2013 U NIFIED COMMUNICATIONS AND COLLABORATION (UCC) … · 2015-02-02 · caused SMBs to...

2013 UNIFIED COMMUNICATIONS AND COLLABORATION (UCC) CHANNEL PARTNERS SURVEY

THE TRUE VALUE OF UCC TO SMALL AND MEDIUM-SIZED BUSINESS

CUSTOMERS: WHY THEY CAN’T THRIVE WITHOUT IT

April, 2013

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Research Team

Elka PopovaNorth American Program Director, Unified Communications & Collaboration, ICT

416.792.0160

[email protected]

Rolando BarreraIndustry Analyst/Project Manager, CustomerResearch

210.247.2465

[email protected]

Contributing Analyst

Research Director

and Strategic Review Committee Leader

Tonya Fowler Global Director, Customer Research

210.247.2413

[email protected]

Lead Analyst

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Contents

Section Slide Numbers

Research Objectives and Methods 4

Executive Summary 7

SMB Customers UCC Strategies, Adoption, and Purchasing

Behaviors 11

Channel Partner Sales Approach and Requirements for Vendor

Support33

Conclusions: the Future of UCC for SMBs 38

Corporate Demographic Profile 39

Appendix 42

About Frost & Sullivan 49

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RESEARCH OBJECTIVES AND METHODS

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Source: Frost & Sullivan analysis.

Research Objectives

The primary objective of this research is to assess channel partners’ opinions regarding

perceived benefits and adoption of unified communications and collaboration (UCC) tools

among small and medium-sized business (SMBs) customers.

Supporting this primary objective, this research will also:

• measure strategic focus on and adoption of UCC tools among SMBs

• identify the key barriers to advanced UCC tool adoption in the SMB segment

• measure adoption of various types of communications endpoints among SMBs

• determine the perceived benefits and importance of UCC tools to SMB customers

• identify the key decision makers in UCC investments and determine their key investment

criteria

• measure partner expectations for future demand for UCC tools in the SMB segment

• identify partner strategies for success and partner expectations for better vendor support

in serving SMB customers

• discover some key differences in UCC perceptions by type of partner and by world region

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Methods

Methodology

A Web-based survey methodology was utilized. The data were collected in November

2012—February 2013.

Sample

Surveyed 315 global channel partners.

Reporting Notes

Frost & Sullivan defines SMBs as entities and organizations with five to five-hundred

employees.

Due to rounding, percentages in charts and tables may not equal 100 percent.

UCC Definition

Frost & Sullivan defines unified communications and collaboration (UCC) as an integrated

set of voice, data, and video communications applications, all of which leverage PC- and

telephony-based presence information. A UCC solution may comprise of the following

applications: telephony, voice/unified messaging, presence, instant messaging (IM), audio,

web, and video conferencing, e-mail, mobility, teamspaces, file sharing, social networking

and more. In this study, UCC refers to both integrated and disparate deployments of the

various communications and collaboration applications that comprise the UCC stack.

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EXECUTIVE SUMMARY

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Executive Summary

• This study confirms previous Frost & Sullivan findings that SMBs have a more conservative

approach than larger businesses when it comes to UCC investments. Smaller budgets, limited

internal IT resources, and a more concentrated workforce represent typical barriers to UCC

adoption among SMBs

• The study also confirms, however, that UCC adoption is on the rise in this customer segment.

Significant opportunities for vendors and partners exist among distributed SMB organizations

where UCC tools can help connect remote teams and enhance productivity.

• One-third of partners believe that their SMB customers are placing a somewhat large or very

large focus on their UCC strategy.

• Partner perceptions vary, however, based on partner degree of involvement and type of

engagement with end-user organizations. IT consultants are most optimistic with 61 percent of

respondents in this group stating that SMBs have a large focus on a UCC strategy.

• Partner perceptions and actual UCC adoption also vary by region. In emerging markets, the

main opportunity for partners is to migrate the SMB customer base to IP telephony and

converged networks. In developed markets, some SMBs are ready to adopt more advanced

UCC tools such as unified messaging (UM), fixed-mobile convergence (FMC), and web/video

conferencing.

• The most widely deployed UCC tools are audio conferencing (83 percent) and VoIP/IP PBX (81

percent). Web conferencing (47 percent), room video conferencing (44 percent), and desktop

video conferencing (41 percent) are reported to have the lowest penetration.

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Executive Summary (continued)

• Majority of partners (71 percent) state that TDM phones are used among their SMB

customers and more than half rank them as the most common communications endpoint in

that segment. Mobile phones are the second most popular type of communications endpoint

(62 percent).

• Half of the respondent identify IP phones as being used by SMBs. However, only 6 percent

believe that business soft clients are used by their SMB base.

• An opportunity exists for partners to help SMB customers realize the full benefits of

convergence and UCC by migrating customers to IP endpoints. Similarly, partners can help

customers more effectively address challenges related to mobility and the bring-your-own-

device (BYOD) trend.

• One-third of partners state that the most common approach among SMBs is to extend

existing investments in voice systems. Another third state that most commonly SMBs are

replacing existing systems with new ones.

• A very small percentage of partners report that SMBs are looking to switch to hosted,

managed or cloud UCC services. However, with increasing availability of compelling

hosted/cloud UC offerings, this is likely to change and partners need to be prepared to

address the trend.

• More than half of surveyed partners believe that the main barriers to SMB adoption of

advanced UCC tools are integration costs (54 percent) and license costs (51 percent). Cost is

a particularly large barrier in South America (88 percent).

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Executive Summary (continued)

• Among partners, IT consultants are most optimistic about future adoption of UCC tools (83

percent); distributors express the most conservative outlook (57 percent). This is a positive sign,

since consultants are typically involved at the early stages of UCC deployment.

• Majority of partners (52 percent) identify the business owner as the key decision maker in UCC

investment decisions. Partners must ensure that the business owner is part of the sales and

implementation process.

• Almost three-quarters of partners believe that the main benefits SMBs seek to realize with the

deployment of UCC tools are cost reduction and enhanced productivity. Only 12 percent believe

SMBs deploy UCC tools for their green benefits.

• According to 81 percent of partners, ease of use is the top UCC purchasing criterion for SMBs.

Only 39 percent think that the technology roadmap is a key concern for SMBs.

• In order to drive accelerated UCC adoption, partners must employ a consultative approach that

helps SMB customers understand the benefits and use cases for the various UCC tools. Partners

must also help train customers on how to use UCC tools more effectively to ensure greater

customer satisfaction.

• Vast majority (83 percent) believe that the IT vertical is showing high demand for UCC tools. Only

20 percent expect the hospitality vertical to adopt UCC tools in the near term.

• In their relationships with vendors, distributors are most focused on discounts and better/more

extensive training. Consultants place the largest focus on training. Partners should demand more

extensive training from their vendors in order to be successful in this rapidly evolving market.

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SMB CUSTOMERS UCC STRATEGIES, ADOPTION, AND

PURCHASING BEHAVIORS

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SMB Focus on UCC Strategy by Type of Partner

Only 33 percent of partners believe that their SMB customers place a very/somewhat large focus on a UCC strategy. However, 61 percent of consultants seem to believe this to be so, which may be due to their early involvement in SMB UCC tools considerations and implementations.

Note 1: Responses include “very large focus” and “somewhat large focus”; Base: All respondents (n=315).

Q1: Please rate how much focus your SMB customers put on a unified communications and collaboration

Strategy

Note 2: Partner types were self-selected by the survey participants. Frost & Sullivan definitions of the different

partner categories are available here.

33%

61%

49%

35%32%

14% 13%

Average of allresponses

Consultant Serviceprovider

Distributor Systemintegrator

Value-addedreseller

Reseller

Amount of Focus SMB Customers Place on UCC Strategy Very/Somewhat Large Focus: Global, 2013

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SMB Focus on UCC Strategy by Region

Surprisingly, a large number of South American partners state that their SMB customers place a large focus on a UCC strategy. The other partners’ opinions are more aligned with regional adoption trends. As expected, few Asian and African partners see their SMB customers as placing a large focus on UCC.

Note: Responses include “very large focus” and “somewhat large focus”

Base: All respondents (n=315).

Q1: Please rate how much focus your SMB customers put on a unified communications and collaboration

strategy

33%

50%

35% 34%

20%17%


South America North America Europe Asia-Pacific Africa

Amount of Focus SMB Customers Place on UCC Strategy Very/Somewhat Large Focus: Global, 2013

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UCC Tools Adoption

Note 1: Responses include “already deployed”, “currently deploying”, and planning to deploy in next 12 to 24 months.” , Base: All respondents (n=315).

Q2: Please select the approach taken by the majority of your customers with reference to the

applications listed below

Note 2: Further details on each UCC tool deployment status are available here.

SMB adoption of the various UCC applications and tools reflects the different technologies’ maturity levels as well as the different degrees of customer familiarity with the tools and their respective benefits.

83% 81%

69% 66% 63%56%

Audio conferencing VoIP / IP PBX Unified messaging Fixed-mobileconvergence

Telephony presence Instant messagingand PC presence

UCC Tools Deployed, Currently Deploying or Planned for Deployment by Majority of Customers, Global, 2013

51% 50% 47% 44% 41%

UC client Contact center Web conferencing Room video conferencing Desktop videoconferencing

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UCC Tools Focus and Adoption—Analysis

Relatively few partners (only 33 percent) believe that their SMB customers place a somewhat large or very large focus on a UCC strategy. Several factors may be contributing to this perceived low level of interest in UCC tools among SMB customers. The key reason is SMB’s slower transition to IP telephony systems and endpoints, which are foundational for UCC adoption.

Furthermore, SMB organizations typically look for simple, easy to use and manage, lower-cost communications and collaboration solutions. The concept of UCC as an integrated set of systems and applications remains confusing and is frequently associated with high costs and complexity, which creates opportunities for channel partners to educate customers and thus accelerate adoption.

Finally, the recent economic downturn in Europe, which affected other regions as well, may have also caused SMBs to de-emphasize UCC in their investment decisions. As macro-economic conditions improve SMBs are likely to switch their focus from more tactical (e.g., immediate cost saving) to more strategic objectives (e.g., competitive advantage through enhanced productivity and accelerated decision-making).

Demand for more mature (and therefore more familiar and more affordable) UCC tools such as audio conferencing is perceived by partners to be higher than demand for more advanced technologies such as web and video conferencing that have been traditionally perceived as costlier. Furthermore, most businesses acknowledge the need to converge networks and migrate to IP telephony in order to lay the foundation for future deployment of other UCC tools, which is driving IP PBX adoption.

Partners need to focus on first enabling the migration to IP telephony and converged networks and then helping SMBs add more advanced tools for additional benefits.

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UCC Tools Focus and Adoption—Analysis

Unified messaging is also maturing and becoming table stakes in infrastructure upgrades. Demand for fixed-mobile convergence is already relatively high, but as the technology matures and the BYOD trend presents additional challenges, FMC adoption will accelerate.

In addition to cost and awareness factors, perceived value is also impacting UCC tool adoption. Small businesses, in particular, may not see much value in conferencing technologies as their employees are typically concentrated in fewer locations and do not require so many tools for remote collaboration.

There are, however, opportunities for greater adoption of conferencing and collaboration tools among multi-location SMBs looking to improve collaboration among geographically distributed employees. Furthermore, technology evolution and increasing competition are driving prices down, which will make these technologies more affordable for SMB customers.

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Types of Communications Endpoints Used in SMB Customers’ Organizations


Q3b: Please rank the following top three communications endpoints for the most used in your SMB customers’

organizations.

Most SMBs are still deploying legacy infrastructure including TDM phones. The limited adoption of IP platforms and IP phones also partly explains the low penetration of soft clients. As expected, mobile devices are increasingly prevalent in the SMB space.

2%

2%

3%

6%

6%

18%

24%

50%

57%

62%

71%

Other

Desktop video phones

Wi-Fi phones

Consumer softphones

Business softphones and web comm portals

Headsets

Personal devices

IP phones

DECT phones

Company mobile / cellular phones

TDM phones

Types of Communications Endpoints Used in SMB Customers’ Organizations: Global, 2013

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Top-three Most Used Communications Endpoints in SMB Customers’ Organizations



organizations.

While TDM phones clearly rank the highest as the most widely used communications endpoint in the SMB market, mobile phones, DECT phones, and IP phones compete for the second and third most used type of device in this customer segment.

1%

2%

1%

3%

4%

13%

23%

10%

17%

21%

5%

0%

0%

1%

2%

2%

5%

29%

10%

20%

22%

11%

0%

0%

1%

1%

1%

1%

4%

5%

13%

20%

55%

Other

Desktop video phones

Wi-Fi phones

Business softphones and web comm clients /…

Consumer softphones

Headsets

DECT phones

Personal devices

IP phones

Company mobile / cellular phones

TDM phones

Top-three Most Used Communications Endpoints in SMB Customers’ Organizations: Global, 2013

#1 Ranking #2 Ranking #3 Ranking

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Communications Endpoints Adoption—Analysis

Many businesses are making the switch to converged or pure-IP communications systems, but few have replaced their TDM phones with IP ones. The more conservative approach to communications endpoints is due to the ability to deploy newer converged systems with legacy terminals, end-user familiarity and satisfaction with the capabilities of TDM phones (i.e., they simply work), and the higher cost of IP phones.

SMBs have lagged behind larger businesses in the adoption of next-generation systems and endpoints. It is not surprising, therefore, that TDM phones are the most widely deployed communications endpoint among SMBs. In fact, other Frost & Sullivan studies show that IP phones account for only 19 percent of installed endpoints in the SMB segment compared to 47 percent among large businesses.

In line with other findings, this study shows that mobile phones are increasingly being used for business purposes. However, today, they are mostly used as secondary or tertiary devices in conjunction with a desktop phone. With the growth of the BYOD trend and advancements in fixed-mobile convergence technologies, mobile devices are likely to become even more prevalent in the SMB market where every incoming call may be a sales opportunity.

Softphone and UC client penetration among SMBs is lower than their penetration among larger businesses. This fact can be attributed to perceived limited value and reliability of soft clients as well as the cost and complexity associated with the implementation of a fully integrated backend infrastructure that would justify the use of a unified client at the desktop. Greater opportunities for UC clients adoption exist among businesses with remote and highly mobile employees.

Overall global softphone and UC penetration is lower than their penetration in the North American market. Other regions have lagged behind in IP migration as well as in the adoption of IM and presence. Also, communications vendors have marketed soft clients more aggressively in North America.

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Communication Investment Approaches in SMB Customer Base


Q4: Which top three communication investment approaches are the most common in your SMB customer base?

Most SMBs appear to be either extending their existing infrastructure or replacing it with next-generation solutions. Few appear to be currently deploying or looking to switch to hosted communications services.

1%

9%

8%

5%

8%

14%

27%

17%

10%

1%

5%

4%

6%

7%

10%

14%

23%

30%

1%

1%

3%

4%

4%

4%

19%

32%

32%

Other

Looking to deploy cloud-based UCC

Looking to virtualize your UCC infrastructure

Looking to deploy managed UCC services

Currently using hosted PBX or Centrex

Looking to switch from premises-based solutions tohosted PBX or Centrex

Wait-and-see

Rip and replace

Investing in extending existing voice systems

Top Three Most Common Communication Investment Approaches in SMB Customer Base: Global, 2013

Most common Second most common Third most common

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Barriers to Advanced UCC Tools Adoption

A primary barrier to UCC adoption among budget-strapped SMBs is the cost of integrations and application licenses. Technology and provider business model maturity appear to be of lesser concern to SMB customers.


Q5: What are the main barriers preventing your SMB customer base from investing in advanced communications and

collaboration tools? Please select all that apply.

4%

19%

20%

30%

30%

40%

42%

47%

51%

54%

Other

Waiting for business models and portfolios to mature

Waiting for technologies to mature

Limited staff expertise to deploy and manage applications

Difficulty of implementation

Limited value of majority of workforce

Other priorities

Limited awareness

Applications license cost

Cost of integration

Main Barriers Preventing your SMB Base from Investing in Advanced UCC Tools: Global, 2013

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Barriers to Advanced UCC Tools Adoption by Region

Cost is the biggest adoption barrier in emerging markets such as those in South America and Asia. Limited awareness and (perceived) value of UCC tools present the biggest challenge in Australia.


Q5: What are the main barriers preventing your SMB customer base from investing in advanced communications and

collaboration tools? Please select all that apply.

50

% 58

%

58

%

42

%

67

%

17

%

42

%

8%

0%

41

% 48

%

70

%

45

% 52

%

21

% 31

%

27

%

17

%

53

%

51

%

44

%

42

%

40

%

30

%

27

%

20

%

21

%

54

%

38

%

54

%

43

%

22

%

32

%

49

%

22

%

19

%

88

%

88

%

25

%

38

%

25

%

50

%

38

%

13

%

25

%

Cost ofintegration

Applicationslicense cost

Limitedawareness

Other priorities Limited value tomajority ofworkforce

Difficulty ofimplementation

Limited staffexpertise todeploy and

manageapplications

Waiting fortechnologies to

mature

Waiting forbusiness

models andportfolios to

mature

Main Barriers Preventing your SMB Base from Investing in Advanced UCC Tools: Global, 2013

Africa Asia-Pacific Europe North America South America

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Investment Approaches and Barriers to UCC Tool Adoption—Analysis

Most partners believe that SMBs are taking a proactive approach to their UCC infrastructure and are either extending and upgrading existing solutions or replacing them with new technologies. Only 19 percent of partners state that the majority of their customers have adopted a wait-and-see approach, which is a positive indicator in view of ongoing economic challenges and rapidly evolving technologies.

Few partners see the majority of their customers either currently deploying hosted solutions or looking to deploy hosted, managed or cloud communications. This may be due to the fact that these partners have contacts primarily with businesses that are deploying or looking to deploy premises-based solutions. However, other research provides further evidence that hosted, managed, and cloud services have so far gained little traction outside of North America due to limited availability, low customer awareness, and established business practices to deploy UCC tools on the premises.

Furthermore, in spite of the hype around cloud and hosted solutions, most businesses continue to have security, reliability, and functionality concerns. Other Frost & Sullivan studies show, however, that going forward, more SMBs are likely to consider and make the switch to hosted/managed/cloud solutions.

Not surprisingly, cost is a primary barrier to SMB adoption of advanced UCC tools. Smaller IT budgets and more limited access to additional capital make SMBs more conservative buyers. It is reassuring, however, that partners do not believe that SMBs are concerned about UCC technology or vendor business model maturity.

Adoption barriers are likely to vary by region based on macro-economic, regulatory, technological, and demographic/cultural factors. Countries with higher GDP tend to have more developed communications markets and are at the forefront of advanced UCC tool adoption. Cost, perceived value, and even awareness are likely to be bigger barriers in developing regions.

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Expected Change with Regard to Demand for UCC Products and Services by Region

An encouraging 62 percent of partners expect demand for UCC tools to increase in the near term. Australia’s optimistic perspective on future demand may be due to low current penetration. European partners’ more conservative approach is most likely due to the tough macro-economic climate in the region.

Note: All responses are compared to past 12 months; responses “significantly increase” and “some increase”


Q6: Thinking about the next 12 months, how would you summarize your expectations with regard to the

demand for UC products and services in your country?

62%

88%84% 84%

67%59%


South America Asia-Pacific North America Africa Europe

Expected Change with Regard to Demand for UCC Products and Services, Significantly/Some Increase: Global, 2013

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Expected Change with Regard to Demand for UCC Products and Services by Type of Partner

It is reassuring that consultants are most optimistic about future demand for UCC tools as they are closest to end-users’ technology consideration and deployment plans.

Note: All responses are compared to past 12 months; responses “significantly increase” and “some increase”


Q6: Thinking about the next 12 months, how would you summarize your expectations with regard to the

demand for UC products and services in your country?

62%

83%76%

59% 58% 57%53%


Consultant Serviceprovider

Systemintegrator

Reseller Value-addedreseller

Distributor

Expected Change with Regard to Demand for UCC Products and Services, Significantly/Some Increase: Global, 2013

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Key Decision Maker with Regard to UCC Investments

Business owners continue to be the primary decision makers when it comes to UCC and other technology investments in the SMB segment. External consultants are, however, almost as important as internal IT staff, mostly due to limited in-house IT expertise in many small organizations.


Q7: Thinking about the majority of your SMB customers, please choose the type of key decision maker with

regard to UC investments.

52%

20%

14% 13%

1%

Business owner C-level executive IT/Telecom staff External consultant Other

Key Decision Maker with Regard to UCC Investments Global, 2013

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Importance of Potential UCC Benefits to SMB Customers

In a tough economic climate, most SMBs are focusing on cost reduction and productivity enhancement, whereas a green ICT policy is the least of their concerns. Less than half of surveyed partners believe that SMBs expect UCC tools to help them gain a competitive advantage.

Note: Responses include “very important” and “somewhat important” Base: All respondents (n=315).

Q8: Thinking about the benefits that each type of UC technology can offer to the majority of your SMB

customers, how important are the following potential UCC benefits to your customers?

74% 73% 71% 68%60% 59% 59%

Reduce operatingcosts (e.g. reduce

travel, lowermobile costs, etc.)

Enhanceproductivity

Increase ability toreach remote andmobile employees

Increase customersatisfaction with abetter handling of

their calls

Ensure businesscontinuity

Enhance virtualteam collaboration

across differentsites

Be able tointegrate personaldevices such as

smartphones andtablets

Importance of Potential UCC Benefits to SMB CustomersVery/Somewhat Important: Global, 2013

53% 42%35% 34%

25%12%

Facilitate homeworking

Gain a competitivedifferentiator

Accelerate decisionmaking

Improve data andtelecom security

Meet specific verticalrequirements

Implement a greenICT policy

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Key Customer UCC Tool Purchasing Factors

Limited or no IT staff in SMB organizations is the primary reason why SMB customers care strongly about the ease of use of UCC technologies. As SMBs have less complex infrastructure that requires additional integrations, open standards appear to be of lesser importance to them.

Note: Responses include “very important” and “somewhat important”


Q9: Which factors help you to win the customer over to implement UCC tools?

81%70% 69% 69% 67% 67% 63% 62%

Ease of use Systemefficiency and

reliability

Level of serviceand support

Existing vendorrelationship

Ease ofimplementation

andmanagement

Return oninvestment

Price Cutting-edgefeatures andfunctionality

Most Important Factors to Win Customers to Implement UCC ToolsVery/Somewhat Important: Global, 2013

62% 59% 56% 55% 53% 53%39%

Vendor reputation Part of a broadtechnology

portfolio that allowsone-stop shopping

Existing in-houseexpertise in

technology andsolutions offered

System security Open standardsand interoperability

with 3rd-partyapplications

Technologymaturity (broad

market adoption)

Technologyevolution roadmap

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Demand for UCC Tools by Vertical

The IT industry has been at the forefront of UCC adoption as technology vendors seek to develop relevant skill sets as well as showcase the new tools with customers and partners. Knowledge workers (e.g., professional services firms) who can benefit the most from UCC tools are also among the early adopters.

Note: Responses include “very interested” and “somewhat interested”


Q10: Thinking about your SMB customers, which verticals do you believe are most interested in deploying UCC

applications?

20%

29%

31%

33%

35%

43%

54%

65%

83%

Hospitality

Education

Retail

Healthcare

Public sector and local government

Manufacturing

Financial Services

Professional services (legal, real estate, consulting,accounting, HR, etc.)

IT

Verticals Most Interested in Deploying UCC ApplicationsVery/Somewhat Interested: Global, 2013

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Demand for UCC Tools by Vertical by Region

Regional economic, regulatory, and cultural factors determine the varying demand for UCC tools by vertical in each region.

Note: Responses include “very interested” and “somewhat interested”


Q10: Thinking about your SMB customers, which verticals do you believe are most interested in deploying UCC

applications?

75

%

58

%

83

%

25

%

42

% 50

%

25

%

58

%

42

%

90

%

70

%

80

%

35

%

52

%

38

%

14

%

31

%

21

%

84

%

65

%

53

%

45

%

31

%

30

%

32

%

26

%

18

%

84

%

68

%

59

%

43

%

59

%

46

%

32

%

46

%

35

%

88

%

50

%

75

%

50

%

75

%

63

%

50

%

88

%

50

%

IT Professionalservices

FinancialServices

Manufacturing Public sectorand local gov.

Healthcare Retail Education Hospitality

Verticals Most Interested in Deploying UCC ApplicationsVery/Somewhat Interested: Global, 2013


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Future Demand—Analysis

More than half of the partners in all regions expect demand for UCC tools to increase. The more conservative outlook in Africa, Asia, and Europe is most likely due to macro-economic factors. In both Asia and Europe cost ranked the highest among potential barriers to adoption. The positive outlook on future demand in Australia is an indicator that partners expect awareness barriers to be overcome in the near term.

Consultants appear most optimistic about future demand for UCC tools, which is probably an indication that many SMB customers are actively inquiring about UCC tools and their benefits. VARs and distributors, on the other hand, are more conservative in their assessment of future demand most likely due to low amount of current purchase orders.

Since the business owner is clearly the key decision maker in UCC investments, vendors and partners need to engage the owner in discussions of key pain points that can be addressed with advanced technologies and the benefits of specific UCC tools. Consultants also play a critical role in investment decisions since most SMBs lack extensive internal IT expertise.

As the survey shows that SMBs seek to mostly reduce costs and improve productivity through the implementation of UCC tools, vendors and partners should help decision makers understand how each tool can address these specific objectives. According to most surveyed partners, SMBs do not see UCC tools as a means to gaining a competitive advantage. That may indicate the need for more education on the side of vendors and partners. Technology adoption is highly correlated with customer perception of how different tools can ultimately lead to a more competitive market position.

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Future Demand—Analysis (continued)

In addition to the specific benefits of each tool, SMBs also base their investment decisions on the ease of use of the solution. Lack of internal IT staff and the need to focus on core business tasks compel them to seek plug-and-play solutions that require little training and ongoing maintenance and support. The same factors also explain SMB’s focus on system reliability and superior customer service on the part of channel partners and vendors.

Budget and staffing limitations are also preventing some SMBs from seeing the “big picture” and developing a more long-term approach with regard to UCC investments. This is apparent from the lack of focus on open standards and technology roadmap. Partners and vendors must help their customers understand the importance of these factors and thus make more sustainable technology investments.

A significant portion of future UCC demand is likely to come from the IT, professional services, and financial services verticals. Most of the organizations in these verticals are geographically distributed and also employ a large number of knowledge workers—two factors that create the need for advanced collaboration tools. Businesses in the IT sector are also deploying UCC tools in order to first test and then showcase the advanced technologies they pitch to their customers.

Demand for UCC tools by vertical is likely to vary in the different countries as the various industries are subject to different regulatory, cultural, and other country-specific factors. For example, instant messaging (IM) is considered impolite in some Asian countries, which may impact demand for IM and respectively UC clients in some Asian verticals that would typically show high demand for these tools on other continents.

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CHANNEL PARTNER SALES APPROACH AND REQUIREMENTS

FOR VENDOR SUPPORT

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Partner Strategies to Address Industry Trends and Better Serve SMB Customers

Most partners are focusing on expanding their expertise and (re)training staff, as well as applying a more solution-centric sales approach in order to better serve customers.

Note: Responses include “very important” and “somewhat important”


Q11: What strategies are you employing to address industry trends such as network and application

convergence, virtualization, etc. and better serve your SMB customers.

32%

53%

58%

59%

69%

70%

74%

75%

76%

Exiting certain markets

Developing vendor partnerships

Specializing and becoming more focused

Entering new markets

Diversifying product and services portfolio

Adjusting sales and marketing pitch

Staff (re)training

Applying a more solution-centric sales approach

Expanding areas of expertise

Strategies Employed to Address Industry Trends and Better Serve SMB Customers, Very/Somewhat Important: Global, 2013

NBF5-64 35


Partner Requirements for Vendor Support in the SMB Market


Q12: Please select the top three ways your vendor partner can support you better in selling UCC to SMBs?

Please select all that apply.

Partners require better discounts and lead sharing from their vendors. Somewhat surprisingly, they do not consider managed and hosted services critical to their success in this segment.

18%15%

12% 12%10%

6%

11%13%

10%13% 12%

9%

13% 13%10%

12%10%

6%

Greater discounts Lead sharing Better and / or moreextensive training

Sharing a clearervision and product

roadmaps

Developing verticalspecific sales and

marketing strategies

More extensiveproduct portfolios

Vendor Strategies to Better Support Partners in Selling UCC to SMBs: Global, 2013

#1 Ranked #2 Ranked #3 Ranked

6% 5% 5% 4% 4%2%

7% 6% 6%4%

7%

1%

11%

6%8%

6% 5%

1%

Developing verticalspecific products

Enabling you toprovide managed

UCC services

Additional marketingcollateral

Enabling you toprovide UCaaS

More creative leasingprograms

Other

NBF5-64 36


Partner Requirements for Vendor Support by Type of Partner

Note: #1 Ranked responses only Base: All respondents (n=315).

Q12: Please select the top three ways your vendor partner can support you better in selling UCC to SMBs?

Please select all that apply.

Partner skill sets and market positioning determine their requirements for vendor support.

18%

15%

12%

12%

10%

6%

26%

9%

26%

9%

6%

6%

10% 1

5%

15%

13%

13%

10%

5%

10

%

5%

5%

14

%

14

%18%

19%

11% 13%

10%

5%

16%

14%

3%

16%

14%

5%

17%

11%

22%

6%

17%

6%

Greater discounts Lead sharing Better and/or moreextensive training

Sharing a clearer visionand product roadmaps

Developing vertical-specific sales and

marketing strategies

More extensive productportfolios

Vendor Strategies to Better Support Partners in Selling UCC to SMBs:#1 Ranked Responses: Global, 2013

Total Sample Distributor Reseller Value-added reseller

System integrator Service provider Consultant

6%

5%

5%

4%

4%

2%

6%

0%

0%

12%

0%

0%3

%

8%

5%

3%

8%

0%

14%

5%

14%

5%

5%

5%6%

5%

5%

3%

3%

2%

5% 8

%

5%

3%

11%

0%

0%

0%

0%

11%

6%

6%

Developing vertical-specific products

Enabling you to providemanaged UCC

services

Additional marketingcollateral

Enabling you to provideUCaaS

More creative leasingprograms

Other

NBF5-64 37


Partner and Vendor Strategies—Analysis

With the increasing complexity of UCC technologies and architectures, partners understand that expanding their skills and expertise and applying a more solution-centric sales approach are critical to their success in the SMB segment. It is both more convenient and more cost-effective for SMBs to work with a single partner for all of their communications and collaboration needs. Therefore, partners are looking to provide a one-stop shop for their SMB customers and to also present a complete solution during the sales process.

Depending on channel partner expertise, market maturity in UCC tool adoption, and other region-specific factors, staff (re)training, a new marketing message or new vendor partnerships may also prove critical for partner success in the different regions.

Overall, partners consider greater discounts and lead sharing most helpful in dealing with SMB customers. At this stage, they do not appear highly interested in developing managed or hosted services capabilities. That is likely to change, however, as managed and hosted technologies and business models mature and SMB customers acknowledge the flexibility and other benefits of outsourcing their UCC solutions from a third party.

The different types of partners have different expectations about how vendors can better support them in serving SMB customers. It appears that some types of partners are really underestimating the importance of training. It is also interesting to note that, among all partners, distributors and consultants are most interested in being enabled to deliver Unified Communications as a Service (UCaaS). Vendors must tailor their strategies to their different partners’ needs to help them become more successful in the SMB market.

NBF5-64 38


Conclusions: the Future of UCC for SMBs

2Increasing competition and maturing technologies will eliminate the key

barriers to SMB adoption of UCC tools: high integration and licensing

costs.

3A solution-centric partner sales approach focusing on ease of use aided

by greater vendor discounts and continued partner training will boost

demand for UCC tools in the SMB market.

1The true value of UCC to SMBs is in reducing costs, enhancing

productivity, and enabling mobility. SMBs will first lay the foundation with IP

PBXs and then gradually add IP phones and more advanced UCC tools.

NBF5-64 39

CORPORATE DEMOGRAPHIC PROFILE

NBF5-64 40


35%

17% 16%

10%

6% 5% 5% 3% 3% 3% 2% 2% 2% 2% 2% 2% 2% 2% 2%

24%

Germ

any

Fra

nce

Spain

Sw

eden

United K

ingdom

Canada

Sw

itzerland

Denm

ark

Fin

land

United S

tate

s

Austr

alia

Mexic

o

Norw

ay

Belg

ium

Bra

zil

Chin

a

Czech R

epublic

Italy

Turk

ey

Oth

er

Base Country of Organization: Global, 2013

Corporate Demographic Profile

Note: Multiple response question


NBF5-64 41


Corporate Demographic Profile (continued)


26%

48%

18%

5% 3%

Percentage of Organization’s Revenue from UCC Products and Services in 2011: Global, 2013

Less than 5%

More than 5% but less than 30%




100%

50%

13% 12% 11%7% 6% 3%

SystemIntegrator

Reseller ServiceProvider

Distributor Value-addedReseller

Consultant Other

Type of Partner in Terms of Delivery of UC Products and Services: Global, 2013

NBF5-64 42

APPENDIX

NBF5-64 43


UCC Tools Investment Approach




51%

40%

29%

25%

23%

21%

14% 1

9%

14% 17%

11%

18%

18% 22%

21% 2

7%

16%

27%

4% 9

% 10%

10%

10%

12%

12%

10%

27%

21%

39%

21%

Audioconferencing

VoIP / IP PBX Telephonypresence

Unified messaging Contact center Fixed-mobileconvergence

Approach Taken by Majority of Customers with Regard to UCC Tools Global, 2013

Already deployed Currently deployingPlanning to deploy (next 12-24 months) Planning to deploy (after 24 months)No plans to deploy

NBF5-64 44


UCC Tools Investment Approach (continued)




17

%

15

%

14

%

9%

9%

15

%

11

%

11

%

12

%

8%

24

%

18

% 22

% 29

%

24

%

16

%

12

% 17

%

17

%

17

%

28

%

43

%

36

%

32

%

43

%

Instant messaging andPC presence

Room videoconferencing

Web conferencing UC client Desktop videoconferencing

Approach Taken by Majority of Customers with Regard to UCC ToolsGlobal, 2013

Already deployed Currently deployingPlanning to deploy (next 12-24 months) Planning to deploy (after 24 months)No plans to deploy

NBF5-64 45


Types of Communications Endpoints by Region



organizations.

50

% 58

%

42

%

67

%

25

%

17

%

8%

17

%

8%

8%

0%

62

%

59

%

25

%

63

%

55

%

20

%

13

%

27

%

7%

7%

0%

76

%

63

%

63

%

47

%

21

%

17

%

4%

4%

3%

1%

1%

46

%

65

%

27

%

57

%

41

%

32

%

11

%

14

%

0% 5

%

3%

63

%

75

%

38

%

38

%

50

%

0%

25

%

0%

0%

13

%

0%

TDMphones

Companymobile /cellularphones

DECTphones

IP phones Personaldevices

Headsets Businesssoftphones

and webbasedcomms

Consumersoftphones

(Skype,Google)

Wi-Fiphones

Desktopvideo

phones

Other

Types of Communications Endpoints Used in SMB Customers’ Organizations Global, 2013


NBF5-64 46


Partner Strategies by Region

Note: Responses include “very important” and “somewhat important” Base: All respondents (n=315).

Q11: What strategies are you employing to address industry trends such as network and application

convergence, virtualization, etc. and better serve your SMB customers.

75

%

75

%

10

0%

83

%

58

% 67

%

67

%

58

%

33

%

66

% 74

% 84

%

73

%

67

%

56

%

70

%

62

%

33

%

75

%

75

%

73

%

70

%

69

%

58

%

55

%

50

%

30

%

70

%

81

%

70

% 76

%

73

%

65

%

65

%

65

%

43

%

75

%

88

%

75

%

75

%

75

%

75

%

88

%

88

%

50

%

Expandingareas ofexpertise

Applying asolution

centric salesapproach

Staff(re)training

Adjustingsales andmarketing

pitch

Diversifyingproducts and

services

Entering newmarkets

Specializingand becomingmore focused

Developingvendor

partnerships

Exiting certainmarkets

Strategies Employed to Address Industry Trends and Better Serve SMB Customers, Very/Somewhat Important: Global, 2013


NBF5-64 47


Partner Type Definitions

Consultant

A n IT or telecom consultant is a business that delivers professional services to end-user organizations and assists them in analyzing their technology needs, designing a solution, and selecting a service provider or vendor. Consultants may also resell products or services but do not typically provide maintenance or managed services themselves.

Service Provider

The term service provider here refers to a telephone company, also known as a telco, telephone service provider, telecom carrier or telecommunications operator. It provides telecommunications services such as telephony and data communications access. Service providers also typically resell communications products and services.

Distributor

Distributors usually store a large number of inventory for telecommunications vendors and then deliver the products to end users either directly or through other channels such as system integrators, VARs or resellers.

System Integrator

A systems integrator is a person or company that specializes in bringing together component subsystems into a whole and ensuring that those subsystems function together, a practice known as system integration.

NBF5-64 48


Types of Partners (continued)

VAR

A value-added reseller (VAR) is a company that adds features or services to an existing product, then resells it (usually to end users) as an integrated product or complete "turn-key" solution.

Reseller

Resellers here refers to businesses that resell communications products or services at a price markup. Unlike VARs, resellers do not typically provide additional product enhancements or related services.

NBF5-64 49

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NBF5-64 50

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