Magic Quadrant for Corporate Telephony
Telephony vendors struggle to grow market share and maintain profitability in a mature market. IT leaders must satisfy new requirements for voice and unified communications while staying within budget. Our criteria can help in the selection of the best vendor to meet short- and long-term objectives.
This Magic Quadrant reviews technology vendors that design, manufacture and distribute a combination of hardware and/or software solutions for corporate telephony. These architectures focus on either centralized or distributed premises-based platforms that are dedicated for use by a single company, whether provisioned as stand-alone or as part of a unified communications (UC) suite. Furthermore, while the corporate telephony market is evolving from a model focused on producing innovations in proprietary hardware to one that uses standards-based hardware and software, vendors' strategies continue to focus on protecting their market share by maintaining the differentiation of their respective product portfolios to lock out competitors. This reality underscores the need for aligning a voice platform with an overall UC strategy. Decision criteria for corporate telephony should focus on scalable solutions that support Session Internet Protocol (SIP), desired levels of resiliency, desktop and mobile functionality, and the ability to integrate with enterprise IT applications while delivering the performance and voice quality demanded by users.
Source: Gartner (September 2012)
Aastra's MX-One is the company's global corporate telephony product. It can be configured as a centralized high-capacity server, a distributed single system over a large geographical area or a combination of both. MX-One supports a VMware virtualized environment with applications as virtual machines residing on a single host. The platform scales up to 15,000 SIP endpoints and 15 gateways per server. Aastra also serves the U.S. market with Clearspan, an enterprise version of the BroadSoft platform that many service providers use in their central offices. Additionally, Aastra's acquisition of Comdasys gives it direct control of its mobility strategy and demonstrates its intent to continue to add value to its product portfolio. Like other vendors, Aastra has also been challenged with the market downturn in Europe, but it has suffered less than many of its competitors due to prudent financial management. Aastra has a strong footprint in Europe and South America, and emerging businesses in North America and Asia. Its product portfolio for telephony is stronger than its developments in UC.
The MX-One is a proven telephony system with very good high-availability options, system management tools, a migration path to UC and support for mobile applications. Aastra customers using the MD110, the forerunner of the MX-One, as well as other private-sector and public-sector organizations, should consider Aastra based on the availability of certified MX-One sales and support capabilities.
- Aastra has a strong history in delivering competitive telephony products, with a reputation for providing investment protection and a total cost of ownership (TCO) that is one of the lowest for corporate telephony.
- Aastra's acquisition of Comdasys strengthens the critically important mobility component for the MX-One.
- Aastra is a well-run business with a strong focus on profitability and expense management. Most recently, the vendor's activities in this category resulted in an upgrade to Positive using Gartner's financial performance model.
- Aastra's investment in R&D (around 10% of sales) is much lower than many of its competitors, both as a percentage of sales and in actual dollars. This investment level limits the extent to which it can innovate, especially in the UC market. The lagging development of its UC portfolio may limit its appeal as a supplier of telephony.
- As a Canadian-based business with the majority of its business in Europe, Aastra's financial performance is doubly impacted by the challenging market conditions and the weakening of the euro to the Canadian dollar.
- Although Aastra has an established business in North America for the MX-One and Clearspan, resources for distribution and support are limited.
The Alcatel-Lucent OmniPCX Enterprise is the vendor's leading platform for corporate telephony. It supports analog, digital and Internet Protocol (IP) endpoints, and can scale to 15,000 IP users per server. The platform provides centralized intelligence, network management and user applications delivered across single or multiple site deployments. Premises-based and hosted versions are supported. Alcatel-Lucent markets the OmniPCX Enterprise platform as a stand-alone telephony system and as part of its OpenTouch UC suite. For businesses with up to 1,500 employees, the full OpenTouch UC suite is a single-server solution. Alcatel-Lucent also offers the OmniPCX Office for businesses with up to 200 users.
In 2011, Alcatel-Lucent announced it was exploring the sale of its Enterprise Business Group, which included its OmniPCX telephony, OpenTouch UC and Genesys contact center product portfolios, as well as its enterprise networking business. On 1 February 2012, Alcatel-Lucent confirmed the sale of Genesys to private-equity firm Permira and indicated that it will keep the remaining enterprise business. Customers and prospects should monitor Alcatel-Lucent for any signs of changes in the Enterprise Business Group's approach to innovation, product strategy and/or customer support. Alcatel-Lucent, as a whole, has expressed dissatisfaction with its overall 2Q12 financial results and has announced a program to reduce costs by €1.25 billion by the end of 2013, including a reduction in head count and a restructuring of or exiting from unprofitable markets. At the same time, the Enterprise Business Group posted an adjusted operating profit of 1.6% of revenue in 2Q12.
The OmniPCX product line is a proven telephony system with a UC road map and strong support for wireless and mobile applications. Organizations should consider the vendor based on the availability of Alcatel-Lucent certified sales and support capabilities in their respective regions. Likewise, current Alcatel-Lucent customers should carefully confirm availability of support before making continued investments with the vendor.
- With OpenTouch, Alcatel-Lucent demonstrates a strong product development strategy and direction to migrate OmniPCX customers to UC.
- A cloud version provides OmniPCX Enterprise users with the option to benefit from a subscription-based pricing model for sites where it would be hard to justify the capital cost for a telephony infrastructure.
- Alcatel-Lucent has an established presence and a significant partner network in place across its home region of Western Europe.
- The Alcatel-Lucent data networking portfolio enables the company to offer a strong end-to-end value proposition for voice and data solutions that could also yield incremental pricing discounts.
- The decision to sell the lucrative Genesys contact center business could create doubt over Alcatel-Lucent's commitment to the adjacent enterprise telephony market. The vendor must again earn the enterprise market's confidence.
- Although the OpenTouch architecture is the core direction for UC, the product is not yet a fully market-proven solution, with channel partners and support expertise in short supply.
- Although Alcatel-Lucent is making progress adding new customers and growing its business in North America, there are a limited number of OmniPCX certified dealers in that region.
During the past year, Avaya has continued to evolve and expand its solution portfolio. Through the acquisition of Radvision, Persony and Sipera Systems, it gained technologies for video and Web-conferencing capabilities, and a session border controller for security. In addition, Avaya has made progress on critical tasks following its 2009 acquisition of Nortel Enterprise Solutions (NES) — it has completed the normalization and stabilization of its products; and the management team is executing on its consolidated marketing strategy. However, Avaya has not yet set an offer date for a proposed initial public offering (IPO) of $1 billion of its common stock, which is intended to help debt repayment of about $1.4 billion due in 2014.
Avaya Aura is a highly scalable telephony platform with local and enterprisewide failover options that extend to SIP and time division multiplexing (TDM) trunks, or a combination of both. The Aura platform also supports a migration plan to UC, and real-time processing of SIP sessions for emerging multimedia business applications. Avaya has also focused on the scaling of IP Office Server Edition for midsize enterprises, the addition of the AvayaLive Connect cloud offering, and the advancement of its Avaya Connect and DevConnect channel partner options. Avaya has made a lot of progress simplifying software and hardware upgrades for Communication Server (CS) 1000 customers, which also enables continued use of NES telephones. Organizations can also draw on Avaya's full range of networking, contact center, security, video, UC and collaboration products. Avaya has complete product portfolios for telephony, contact center and UC, as well as the ability to meet the requirements of globally situated enterprises. In addition, IP Office is a good fit for small or midsize businesses (SMBs).
Consider Avaya Aura if you need to bring together heterogeneous environments; require a contact center as part of UC; need video, mobility and business application integration; or have significant investments in Avaya that you wish to migrate toward a next-generation UC solution.
- Avaya expertise deploying Aura Session Manager enables selective location-independent deployment of telephony and UC applications and services throughout the organization. Aura Session Manager supports the routing of sessions and sharing of applications between Avaya and non-Avaya IP-PBX systems.
- Avaya's Agile Communication Environment (ACE) platform enables the vendor to deliver SIP-based communications-enabled business processes (CEBPs), as well as solutions that interoperate with UC and business applications from disparate vendors. The ACE platform also reinforces Avaya Aura's ability to enable back-end processing of SIP sessions required by high-performance, real-time communications applications.
- Avaya's pricing is usually competitive relative to its peer group. Users of older Avaya Aura and CS 1000 releases will benefit from generous license upgrade credits.
- Avaya Aura System Manager provides a single management interface for administrators to manage the Avaya Aura core, Communication Manager, CS 1000 and related applications, including messaging, conferencing, contact center, data networking and branch gateways.
- Some Gartner clients report uneven availability of quality Avaya technical support personnel, which has resulted in longer-than-desirable response times. Similarly, it takes an undue amount of time for Avaya to generate maintenance contract pricing and render accurate bills to customers. Avaya is addressing this with a new automated quoting process and new lookup tools, which reduce quote time; a combined invoice for hardware and software that simplifies billing is now in place.
- Avaya has been slower than some of its competitors to introduce a virtualized and consolidated Aura option for organizations that prefer running a core telephony platform in a VMware environment. While Avaya plans for the first release to be available by the end of 2012, prospects should confirm that Avaya support personnel and channel partners have the required certifications.
- Avaya continues to receive a Caution rating, according to the Gartner financial rating methodology. Despite slow and steady improvements since the acquisition of the NES assets, Avaya reported a year-over-year revenue decline of about 9% in its FY12 second quarter ending 31 March and third quarter ending 30 June. Avaya reports that the decrease in revenue was, in part, driven by limited quality issues in its infrastructure solution product portfolio, which have now been addressed. Given its high debt level, Avaya's financial performance should be monitored.
Cisco Unified Communications Manager (Cisco Unified CM) is the core platform for the vendor's collaboration services, providing not only voice, but also integrated video, mobility, session management, security, presence and messaging, allowing enterprises to use what they have as they add services and move to UC. The platform is highly scalable and has an established worldwide presence. For more than the past three years, Cisco has consistently been No. 1 among corporate telephony vendors for total shipments of telephony user licenses. The vendor benefits from its leadership position in data networking, and is expanding its relationships with IT professionals by offering UC solutions that include data center virtualization and cloud-based deployment options. Cisco offers significant portions of its software on VMware, which can operate under Cisco Unified Computing System (UCS) servers and other qualified servers.
With its global distribution network and comprehensive product portfolios, Cisco is a strong contender for virtually any organization's voice communications infrastructure, especially those inclined toward using Cisco for end-to-end solutions that include network gear, voice, UC, video and collaboration requirements, as well as requirements for UC client support on Apple and Android products.
- Cisco's virtualized version of Cisco Unified CM runs in a VMware environment and can reduce the need for dedicated servers. The server options include Cisco UCS as well as HP and IBM servers that comply with Cisco's published requirements. Cisco's virtualized data center environment leverages many of the customer's data center infrastructure components, such as data center management tools, storage and facilities, as well as supporting georedundancy and high-availability requirements.
- Virtualized instances of Cisco unified messaging (UM) and contact center applications can also operate in a VMware environment.
- Cisco has many certified dealers, system integrators, service providers and network outsourcers able to satisfy global and regional requirements for organizations of almost any size.
- Cisco's bundled pricing model is value-based and may increase TCO. To optimize costs, prospective buyers should compare the pricing for Cisco's bundled and unbundled solutions and licenses in the context of their own UC road map to determine which licensing approach represents the best financial alternative.
- Many Gartner clients report that choosing Cisco as their sole-source provider for IP telephony, the data network, Web conferencing, video, etc., can lead to reduced negotiating leverage and higher costs (see "Applying the Vendor Influence Curve to Unified Communications" [Note: This document has been archived; some of its content may not reflect current conditions.]).
- Unlike Cisco's corporate telephony competitors, which are receptive to clients' use of virtually any brand of networking equipment, Cisco representatives and its dealers often discourage using a non-Cisco network infrastructure by suggesting that performance of Unified CM will not be optimal. However, Cisco telephony does run equally well on other vendors' networks (see "Debunking the Myth of the Single-Vendor Network" [Note: This document has been archived; some of its content may not reflect current conditions.]).
Digium continues to make progress in penetrating global enterprise telephony markets with its Asterisk telephony solution and its Switchvox telephony-oriented UC solutions, which are based entirely on open-source software. Digium's road map plans for Asterisk 12, Asterisk Scalable Communications Framework (SCF) and Switchvox are designed to support increasingly larger enterprises and greater UC functionality.
Switchvox is a prepackaged solution that is configured and managed through an intuitive user interface. The system is an all-in-one design that requires fewer internal resources to support it than Asterisk; the latter is a build-it-yourself system that will need dedicated resources, but the open-source software is free. Digium's Asterisk 10 and Switchvox 5.5 products are suitable for small businesses or small offices of large organizations that want a low-cost, SIP-based, distributed telephony architecture.
SMBs should consider Digium if they understand the benefits and modest risks of using open-source software for a telephony solution and a migration path to UC.
- Asterisk offers free open-source telephony software, in conjunction with a per-user-based subscription licensing model that provides ecosystem support.
- Asterisk provides customers with the capability to customize their IP telephony system to meet their needs, and to add UC capabilities at their own pace.
- Digium's business model and development road map for Asterisk have been embraced by SMBs that accept and manage the use of open source and its whole-of-life-cycle internal support requirements. The vendor's customers typically understand the support required for installation, configuration, operations, integration and life cycle planning, but accept it as a trade-off for perceived better control and TCO of their communications environment.
- Asterisk products are intended for deployment on commodity hardware, such as IBM, HP, Dell servers, Ethernet switches and SIP phones. Its virtualization uses Linux, VMware ESX, Xen, Debian or other open-source solutions; the platform also runs on Amazon's Elastic Compute Cloud.
- Large, multisite organizations might not find an open-source platform suitable for telephony requirements due to the internal ecosystem required for support. However, some are using Asterisk for large-scale, inexpensive voice mail deployments.
- While Digium has a very enthusiastic development community, users recognize the business risks of using Digium's open-source solutions, given that the privately held company is relatively small, compared with its corporate telephony competitors. However, customers have source code that is maintained by a large community of users that could continue the project with or without Digium.
Huawei has been added to this Magic Quadrant because it is in the process of launching a global enterprise networking business unit. Headquartered in China, Huawei offers a broad portfolio of communications products and services, and addresses the market through its new enterprise networking division. The telephony and UC application, branded eSpace, is based on the SoftCo family of hardware and software platforms. The solution offers telephony (IP-PBX) functionality, conferencing, PC client and UM, as well as contact center functionality and integration options with Microsoft, IBM and others. In 2012, Huawei added collaboration functions to the eSpace solution.
Consider Huawei for a telephony solution in regions where its carrier and large enterprise business resources are significant enough to provide capable support — primarily in China and some countries in the Asia/Pacific region, Middle East, Eastern Europe, Africa and South America.
- Huawei had $32.3 billion of revenue in 2011. Its new enterprise networking business group (which covers telephony and unified communications and collaboration [UCC] products and solutions) stated 2011 revenue of $3.8 billion. The global contract sales revenue of Huawei Enterprise Business Group increased strongly in 2011, compared with 2010, following heavy investment in the expansion of its global distribution plans and R&D directed at enterprise solutions.
- With solutions for large enterprise and SMB markets across the globe, the vendor has a large base of clients, and can leverage its strengths in the network and server business.
- Huawei's enterprise communications architecture can scale to very large enterprise deployments. Furthermore, the vendor is developing large-scale telephony, UC multimedia converged solutions and virtual contact center clouds for communications service providers (CSPs) to sell as multitenant solutions to their traditional enterprise customers.
- Huawei faces political, trade and intellectual property trust issues in some regions. To succeed in the corporate telephony market, as well as other technology-focused markets, the vendor needs to overcome these barriers by increasing the confidence of decision makers.
- Huawei's enterprise business has a strong base in China, which is one of the fastest-growing markets in the world. It also has an increasing presence in other emerging economies, such as Brazil, Russia, India and China, as well as the Middle East and Africa. However, Huawei is finding it difficult to enter the North American and Western European enterprise telephony markets, not only due to global economic uncertainty, but also due to the difficulty in finding channel partners willing to invest in a telephony market that is barely growing.
- Enterprises need to scrutinize the ability of Huawei to build a support model that includes not only technically qualified personnel and network operations centers, but also a logistics capability for managing and delivering spare parts for critical and noncritical components. Similarly, the vendor needs to demonstrate that it has an ecosystem that supports hardware and software updates and upgrades.
Microsoft Lync 2010 supports enterprise telephony as part of a full UC suite. While Microsoft is not listed as one of Gartner's top vendors in telephony, it is a Leader in the UC market (see "Magic Quadrant for Unified Communications"). The inclusion of IP phones from a variety of third-party providers enables Lync to address a broad range of telephony users. The availability of worldwide emergency dialing that meets regional regulatory requirements and branch survivability solutions enables organizations to better plan their networks for the deployment of Lync. While feedback from early adopters has been positive, many users continue to indicate they are not yet ready to replace their PBX systems. Many are limiting use of Lync for telephony for non-mission-critical applications until they are satisfied Lync's real-time telephony functionality, performance and resiliency are proven. In addition, some are using Lync for nontelephony functions, while continuing to rely on an external voice platform.
Lync is an appropriate choice for organizations committed to adding Microsoft UC to knowledge workers' desktops, complete with telephony. Given that we believe Microsoft is positioned to deliver enhanced capabilities for Lync Server and Lync Online during 2013, a phased migration would provide the lowest risk and the opportunity for organizations to acquire new technical competencies, including desktop, networking and telecom support. However, organizations considering Microsoft for UC should complete a full analysis of user requirements before displacing the IP-PBX altogether.
- Microsoft has strong brand awareness for UC with midsize and large organizations. It has used its volume license agreement very effectively to seed the opportunities to deploy Lync for instant messaging, voice, video and Web conferencing.
- Microsoft is a financially viable company. It also has huge mind share and the marketing and sales resources to influence telephony buyers. Furthermore, the vendor has made a significant R&D funding commitment to continuously develop its UC portfolio.
- Microsoft's collaboration-centric approach and deep integration with the Office portfolios give it credibility as a solution to top-level business process issues. Consequently, it has strong sponsorship at the senior level in many organizations.
- Microsoft's vision for an integrated and UC user interface has been transformational; it has created new market opportunities and has enabled planners to develop their overall IT strategies to better leverage voice communications while improving business processes.
- Organizations that do not have a volume licensing agreement with Microsoft will pay a higher incremental cost for the right to use Microsoft Lync than organizations that do have a volume licensing agreement.
- Although the development of Lync Mobile is promising, with the release of mobile clients, Microsoft is still behind its UC competitors in terms of product development for mobile devices, especially voice over IP (VoIP) and videoconferencing from smartphones and tablets.
- Gartner clients report that Microsoft Lync functions best in environments with Windows-based PCs and Exchange Server for Outlook email. Organizations using disparate operating systems and email applications should ask Microsoft about its plans to support non-Microsoft environments in the future.
- Microsoft Lync telephony feature availability is dependent on which third party is supplying the desk phones. Clients report limitations associated with features such as music on hold, multiple appearances of the same directory number on the same phone, and local intercom calling between managers and their staff, which typically includes administrators and executive assistants. Organizations planning a Lync implementation should investigate which IP phone providers can best support their respective requirements to avoid losing features, especially those frequently used by managers and executives.
Although an established corporate telephony vendor, Mitel's recent decision to refocus investments in the midsize enterprise market is yielding financial performance improvements. To support its goals for midmarket telephony, and to eliminate being in competition with its dealers, Mitel has been shifting to indirect sales via channel partners and maintaining its long-term presence in the global telephony market. Mitel was an early adopter of VMware and virtualized communications solutions. It has extended its collaboration in virtualization with VMware and delivery of IP telephony and UC as a virtual appliance to simplify installations. The Mitel Communications Director (MCD) enterprise licensing package, which is targeted at customers that require resiliency and high-availability features with failover, includes redundancy. In keeping with its established product architecture for deploying advanced applications, users access Mitel UC functionality through the Mitel Applications Suite (MAS), which supports a UC client for desktops and mobile devices. MCD and its associated components can be deployed either premises-based, hosted, cloud or in combination, as well as in a VMware virtualized environment.
Consider Mitel if you are looking for the ability to run industry standard servers, such as HP, Dell and IBM, or, in a virtualized environment, with the option to interoperate with Microsoft Lync or to use Mitel's UC client.
- Mitel's support for a virtualized environment can streamline communications infrastructure costs, simplify the implementation and reduce ongoing operating costs.
- The vendor's increased focus on implementations with up to 2,500 users has been improving its ability to be more responsive to market requirements and is providing cost-effective bundled pricing that is significantly lower than its a la carte model.
- Mitel's financial performance has improved during the past two years. According to Gartner's financial model, Mitel has a Positive financial rating, which improves the vendor's overall viability in the market.
- Mitel has had success with its managed services offering in the U.S. market; it is offered through direct and indirect channels, and achieves high customer satisfaction ratings. It includes Mitel's TotalSolutions managed service offering with NetSolutions network services. The turnkey program provides fixed costs, full service and warranty, and includes software upgrades.
- Although Mitel has developed a strong product, it is taking time to develop brand awareness against stronger competition in the large business segment. As a result, it continues to struggle to establish needed market momentum.
- Although improving, many Mitel dealers have not yet developed experience installing and supporting Mitel solutions in a virtualized environment. Evaluate the skills and experience of the channel partner, in addition to the potential costs and benefits of the technology.
- Prospects should confirm that Mitel channel partner references match their UC and geographical requirements, and verify that support personnel have been trained and certified on current product releases.
NEC is a strong global player with two main alternatives for the corporate telephony market. Its Univerge SV8500 IP communications server supports 4,000 endpoints in a single server and up to 192,000 endpoints in a single system with multiple servers. The platform is targeted at NEC users who prefer a migration to IP and UC, while leveraging their investments in the NEC Univerge product family. Univerge 3C is a softswitch intended mainly for new telephony and UC installations, but can also bring its broad range of capabilities to Univerge SV8500 users. One Univerge 3C system with multiple servers supports up to 30,000 endpoints.
NEC users and prospects should consider NEC for solutions requiring scalability, high availability and multiple levels of redundancy, with a good migration path to UC.
- NEC is a large, diversified, global supplier of corporate telephony with financial strength, extensive internal resources, and channel partners in North America, EMEA, Central and Latin America, and the Asia/Pacific region, including large distributors, CSPs and dealers.
- The vendor has sustained its strengths in selected vertical markets, such as hospitality, healthcare, government and education. It provides appropriate customized and scalable telephony solutions based on Univerge SV Series or Univerge 3C software.
- NEC uses multiple servers and virtualization for Univerge 3C software solutions deployed in various network locations for dynamic load balancing. A range of media gateways provides remote survivability. NEC's SIP implementations are certified with major CSPs, which facilitate normalizing and terminating SIP transport provisioned by dissimilar CSPs.
- Although most of NEC's Univerge 3C deployments and experiences have been in North America and Europe, the vendor is in the process of expanding its market penetration globally.
- Enterprise telephony buyers should contact NEC to ensure that they choose NEC's on-premises, hosted, distributed, centralized or cloud telephony options appropriately, and that their channel supplier can support that solution and its emerging alternatives effectively.
- NEC's extensive product lines are targeted at SMBs as well as large enterprises, so not all dealers have experience designing, installing and supporting large deployments. Prospective buyers should contact NEC to confirm that there are appropriate NEC channel partners.
Although ShoreTel's technology has been particularly well-suited for SMBs with distributed communications requirements, the vendor continues to make progress among enterprises with more than 1,000 users who are centralized or have many branch offices and retail sites. ShoreTel scales from 10 to 20,000 users on a single platform. The acquisition of M5 Networks in March 2012 gives ShoreTel an opportunity to offer a portfolio of cloud-based voice services and other applications, while growing its U.S. presence. The ShoreTel architecture is particularly well-known for its simplicity of installation and administration. Survivability is provided via ShoreTel's N+1 switch failover capability; a switch can fail over to another switch anywhere in the network. ShoreTel also supports a full set of mobile options. ShoreTel 13 adds video connectivity, with room-based systems supported by video providers such as Polycom and the LifeSize division of Logitech.
Consider ShoreTel if your company is distributed and is looking for telephony and mobility capabilities that are easy to install, have very intuitive management and user interfaces, and have UC functions that can integrate with Microsoft Lync or utilize ShoreTel's own UC client.
- ShoreTel's focus on customer satisfaction throughout the implementation cycle and beyond translates to consistently high satisfaction ratings from its channel partners and customers.
- Enterprises can expand ShoreTel system capacity for software, trunks and users by adding switch modules that can be administered from a centralized interface, regardless of where the platforms are physically located.
- In a market that has been essentially flat, ShoreTel's year-over-year growth has been steady, with revenue growing 29% from 2010 to 2011. The public company continues to be cash-flow positive, and the number of ShoreTel employees grew by about 50% during the same period, excluding those who joined as a result of the M5 Networks acquisition. User licenses were also up sharply, as were the number of new customers.
- ShoreTel 13 includes support for VMware; however, the solution currently requires use of ShoreTel appliances at remote sites to provide native failover capabilities.
- ShoreTel products are primarily sold through dealers, and some may not have experience with users' requirements that include VMware expertise.
- The vendor sells mainly through partners in North America. However, it is achieving revenue and channel growth in global regions, such as Canada, Mexico, Australia and European countries. Gartner recommends that channel coverage should be evaluated for deployments extending to sites outside of North America.
Siemens Enterprise Communications is 51% owned by private-equity firm the Gores Group and 49% by Siemens after a 2008 joint venture. It sells enterprise telephony and UC solutions, as well as related managed and professional services. The vendor's flagship telephony platform is OpenScape Voice platform, which has been achieving sales growth in European and South American countries, and continues to gain momentum in North America. The platform is designed as a software application that is optimized for a data center environment, and is deployed on any commercially available server. The architecture is inherently multitenant, enabling OpenScape Voice to support private, hybrid or public cloud deployments, and supports session management. The OpenScape UC Suite can be virtualized on VMware or any open virtualization, format-compliant hypervisor. A single OpenScape Voice node can be scaled seamlessly up to 100,000 users and 500,000 voice and UC users in a single system configuration.
OpenScape Voice solutions will appeal to midsize to very large organizations, as well as to Siemens Enterprise Communications customers that want to upgrade older HiPath 4000 and Hicom 300 installations. Very large organizations should also consider the OpenScape Voice platform for its ability to be deployed globally as a single, highly resilient system that customers can centrally manage from a choice of geographically different locations. The OpenScape UC Suite offers investment protection as OpenScape Voice customers transition to UC.
- For new systems, Siemens Enterprise Communications offers competitive pricing for the purchase of "right to use" and subscription-based licenses.
- The vendor can support international companies that choose to overlay and/or standardize on its technologies for telephony and UC.
- The multitenant capabilities of OpenScape Voice will be useful to organizations looking to adopt software as service (SaaS) models for telephony, where offered by service providers.
- Siemens is offering to support HiPath 4000 for the foreseeable future, and provides financial incentives that enable organizations to plan phased migrations to OpenScape, especially during times of uncertainty regarding the economic climate.
- 65% of the vendor's business is with European organizations where the economy continues to be very challenging. However, because Siemens Enterprise Communications is privately held, it's hard to assess its financial viability. An executive briefing from senior management might be requested to provide additional visibility into the vendor's financial results.
- Although sales have been improving in North America, the vendor needs to further expand its distribution network and technical support, not only to win new business, but also to curtail erosion of its installed base. Furthermore, growth in North America may not compensate if there is any shortfall in other regions.
- While the number of migration proposals for HiPath installed-base customers is growing, and support contract renewals are also increasing for current HiPath customers, Siemens Enterprise Communications needs to do a much better job of winning new business for its new OpenScape solutions.
The IP-capable Toshiba Strata CIX Series telephony platform supports up to 1,000 users. The newer Toshiba IPedge system also has a capacity of up to 1,000 users. IPedge is a pure IP solution built on a Linux-based platform featuring telephony, voice mail, UM, IM/presence and SIP trunking capabilities in single-server architecture. Although the Strata CIX and IPedge solutions are positioned to customers in the same size segments, the CIX solution supports digital and IP devices, while IPedge is a pure IP-based solution. The solutions can be networked together as necessary. Toshiba also offers a VIPedge cloud-based VoIP service, which is being sold by the same dealers in Toshiba's distribution network.
The vendor's products will appeal to midsize and large organizations with centralized requirements or the need to support remote sites in vertical markets (such as retail, automotive, banking, financial services and government) with a plan to move gradually to UC.
- All Toshiba Strata CIX Series systems use the same applications, endpoints, cabinets and interfaces, with the capability to support a wide range of wired and wireless devices, as well as softphones.
- The IPedge provides optional survivability for IP telephones, softphones, UC clients and messaging applications, with the ability to reregister to a secondary (backup) system if the primary system fails. Both outgoing and incoming calls automatically follow the IP telephones to their new location on the secondary system through an AudioCodes gateway. The Strata CIX provides the same survivability for IP telephones and softphones.
- Toshiba offers a unique, centrally managed national accounts program. This sales approach will appeal to organizations with locations that cross regional boundaries. The plan offers uniform pricing of products and services for applications that require deployment across multiple sites.
- In the U.S., Canada, the U.K., parts of the Asia/Pacific region and Japan, Toshiba continues to provide reliable system performance, cost-effective price points, and migration capabilities to IP technology and UC. The vendor is known for producing reliable and affordable voice-oriented offerings.
- Although parent company Toshiba is a large diversified manufacturer and marketer of electronics and electrical products, the communications business does not have any presence in the large enterprise market in EMEA, nor does it have a global strategy that focuses on IP telephony requirements outside the U.S., Canada, the U.K., parts of the Asia/Pacific region and Japan.
- The maximum capacity for the Strata CIX Series and IPedge is 1,000 users on a single system. For additional capacity and distributed configurations, enterprises can network multiple systems. Toshiba can supply an optional AudioCodes gateway for the automatic rerouting of incoming calls to an alternative Strata CIX or IPedge system in the event of a failure.
- Organizations could find it challenging to integrate platforms such as Microsoft OCS and Lync with Toshiba's Strata CIX and IPedge, because the solutions require the integration of various servers to achieve full UC functionality.
- The IPedge solution has received limited traction to date. Most Toshiba dealers do not have experience with IPedge implementations or support. Before moving forward with an IPedge contract, prospects should gain assurance that their specific partner has the expertise to install IPedge or that the dealer has effective relationships in place with Toshiba to address potential implementation issues.
We review and adjust our inclusion criteria for Magic Quadrants and MarketScopes as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant or MarketScope may change over time. A vendor appearing in a Magic Quadrant or MarketScope one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. This may be a reflection of a change in the market and, therefore, changed evaluation criteria, or a change of focus by a vendor.
Huawei was added to the Magic Quadrant this year.
There were no vendors dropped from the Magic Quadrant this year.
To be included in the corporate telephony Magic Quadrant, solution providers must meet the following minimum criteria:
- Demonstrate an IP-based corporate telephony application that provides enterprisewide call routing and management for enterprises with more than 800 voice users, including switchboard operations across multiple wired and wireless networks.
- Have a product offering that includes the management of legacy telephony environments, including media gateways; the connection of IP with circuit-switched-based networks; and functions such as call admission control, survivability, codec management, echo cancellation, and access to emergency services and agencies. The systems must also integrate with UC functionality.
- Have a significant market presence in telephony that can be demonstrated by significant market share or differentiating innovation. Vendors must have a minimum revenue from enterprise communications of $150 million.
- Offer systems in multiple global market regions, including North America, Europe, Central America and Latin America, and Asia.
- Provide evidence of sales, revenue and operational investments that support market objectives — this research focuses on the large and very large enterprise market (vendors focused primarily on SMBs are not included).
- Provide multiple references for enterprise on-premises portfolios/products.
This research provides guidance for planners who are responsible for updating or replacing a telephony system. Gartner analysts evaluate corporate telephony solution vendors based on the breadth, quality and overall maturity of their applications, processes, tools and procedures that enhance individual, group and enterprise communications. Ultimately, these vendors are judged on their ability and success in capitalizing on their vision:
- Product/Service: Core products providing telephony capabilities, offered by vendors that compete in and serve the enterprise market segment. This category includes the vendors' current product capabilities, as defined in the market definition, as well as the respective road maps vendors offer that enable organizations to migrate to UC.
- Overall Viability (Business Unit, Financial, Strategy and Organization): Includes an assessment of the organization's overall financial health, as well as the financial and practical success of the business unit, especially under current market conditions. Also included is the potential of the business unit to continue to invest in the product, offer the product and advance the state of the art in the company's broader portfolio of products.
- Sales Execution/Pricing: The vendor and channel capabilities in all presales activities and the operational structure that supports them. This category includes deal management, value selling, pricing and negotiation, presales support, and the overall effectiveness of the sales channel, direct and indirect.
- Market Responsiveness and Track Record: The ability to respond to current market conditions and the disruptive influences of UC. This evaluation assesses how a vendor might change direction or modify its portfolio to achieve competitive success, as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the vendors' history of market responsiveness, as tracked in our market share and sizing research.
- Marketing Execution: The clarity, quality, creativity and efficacy of marketing programs designed to deliver the organization's message to influence all markets, promote the brand and business, increase product awareness, and establish a positive identification with the product, the vendor and the channel in the minds of buyers. This mind share can be driven by a combination of publicity, promotions, thought leadership, word of mouth and sales activities, as well as Gartner's inquiry process.
- Customer Experience: Sales and support relationships, products and programs that enable customers to have a positive experience and achieve their respective goals for a corporate telephony implementation. This assessment includes the availability of technical and account support, and the number of channels through which this is available. Also included are customer support programs (and the quality thereof), and the availability of user groups and SLAs. Gartner's feedback from clients through the inquiry process is included in our analysis.
- Operations: The ability of the organization to meet its goals and commitments, especially in the current climate. Factors include the quality of the organizational structure, especially global operations, skills, experiences, programs, systems and other vehicles that enable vendors to operate effectively and efficiently on an ongoing basis.
Source: Gartner (September 2012)
Gartner analysts evaluate telephony solution providers based on their ability to convincingly articulate logical statements about current and future market directions, innovations, customer needs, and competitive forces, and how well these map to Gartner's overall understanding of the marketplace. Ultimately, these providers are rated on their understanding of how market forces can be exploited to create opportunities for providers and their clients:
- Market Understanding: We evaluated vendors for their understanding of how customer needs are changing (both for users and the IT group responsible for managing telephony). It was especially important to see how vendors proposed to complement, or compete with, UC collaboration solutions.
- Marketing Strategy: A clear, differentiated set of messages for telephony and enhanced communication consistently delivered by executives and senior employees, and promoted through websites, advertising, customer programs and positioning statements.
- Sales Strategy: The strategy for selling telephony products that uses an appropriate and profitable balance of direct and indirect sales, marketing, service, and communications affiliates that extend the scope and depth of market reach to selective markets.
- Product Strategy: The vendor's approach to telephony product development and delivery, with road maps for consolidation where necessary. Important factors include the migration to software, support for SIP and the ability to build scalable solutions that are consistent with the needs of target markets.
- Business Model: The logic of the vendor's underlying business proposition for the direction of the communications market.
- Vertical/Industry Strategy: Some vendors articulate a specialization for vertical markets by leveraging intellectual capital, technology, or an alignment with a sister or parent company. Also evaluated is the telephony solution provider's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, especially in the current climate, where the propensity to spend varies among segments.
- Innovation: The IP telephony market has reached maturity. Vendors need to demonstrate the necessary innovation to capture market share and grow in associated markets, with a combination of technology and services to grow revenue beyond the market average.
- Geographic Strategy: The telephony market has historically been fragmented, with most players receiving income from their traditional home market. The requirements of many of Gartner's end-user clients are global. A vendor should demonstrate how it directs resources, skills and product offerings to meet the needs of international clients, directly or through channels, to market to the needs of clients.
Source: Gartner (September 2012)
Leaders are high-viability vendors with broad portfolios, significant market shares, broad geographic coverage, a clear vision of how telephony needs will evolve and a proven track record of delivering telephony solutions. They are well-positioned with their current product portfolio and likely to continue delivering leading products. Leaders do not necessarily offer a best-of-breed solution for every customer requirement. However, overall, their products are strong and often have some exceptional capabilities. Additionally, these vendors provide solutions that present relatively low risk.
Challengers are vendors with strong market capabilities and good solutions for specific markets. However, overall, their products lack the breadth and depth of those in the Leaders quadrant. Challengers do not always communicate a clear vision of how the telephony market is evolving, and they are often less innovative or advanced than Leaders. Vendors in this quadrant often have excellent telephony functionality, but lack brand awareness in the market.
Visionaries demonstrate a clear understanding of the telephony market and provide key innovations that point to the market's future. However, these vendors may be relatively new to the telephony market, with very good potential to grow while in the process of expanding their regional and global sales and support capabilities.
The vendors in this quadrant offer telephony solutions that focus on a segment or segments of the market, or a subset of telephony functionality. Customers aligned with the focus of a niche solution provider may find its offerings to be a good match for their limited needs. Niche Players often offer strong products for particular geographical or vertical market subsets, but may have some weaknesses in one or more important areas.
Companies are increasingly focusing their business strategies and acquisition decisions around UCC technology; it is supplanting the historical domain of corporate telephony (see "Key Issues for Voice Applications, 2011" and "Key Issues for Unified Communications, 2011"). This shift presents IT planners with new user needs and technological integration challenges, especially as telephony applications become more mobile, and as knowledge workers increase their reliance on conferencing, video, IM and collaboration tools to fulfill group tasks.
Organizations will continue to invest in IP telephony platforms after having mapped out telephony's role in a clear UC strategy. As users' communication habits evolve, infrastructure and operations leaders should consider new telephony and UC vendor relationships, as well as the use of managed services, outsourcing, hosted and cloud-based solutions. Employment of IP-PBXs will vary according to current investments, maturity of an organization's network infrastructure and incumbent vendor strategy.
The telephony market recovery that started toward the end of 2010 has slowed in 2012. Following a 17% decline from 2008 to 2009 that mirrored the global economic downturn, shipments rebounded by 10% in 2010. However, Gartner projects that the compound annual growth rate (CAGR) for telephony shipments will be 2.2% from 2011 through 2016.
Some of the key trends in corporate telephony are:
- Microsoft continues to enhance the corporate telephony component of Lync with new features and improved resiliency. However, although adoption has been increasing, organizations are still opting to keep corporate telephony on an established, more proven core platform. In addition, Cisco Unified Communication Manager, already a strong telephony platform, now offers a fully integrated UC suite with scalable support for IM/presence, video and telephony conferencing.
- As uncertain economic conditions persist globally, European-based vendors (such as Aastra, Alcatel-Lucent, ShoreTel and Siemens Enterprise Communications) have been seizing opportunities to win business with competitively priced platforms that offer improved system management capabilities and realistic road maps for gradually migrating to UC.
- An increasing number of companies are using session management capabilities to support policies for routing sessions between networks and endpoints. This approach provides managers with alternatives for creating a homogeneous voice platform that can interoperate with disparate communications platforms across the business, and can facilitate the migration to UC while enabling investment protection.
- As the topic of virtualized telephony environments becomes increasingly popular among enterprises, most vendors are investing to meet this need (see "Communication Server Virtualization"), while also addressing IT leaders needs to improve the enterprise's resiliency and disaster recovery capabilities and to reduce server and operations costs.
- Vendors are increasing the bundling of communications capabilities to include not only voice, but also capabilities such as presence, IM, conferencing and mobility. Organizations must have a UC strategy in advance of buying into communications bundles. While offers may look attractive and are often appropriate for some users, the added cost of a software subscription means buyers will likely be overpaying for features that are used by a minority of users.
The Telephony Market Today
During 2011 and the beginning of 2012, Gartner witnessed two major trends:
- Continued aggressive discounting (ranging from 50% to 65% for corporate telephony systems) that began in 2009, especially for large global telephony deals. This trend reinforces the need for buyers to use the RFP process and be strategic about vendor selection (see "How to Develop a Comprehensive RFP for Unified Communications" [Note: This document has been archived; some of its content may not reflect current conditions.] and "Four Best Practices for UC RFP Review").
- The bundling of individual telephony/UC functions into a single license. Bundling combines valuable components around core telephony, such as presence services, UM, mobility and softphone clients, into an aggregated license that will cost less than the total for individual licenses (see "Best Practice: Having a 'Big Picture' View of IP Telephony Will Give the Buyer More Control" [Note: This document has been archived; some of its content may not reflect current conditions.]).
With users becoming more mobile, organizations are interested in twinning incoming corporate telephony calls at the desktop with mobile devices (see "Critical Capabilities for Corporate Telephony"). Enterprises are gaining buying power with mobile operators. They are able to negotiate on-net rates for lower-cost or flat-rate calling between mobile users and their enterprise networks. As IT welcomes mobile devices to the enterprise, organizations will demand solutions that integrate the mobile phone more tightly into the corporate telephony solution and employees' preferred smartphones.
The Future of Telephony Vendors
The enterprise voice market includes the provisioning of holistic voice communications for all wired and wireless users. Typically, architectures support distributed on-premises solutions, as well as centralized, virtualized and hosted platforms dedicated for use by a single organization.
Some technology providers may not meet all your organization's requirements as they refine their strategies for profitability and sustainability. Evaluate a telephony vendor's ability to support one or more of the following future directions and capabilities:
- Supports real-time voice, video and conferencing capabilities across the enterprise network, integrated with collaboration capabilities, such as IM, email and desktop sharing. Migrating between different communications channels should be seamless for users and offer a lower TCO for the IT group than managing separate communications channels.
- Demonstrates the value of session management and control, and supports policies for the ways that sessions are established between network endpoints across multiple technology platforms and managed for quality and cost controls. This approach elevates the role of the corporate communications platform to that of network and session manager. It is an alternative option to creating a homogeneous voice platform integrated with multiple communications channels across the business. Evaluate vendors with this approach for their ability to offer enhanced routing capabilities, extending contact center technologies as a value-added component of communication beyond the customer service center.
- Offers an open telephony platform that supports integrations and partnerships with conferencing and collaboration applications from disparate vendors. Vendor solutions should focus on managing voice across wired and wireless endpoints.
- Enables system integration with and support for competitive UC products to complement and supplement their telephony solutions. Over time, enterprises will need a global capability to support knowledge worker groups across diverse geographies.
- Provides a scalable hosted alternative that supports capabilities for service providers to offer communications-as-a-service solutions.
- Includes established network and system management tools that leverage the efficiencies and opportunities for cost savings afforded by IP technology, such as managing voice and data communications through a common Web-based user interface; remote provisioning of new extension users; and performing moves, adds and changes without the need to deploy technicians.
- Feedback derived from Gartner inquiries, which amounts to more than 900 end-user client discussions per year
- More than 100 face-to-face meetings with clients
- Vendor responses to detailed questionnaires specific to this Magic Quadrant research
- Interviews with vendor references
- Periodic vendor briefings during a 12-month interval
- Generally available information, news and data in financial and industry publications
- Attendance at vendor analyst conferences and industry tradeshows
- Discussions with Gartner peers in research communities
- Gartner management critique, peer review, and vendor review and confirmation
Ability to Execute
Product/Service: Core goods and services offered by the vendor that compete in/serve the defined market. This includes current product/service capabilities, quality, feature sets, skills, etc., whether offered natively or through OEM agreements/partnerships as defined in the market definition and detailed in the subcriteria.
Overall Viability (Business Unit, Financial, Strategy, Organization): Viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood of the individual business unit to continue investing in the product, to continue offering the product and to advance the state of the art within the organization's portfolio of products.
Sales Execution/Pricing: The vendor's capabilities in all presales activities and the structure that supports them. This includes deal management, pricing and negotiation, pre-sales support and the overall effectiveness of the sales channel.
Market Responsiveness and Track Record: Ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the vendor's history of responsiveness.
Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the organization's message in order to influence the market, promote the brand and business, increase awareness of the products, and establish a positive identification with the product/brand and organization in the minds of buyers. This mind share can be driven by a combination of publicity, promotional, thought leadership, word-of-mouth and sales activities.
Customer Experience: Relationships, products and services/programs that enable clients to be successful with the products evaluated. Specifically, this includes the ways customers receive technical support or account support. This can also include ancillary tools, customer support programs (and the quality thereof), availability of user groups, service-level agreements, etc.
Operations: The ability of the organization to meet its goals and commitments. Factors include the quality of the organizational structure including skills, experiences, programs, systems and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis.
Completeness of Vision
Market Understanding: Ability of the vendor to understand buyers' wants and needs and to translate those into products and services. Vendors that show the highest degree of vision listen and understand buyers' wants and needs, and can shape or enhance those with their added vision.
Marketing Strategy: A clear, differentiated set of messages consistently communicated throughout the organization and externalized through the website, advertising, customer programs and positioning statements.
Sales Strategy: The strategy for selling product that uses the appropriate network of direct and indirect sales, marketing, service and communication affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base.
Offering (Product) Strategy: The vendor's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature set as they map to current and future requirements.
Business Model: The soundness and logic of the vendor's underlying business proposition.
Vertical/Industry Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including verticals.
Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, defensive or pre-emptive purposes.
Geographic Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography, either directly or through partners, channels and subsidiaries as appropriate for that geography and market.