Magic Quadrant for Unified Communications as a Service, North America
UCaaS is a cloud-based delivery of integrated UC capabilities spanning voice, messaging, conferencing and presence. Businesses of up to 5,000 employees are starting to deploy UCaaS, with expansion to larger accounts expected in 2013 as offerings from larger UCaaS suppliers mature.
This document was revised on 5 December 2012. The document you are viewing is the corrected version. For more information, see the Corrections page on gartner.com.
Unified communications as a service (UCaaS) supports the same types of functions as its premises-based counterpart. Only the delivery model is altered. Therefore, Gartner uses the same six broad communications functions for both:
- Voice and telephony. This area includes fixed, mobile and soft telephony, as well as the evolution of PBXs and Internet Protocol (IP) PBXs. This also includes live multimedia communications, such as video telephony.
- Conferencing. This area includes separate audioconferencing, videoconferencing and Web-conferencing functions, as well as converged unified conferencing capabilities.
- Messaging. This area includes email, which has become an indispensable business tool, voice mail and unified messaging (UM) in various forms.
- Presence and instant messaging (IM). These play an increasingly central role in next-generation communications, enabling the aggregation and publication of presence and location information from and to multiple sources. This enhanced functionality is sometimes called "rich presence."
- Clients. Unified clients enable access to multiple communication functions from a consistent interface. These may have different forms, including thick desktop clients, thin browser clients and mobile PDA clients, as well as specialized clients embedded within business applications.
- Communication applications. This broad group of applications has directly integrated communication functions. Key application areas include consolidated administration tools, collaboration applications, contact center applications and notification applications. Eventually, other applications will be communication-enabled. When business applications are integrated with communication applications, Gartner calls these "communication-enabled business processes."
Mobility, through smartphones and tablets, now plays a prominent role in the UCaaS ecosystem. The more advanced mobility offerings provide PBX features into the mobile endpoints, obviating traditional handsets in certain cases.
Source: Gartner (November 2012)
Northern California-based 8x8 is a publicly held company with 10 years of cloud voice over IP (VoIP)/unified communications (UC) experience delivered over an internally developed platform. The company's focus has traditionally been on small or midsize business (SMB) cloud VoIP. Starting in 2010, it offered a richer UC suite of services, and in the past 12 months, it has been targeting larger accounts in the 1,000-employee range. The current mobility offering supports both smartphones and tablets (iPhone/Android), PBX features, single-number reach, and unified messaging. In the third quarter of 2011, 8x8 acquired cloud contact center specialist Contactual to fulfill market demand for integrated cloud UC and contact center solutions.
Most 8x8 users leverage the company's existing broadband infrastructure (that is, DSL or cable modem). While providing a lower-cost basis, UCaaS delivered via broadband typically lacks the reliability and service quality demanded by enterprise clients. As 8x8 seeks to expand into the midsize market, the company has started to deliver services over more robust carrier-grade networks (such as the customers' existing IP Multiprotocol Label Switching [MPLS] and Ethernet networks).
The core 8x8 offering is branded as Virtual Office. The richer Virtual Office product includes Web conferencing and multiparty videoconferencing, Internet fax and call recording. Services are available across the U.S. 8x8 is preparing for a Canadian launch in the fourth quarter of 2012, with a planned European launch in 2013. Supporting approximately 250,000 end users, 8x8 is one of the largest North American suppliers of UCaaS. However, 8x8 is just starting to crack the 1,000-plus employee barrier.
Consider 8x8 if you are a small or midsize enterprise looking for a cost-effective UCaaS solution.
- Pricing is very competitive as 8x8 has traditionally focused on the price-sensitive SMB market.
- The company is experienced at automated, low-touch, self-service provisioning. Most users activate themselves with a limited amount of remote support, which facilitates shorter 12-month contracts.
- The company has a role-based portal that supports self provisioning, moves, adds and changes (MACs), bill paying, and individual employee management.
- The company offers a broad UC suite of services that includes VoIP, IM/presence, UM, mobility and conferencing. The multiparty videoconferencing and Web-conferencing offerings are particularly strong for an SMB solution.
- The contact center functionality (acquired from Contactual) is not yet fully integrated into the 8x8 UCaaS solution. Gartner expects an integrated contact center functionality by the third quarter of 2013.
- The company has only recently been delivering business-grade services over IP MPLS networks with committed SLAs. 8x8 has traditionally supported its price-sensitive customers over broadband (for example, DSL and broadband).
- 8x8 has traditionally been SMB-focused and is just starting to secure accounts in the 1,000-employee range.
- 8x8 does not have a strong brand, despite supporting approximately 250,000 cloud UC endpoints.
AT&T is a global communications service provider (CSP) headquartered in Dallas, Texas, while the UC group supporting business accounts is based in New Jersey and Massachusetts. AT&T has more than five years of experience in cloud telephony through its BroadSoft-based Voice DNA service targeted to SMBs. This solution is VoIP-centric, with limited UC functionality, such as mobility and UM.
The cloud UC solution evaluated in this research is based on the Cisco Hosted Collaboration Solution (HCS) platform, complemented with AT&T's internally developed UC infrastructure. It is marketed to larger-enterprise accounts and is marketed in the U.S., Canada and 46 countries. AT&T is now in a "controlled introduction" of its next generation of UC products as of the fourth quarter of 2012. This AT&T terminology means that there are active and paying customers, with sales focused on a select base of accounts.
The new AT&T UC Services offering comes in two variations, both of which are based on the underlying Cisco HCS platform:
- UC Voice — This is a cloud-based alternative to a premises-based IP PBX.
- UC Central — This is a downloadable client for PCs, Macs and mobile devices that offer a full UC suite, including presence, IM, conferencing (audio, Web and video) and UM, in addition to the voice and telephony functionality of UC Voice.
AT&T also offers a range of UCaaS-related services, including hybrid configurations of UC, integrations with on-premises PBXs, and managed IP PBXs for Cisco and Avaya.
Consider the AT&T UC solutions if you have an existing strong relationship with AT&T; however, Gartner strongly recommends you obtain and verify references who have deployed the same functionality that you will be deploying.
- AT&T has strong brand-name recognition and global data centers that the UCaaS offering leverages.
- The company has robust wireless capabilities that are integrated into the UCaaS offering. The recently introduced AT&T Toggle (bring-your-own-device mobile management with separate work and business personas) further enhances its mobile portfolio.
- AT&T possesses a large base of existing business telephony accounts that represent an attractive target market for AT&T UCaaS.
- The AT&T UCaaS solution includes significant amounts of internally owned and developed functionality (for example, Web conferencing, presence and messaging, much of it from the Interwise acquisition) that helps lower its cost structure. Alternatively, the AT&T back-end infrastructure can also work with the market-leading UC clients — namely, Cisco Jabber and Microsoft Lync.
- AT&T has been very slow in bringing its UCaaS offering to market (which Gartner believes is partly due to a broader AT&T operations support system/business support system upgrade delay). AT&T is in a controlled introduction in the fourth quarter of 2012. This lag to market reduces its ability to compete effectively, and users should expect AT&T functionality to lag behind that of other vendors that are faster to market.
- Gartner was able to secure only one AT&T UCaaS reference (VoIP-focused) as part of this research. However, AT&T states that it possesses numerous paying customers (controlled introduction), as well as customer trials, both in North America and globally.
- While having its own AT&T UC Central client allows incremental functionality and better margins, R&D on the AT&T client may not be sufficient to allow it to remain as attractive and functional versus those of competitors, which are using Cisco and Microsoft UC clients (which AT&T UC Voice also supports).
- AT&T currently lacks a complementary cloud contact center offering.
Note: As this report was being published, Avanade announced its intention to acquire Azaleos. Avanade, also based in Seattle, is a global business technology solution and managed service provider. Accenture is the majority owner of Avanade. The announcement indicated that Azaleos will fold in under the Avanade brand and will operate as an Avanade business unit, providing Avanade's current and future clients with the existing full set of managed service offerings for Exchange, SharePoint and Lync.
Seattle-based Azaleos focuses on cloud and managed support of Microsoft applications, led by Exchange, SharePoint, Active Directory and Lync. Azaleos has offices and network operations centers in Seattle, Washington, and Charlotte, North Carolina. Azaleos provides managed services in private cloud, on-premises or mixed hybrid architectures.
Azaleos is one of Microsoft's top partners. When Azaleos offers the products in an on-demand model, it has a solution similar to, and somewhat in competition with, Microsoft Office 365. Because Azaleos uses standard enterprise versions of these products, operated with Azaleos' own management (ViewX) and virtualization tool, the feature functionality is comparable to that available in the Microsoft on-premises releases. The Azaleos managed services for Lync, SharePoint and Exchange are currently available in all global markets. Telephony (but not IM/presence and conferencing) is a new (and therefore smaller) part of the Azaleos business. Azaleos' telephony offering is based on Lync technology, through both on-premises PBX integrations and its cloud offering.
Consider the Azaleos solution if you are looking for UCaaS versions of the Microsoft Lync, SharePoint and Exchange solution suite.
- Azaleos has a strong Microsoft partnership, with extensive experience operating and managing the Microsoft solution set for both small and large companies.
- Azaleos is experienced in integrating UCaaS Lync, SharePoint and Exchange with the on-premises infrastructure.
- Azaleos is able to offer the full Exchange and Lync feature set, including IM, presence, videoconferencing, UM, mobility and VoIP. These offerings provide greater customization and control capabilities than what is available with Office 365.
- When offering Lync, Azaleos must rely on third parties that offer Session Initiation Protocol (SIP) trunks, E911 support, data centers and network services. Furthermore, these third parties also might be offering UCaaS.
- Azaleos competes with Microsoft's Office 365, and while in the near term Azaleos is well-positioned to differentiate, longer term, the distinctions may be reduced, and price may become a factor.
- Full UC solutions will require two contracts — one for Microsoft licensing and a second for Azaleos support (including the platform, network, service management and data center).
- Although quite experienced with IM, presence and conferencing, Azaleos has less experience offering the full Lync solution — including mobility, video and telephony.
CSC is based in Virginia, U.S., and is one of the world's largest IT outsourcing companies. CSC has $16 billion in annual global revenue, and it offers a broad and varied set of services through multiple business units. In the area of UC, CSC offers managed services and private cloud across such vendors as Avaya, Cisco and Microsoft. CSC is also one of the earlier companies to market with a Cisco HCS-based UCaaS deployment and has multiple referenceable clients. This Cisco UCaaS solution includes a strong mobility capability, although actual mobile implementations are in the early stages. CSC's solution is a global offering available in regions beyond North America.
CSC plans to offer a Microsoft Lync UCaaS solution in late fourth quarter of 2012 (too late to be evaluated in this Magic Quadrant). There is a professional services organization for assisting with multivendor UC environments (for both cloud and customer premises equipment [CPE]), particularly across the Avaya, Cisco and Microsoft platforms. UCaaS customers opting for CSC network services are supported with an underlying Sprint IP MPLS network. In addition to providing UCaaS, CSC offers video, contact center, collaboration and email as a service.
Consider the CSC UC solution if you want an established global service provider with a solution based on Cisco HCS.
- CSC is a well-established hosting, managed services and cloud infrastructure provider with data centers and customers around the globe.
- CSC has a growing base of referenceable UCaaS customers on the Cisco HCS platform. Some CSC customers have more than 1,000 activated users, with plans to expand to 50,000 users over two years.
- The company offers a good product road map and will be offering contact center with HCS when this functionality is released as part of HCS 9.0.
- CSC promotes its ability to port on-premises Cisco UC customers to an HCS UCaaS solution and to facilitate license transfers. This is accompanied with professional services expertise for working in a multivendor UC environment (for example, Avaya, Cisco and Microsoft).
- The CSC customer portal remains limited as it is focused on VoIP. Integrated portal support for the broader mix of UC functions is expected in the second half of 2013.
- UCaaS is a new offering to CSC as well as to Cisco. As a result, both are still learning and adapting this new offering.
- CSC customers report inconsistent customer service (often because various CSC business units are not well-integrated), with a mix of satisfied and unsatisfied customers. This characteristic is not specific to CSC UCaaS, but across CSC's IT support services in general.
Google offers a rich set of UC and collaboration capabilities through Google Docs, Gmail, Google Talk, Google Voice and Google+ Hangouts. Low-cost email remains the anchor application that is driving adoption, with advanced email capabilities available (for example, encryption and archiving for an additional fee) for more rigorous IT requirements.
Selected business customers have adopted Google Docs as a cost-effective replacement for Microsoft Office Suite. IM and presence (via Google Talk) are embedded in Google Calendars and Google Docs to promote collaboration across the business. A multiparty video capability is now available through Google+ Hangouts. Google offers an integrated mobility capability for both Android and iPhone devices. However, mobility is tied to Google Voice, which is not integrated into the enterprise environment. Nonetheless, the UCaaS bundle is deep (outside of voice) and includes IM, presence, Web conferencing, videoconferencing, mobility and email.
During the past year, Gartner has witnessed increased Google commitment to the enterprise segment, as evidenced by a series of high-profile wins (for example, the Department of Interior and the National Oceanic and Atmospheric Administration). However, Google has unorthodox customer support and provides limited guidance on product road maps. Some popular Google products lack deep enterprise IT administrative control (for example, Google Voice and Google+ Hangouts). Businesses accept these limitations in return for significant cost savings.
Consider Google UCaaS if you seek a low-cost solution, have alternative methods of securing enterprise voice, and have an IT department that is comfortable securing support through Google partners (as opposed to Google directly).
Note that Google did not respond to requests for supplemental information, although Google did review the draft contents of this document before publication. Gartner's analysis is therefore based on other credible sources, including public information, Gartner analyst experience with Google offerings and more than 10 discussions with users of this product suite.
- Service pricing remains very competitive. Users secure a broad set of IT capabilities for a single annual fee of approximately $50 to $75 (with value-added services) per user.
- Google's consumer legacy has provided it with a delivery architecture with a proven capability to support large environments of more than 25,000 employees.
- Google has a fast pace of innovation, as exemplified by multiparty desktop video and Web-conferencing capabilities that are now part of Google+ Hangouts.
- The company is strong in the public-sector vertical, and it offers dedicated infrastructure to public-sector customers to fulfill regulatory requirements.
- Google Voice is a consumer offering that cannot be integrated into the enterprise IT management. In addition, Gartner has seen less promotion of Google Voice, as evidenced by the nonoccurrence of a previously planned European launching.
- Traditional enterprise telephony support is the notable weak link with Google UCaaS. Google relies on partners such as Esna for integration with business PBXs and cloud telephony (for example, BroadSoft).
- The Google UCaaS product suite is complex for businesses to understand. Businesses must be careful to identify what products are generally available (as opposed to "preview") and what products support enterprise controls.
- Enterprises may find that consumer products (often free) that they are counting on to be offered in a business version may instead be terminated with limited notice. Google is not shy about terminating products that fail to secure market adoption or are incompatible with Google's evolving technical direction.
- The Web-conferencing capability available with Google+ Hangouts is adequate for internal team usage. However, it lacks the scale and feature richness of the industry stalwarts.
Microsoft Office 365 provides cloud delivery of the firm's IT software applications originally designed for on-premises deployment. The offering consists of four core applications: Exchange Online, SharePoint Online, Lync Online and Office Professional. There are also a range of support applications and mobility options. Office 365 is now supported in 88 markets and 32 languages, with two or more data centers in each of the North American, European and Asia/Pacific regions. While Microsoft Office 365 does experience isolated service incidents, a number of customers report that the Microsoft Office 365 service availability actually exceeds what they could provide via their internal staff.
This UCaaS assessment focuses on the two Office 365 applications that provide UC functionality — Exchange Online and Lync Online. Exchange Online offers email and can store unified messages that are forwarded to it from voice mail and email systems. Lync Online provides rich presence, IM, Web conferencing, limited videoconferencing and limited VoIP. Current mobility capabilities include single-number reach, UM and IM/presence integration (but do not include VoIP).
Users of Office 365 can acquire services directly through Microsoft or through channel partners that offer value-added services. Gartner believes that direct support is the most efficient model in North America. Channels will provide more value in the future, as Microsoft matures its real-time applications and partners add network capabilities and E911 support.
Microsoft announced enhancements to the on-premises version of Lync — Lync Server 2013 — which will be available in late fourth quarter of 2012. It has indicated plans to incorporate (Gartner estimates the first half of 2013) some of these features into the Lync Online portfolio. Similarly, Microsoft has indicated plans to integrate Skype with Lync Online — initially with basic IM/presence and talk capabilities between the two. These are forward-looking statements, and actual availability remains to be determined.
While the Exchange and SharePoint elements of Office 365 are suitable for businesses of all sizes, most Lync Online adoptions appear to be from smaller distributed enterprises. Deployments focus on IM/presence, Web conferencing and peer-to-peer voice. Use of telephony with Lync Online, even via integration of Lync Online with on-premises Lync or with partner telephony deployments, remains very limited. As this Magic Quadrant research was being finalized, Microsoft announced that the Lync product team will now be merged and led by the Skype unit that Microsoft acquired in 2011, which Gartner expects to facilitate future integrations of Lync and Lync Online with Skype.
Consider the Office 365 UCaaS solution if you can accept the telephony, video and mobility limitations. Many customers will opt to select a few proven cloud products that Microsoft has shown to excel at via the cloud (for example, messaging and IM/presence).
- Office 365 is a strong brand, and Microsoft is marshalling significant corporate marketing, technical, support and channel resources toward the UCaaS elements of the portfolio. The company has largely met its product release commitments and has a solid product road map.
- Gartner expects that when Lync Server 2013 functionality is available in the Lync Online offering (estimated for the first half of 2013), this offer will both enhance telephony capabilities and include limited Skype integration capabilities.
- Business users are attracted to Office 365 for multiple reasons, including the pricing model, ease of administration (for example, with Active Directory) and employee familiarity with Microsoft applications.
- User adoption has been significant; led by Exchange Online, and then with additional interest in SharePoint Online; and the IM, presence and Web-conferencing functions in Lync Online.
- Exchange Online is already supporting many large accounts of more than 25,000 employees, both in North America and in other regions.
- Lync Online telephony is the least mature of the services in the Microsoft UCaaS portfolio. The use of Lync Online for voice beyond pure Lync-to-Lync calling is limited, and enterprises should not expect strong telephony functionality from Office 365 at this time.
- Enterprises planning to migrate from on-premises Lync Server 2010 to Lync Online (cloud) should carefully evaluate the features, functions and road maps. Some users have reported that Microsoft has not explicitly articulated these details.
- Customers continue to report that problem escalation can be sluggish (which Gartner attributes to the recent high adoption), and complex problem resolution can be challenging.
- Lync Online (limited PBX feature set) offers less functionality than is available with Microsoft's on-premises version.
Ottawa-based (Canada) Mitel uses the Freedom brand to promote consistent UC services across devices and delivery (cloud or CPE). The core business focus is on small and midmarket accounts of up to 3,000 employees. A virtualized architecture based on VMware allows applications to be shared on CPE and cloud. At present, Mitel's cloud offering, branded as Mitel AnyWare, does not include the full base of functions available with the CPE version.
Mitel AnyWare capabilities include telephony, UM, mobility, audioconferencing/Web conferencing and contact center. A forthcoming cloud release will include IM, presence and video (at which time it will have feature parity with Mitel CPE). Mitel runs and operates its UCaaS platform. Sales are conducted both directly and through the existing base of CPE channels (often in a co-selling arrangement). This model relieves Mitel channels from the complexity and costs of running their own UCaaS platform. The Mitel UCaaS solution is available across the 50 U.S. states as well as in other global regions (Europe and Asia/Pacific).
Consider the Mitel solution if you are looking for a UCaaS suite from a newly established UCaaS provider. While larger enterprises can be served, current North American Mitel clients to date are small to midsize.
- The Mitel UCaaS suite is based on virtualizing its established on-premises product. It includes strong telephony and can also incorporate contact center functionality.
- Mitel has an existing base of CPE channels, giving it the potential to quickly scale and reach a broad market base.
- Mitel AnyWare includes a Web portal to enable enterprises to manage users, profiles, call handling and telephony customization.
- Mitel is new to the North American software as a service (SaaS) market, and while it understands the technology well, it will have to prove that it can advance in this competitive new market.
- A segment of Mitel's existing CPE channels are unlikely to make the transformation to cloud delivery (which possesses a different business model and requires a different technical expertise).
- The Web-conferencing (limited integration) and mobility (does not yet include PBX features) elements of the Mitel AnyWare product are limited.
- The current UCaaS feature set is not as deep as the CPE feature set.
PanTerra Networks is a California-based, privately held UCaaS supplier that operates a proprietary platform branded as WorldSmart. The company focuses on supporting the SMB market with a cloud UC solution that is low touch (specifically, does not require extensive IT support). WorldSmart is especially practical for highly distributed organizations that have remote sites with low employee concentrations (that is, below 10 employees). Throughout the years, PanTerra has expanded the feature set, which now includes VoIP, UM, IM/presence, mobility, conferencing, Web collaboration, videoconferencing and contact centers.
Notable new capabilities offered by PanTerra since 2011 include multiparty video and a stronger mobile offering for smartphones/tablets (including PBX feature sets, IM/presence and UM). In the second half of 2012, PanTerra introduced a managed service capability that can be integrated with carrier-class networks (IP and Ethernet). Finally, there is an ancillary cloud storage capability designed to strengthen the SMB bundle.
Consider PanTerra if you are an SMB seeking a competitively priced, self-administered solution. Most current PanTerra customers secure network connectivity via broadband.
- The new multiparty video capability supports both UC users and contact center agents.
- PanTerra has a reputation for competitive pricing and strong customer service.
- The WorldSmart UCaaS suite is intuitive and well-suited for businesses with limited IT resources. Special emphasis is directed to Web-based (thin) clients to minimize the required IT support.
- Customers value PanTerra's call center functionality (with call recording), which provides sufficient functionality for many SMB accounts.
- PanTerra lacks brand recognition in a highly fragmented UCaaS market.
- The PanTerra solution focuses on SMB accounts, with limited customer accounts above 300 employees.
- The multipronged distribution strategy — inside sales, master agents, value-added resellers (VARs) and competitive local-exchange carriers — has yet to enable PanTerra to distinguish itself in the marketplace.
- The PanTerra Web-conferencing component has a limited feature set. Many users prefer to use it mainly for internal communications, and they rely on a third-party Web conference tool for external usage.
Northern California-based ShoreTel acquired New York City-based UCaaS provider M5 Networks in the first quarter of 2012 for $168 million. The core objective of the acquisition was to provide parent ShoreTel with a cloud delivery option for the increasing base of customers requesting UCaaS. The former M5 unit is now branded as ShoreTel Sky. Key benefits that the ShoreTel parent company bring to ShoreTel Sky are a stronger brand, a larger sales force (particularly on the West Coast in the U.S.), and a richer set of UC features that can be ported (that is, ShoreTel CPE functionality can potentially be enabled on ShoreTel Sky). UCaaS is now delivered out of three U.S. data centers. A fourth data center in London is scheduled to be on board in the first quarter of 2013.
ShoreTel Sky is one of the more experienced UCaaS suppliers with 12 years of operations. Starting with a cloud VoIP and contact center foundation, ShoreTel Sky now has IM, presence, UM, mobility and videoconferencing. Through the past year, ShoreTel Sky has been securing a larger account base. Gartner estimates that ShoreTel Sky now supports approximately 10 accounts with more than 1,000 employees and supports some in the 5,000-employee range.
Consider ShoreTel Sky if you are a small to midsize enterprise of up to 5,000 employees seeking a combined cloud UC and contact center capability.
- Users are attracted to ShoreTel Sky's complementary contact center capability. Areas of contact center strength are analytics, automated call flow implementation, and support for customer service and sales agents.
- The ShoreTel integration is proceeding well. ShoreTel Sky has already integrated the ShoreTel Mobility offering (previously Agito).
- ShoreTel Sky is one of the larger and more experienced North American UCaaS providers. The company has invested heavily in network tools for automating the provisioning process and supporting a high-quality network.
- The company has a tradition of strong customer service.
- The current video capability is only single-party (that is, between two people), with Video Graphics Array (VGA) quality.
- ShoreTel Sky lacks a Web-conferencing capability. Gartner expects that ShoreTel Sky will secure the Web-conferencing functionality from the parent company's CPE platform in the first half of 2013.
- ShoreTel Sky's offering has traditionally been priced at a premium as the company focuses on high-end customer service.
- ShoreTel Sky's offering and ShoreTel's CPE offering are two separate platforms. Users therefore have to evaluate the features and functionality of each platform separately.
Thinking Phone Networks is a Massachusetts-based, privately held UCaaS provider. It uses a proprietary platform that includes open-standards-based Web APIs to facilitate UC application integration. UCaaS is branded as ThinkingSuite, which is offered across North America. There is now a U.K.-based data center supporting European sites of North American accounts. The majority of customers have been secured through an internal sales force. In the past 18 months, Thinking Phone expanded its base of channel partners, including CSPs, VARs and master agents. Channels will be used to reach Europe-based companies starting in 2013.
Thinking Phone has a VoIP and contact center legacy. Customers are supported over carrier-class networks as opposed to broadband. The company has invested significant resources in tools to facilitate customer provisioning, network performance management, customer MACs and other back-office capabilities. This has resulted in a solid customer service and support track record. Thinking Phone has historically focused on midsize accounts. In the past year, it has started to support a few clients of above 5,000 endpoints (Gartner estimates six to eight clients above 5,000 endpoints).
Consider Thinking Phone Networks for midsize deployments seeking a broad portfolio of UC services based on a proprietary platform.
- The Thinking Phone UCaaS offering is strong in mobility (with PBX feature set and IM/presence extended to smartphones/tablets) and videoconferencing (six-way desktop videoconferencing).
- The integrated analytics capability leverages business data in such areas as workforce scheduling, agent productivity tracking, best-practice identification and related business processes.
- Thinking Phone provides a strong combined cloud VoIP and cloud contact center value proposition.
- Web-based APIs enable integration with multiple CRM systems — for example, salesforce.com, Microsoft Dynamics CRM, SugarCRM and SAP CRM.
- During each of the past three years, Thinking Phone has increasingly shown the ability to support larger accounts (Gartner estimates six to eight clients of above 5,000 endpoints).
- Thinking Phone has limited brand recognition, despite its ability to support midsize enterprise accounts. Some potential prospects prefer branded solutions from the better-known vendors (for example, Cisco and Microsoft).
- Thinking Phone Networks' channel partners have yet to make a noticeable impact in expanding market awareness. A number of partners are also supporting other cloud UC options.
- The UCaaS offering does not currently offer an internally supported Web-conferencing capability (but is expected to in the first quarter of 2013). Currently, Thinking Phone UCaaS integrates with third-party tools — Citrix GoToMeeting, Cisco WebEx and IBM Sametime.
Verizon is a global CSP headquartered in New Jersey. Its lead UCaaS offering is with the Cisco HCS platform for midsize to large accounts. There is also a cloud VoIP offering (using the BroadSoft platform) targeted to SMBs. This Magic Quadrant analysis concentrates on Verizon's Cisco HCS offering because of its enterprise focus.
Verizon initially struggled to get the Cisco HCS offering to a market-ready status, in part due to the challenges in operationalizing and automating the back-office toolsets (both Cisco's and Verizon's). From a "glass half-full perspective," these challenges appear to be resolved because the Cisco HCS offering is both generally available in North America and possesses active accounts with an expanding pipeline. Gartner expects Verizon to introduce the HCS offering to Europe in 2013.
The BroadSoft platform, now branded as Virtual Communications Express (VCE), focuses on VoIP services for the SMB market. VCE also includes a limited base of UC functionality in the areas of mobility, IM/presence and third-party integration with Google UC applications.
Enterprises seeking a branded Cisco cloud UC offering with strong mobility capabilities should consider Verizon UCaaS.
- The Verizon Cisco HCS UCaaS offering is now generally available, with more than 10,000 enterprise customer endpoints (across multiple accounts) activated and deployed.
- Verizon possesses a strong base of complementary skills and assets that have the potential to make Verizon a formidable UCaaS supplier — global footprint, wireless solutions, IP/Ethernet networks, Terremark data centers, security and financial strength.
- Verizon has a strong product road map, particularly in the areas of global delivery and wireline/wireless integration.
- The company has more than eight years of cloud VoIP/UC experience, which can be leveraged with the newer Cisco, and existing BroadSoft, UCaaS solutions.
- Verizon continues to have a methodical product development process prone to scheduling delays. Early UCaaS indicators reveal that competing system integrators and application specialists are faster at introducing new services.
- Gartner remains skeptical as to whether Verizon can effectively support multiple parallel cloud UC offerings based on Cisco and BroadSoft.
- Customers report complexity in getting various Verizon support groups — for example, sales, project management, field installation and customer service — across the delivery chain to operate synchronously. This is particularly true for midsize accounts.
- The company has experienced a fair amount of management and workforce turnover as Verizon leadership seeks to transform the company from a legacy network provider to an IT solution provider.
West is based in Omaha, Nebraska, and it now offers three distinct UCaaS solutions across a single delivery platform. The first is the Smoothstone solution (West acquired Smoothstone in the second quarter of 2011 for $120 million), branded as VoiceMaxx. This is the most mature solution, with roughly a decade of experience supporting cloud UC customers. Gartner believes that West is one of the top North American suppliers of cloud UC endpoints in terms of market share (Gartner's estimate is 150,000 or more total endpoints). In the past year, West has recently integrated its InterCall conferencing functionality to its platform.
The second solution is based on Cisco HCS, branded as VoiceMaxx CE, and has been generally available since the fourth quarter of 2011. West now has a few thousand endpoints operating with VoiceMaxx CE, and it is aggressively looking to build the sales funnel. The third solution is based on Microsoft Lync, which will be generally available in late fourth quarter of 2012. All three UCaaS solutions share a common delivery platform, architecture and set of data centers. This Magic Quadrant rating will focus on the first two (as the Microsoft Lync offering was too late for inclusion in this research).
The company prefers to supply its customers with a bundled data network (many accounts rely on West for its IP/MPLS and Ethernet services), complemented with Cisco routers and handsets to deliver greater control and better performance. West has traditionally focused on clients above 250 employees and has been a UCaaS pioneer relative to supporting larger UCaaS deployments of more than 1,000 employees, with some (Gartner estimate of five clients) now exceeding 5,000 employees.
In addition to its UCaaS solutions, West offers a collection of communications solutions for automated alerts/notifications, emergency communications solutions, contact center/interactive voice response (IVR) services, social media interaction and mobile solutions. These solutions have largely been run as parallel businesses and are not part of this evaluation.
Consider West as an experienced supplier, especially for midsize to larger UCaaS deployments, including those that may require integrated contact center functionality.
- The VoiceMaxx (Smoothstone) offering is a mature and stable cloud UC solution. Starting with VoIP and contact center as the foundation, it now supports IM/presence (the AMP client), Web conferencing (via West InterCall), UM and mobility.
- Midsize accounts value the combined cloud UC with contact center functionality, which also includes IVR, analytics and workforce optimization.
- West UCaaS customers report satisfaction with customer service. A single support representative can often address Levels 1 through 3 support issues.
- West has proved to be an agile UCaaS supplier to date. It is able to bring new products to market faster than many of its competitors.
- It is difficult to understand the full portfolio of West solutions (spanning conferencing, UCaaS, emergency communications, among others). To date, the portfolios have largely been run independently, with limited product integration.
- Gartner is concerned about West's ability to support, maintain and evolve three parallel UCaaS solutions: Smoothstone, Cisco HCS and Microsoft Lync.
- The West (from the Smoothstone acquisition) mobility capability (Mobile Connect) is serviceable but is not leading-edge. For example, it presently does not offer tablet support or provide a rich PBX feature set (West does support Cisco and Microsoft clients to meet the more-advanced needs).
- West has a reputation for slightly higher pricing than market averages as it focuses on strong technical support and a robust underlying network.
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.
Azaleos, CSC, Mitel and 8x8 were added. ShoreTel has replaced M5 Networks (which ShoreTel acquired in the first quarter of 2012).
BT, Cisco, Cypress Communications and Siemens Enterprise Communications were dropped.
BT was not included because the North American focus of this research does not reflect BT's UCaaS strengths in its core European market and other global regions.
Cisco was removed because its main go-to-market strategy is to deliver a partner-led cloud UC technology platform.
Cypress was removed because its new parent company, Broadvox, has changed its business focus.
Siemens Enterprise Communications was removed because its cloud UC focus for the North American enterprise market is on private UC cloud infrastructure.
For inclusion in this Magic Quadrant, solution providers must support the following capabilities:
- The UCaaS delivery model. Typical characteristics include a multitenant or virtualized UC infrastructure that is owned, maintained and hosted by the provider. Users then purchase a service (often paid via the SaaS model) based on a per-user, per-month fee.
- A UCaaS offering with significant market presence that includes VoIP, with integrated
conferencing (audio, video and Web), IM/presence, and messaging.
- The UC functions must be well-integrated; specifically, VoIP-centric solutions will not be considered.
- Email may be provided separately, but UM is a core service.
- A significant market presence in North America. This can be demonstrated in one or
more of the following ways:
- UCaaS annual revenue exceeding $25 million.
- Differentiating service innovation and mind share with North American enterprises (3,000 employees and above).
- Proven ability to support enterprise accounts nationally.
- Sufficient sales, revenue and operational presence to support market objectives.
- Services over a large segment of North American geographic regions (suppliers limited to pockets of North American regions will not be included).
- The ability to supply a complete UCaaS portfolio, even if the parts are offered via partnerships.
- Demonstrable UCaaS portfolio with references.
- References should use a broad set of UC capabilities.
- The ability to generate significant interest by leading client market segments.
Note that UCaaS resellers that do not offer significant value-added capabilities/services (beyond the UCaaS offering that they represent) are not considered for this Magic Quadrant analysis.
Gartner analysts evaluate UCaaS providers based on the breadth, quality and overall maturity of their applications, processes, tools and procedures that enhance individual, group and enterprise communications. Ultimately, UCaaS providers are judged on their ability and success in capitalizing on their vision (see Table 1).
Source: Gartner (November 2012)
Gartner analysts evaluate UCaaS providers based on their ability to convincingly articulate logical statements on 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, UCaaS providers are rated on their understanding of how market forces can be exploited to create opportunities for providers and their clients (see Table 2).
Source: Gartner (November 2012)
Vendors in the Leaders quadrant have been delivering complete UCaaS solutions for more than a year, have clients with more than 1,000 subscribers and have more than 100,000 total endpoints in service. These vendors offer comprehensive and integrated UCaaS solutions that directly, or with well-defined partnerships, address the full range of market needs, including the ability to service large accounts. These vendors have defined migration and evolution plans for their products in core UCaaS areas and are using their solution sets to acquire new clients, as well as to expand their footprints in their client bases to new functional areas.
Vendors in the Challengers quadrant have the potential to deliver to large national enterprises, and are poised to move into the Leaders quadrant but have not yet done so. They have yet to bridge this gap because their UCaaS solution is missing selected elements, they are unable to provide references on the full suite, or they are still evolving their customer support.
Vendors in the Visionaries quadrant are close to, or are already, delivering differentiating UC functionality or services but have not yet established themselves in the market (for example, support accounts above 1,000 endpoints). For instance, a vendor may have added useful social or collaboration functionality to its portfolio, or a vendor may have unique mobile UC capabilities, or a vendor may differentiate with video or with exceptional customer service. All of these may make a provider visionary.
Vendors may be in the Niche Players quadrant for different reasons. Some may have major elements of their portfolio not unified or may lack important functionality in their solution. Others may be in the Niche Players quadrant because they are an on-premises UC vendor that is largely unproven in the UCaaS market. Finally, some vendors are in the Niche Players quadrant because, despite their full UC solution, they do not have the brand recognition or marketing ability to sell nationally (that is, beyond their core territory).
The North American UCaaS market has evolved significantly through 2012 in three core areas: the emergence of branded CPE platforms now supporting UCaaS; the maturity of selected UCaaS platforms; and limited adoption by the Fortune 1000 community. First, Cisco is the lead branded CPE vendor supporting UCaaS through some 20 active channel partners (many of which are evaluated in this Magic Quadrant). Microsoft now offers UCaaS directly via Office 365, while also supporting a cloud-enabled version of Lync for channel partners (this model shares multiple similarities with that of Cisco HCS).
First, all prominent CPE UC vendors now support UCaaS in some shape or fashion — Alcatel-Lucent, Avaya, Interactive Intelligence, Mitel, NEC, Siemens Enterprise Communications, ShoreTel and Toshiba, to name a few. These traditional CPE vendors believe it is essential to support both premises and cloud UC to maintain market relevancy. In parallel, larger customers tend to reveal a preference for UCaaS delivery via the major CPE vendors, particularly Cisco and Microsoft.
Second, a number of UCaaS suppliers are now in their third or fourth product release. This is particularly true of the application specialists that operate with homegrown infrastructure. The 2012 generation of video, mobility and contact center functions are more capable and integrated. Users report that portals have also improved in the past year in terms of ease of use, reporting capabilities and management controls. User adoption of richer UCaaS functions has picked up from 2011, when a higher proportion of users focused mainly on VoIP. Gartner estimates that more than 75% of UCaaS accounts now implement UC functionality beyond VoIP. A number of UCaaS offerings now support multiparty high-definition video, a notable improvement from 2011's single-party VGA quality video. Mobile users can increasingly secure PBX feature set functionality integrated with their smartphones, while in 2011, they settled for single-number reach and simultaneous ringing.
Third, Fortune 1000 companies are cautiously adopting UCaaS via staged rollouts. In many cases, these rollouts are limited to a specific business unit, functional group or geographic location. Gartner expects that broader, global rollouts will occur after these initial forays have proven successful. Larger Fortune 1000 organizations require such proof points before making corporatewide technology commitments. In addition, they generally prefer working with branded vendor solutions from larger delivery partners.
UCaaS still has two barriers to overcome. First, it has few proven success stories for large enterprises. The back-office provisioning tools for onboarding 10,000 or more endpoints are still maturing and not fully proved. Second, many of the accounts of more than 1,000 employees that have opted for UCaaS are initially only deploying cloud VoIP (as opposed to the broader array of UC functions). Today's deployments are primarily regional, spanning a single country or geographically neighboring countries. There are few panregional implementations (for example, supporting a multinational corporation's operations in North America, Europe and Asia/Pacific).
Although this is the fourth year of Gartner's North American UCaaS Magic Quadrant, this is the first year in which any participants have achieved a position in the Leaders quadrant. These participants bring to market a broad mix of UC functions while demonstrating the capacity to support enterprise accounts exceeding 1,000 endpoints (sometimes into the 5,000-employee range). User feedback reveals positive experiences with mobility functions that provide PBX functionality to smartphones (primarily iOS and Android). A small but growing segment (estimated at 5% for new North American UCaaS deployments) of users no longer even use hard phones, instead relying solely on mobile devices and softphones.
Gartner's expectations for UCaaS in 2013 are twofold. First, UCaaS will start supporting global deployments spanning multiple regions. Many of the UCaaS participants in this Magic Quadrant already have infrastructure in North America, Europe and Asia/Pacific as a first step. Second, today's Fortune 1000 UCaaS users will adopt the service across broad swaths of the organization. However, for either of these events to transpire, UCaaS suppliers must demonstrate effective back-office toolsets that offer automated support of large installations.
UC offers businesses the ability to enhance how individuals, groups and companies interact, perform and, if applied wisely, improve profitability. The majority of UC deployments continue to be via premises-based solutions. IT culture and real or perceived infrastructure control requirements both favor premises-based deployments. However, cloud UC (known as UCaaS) continues to gain customer mind share as the technology matures. Gartner has experienced a significant uptake in UCaaS inquiries, with some clients starting out with the premise of "Why not the cloud?"
With UCaaS, the provider owns, manages and hosts the UC infrastructure in its facilities. The infrastructure is typically multitenant or virtualized to allow customers to share hardware resources (and thereby reduce system cost structure). Users pay subscription fees for UC services (typically monthly) rather than making capital investments for dedicated infrastructure. Another UCaaS benefit is that the user does not incur the technology risk of purchasing infrastructure from a vendor that later exits the market (for example, Nortel).
The majority of UCaaS deployments to date have focused on a single platform vendor (with email being the exception). UCaaS suppliers have yet to demonstrate strong interest in cross-vendor interoperability. Higher licensing costs also hurt the business case for multivendor UCaaS.
UCaaS implementations typically leverage existing Microsoft Exchange (premises-based or Online) and, to a lesser extent, Google, for email. These two companies' dominant email position and associated low costs make it unprofitable for other UCaaS vendors to offer their own solutions. Both Microsoft and Google provide open interfaces to enable efficient UCaaS UM.
The UCaaS participants in this 2012 Magic Quadrant emanate from four primary sources:
- Application specialists
- Technology vendors
- System integrators
Application specialists are typically private or small public companies that focus on UCaaS delivery. 8x8, PanTerra Networks, Thinking Phone Networks and West (formerly Smoothstone) are the Magic Quadrant participants grouped into this category. They have been the pioneers of UCaaS and continue to lead the market through 2012. They typically started from a cloud VoIP business model, migrating to UCaaS application specialists focusing on strong customer service.
Through 2012, the application specialists have been expanding to larger accounts, in some cases up to 5,000 employees (see Note 1). They have also experienced moderate success in getting their account base to deploy a richer UC feature set (a combination of VoIP, UM, IM/presence, audioconferencing and mobility). Integrated contact center functionality has also proved to be a compelling feature (for example, a 1,500 user UC deployment that also supports 75 contact center agents).
Many application specialists operate with an internally developed UC infrastructure. They then integrate with corporate IT tools, such as Outlook (Microsoft Calendar), Internet Explorer (Microsoft Web browser), iPhone (Apple smartphone) and Androids (Google smartphones). To date, the use of proprietary UCaaS platforms has not been a major inhibitor to adoption in the SMB sector. The application specialists have a reputation for strong customer service and support, which is viewed as a competitive differentiator against the larger players entering the market.
CSPs are the large, legacy telephone carriers that now seek an expanded IT and cloud delivery role. AT&T and Verizon are the Magic Quadrant participants grouped into this category. In addition, Sprint entered the market in mid-2012 with a wireless-focused UCaaS offering leveraging Cisco HCS infrastructure (although this offering was too new to qualify for review in this Magic Quadrant). The CSPs bring a foundational base of carrier-grade network services, data centers and wireless assets, and through 2012, this group has remained committed to the UCaaS market. They typically leverage third-party vendor platforms, led by BroadSoft, Cisco and potentially Microsoft.
The CSPs' financial clout, strong brand and experience in real-time communications make them logical candidates for UCaaS market leadership. Through 2012, the CSPs have been signing contracts with midsize and larger enterprise accounts. The midsize accounts are starting to get activated. The larger enterprise accounts are often in the early stages of a multiyear integration.
Technology vendors are selected, well-branded technology vendors that are also service providers. Google, Microsoft and ShoreTel (via the M5 acquisition) have migrated their premises-based platforms to support direct cloud delivery (note that Cisco's cloud platform is designed to be delivered through channel partners, not directly served by Cisco).
Microsoft leads with its Office 365 offering, which consists of a broad suite of Microsoft business IT services, of which UCaaS is one. The Office 365 delivery model allows users to purchase cloud UCaaS either directly from Microsoft or through channels. Most UCaaS participants view Microsoft as both a potential partner and a potential threat. The threat perspective became more prominent following Microsoft's fourth quarter of 2011 acquisition of over-the-top provider Skype.
System integrators are the most recent addition to the UCaaS market. They have traditionally provided managed UC services and are now entering the UCaaS space. CSC is the lone system integrator in this UCaaS analysis, but Gartner expects more active UCaaS participation from such system integrators as HP, Dimension Data, IBM, Presidio and Xerox in 2013 and beyond. System integrators focus on larger accounts serviced over carrier-grade networks.
Market pricing for UCaaS varies widely. Key factors influencing price include deployment size, contract duration, the specific UCaaS supplier, features subscribed to, and any additional customized services included. Many UCaaS suppliers bundle a WAN service (such as IP MPLS) with UCaaS to ensure better network performance. Pricing for a rich UCaaS offering (that is, all features subscribed to) typically ranges from $30 to $45 per user per month. Simpler VoIP-centric solutions range from $13 to $22 per user per month. Gartner expects annual price erosion as the market matures, more vendors enter the market, service delivery becomes more efficient, and users gain market savvy.
Many enterprises with more than 1,000 employees, particularly those above 5,000 employees, prefer hybrid implementations. The hybrid model calls for some UC functions to be supported in the cloud, with others on-premises. The main factor driving hybrid implementations is the need to fully depreciate on-premises assets, such as an IP PBX purchased two years ago. Other reasons that businesses require a hybrid architecture include the preference to maintain certain functionality on-site (for example, email and concern about reliability of selected UC function(s)).
A hybrid deployment (see Note 2) is typically based on either a functional or geographical segmentation. A functional segmentation example is a deployment in which messaging and VoIP are delivered via the cloud, while IM/presence and conferencing are delivered on-site. In contrast, a geographical segmentation example is where the headquarters location is served by an on-premises IP PBX, with regional locations supported by cloud VoIP.
UCaaS suppliers indicate that enterprise requirements for hybrid deployments can result in elongated and expensive integrations. A significant amount of planning is required between the enterprise and UCaaS supplier to define the hybrid architecture (that is, getting the old to work with the new). The UCaaS supplier must then implement this customized hybrid environment via manual processes that result in significant professional services costs. Re-creating corporate dial plans in hybrid architectures have shown to be particularly difficult.
The complexity of tackling hybrid requirements is one reason why larger enterprises (above 5,000 employees) have been slow to adopt UCaaS. The ensuing professional services costs can destroy the UCaaS business case. We expect this hurdle to gradually be reduced (although not fully solved) a little bit each year during the next five years, as legacy infrastructure becomes more outdated, the user community becomes more comfortable with alternative UCaaS technology, and UCaaS providers secure automated tools to support hybrid environments.
Cloud UC deployments supporting more than 5,000 employees remain more the exception than the rule. Larger deployments above 5,000 tend to focus on a limited set of UC services. We expect larger, richer UCaaS deployments through 2013.
This Magic Quadrant analysis considers hybrid implementations as long as the majority of functionality is delivered via the cloud. However, vendors leading with hybrid implementations have their ratings reduced for not being fully cloud-enabled. Cisco, Google and Microsoft are all branded vendors capable of supporting large installations where hybrid is their lead delivery model. Google and Microsoft are full cloud solutions, but the resulting voice service is inadequate for most business environments.
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 and skills, 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 that the individual business unit will continue investing in the product, will continue offering the product and will advance the state of the art within the organization's portfolio of products.
Sales Execution/Pricing: The vendor's capabilities in all pre-sales 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 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 initiatives, 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 and so on.
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 to 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 products 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 sets 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 vertical markets.
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.