Investment Decisions in Communications and Collaboration Products and Services

Additional Information

Report Excerpt

The awareness of all communication and collaboration tools surveyed is generally high. Moreover, the fact that utilization rates lag behind awareness rates indicates potential for further market growth.

Unified messaging, instant messaging, and mobile extensions of corporate communications applications are used most extensively at all levels of organizations. Audio, Web, and video conferencing are primarily used by senior management. Thus, if manufacturers/providers of these products/services wish to expand further into all levels of organizations, pitches must focus on the cost reductions that these conferencing services provide by replacing more expensive technology/products or, in some cases, travel costs. Furthermore, mobile/cellular phones make up a primary communication endpoint for more than half of North American companies. Other widely-used endpoints include headsets, IP phones and consumer softphones, such as Skype or Google. The proliferation of communications endpoints is likely to continue in the future with most users using more than one device/interface to communicate.

Microsoft, Google, Skype, and AT&T have the greatest mindshare as communications and collaboration tool providers. Over xx percent of respondents reported that these companies were their primary communication tool providers. Microsoft is ranked the top company for delivering unified communications and collaboration (UCC) capabilities. As customer perceptions are frequently impacted by providers’ overall portfolio and market positioning, established participants with diversified portfolios and those with strong consumer brands are likely to enjoy a competitive advantage in the enterprise UCC space.

At least one-third of the companies have implemented or are implementing a unified communications architecture, a virtualized communications infrastructure, or a communication-enabled business process (CEBP) solution. On average, businesses report using roughly four UCC tools. Moreover, if the stated intentions materialize, market penetration will nearly double within the next few years. However, almost one-fifth of the companies–usually small–do not plan to deploy such solutions within the next three years.

Frost & Sullivan expects businesses to deploy a growing number of UCC tools and to seek to integrate them for greater cost efficiencies and productivity benefits.

All surveyed tools are rated as similarly important in enabling organizations to operate more efficiently. Furthermore, all tools meet or exceed the expectations of most CXOs: in all cases, at least 86 percent of CXOs indicate that their expectations are met or exceeded.

Hosted and managed services are used equally often. Specifically, xx percent use hosted or managed services only, while 15 percent use both types of service. The top drivers promoting the use of hosted services are the limited expertise in new products and technologies and the elimination of costs and hassles associated with integrating multi-vendor products and solutions.

The top driver promoting the use of managed services is the fact that IT/telecom costs are more predictable. Thus, companies with limited IT and telecom knowledge and unstable/unpredictable revenue streams may benefit the most from hosted and managed services. As communications architectures become increasingly complex, businesses will seek to deploy hosted and managed services for access to greater expertise and superior service-level guarantees. Hybrid architectures and a mix of hosted and managed services will become increasingly prevalent.

Rates of unified communications and collaboration tool use are expected to remain stable or increase. The most notable increases concern video and Web conferencing as well as instant and unified messaging. The main reasons cited for non-implementation of many UCC tools are ‘not useful’ and ‘not cost effective’.

Budgets for communications and collaboration tools have remained the same or increased over the past xx months. At the moment, two-thirds of the companies allocate up to a quarter of their budgets to IT, to communications and collaboration technologies, and to new technologies in general; around xx percent plan to increase their budgets in the future. The top driver for the budget increase is good budget forecast. Other top drivers include the need to support remote collaboration, technology advances, and cost reduction.