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UCC: We Are At The Strategic Inflection Point

A post written by my colleague Marty Parker earlier this month discusses the idea of carving up your PBX (How to Carve PBX). In his post, Marty refers to Andy Grove’s (former CEO of Intel) famous book, Only The Paranoid Survive: How To Exploit The Crisis Points That Challenge Every Company. Throughout his book, Andy refers to a “strategic inflection point.” I believe, beyond a shadow of a doubt, that we are at that strategic inflection point for Unified Communications and Collaboration.

According to Andy, strategic inflection points:

  • “Are at a time in the life of any business when its fundamentals are about to change. That change may be a new opportunity or a signal of the beginning of the end.” 

  • “Can be caused by technological change but they are more than technological change. They can be caused by competitors but they are more than just competition. They are full-scale changes in the way business is conducted so that simply adopting new technology for fighting the competition as you used to maybe insufficient.”

And here is Andy's warning: “a strategic inflection point can be deadly when unattended to. Companies that begin a decline as a result of its changes rarely recover their previous greatness.” 

 

Numerous Strategic Inflection Points

Strategic inflection points are numerous and here are a few examples:

  1. Digital Media – All written media, including books, magazines, and newspapers have seen tremendous changes in how their content is delivered “almost overnight,” and traditional ways of selling and delivering retail hard copy have changed forever how they do business.

  2. Online vs. Brick-and-Mortar Shopping – the race is on to determine who ultimately wins in the race for delivering retail product either via an online or brick-and-mortar experience. Ten years ago, brick-and-mortar was king, and now we see the online shopping gaining ground annually.  Brick-and-mortar companies are getting extremely aggressive, in many cases matching (and even beating), online pricing models. Ease of returns and the introduction of taxes for all online purchases should begin to erode the onslaught of online purchasing over brick-and-mortar purchases.

  3. Online Banking – Online banking has had a huge effect on the regular visit to your local banking branch to perform a transaction, and instead has flattened many of the personal differentiators most banks have become accustomed to. New video conferencing tools, including video kiosks, are beginning to appear at the branch level to reintroduce the personal banking experience once again.

  4. Video Streaming – Video streaming is now a very “hot” industry segment; five of Amazon.com’s top 10 most frequent retail sales today, as of this writing, are streaming media. Video streaming will begin to forever change how we watch movies and programs, and the DVD / Blu-Ray market segment is finding it more and more difficult to sell physical media DVDs in the retail space.

 

The UCC Strategic Inflection Point

For Unified Communications and Collaboration, I believe that the strategic inflection point is here. In my opinion,

  • We are at that moment in time where you either take control of this industry change or the industry changes you.

  • We are also at that “tipping point” where the timing advantage of early adopters will be lost as UCC goes mainstream.

With consumer-driven apps helping to lead the way with basic UCC functionality, it is difficult not to consider the full UCC suite as a requirement as a part of a replacement model of an aging telephony environment at end-of-life, end-of-support (TDM or IP). In fact, every client bid process we have been involved with in the last 12 months included the purchase of a full UCC suite as part of the capital purchase.

For our clients, we have taken a holistic view of UCC. In our world, we consider all aspects of real time communications, including telephony, Contact Center, presence, IM/chat, audio conferencing, video conferencing, emergency notification, QoS enabled Wi-Fi, collaboration, document sharing, UC Federation, UC Mobility, SIP Trunking, voice and video enabled networks, Unified Messaging, LDAP/Corporate Directory, and more.

In addition, replacing telephony for telephony only, offers no perceived value in today’s market. And for many, the investment in new UCC technologies (telephony included) is in the millions and a significant purchase. New UCC feature/functionality needs to be introduced as a part of a replacement rollout, otherwise the end user clearly does not see any advantage to a replacement model, while having to pay their portion of the whole capital purchase.

The uCaaS UCC cloud option is also gaining momentum, providing a rental alternative to a traditional purchase, with the promise of taking the complexity out of a fully-loaded UCC implementation. This market segment is in the early adopter stage and is still “gelling,” and in my opinion will be gaining more traction to replace legacy systems for those communities wanting to give the complex “UCC headache” to an outside organization. In this case it’s about not just SLAs for managing and delivering on UCC, but it’s also about the cost differential over a seven-year life-cycle period. To-date, we have seen a move to the cloud to be strategic for an organization and less about a cost model – we have yet to see a uCaaS model win over a capital model based on seven-year life-cycle costs.

Lastly, the market has moved to a license-based model, and UCC functionality along with telephony is at its lowest cost point ever. Compared with 30 months ago, UCC + Telephony is, in our experience, actually 15%-20% less than just telephony alone. This is a great time to be an enterprise organization, with pricing dropping to the point that it has. 

 

Next Steps

Knowing that we are at the UCC Strategic Inflection Point, doing nothing is not an option, even just for simply staying alive. As the CIO or IT Director, your user community is ready for UCC, already using individual UCC functions as consumers (such as IM/chat a.k.a. texting, presence a.k.a. friends lists, and video conferencing a.k.a. Facetime et al).

A needs assessment or strategic plan and budgeting is in order to determine what the benefits and costs will be for a new UCC solution and any risks associated with your existing infrastructure. And leveraging areas for hard-dollar ROI should be a necessary ingredient to help meet project approvals.

IT can once again be strategic to your organization by leveraging UCC. This is that moment in time to begin adopt UCC into your IT arsenal. The industry will go ahead and adopt UCC with or without you and me.