I recently met Ashish Reddy in Virginia. A 30-year-old techie from South India, he works in a lab owned by a Virginia-based telecom company. He joined this company when he was 24 and since then made it a point to visit his home town in Andhra Pradesh every other year to spend at least three weeks with his parents. But this time he is not going to India. Reddy fears that with the current recession in the US forcing many large companies to lay off thousands of employees, he may not find his job when he returns.
The economic downturn in the US is beginning to hit everyone and it is visible. We were four Indian journalists visiting the US and we travelled across New York, Virginia and California - easily among the most affluent American states. Even in this short time one could see the impact of the economic downturn.
On my arrival at the JFK Airport in New York, I happened to take a cab driven by a Sikh. The 42- year-old garrulous man, with his family in Amritsar (and a girlfriend in New York), has been chasing the great American dream in his cab for the past 10 years. But now, unable to raise enough income to repay his loans and support his family, he wants to apply the brake and go back to India.
As I was being driven to a hotel, the Sardarji, instead of showing me the sights and sounds of the Big Apple, was pointing out at the beggars on the street and young men with cards around their necks which read "Willing to work - Want a job". Coming from India, where such sights are common, I did not give it a second thought.
But when I reached the hotel, a reputed international chain near Times Square, I was quite surprised to find the absence of basic services, usually associated with a top notch hotel. The toothpaste, brush and a shaving kit were a part of the mini-bar, priced at $5 each! I was lucky to have packed a full toilet kit but my fellow journalists had to trudge to Times Square to buy toothpaste in the middle of the night.
A hotel employee said the management had decided to offer a no-frills service given the increasing costs and declining visitors as a result of the economic slowdown. There were other stronger signals too. Near-empty malls even on the eve of Thanksgiving Day, newspapers with depressing stories, shops giving massive discounts as they were going out of business and people like Reddy are bracing themselves for tough times ahead. Take the case of Shailesh, a Gujarati, who sells premium range shoes in a mall located in the upmarket Santa Clara area. In normal times, his clients included top executives of the Silicon Valley. But sales were dipping over the past few months. He expected business to pick up during the Thanksgiving week but I saw just a few guys hanging around.
When a fellow journalist walked in to buy a pair of shoes, the Gujarati man was so desperate to get a sale done that he offered a 40 per cent discount. Tony, the owner of a cab agency who drove us around San Francisco, said his business had declined by 30 per cent over the past four months. "People are travelling less these days. I haven't seen some of my regular clients for many months now," he said.
The last time I was in New York was right after the 9/11 attacks. I really don't know what was more depressing - the sight where the twin towers once stood or the grim look on the faces of executives as I walked down Wall Street.
But what stood out then, as also now, are the determination and hope that Americans harbour as they go about making sense of the latest crisis. It is this hope that has given the newly elected President Barack Obama a superman- like status. So one could see Obama caps, Obama T-shirts, Obama posters being sold on New York streets. People like Tony are betting huge on the next US President. You ask anyone about their opinion on Obama, especially the youngsters, and their eyes light up.
And to be fair, things are not all that bad. Not when compared with Indian lifestyle. Yes, Americans may not be buying SUVs or yachts, but we had to wait for an hour before we could find a seat at Sarabeth's - the hugely popular restaurant near the Central Park in New York. The hotels may be offering no-frill service, but we were being driven around in a stretch limousine through San Francisco. Well, recession is a relative term.
Flying back home, I thought of Reddy and sent up a fervent prayer that he'll be able to visit his parents soon.
Saturday, December 13, 2008
Thursday, December 11, 2008
Unified Rivalry
They have been fighting a pitched battle for a larger share of the global unified communications market for over two years. Now with the Indian enterprise segment increasingly investing in efficient networks and productive systems, the brawl between Microsoft, Avaya and Cisco has hit Indian shores. Ironically, one is a software giant, the other two are the leaders in traditional communications hardware. While Microsoft wants to leverage its dominant position in the desk top software market, Cisco and Avaya are betting on its strength as a leading provider of IP based voice solutions to tap the growing unified communication space.
Depending on who you talk to, unified communications is described as telephone and video collaboration, or as a converged network for voice and data, or used as an all-encompassing term to describe all forms of call and multimedia/cross-media message-management functions. To put it simply, a unified communications system includes elements of presence, instant messaging, IP telephony, audio conferencing, web conferencing or data collaboration, unified messaging (a common message store for voicemail, email, and faxes),mobility, and/or video conferencing -- all accessible through a single client interface or within an embedded application interface.
When done right, unified communications can reduce downtime that’s implicit in any interaction. Consider this: according to a study, more than 70 percent of business calls are placed on hold for an average of 45 to 60 seconds each in a traditional legacy network. The average executive spends 17 minutes each day on hold, and some 80 percent of phone calls end up in voice mail. UC curbs the wastage of time by letting users reach the right person at the right time through their preferred mode of contact. This goes way beyond slashing hold times or staying clear of voice mail. It means organising information faster and getting that information to the right person in a usable format when the recipient needs it most.
“The prime deliverables of UC are cost reduction/ optimization and productivity improvement. Both of these are as well the prime objectives of each of the business leaders in India. This convergence of deliverables and objectives is driving the interest in UC and its uptake,” says Mr. Vivek Porwal, BU Head – Unified Communications, Avaya GlobalConnect.
The unified communications global market is estimated to touch nearly $48 billion by 2012. In India, the UC market is still nascent with total size of around $600 million. But this is quickly growing exponentially even as small and medium enterprise segment is beginning to understand the benefits of deploying UC solutions. Growth rate of UC in India is among the highest globally. According to a forecast from Frost & Sullivan on UC in India, the total market size of UC is likely to grow to more than $1B by 2010. Explaining the uptake of UC, Mr K.B. Sanish, Research Analyst, Gartner India says, “ According to our user analysis in North America and Europe in the CME segment some the major reasons for implementing unified communications is as follows: Of the organizations that have implemented UC, the top two reasons cited for deploying it is related to business process improvements. These included improving the speed of business across the organization (cited by 44% of respondents) and offering better communications for distributed sites and remote or mobile workers (cited by 39% of respondents).”
According to Gartner, hard factors like a need to replace equipment and lower total cost of ownership each also played a part in the decisions of 33% to 36% of CMEs that made unified communications investments.
While everyone agrees on the potential and benefits of UC in India, vendors are working on different strategies to garner a larger share of this market. As expected, Microsoft’s approach is focused on desktops and email based applications. It is integrating several collaborative applications to enable UC functions on the desktop. Microsoft is playing to its strengths here because it’s the market leader in desktop software and has a long history in many aspects of UC such as e-mail, office productivity tools and instant messaging. “Microsoft has long seen that the path to UC was in powerful, well-integrated software. Microsoft UC solutions enable customers to preserve their investments in their PBX and avoid upgrading their network infrastructure while quickly realizing the productivity and cost-reduction benefits of unified communications. Designing unified communications functionality into the solution rather than acquiring point products helps provide customers with an enhanced end-user experience and helps make system management easier. Because Microsoft takes a software-platform approach rather than relying on hardware, customers receive investment protection,” says Mr Sanjay Manchanda, Director, Microsoft Business Division, Microsoft India
On the other hand Cisco and Avaya’s strategy is to start with an intelligent IP network and build the UC capabilities into the network. Says Minhaj Zia, National Sales Manager, Unified Communications, Cisco India & SAARC. “Cisco's core business is enabling an IP based network platform. Since it is the leader in this market and IP enables the ability to converge data, voice, video and mobility, we are well positioned to drive the UC platform in the market over the next few years.”
Both sides of the camp feel that their approach to UC is better than the other. Taking a shot at Microsoft’s strategy, Avaya’s Porwal says, “E-mail and desktop UC accounts for only 10-15 per cent of the UC revenues. Major revenues for UC are from Voice and Collaboration. Voice (including IP telephony) contributed the maximum proportion of approx. 73 per cent of this market followed by conferencing (video, audio and web) and messaging and calendaring (which includes e-Mail, Internet Messaging, Unified Messaging and mobile business messaging,” says Avaya’s Porwal
But Microsoft reckons that this is far from the truth. “The most used application in enterprises today is e-mail. According to an IDC report on unified communications, stand alone e-mail is still considered biggest productivity tool and ranks topmost (96% ranked it among top 3 applications having impacted productivity the most). Microsoft is focused on extending the same familiar Outlook experience to other applications. Microsoft has always held that e-mail is a critical component of unified communications and now competitors are changing their approach to fill out clear gaps in their solutions that Microsoft is already offering. In fact, Cisco’s acquisition of Post Path, a Linux-based messaging solution provider (Exchange competitor) is a testament to the fact Unified Communications is not just about telephony,” counters Manchanda.
Traditional IP hardware vendors such as Cisco think that voice based applications are clearly driving the UC market. “Microsoft is talking about email and desktops because it does not have a good voice solution in its UC portfolio,” says Zia.
Admitting that it is lagging behind when it comes to the telephony aspect of UC, the software major, which has clients including Marico, Moser Baer, NIIT, BILT and Laxmi Vilas Bank, says it is working on to plug the gap. “We are taking proactive steps in building our Voice Credibility by showcasing our Voice Quality and its integration with our Email, IM and Conferencing environments. We are doing this through an extensive Pilot program and Partner Enablement. In just in a year of entering voice, we have featured in the Gartner Magic Quadrant for Telephony (2008) in the Visionary quadrant. The telephony space has been contested by our competitors for many years now and for us to come from software background and positioned in the visionary quadrant is creditable,” says Manchanda.
Cisco, which was among the first to move into the UC space and sold millions of IP phones before Microsoft entered this segment, claim that Microsoft solutions are not open sourced. “Microsoft mostly insists on using their software and applications, especially on the desk top, whereas Cisco has always believed in the interoperating with existing systems and applications. This has cost implications for the users,” says Zia
Responds Manchanda, “On the contrary, Microsoft Unified Communications solution is compatible and interoperable with other communication infrastructure used by organisations today. In fact we offer choice in end point devices with partners like Polycom and other SIP phone providers which are more cost effective than other competitors like Cisco and Avaya who provide their own hardware (server, gateway and phones) to run their applications. Customers are tied into these investments and very often the cost of upgrading this hardware turns out to be more expensive than a new purchase.”
But even as they fight it out, there are some common challenges for the vendors. For one UC is still primarily being deployed by verticals which have been traditionally strong in using IT in enhancing their productivity i.e. banking and financial sector and ITeS. Other sectors are still weighing their options. Second, UC is highly segmented with not many corporates deploying the entire gamut of services under the unified communications portfolio. At present, companies are deploying just some parts of the solution which could be just IP telephony or just an email based application with some video capabilities. Analysts predict that it will take another 2 years or more for Indian corporates to start using UC in its true sense. However the vendors are confident that given the huge benefits that UC brings to the enterprise segment in terms of cost savings and better productivity, there is a compelling reason for more and more corporates to adopt it.
Therefore there are other players like IBM and Nortel who have also jumped into the fight for UC deals. According to industry estimate, UC deals worth $400 million could be up for grabs in India over the next 2 years. Clearly, the gloves are off. The battle is so fierce that even independent analysts, with whom e-world spoke to, refused to stick their neck out with their prediction on who will win. The first round though seems to have gone to Avaya, which according to IDC has a 30 per cent share and is the market leader in the unified communications space in India. But the war has just begun with many more rounds to go.
Depending on who you talk to, unified communications is described as telephone and video collaboration, or as a converged network for voice and data, or used as an all-encompassing term to describe all forms of call and multimedia/cross-media message-management functions. To put it simply, a unified communications system includes elements of presence, instant messaging, IP telephony, audio conferencing, web conferencing or data collaboration, unified messaging (a common message store for voicemail, email, and faxes),mobility, and/or video conferencing -- all accessible through a single client interface or within an embedded application interface.
When done right, unified communications can reduce downtime that’s implicit in any interaction. Consider this: according to a study, more than 70 percent of business calls are placed on hold for an average of 45 to 60 seconds each in a traditional legacy network. The average executive spends 17 minutes each day on hold, and some 80 percent of phone calls end up in voice mail. UC curbs the wastage of time by letting users reach the right person at the right time through their preferred mode of contact. This goes way beyond slashing hold times or staying clear of voice mail. It means organising information faster and getting that information to the right person in a usable format when the recipient needs it most.
“The prime deliverables of UC are cost reduction/ optimization and productivity improvement. Both of these are as well the prime objectives of each of the business leaders in India. This convergence of deliverables and objectives is driving the interest in UC and its uptake,” says Mr. Vivek Porwal, BU Head – Unified Communications, Avaya GlobalConnect.
The unified communications global market is estimated to touch nearly $48 billion by 2012. In India, the UC market is still nascent with total size of around $600 million. But this is quickly growing exponentially even as small and medium enterprise segment is beginning to understand the benefits of deploying UC solutions. Growth rate of UC in India is among the highest globally. According to a forecast from Frost & Sullivan on UC in India, the total market size of UC is likely to grow to more than $1B by 2010. Explaining the uptake of UC, Mr K.B. Sanish, Research Analyst, Gartner India says, “ According to our user analysis in North America and Europe in the CME segment some the major reasons for implementing unified communications is as follows: Of the organizations that have implemented UC, the top two reasons cited for deploying it is related to business process improvements. These included improving the speed of business across the organization (cited by 44% of respondents) and offering better communications for distributed sites and remote or mobile workers (cited by 39% of respondents).”
According to Gartner, hard factors like a need to replace equipment and lower total cost of ownership each also played a part in the decisions of 33% to 36% of CMEs that made unified communications investments.
While everyone agrees on the potential and benefits of UC in India, vendors are working on different strategies to garner a larger share of this market. As expected, Microsoft’s approach is focused on desktops and email based applications. It is integrating several collaborative applications to enable UC functions on the desktop. Microsoft is playing to its strengths here because it’s the market leader in desktop software and has a long history in many aspects of UC such as e-mail, office productivity tools and instant messaging. “Microsoft has long seen that the path to UC was in powerful, well-integrated software. Microsoft UC solutions enable customers to preserve their investments in their PBX and avoid upgrading their network infrastructure while quickly realizing the productivity and cost-reduction benefits of unified communications. Designing unified communications functionality into the solution rather than acquiring point products helps provide customers with an enhanced end-user experience and helps make system management easier. Because Microsoft takes a software-platform approach rather than relying on hardware, customers receive investment protection,” says Mr Sanjay Manchanda, Director, Microsoft Business Division, Microsoft India
On the other hand Cisco and Avaya’s strategy is to start with an intelligent IP network and build the UC capabilities into the network. Says Minhaj Zia, National Sales Manager, Unified Communications, Cisco India & SAARC. “Cisco's core business is enabling an IP based network platform. Since it is the leader in this market and IP enables the ability to converge data, voice, video and mobility, we are well positioned to drive the UC platform in the market over the next few years.”
Both sides of the camp feel that their approach to UC is better than the other. Taking a shot at Microsoft’s strategy, Avaya’s Porwal says, “E-mail and desktop UC accounts for only 10-15 per cent of the UC revenues. Major revenues for UC are from Voice and Collaboration. Voice (including IP telephony) contributed the maximum proportion of approx. 73 per cent of this market followed by conferencing (video, audio and web) and messaging and calendaring (which includes e-Mail, Internet Messaging, Unified Messaging and mobile business messaging,” says Avaya’s Porwal
But Microsoft reckons that this is far from the truth. “The most used application in enterprises today is e-mail. According to an IDC report on unified communications, stand alone e-mail is still considered biggest productivity tool and ranks topmost (96% ranked it among top 3 applications having impacted productivity the most). Microsoft is focused on extending the same familiar Outlook experience to other applications. Microsoft has always held that e-mail is a critical component of unified communications and now competitors are changing their approach to fill out clear gaps in their solutions that Microsoft is already offering. In fact, Cisco’s acquisition of Post Path, a Linux-based messaging solution provider (Exchange competitor) is a testament to the fact Unified Communications is not just about telephony,” counters Manchanda.
Traditional IP hardware vendors such as Cisco think that voice based applications are clearly driving the UC market. “Microsoft is talking about email and desktops because it does not have a good voice solution in its UC portfolio,” says Zia.
Admitting that it is lagging behind when it comes to the telephony aspect of UC, the software major, which has clients including Marico, Moser Baer, NIIT, BILT and Laxmi Vilas Bank, says it is working on to plug the gap. “We are taking proactive steps in building our Voice Credibility by showcasing our Voice Quality and its integration with our Email, IM and Conferencing environments. We are doing this through an extensive Pilot program and Partner Enablement. In just in a year of entering voice, we have featured in the Gartner Magic Quadrant for Telephony (2008) in the Visionary quadrant. The telephony space has been contested by our competitors for many years now and for us to come from software background and positioned in the visionary quadrant is creditable,” says Manchanda.
Cisco, which was among the first to move into the UC space and sold millions of IP phones before Microsoft entered this segment, claim that Microsoft solutions are not open sourced. “Microsoft mostly insists on using their software and applications, especially on the desk top, whereas Cisco has always believed in the interoperating with existing systems and applications. This has cost implications for the users,” says Zia
Responds Manchanda, “On the contrary, Microsoft Unified Communications solution is compatible and interoperable with other communication infrastructure used by organisations today. In fact we offer choice in end point devices with partners like Polycom and other SIP phone providers which are more cost effective than other competitors like Cisco and Avaya who provide their own hardware (server, gateway and phones) to run their applications. Customers are tied into these investments and very often the cost of upgrading this hardware turns out to be more expensive than a new purchase.”
But even as they fight it out, there are some common challenges for the vendors. For one UC is still primarily being deployed by verticals which have been traditionally strong in using IT in enhancing their productivity i.e. banking and financial sector and ITeS. Other sectors are still weighing their options. Second, UC is highly segmented with not many corporates deploying the entire gamut of services under the unified communications portfolio. At present, companies are deploying just some parts of the solution which could be just IP telephony or just an email based application with some video capabilities. Analysts predict that it will take another 2 years or more for Indian corporates to start using UC in its true sense. However the vendors are confident that given the huge benefits that UC brings to the enterprise segment in terms of cost savings and better productivity, there is a compelling reason for more and more corporates to adopt it.
Therefore there are other players like IBM and Nortel who have also jumped into the fight for UC deals. According to industry estimate, UC deals worth $400 million could be up for grabs in India over the next 2 years. Clearly, the gloves are off. The battle is so fierce that even independent analysts, with whom e-world spoke to, refused to stick their neck out with their prediction on who will win. The first round though seems to have gone to Avaya, which according to IDC has a 30 per cent share and is the market leader in the unified communications space in India. But the war has just begun with many more rounds to go.
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