of my business. But, I could send him an IM and could escalate the call to that individual, who could actually maximize the first call resolution. That kind of functionality is very exciting, and we’re going to see a lot more of it going forward.

RT: What is your take on the relationship between Microsoft and Nortel (News - Alert) at the moment, and how that relates to Mitel?

I don’t think we compete terribly much. Obviously, they’re coming out with a product later this year, so it’s a bit difficult to judge that, but our view is that Mitel tends to play in the smaller enterprise side of the SMB space — though we’re very successful with larger enterprises as well. But, the majority of our sales are in the sub-1000 seat space, and I think if you look at the way Microsoft and Nortel are targeting at the moment, it’s above that line. So, I think we’re complementary. We will also try to differentiate ourselves around vertical markets, but it’s very strategic for both companies, and there’s room for more than one player in this industry.

RT: Do you think enterprise communications spend per seat is going to increase because of unified communications applications?

Not necessarily. I think what you’re seeing is very much more of a software model, not just the hardware, so you’re thinking open platforms. If you’re going to go for the full unified communications suite, yes, you will probably end up paying a little bit more, but I don’t think it’s substantially greater than what is out there today. Obviously, you’re getting greater value by virtue of the services that you’re either purchasing using on a hosted basis. Therefore, the greater the value to the customer, and the greater the features, then you’re going to be paying more for that. But, I think overall, I mean, you know, Microsoft has said that they will use economics, and I put that in (inaudible), to penetrate this market, and I think, you know, that is something that we will be watching very carefully.

I’ve been in the industry a long time, and, every year, analysts say the price per line, or the price per device, or the price per user is going to decline, but, frankly, I think that’s been offset by greater value being created by us as manufacturers and software vendors to maintain that price. So, yes, I think I think it will be going up a little bit, but, at the same time, we can add value to maintain the value perceived by the customer versus the price point that we want to see. RT: How do you see mobility playing into unified communications?

It will be a huge part of it. We’ve heard an awful lot of talk around fixed/mobile conversion, and I think there’s a lot of confusion as to what that really means. There are many definitions. Technology used to come out of the enterprise space into the consumer land, and now, to a certain extent, it’s the other way around. For instance, people are expecting to have IM — enterprise IM — and they’re expecting to be able to use a cell phone as part of the corporate network, and we’re getting to this age where the younger generation coming into the business world expects this kind of functionality. That puts pressure on the CIO, but that is inevitable. I’d also add that a lot of people look at FMC as a cost reduction within their business, but it isn’t. There are many things to consider when looking at FMC, but what it’s really about is productivity and efficiency, and being able to get hold of the right person at the right time.

RT: Do you see the challenge of the future of unified communications being competition between the enterprise communications manufacturers and the cellular carriers?

SG: I don’t think so. I think there are only certain things you can do on a cell phone. You can now extend PBX (News - Alert) functionality, to a certain extent, to a cell phone, but, I don’t think I’ll be going to my cellular service provider to rustle up a call center, because I don’t think it’s appropriate. I think there are certain circumstances and certain places of business — particularly in Europe — where a very small business might just rely on the cellular network and Skype (News - Alert) . But, where people want to have true collaboration within their business, and with their stakeholders and their partners, I’m not sure the cellular service provider will be able to supply that.

RT: What do you think a company looking to deploy unified communications should be looking for first when making a decision?

They have to ask the big question: Why and for whom? I’m not sure that unified communications suits everybody within a business, and they have to look at their individual business processes, and how they’re actually going to embed the benefits of unified communications within those business processes. People need to consider that, and they also need to consider how they’re going to achieve a competitive advantage through the use of unified communications.

We’ve seen examples of people implementing unified communications because they’ve seen modernity and, therefore, an attraction for getting university students to join their businesses. There are all sorts of reasons, but taking it into your back-end systems and getting to the point whereby the features of voice become actions of a database field, like creating an alert, is where unified communications is going.

Say it’s an accounts receivable clock, and somebody has gone over the 45-day payment term, the system can alert them to the rep to contact the customer as a matter of course and provide the appropriate contact information. Unified communications could actually automate all those kinds of processes. It’s very business specific each business needs to think about how they’re going to maximize the benefits of unified communications, because I don’t believe it’s a one-size-fits-all type of environment.

RT: From a competitive standpoint, where do you see the biggest competition for your company going forward?

I think there’s competition from all over the place — there always has been and always will be — but the interesting thing about unified communications is you have new entrants coming into the market. It’s not just the Microsofts, but you’ve got the IBMs at the same time, and you’ve got Oracle (News - Alert) with its collaboration suite.

The landscape is changing quite a bit, but I think the most important thing for us is to work out who’s most prolific on the desktop. We have our end products, but we also partner, and because the desktop is where it’s going to be first implemented, our view is that working with Microsoft initially is not a bad bet. Still, there is going to be quite a battle out there. It’s a case of understanding where your products fit into the marketplace, understand your customer needs, and, to a certain extent, avoiding the hype around what isn’t there and what can’t be there from some of these new entrants, yet. But as I say, they’ll persevere, so it’s going to be an interesting time.

RT: You talked about a software model as the direction unified communications is headed. Is there a point where you believe most equipment manufacturers will somehow find a way to focus mostly on software and not worry about the hardware side of the business?

It really comes down to what is specialty and what isn’t. For instance, you’ve seen our products working on various servers, but having a very good gateway is also important. So, I think you’ll see more of a move toward a data center-type model, particularly for the larger enterprise. But, there’ll still be a need for the smaller enterprise to have the all-in-one, reliable solution.

The model is changing, but the all-in-one solution is definitely still very attractive to an SMB. If you think back ten years, if you wanted a large PBX, it was about the size of a large walk-in wardrobe, whereas now, the same device is about the size of a CD player. It is a different dynamic, and if you look at the majority, if not all of the manufacturers, they’ve all gotten out of manufacturing because, there’s no need for it.

At the same time, the value is now primarily in software. If we look at Mitel, the ratio of software to hardware engineers is changing. The other thing I would say is that the adoption of open standards, most particularly things like XML and COTA, makes it much easier for independent software vendors to add value to their own products by inventing telephony, or adding value to the telephony products through the use of their applications. So again, there are exciting opportunities for some new vertical applications and new real forward-thinking applications.

RT: As a telecom industry veteran, what do you see as the difference between telecom in the next five to ten years versus what you’ve seen in the past?

SG: The transition over the last ten years or so has been pretty great —some of it successful, some of it not successful. If you think back to the late 1990s, that’s when Microsoft made its first foray into voice, and we were working with them then. Then we went through all the CTI (News - Alert) years, which wasn’t very exciting for most manufacturers, because it was still a very proprietary business.

Now, as we move more to open, packet-based systems, the opportunity for embedding voice into all applications within the business become much easier, and I think you’re going to see continuous change in the industry. The most important thing for us, as manufacturers and you as a publication house, is to ensure that we don’t confuse everybody.

Since 2001, in the enterprise base we’ve gone through VoIP, IP communications, IP telephony, unified communications, and many other iterations. Where is it going to stop? I asked some people a while ago if they, as end users, are confused by what’s happening? These were primarily SMBs, and they all put their hands up and said that they are. So, I think we need to do a better job of articulating what the true benefits of these new solutions and these new technologies are.

We’ve seen a lot of consolidation already within the industry, and I think that will continue, but, ultimately, as they say, “If change is inevitable, drive it.” So that’s what we’ve been doing over the last few years, and I don’t see any reason why we should stop.

Rich Tehrani is President and Editor in Chief at TMC.

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