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Another year has gone by without the long-awaited unified communications revolution, but industry activity suggests the anticipation is still high

Unified communications (UC) seemed like a technology that was on the brink of mainstream adoption before the economic downturn kicked in. In 2009, however, its potential remained unfulfilled.

Moving to a single network, based on the Internet protocol, for communications is widely considered to be the first, vital step towards UC, and it is one that many organisations have already taken: This year’s Effective IT Survey found that 45.7% of respondents have ‘Implemented a unified IP network architecture’. The strategy was rated third highest in terms of effectiveness: Of those respondents that have adopted it, 79.4% claimed that the strategy has been either ‘effective’ or ‘very effective’. Clearly, converging on an IP network is now established as best practice.

However, many observers report that the functional benefits of converging all communications onto a single platform, from telephone calls and voicemails to videoconferencing and instant messaging – benefits to collaboration, to the speed of internal processes and to travel expenditure – remain largely unrealised. "There has been a piecemeal approach to UC take-up,” says Evan Kirchheimer, principal analyst for mobile UC at Ovum. According
to the telecommunications analyst, IT departments are in no rush to adopt a technology in which they still cannot recognise quantifiable benefits. This situation is unlikely to change in 2010, he adds.

According to Kirchheimer, the blame for UC’s poor uptake does not rest with the economic downturn. It has played a part, he says, but it has not been “the show-stopper”. Justifying the expenditure required by a full-blown UC deployment is difficult in any economic climate, says Kirchheimer. “It’s difficult to make a business case for UC. It’s very hard to calculate exactly how much will be saved or what will be made more efficient,” he explains.

That means UC sits at odds with the IT management mindset of the day, focused as it is on returns on investment and business value. “There are benefits,” Kirchheimer says, “though they are quite difficult to monetise or measure.”
While the customer adoption picture moved little in 2009, the industry behind the technology was turned on its head when Nortel filed for bankruptcy protection in January 2009. The Canadian telecommunications giant had invested significantly in UC technology, and by forcing it to divest itself of its UC technology, its financial troubles effectively plucked one of the leaders out of the race.

Rival vendor Avaya’s subsequent acquisition of Nortel’s Enterprise Solutions division finally closed in November 2009. The $900 million deal grants that company a full 25% share of the UC market. This is not to say that the UC market is all sewn up, however. In fact, it is an opportunity that has attracted some formidable contenders. Already chomping at Avaya’s heels in the UC space are Microsoft and Cisco, two companies with the cash and the inclination to fight for as long as it takes.

Furthermore, the UC opportunity has attracted the attention of various mobile telecommunications providers, keen to grow their share of the business market. In July 2009, for example, Vodafone launched its own enterprise UC offering, Vodafone One, based on Microsoft’s Office Communication Server (OCS) technology. “This is a corporate-wide, long-term commitment to become a full-blown UC provider,” Peter Kelly, enterprise director of Vodafone UK, told Information Age. But perhaps the most significant development in the communications arena during 2009 was the emergence of hosted UC offerings.

Hosting the call

A number of vendors already offer hosted UC offerings, but 2009 saw some bigger names muscle in on the act. Vodafone, again, followed up the launch of Vodafone One with a hosted alternative, targeted at small and medium-sized businesses. And in December 2009, BT and Cisco announced a partnership that will see the telecommunications provider use Cisco’s IP telephony infrastructure products to offer hosted, converged voice, data and mobile services to enterprise customers.

Enterprise organisations’ appetite to outsource their communications infrastructure was seen in early December, when energy giant BP announced a five-year deal with Deutsche Telekom AG’s T-Systems to manage its voice and data infrastructure. Deals of this ilk may well accelerate UC adoption, as businesses choose to adopt cutting-edge functionality as they outsource.

Another driver for hosted UC will be the challenge of securing on-premise systems, according to Jonathan Zar, a spokesman for the Voice over IP Security Alliance. Already, UC adopters are finding that their existing network security measures are insufficient for IP-based voice systems, he says, and as more communication tools are converged on the IP network, the security challenge will only grow. “[UC] will go the way of cloud computing,” says Zar, “with organisations migrating to fully hosted arrangements.”

Some market watchers expect demand for hosted UC services to grow rapidly in the next few years. A report published in the first half of 2009 by analyst company Radicati Group predicted that the global hosted UC market would be worth $2.3 billion in 2009, and grow to nearly $5 billion by 2013. A report from ABI Research, meanwhile, valued the combined UC market at just $302 million in 2008, and predicted that it would grow to $4.2 billion by 2014. (The discrepancy in these values may relate to alternative definitions of what exactly constitutes a ‘unified’ communications offer.)

However, Ovum’s Kirchheimer insists that no “hockey stick growth curve” in UC of any kind is on the cards, and his view is not untypical. It is clear from industry moves that a number of parties anticipate an increase in adoption in future, but whether 2010 will be the year that UC becomes mainstream is far less certain.