Highlights from Iron Mountain Digital 2.0 Industry Analyst Meeting

Highlights: The overall annual growth in data volumes is beings driven by an increase in unstructured data created by social media and collaboration solutions, mobile solutions and rich media which is leading to much higher costs for information storage and management. This problem is further exasperated as the information creation moves from customer on-premises sources, to now include mobile edge devices and the cloud. SMBs and mid-market enterprises now need to take a much more holistic approach to information management. Driven by the need to support compliance, litigation, business continuity and disaster recovery requirements – SMBs need to carefully consider who they partner with as their trusted guardian of their information considering their need to store, protect, manage and retrieve this information in a virtual world anytime, anywhere, and anyplace.

Quick Take: I’ve been following Iron Mountain for a while, and this was their 3^rd. analyst event that I attended. Everyone recognizes Salesforce.com as a cloud solution market leader; I would venture to say that the 2^nd biggest cloud solution and services provider is Iron Mountain Digital. Key insights from the conference are:

• Shift in company focus from Storage-as-a-Service to ‘Integrated Information Management Solutions‘ that is based on a location agnostic strategy – from on-premise to edge to cloud
  
  
• Key Value Propositions to address the customers Total Cost of Ownership/Total Cost of Management of Information include:
  
  • Help customers reduce their spend and risk in owning / storing their rapidly growing information through policy-based intelligent information storage and access
    
  • Help customers improve operational efficiencies and reduce their spend in managing their information for use
    
  • Trusted partner in information management for both physical and electronic records and information, and in bridging from one to the other in terms of document conversion, data restoration, scanning, etc. 

What makes Iron Mountain different?

• Information management platform with intelligence-driven and policy-enabled applications. This has been enabled through internal development and innovation (Digital Record Center for Compliant Messaging, for example), partnering (Total Email Management Suite, powered by Mimecast), and a carefully crafted acquisition strategy that started with Connected® and LiveVault® for backup to recent acquisitions that include Stratify® for eDiscovery and Mimosa for archiving.
  
• Unique capabilities
  to “look into” and “look across” information. This will help with categorization of data – even at the point of creation – to enable intelligent access, compliance (including risk management), discovery, recovery, destruction and other potential use cases
  
• Trusted partner who is financially strong. There are several companies offering remote backup solutions, and hosted email archiving, including you local VAR. But will these companies be around when you need the information 10-20 years from now for compliance purposes or to support litigation?
   What is still missing? Iron Mountain is accumulating a good war chest for location-agnostic information management solutions. They do have global relationships with large enterprise and upper mid-market companies – developed as the dominant leader in the physical information management services business that includes the storage of paper documents and magnetic tape storage media for backup and archiving purposes. They serve the SMB market through some core services, through direct and indirect channels. However, in my opinion, there is a larger opportunity in the SMB and core mid-market that includes:
  • Backup and archiving to support daily operations for desktops, servers and mobile devices
    
  • Backup and archiving to support business continuity and disaster recovery
    
  • Information management to support risk and compliance management
    
  • Virtualization of servers and desktops, and cloud computing is creating new and unique information creation and management opportunities which need to be addressed. The vendors that address these solutions (on public clouds based solutions) will be in the unique position to provide the services that Iron Mountain Digital 2.0 is seeking to provide. 

The first mover vendors will gain tremendous benefits, as these solution partnerships are now easy to replace – Iron Mountain can attest to this with their decade-long relationships with a large percentage of their customers. Iron Mountain needs to craft an SMB and core mid-market strategy with a more aggressive go-to-market plan than what I see at present.

 

Intuit and Microsoft – two SMB market leaders partnering on cloud platform strategies to deliver web applications

This agreement provides an end-to-end applications development environment and marketing/sales channels for application developers to develop and market application solutions to small businesses. Key elements of the agreement include:

• Broadening the applications developer community to develop SMB focused applications – Intuit to provide a SDK to help developers build applications on Microsoft Windows Azure Platform (and Visual Studio) and federate these web applications into Intuit Partner Platform (IPP) and launch these applications through the Intuit App Center (IAC).
• Expand channel for application developers to promote and market their applications – Business Productivity Online Suite into Intuit Partner Platform (IPP) by year-end – Salesforce.com’s Force.com PaaS platform. Microsoft and Intuit will join forces to expand channels for application developers by introducing them to IAC. With capabilities to buy and access these cloud-based applications from the IAC and support for single sign-on will make it easier for SMBs to use these applications.
• Microsoft to integrate Microsoft Business Productivity Online Standard Suite (BPOS) is a set of messaging and collaboration solutions hosted by Microsoft, and consists of Exchange Online, SharePoint Online, Office Live Meeting, and Office Communications Online. SMBs that use BPOS will have access to Intuit’s SMB focused business applications like QuickBooks and additional applications available through the IAC.

This relationship is focused on the U.S., the region where Intuit has majority of its presence. Microsoft and Intuit will support joint marketing programs targeted at the applications developers, channels and SMB companies.

In today’s fast-paced and volatile business climate, SMB need cloud-based application as they provide much better total cost of ownership (TCO) compared to on-premise installed applications. This relationship will provide significant benefits to SMBs that have shown increasing appetite to adopt cloud based solutions. The key benefits to the SMB community from this relationship are:

• For Microsoft Windows Azure cloud platform service (PaaS), the Intuit relationship is a key endorsement of Microsoft as a key player in the SMB segment and of a company that has a good understanding of how to work with application developers. This combination will provide good competition to the
• With Microsoft withdrawing from the small business accounting application area, creates a much more favorable partnership environment between the two companies to collaborate on the applications and channels front. A cooperative relationship between these two SMB focused companies will yield tremendous benefits to the SMB community.
• With more than four million Intuit’s QuickBooks customers, the Inuit App Center will present a very attractive opportunity for applications developers to showcase their applications to the QuickBooks user community.

Prognosis on SAP’s Business ByDesign – SaaS based ERP solution for the core mid-market

I came across a good analysis on some aspects of SaaS vs. on-premise vendors and solutions in the smoothspan post Why Do SaaS Companies Lose Money Hand Over Fist?

After reading through the post and various responses, I have some comments that could shed more light on the SaaS vs. on-premise topic and how this relates to SAP’s continued focus on Business ByDesign.

• The global ERP market opportunity driven by the large number of SMB/mid-market companies. In the U.S. there are 11 times more mid-market companies and on a worldwide basis the number is 13.5X.

  	# of U.S. Companies	# of Worldwide companies
  Enterprises (1000+ empl.)	9,000	52,000
  Mid-Market (100-1000 empl.)	100,000	700,000
  Ratio – Mid-market/Enterprise	11X	13.5X

   

   

• The enterprise market is heavily penetrated by ERP type solutions, mostly on-premise solutions. The U.S. mid-market has less than 42% ERP penetration. This penetration of ERP solutions is much lower outside the U.S. Existing SaaS solution vendors until now have primarily focused on the U.S. market, with less than 15-20% international sales (other than Salesforce.com). SAP being a global company, has the potential of ramping up fast in the international markets which is very under penetrated, where SAP already has established relationships and market presence (significantly more than any of the SaaS vendors). This presents a significant upside revenue opportunity for SAP in the mid-market (especially in the 100-500 employee segment which is outside of the sweet spot of other SAP midmarket solutions – BusinessOne and Business All-in-One).
  
• One also needs to look at the Total Cost of Ownership (TCO) of SaaS vs. on-premise solutions. A recent paper investigated details on this, The TCO of Cloud Computing in the SMB and Mid–Market Enterprises; A total cost of ownership comparison of cloud and on–premise business applications. Thee general conclusions are:
  
  • Considering a 4 year TCO, works in favor of the SaaS ERP solutions when the number of users is less than 400 users. Beyond these numbers of users, the on-premise TCO starts to become better (lower). These would be mostly enterprise companies, who favor on-premise solutions.
    
  • When considers a TCO beyond 4 years, on-premise solutions are better (lower). Again, these tend to be larger companies.
    
• Most of the SaaS vendors like Salesforce.com and NetSuite have a much higher sales and marketing expenses ratio (~ 54% of revenue as shown in the smoothspan post Why Do SaaS Companies Lose Money Hand Over Fist?) primarily driven by their direct sales model. For Business ByDesign, for which SAP is promoting a channel driven model, this percentage should be lower.
  
• R&D spending of 16% by SaaS companies – the strategy that needs to be explored by vendors looking to develop SaaS products, they need to seriously consider SaaS platforms like force.com (from Salesforce.com) and QuickBase (from Intuit). The developers that have used these platforms, have significantly reduced both their initial R&D spending and also their product development timeframe, brining SaaS solutions to market in some cases 1-2 years sooner. These SaaS/cloud platforms-as-a-service were not available when SAP embarked on development of ByD (or would they have used one, even if it was available…I am sure they have developed a significant internal expertise with this development experience). It is prudent for SAP to control the roll-out of Business-ByDesign until the product, delivery and channel kinks have been worked out. Prediction – Past experience with German engineering should alert the ERP market that in 2010, SAP will probably deliver a successful mid-market SaaS ERP solution for the core mid-market.
  

Reviewing the above, including good reviews from the current customers of Business ByDesign, it would be prudent for SAP not to scale back efforts on the roll-out of Business ByDesign – as strategy they have consistently communicating to the market.

Business Intelligence (BI) – Does it have a place in the SMB and Mid-Market Enterprises?

The recent demise of LucidEra has brought forward the discussion of the need for BI in the SMB and Mid-Market enterprises (companies with 1-999 employees and revenues usually less than $1 billion). My take is that this was based on the limited BI value LuidEra offered and the current difficult economic conditions vs. their SaaS based business model. With the explosion of BI solution targeted at the SMB & mid-market, the BI industry is inundated with newer solutions and scaled-down versions of existing enterprise solution targeted at this segment. I have also seen several discussions on the potential increase in adoption of BI solution based on these solutions being delivered in a SaaS model to address the IT resources and infrastructure in the SMB and mid-market companies.

Business Intelligence is all about gaining 360 degree insight into a company’s business, and helping company executive make decisions based on the facts as opposed to information in Excel spreadsheets or gut feel. Business intelligence can offer significant benefits to small and mid-sized organizations. The problem becomes sifting through the plethora of solutions to select offerings that meet the SMB’s needs. SMBs don’t have the required resources or time to do this.

The key question that needs to be addressed is – what are the BI related need of the SMB and mid-market companies and weather these needs are being met by these BI solutions? The solution delivery model is secondary to the key question. This segment of companies is realizing that business decisions need to be made on more than excel spreadsheets and gut instinct.

SMBs don’t understand data warehouses and BI, as it is applied to large enterprises as they do not have staff that can make sense out of the reporting provided by these standalone BI tools nor do they have IT resources/budgets to integrate standalone BI applications to data from various business applications and business processes. SMBs understand BI in the form of dashboards and reports with drill down capabilities. They need solutions that can provide quick real-time insights and ROI that can have measurable business results. How can the use information from the past to more accurately predict the future or to look at real-time data to more efficiently utilize the existing resources or inventory; make changes to enhance business process or operational efficiencies?

In my recent interaction with business solution vendors that focus on the SMB and mid-market, BI solutions are now available and embedded as part of a larger business solution – integrated business solution like NetSuite; SAP (based on Business Objects acquisition) – Businessone, Business-by-Design, Business All-in-One; Oracle Business Intelligence Standard Edition; other ERP and CRM solutions (Salesforce.com) .

SMB and mid-market companies need to first investigate the BI capabilities that are already provided by these applications or modules that are already integrated and can be easily add-on to their business application solutions. It does not matter whether these solutions are cloud-based (SaaS), hosted or on-premise; utilizing these exiting BI functionality will provide much easier implementation and ROI compared to bringing in new vendors. Most of the vendors mentioned provide easy to use dashboards with BI analytics capabilities to enhance operational efficiencies, analytical and predictive analysis, risk analysis, forecasting, etc. Business application vendors need to increase their focus on their BI solutions as a key value proposition to the SMB and mid-market.

 

The Compelling TCO Case for Cloud-based business applications in SMB and Mid-Market Enterprises

A 4-year total cost of ownership (TCO) perspective comparing cloud and on-premise business application deployment

Small and medium businesses (SMBs) face a tricky dilemma in today’s tough economic climate. It’s no longer business as usual; companies need to figure out how to survive through the current downturn, and get on track to capitalize on new opportunities that will emerge as the economy starts to grow again. They need business solutions to help them to manage more efficiently day-to-day, and also the intelligence they need to move the business forward.

As SMBs weather through turbulent economic storms, total cost of ownership (TCO) is often top of mind when evaluating new business applications. Many customers have become interested in how cloud computing or software-as-a-service (SaaS) can help lower their costs by eliminating upfront capital investments and ongoing maintenance costs associated with on-premise solutions.

Hurwitz & Associates recently completed an in-depth study comparing TCO of cloud-based business application and equivalent on-premise solutions.

Cloud computing essentially eliminates the need for customers to buy, deploy and maintain IT infrastructure or application software individually. Regardless of the application, the cloud computing vendor takes responsibility for all of the infrastructure required to run the solution–servers, backup, software, operating systems, databases, updates, migration, power and cooling, facility space, etc., and associated internal and third-party staffing costs. Because cloud computing vendors manage all of their customers on a single instance of the software, they can amortize costs over thousands of customers. This yields substantial economies of scale and skill, and lowers TCO.

Key findings from our analysis include:

• Overall TCO for cloud-based integrated solution suite is significantly lower than a comparable on-premise solution. This holds true for both SMB and mid-market firms.
  
• IT Infrastructure costs (hardware, software and maintenance) account for about 10% of the total cost of deploying on-premise business applications.
  
• The cost advantages of cloud computing slowly taper off as the number of users increases beyond mid-market to larger enterprise companies.
  
• Application subscription costs account for two-thirds of the total solution cost in the cloud computing model, where the subscription fee encompasses underlying IT infrastructure and personnel costs required to manage business solution. In comparison, business application costs comprise about 27% of total cost in an on-premise situation.
  
• Costs for internal IT staff and/or value-added reseller (VAR), consultant or systems integrator (SI) resources required for application implementation and support represent a significantly higher percentage of total cost for on-premise solutions than for cloud-based business solutions.
  
• Pre-integrated front and back office functionality in the integrated business application offering contributes to reducing integration complexity and lowers application implementation costs.
  

Intuit’s Federated Apps Cloud Computing Partner Platform Will Provide Very Significant Benefits to ISVs

One of the key technology pain-point (for SMBs) relate to multiple disparate SaaS/on-premise based business and collaboration applications that do not talk to each other (requiring re-entry of the same data) and each with their own separate access, UI, billing and pricing schemas – making it very difficult for them to resolve problems when they occur as they cannot triage the source of the problem. These SMBs lack the IT resources to identify the source of problems in an environment of multiple SaaS applications or have the capabilities integrate multiple soiled SaaS applications (each with a different UI, access requirements and billing platforms) and infrastructure services.

Intuit has a deep understanding of the SMB market based on its proven track record as leading business applications vendor in the U.S. Based on this in-sight, Intuit has developed a much more expansive CONNECTED SERVICES strategy to address the above mentioned technology problem – by providing a platform to connect and distribute all the varied cloud-based SMB applications and also providing a cloud-based development platform for ISVs that want to develop on the Intuit QuickBase platform.

Why is this of value to the ISVs that want to service the 6 million plus SMB companies in the U.S.?

• Aggregation of applications on a cloud-based online application store – the Intuit Workplace portal to be part of the Intuit Marketplace with single sign-on where existing Intuit customers and Intuit and other small business prospects can find, try and buy any of the cloud-based applications that are part of the Intuit Partner Platform (IPP) ecosystem.
  
• The biggest attraction for ISVs to join the IPP is the large installed base of Intuit customers in both the SMB and mid-market segments – more than 4 million plus active customers (with 25 million employees); which can be referred to as Customer Cloud. Reaching potential customers was identified as the biggest challenge by both the IVS panel and the VC panel. Selling to this vast SMB population has been the biggest barrier for ISV (especially the ones with less than 50 employees). Existing VAR channels do not work for this segment, online marketing channels are also very expensive and do not provide an adequate level of exposure to these hard-to-reach small businesses – in most cases the SMBs are not even aware of the application solutions. Successful cases of viral marketing based on social networking are rare. The Intuit IPP provides a platform for these ISVs to ride on the coattails of Intuit (several ISVs that are developing on the Salesforce.com Force.com platform have experienced similar success, although that ecosystem is only limited to applications developed on that platform – the federated strategy of Intuit’s IPP has the potential of creating a significantly bigger ecosystem).
  
• The flexibility to:
  
  • develop new (and existing web applications) cloud-based applications with any programming language, database, or cloud computing resource and then publish them to the Intuit Workplace.
    
  • host the cloud-based solution on Intuit Workplace cloud datacenter or an alternate cloud computing data center (Amazon-EC2, Salesforce.com – CloudForce.com, IBM-Blue Cloud, Rackspace, etc.) and at the same time be part of the Intuit IPP application ecosystem and marketplace and get all the benefits associated with it.
    
• The Intuit Workplace will provide the Single billing and e-commerce platform for all the ISV applications in the Intuit marketplace. This is of huge value of these ISVs.
  

This federated application capability now available on the Intuit IPP. Every application on the IPP will work together, use a single username and password, and be accessible via browser. Some of the federated applications will also work with the Intuit family of products. To make all these applications work in harmony on the IPP – Intuit will run a security assessment and privacy policy review on these applications prior to publication on the IPP. The four integration points for the federated applications are:

• Data: To integrate applications with Intuit Partner Platform data, developers must program against APIs provided by Intuit to enable data synchronization
  
• Login: A Federated Identity Web API allows users to use their Intuit Workplace login credentials to access the federated applications within Intuit Workplace.
  
• User management and permissions: Intuit provides developers with a Web API so that their application can handle processes such as inviting additional users to their application.
  
• Navigation: Developers with existing SaaS applications may have to make minor User Interface adjustments, such as removing sign-in/sign-out links within their solutions. The Intuit Workplace provides this in its toolbar to provide users a seamless experience between applications.

The next generation Contact Center – Social Networking + Traditional Contact Center

The traditional contact centers now support more real-time communications technologies – VoIP, IVR, e-mail, IM. However, the intelligence and information repositories that are leveraged by these contact centers is very much static and internally focused.

With the growing popularity of social networking and community knowledge, where contact center agents can take advantage of consumers/customers helping each other with issues and queries – reducing the number of inquiry interactions the contact center service reps have to make, delivery real cost savings and improving the contact center ROI. The issue is – the lack of a comprehensive easy-to-use solution that integrates blogs, social networking sites (Twitter, Facebook, and LinkedIn, etc.) and search to easily aggregate the desired knowledge and mesh it with the internal knowledge repository, including the customer information stored in the enterprises CRM systems.

I was at the Salesforce.com CloudForce.com seminar some time ago, where they showcased their service cloud strategy. This Service Cloud showed an elegant and easy-to-use dashboard to present and search the popular social networking sites to the contact center agents – this will help them take advantage of all the community knowledge without spending a lot of time and effort following individual solutions like Twitter, Facebook, LinkedIn, WordPress,

Traditional contact center solutions when integrated with an easy-to-use comprehensive community knowledge solution – presents a market disruption elevating this new contact center solution to one that provides significantly higher ROI and customer satisfaction. The Salesforce.com ServiceCloud can be integrated with the traditional contact centers solutions that have primarily relied on static internal information to service the customers, and have been separated from the community knowledge in the cloud from social networking conversations, blogs and Google. The Service Cloud presents an excellent dashboard to bring these two disparate clouds to establish a cloud-based customer service platform and knowledge for contact/call centers – for customer service agents, customer self-service portals and partners. SIP and presence enable this cloud service platform, and it is ready for some very significant communication and collaboration – via VoIP phones (click to call), e-mail, or IM based conversations.

Why is this of value to Customer Contact Center solutions companies? The current leading Contact Center solutions from the leading telecom equipment vendors like Avaya, Cisco, and Nortel are more along the lines of the traditional on-premise solutions and do not present an easy solution to integrate the cloud-based community knowledge, except in some cases they have integrated search solutions by integration with Google. The Salesforce.com Service Cloud platform can be used to provide an integrated internal knowledge base and the community knowledge/social network (enterprises can define the scope, and members of their communities) from Twitter, Facebook, blogs, Google search, etc. In addition, one can include CRM to monitor customer satisfaction, address any questions/concerns, resolve problems quickly, provide product tips and tricks, and send out information in the customers’ preferred way of communication – without long waiting times or endless forwards and escalations. This could present a disruptive service solution which has the capability to significantly improve customer satisfaction and at the same time reduce the cost to provide this service.

This presents a good partnership opportunity for the traditional contact center application vendors to integrate with the social networking/community knowledge cloud-based service platform without the long internal development cycle. Adopting the Salesforce.com Service Cloud platform will provide a 1-2 years time-to-market advantage vs. the vendors that choose to do it themselves.

 

 

CitrixOnline #GoToMeeting is the leading Web Conferencing and Collaboration solution for Small Businesses

In a recent Twitter Tweetchat discussion hosted by @sbbuss, majority of the small businesses mentioned #GoToMeeting as their solution of choice for Web Conferencing and Collaboration.

The web conferencing software and services market is becoming highly competitive, lead by the presence of a few major brands and a plethora of small vendor. Web conferencing is an integral workplace application that is used for communications and collaboration.

Small businesses are primarily using hosted web conferencing services offered by service providers on a on-demand SaaS (Software as a Service)  delivery model for a flexible licensing model based on pay-as-you-use fee (cost per user per minute) or fixed fee (cost per seat per month). Medium businesses use a mixture of these hosted and in some cases on-premise IP-PBX based web conferencing solutions.

Designed for the unique needs of SMB enterprises, leading web conferencing vendors are striving for ease-of-use, simplicity, efficient network performance and flexibility in their licensing and pricing models.

Key Drivers for Web Conferencing:

• Better support a global distributed workforce
• Save travel costs and participant time
• Support revenue generation activities
• Availability of hosted service with pay-as-you-go
• Ability to do impromptu meetings
• Improve employee collaboration & productivity
• Improve organizations efficiency
• Better communication and collaboration between employees, customers, partners, suppliers
• Increased adoption of web conferencing for training
• Hosted solutions eliminate/ reduce need for client software

Vendors - The leading global web conferencing vendors based on number of customers/registered users are Cisco/#WebEx, Microsoft LiveMeeting, CitrixOnLine #GoToMeeting, and IBM #Sametime Unyte and Lotus SameTime.

In the small business segment, #CitrixOnline GoToMeeting has the largest share driven by the very visible and successful TV advertisement campaigns.

Several new web conferencing startups – like DimDim, Yugma – based on open source are promoting free hosted solutions with basic features for a small number of users (usually 10) and charging SMBs as the number of users increases or for a customer hosted version. The question is ‘Are SMBs jumping to the free bandwagon?’ There always will be the small businesses (mainly SoHo users) that are looking to use these vendors on an ad-hoc basis where communications are not mission critical. SMBs do not want a repeat of the internet bubble where all these types of ‘free stuff’ companies got wiped out.

Applications/Markets - This application is now used extensively horizontally across all small and mid-market companies. Sales, marketing (product announcements, partner recruitment, investor conferences), training (for distributed employees, partners, and customers), project management, and product development are the key application segments.

Vertical industries including financial services, technology, manufacturing, healthcare, construction, law, education, and professional services are among the top adopters of web conferencing solutions.

Can Cloud Computing and Managed Services Resolve the Telecom Crisis?

The telecom dilemma is not new, the failure of telecom network service providers to leave their legacy technologies and embrace the all-IP world has not materialized as anticipated, especially in helping them generate significant revenues. They are still dependent on a handful of commodity services, even when one considers their cellular operations. They have not succeeded to create mobile IP applications that would have provided the growth engine – Apple with their iPhone platform is successful leading that effort.

Telecom companies (like AT&T, Verizon, BT) are painfully aware that their existing services telephony (PSTN services are experiencing a rapid decline and mobile services are also experiencing stagnation; some growth in VoIP services), Internet access markets are experiencing slow growth as adoption reaches saturation, and their Managed Services are still not breaking even as they not widely promoted. However, what these giant Telecom companies have going for them is that they still own the networks that power the cloud and large data centers in the cloud.

These companies need to introduce new services if they are to gain new and retain existing customers and grow revenue streams. If they can partner with some strategic global vendors and develop a vision to monetize these assets, they can become a key player in the cloud ecosystem. The current turbulent economic conditions provide the market disruption that provides an entry for these Telecom based partner ecosystem.

‘Cloud Computing and Services’ presents this market disruption, an opportunity for the telecom companies, as enterprises and SMBs look for alternatives to significantly reduce their capital and IT staff expenditures to more flexible pay-as-you-use operational expense models – if they can address IT needs of the enterprises and SMBs, not just ISVs or custom application developers (the existing cloud computing vendors are primarily addressing the needs of the software developers).

Cloud Computing and Services presents is a significant growth market opportunity. As the management/services of IT infrastructure and applications accounts for a more than 60% of the total IT spend, IT segments getting more specialized, cost and complexity of data centers increasing exponentially – enterprises and SMBs are looking for alternate IT solutions that can help these enterprises focus on their core business. This represents a very significant revenue and growth market opportunity in cloud computing and services for solutions that address the IT needs of mainstream enterprises and not only tech savvy software developers.

The significant Telecom companies surely have the financial resources to do this. However, they need to transform and act more like a technology company – partner with the technology companies that are successful at developing and implementing compelling new ideas – with go-to-market urgency, marketing prowess, technology partnerships with vendors that are market leaders and can bring channels to quickly reach the enterprise and SMB businesses, easy-to-understand and implement business models, and proactive customer service models.

The question is can these traditional Telecom companies comprehend and exploit the market momentum for this opportunity – Can they be aggressive and innovative like the IT technology and Web 2.0 companies or will their traditional bureaucratic structure relegate them to a me-too status!

BroadSoft now supporting Hosted Video Unified Communications creating new revenue opportunities for Service Provider partners

BroadSoft, the leading provider of hosted PBX platform, VoIP services and unified communications solutions is now supporting video communication solutions from the leading video communications vendors – Tandberg, Polycom and LifeSize.

As SMBs become more distributed and globalized, efficient communications and collaboration are becoming increasingly difficult with utilizing only applications like e-mail and audio conferencing solutions. These companies are turning to affordable web and video conferencing solutions to resolve and optimize the above issues.

In the current difficult economic environments and with increasing travel expenses (both domestic and international) and time commitment required, the new affordable and easy-to-use hosted video conferencing systems that may be conference room or desktop based, the reduction in travel costs is providing rapid ROI and savings in travel time providing increased employee productivity – leading to increased adoption even among SMBs globally. In addition, as SMBs become more environmentally aware and responsible, these solutions help support the need to reduce carbon emissions and provide support for ‘green’ initiatives.

In my discussions with several small and mid-market SMBs in the last several weeks, an increasing percentage of the SMB and mid-market enterprises distributed over several locations, are now seriously considering video conferencing solutions. Some of the larger financial and private venture companies are looking at 3 Tier solutions. The top Tier of Telepresence solution at corporate locations to communicate with key accounts for executive management, Tier 2 small conference room solutions for teams/workgroup meetings and training sessions, Tier 3 of personal integrated or desktop system for more regular 1:1 communication sessions. As the adoption of “presence” becomes more prevalent for IP devices and unified communications, integration of video communications into presence engines will further increase interest and adoption; new video conferencing solutions are based on standards and allow easy integration with other audio visual systems at partner and customer sites.

The ability to use standard web browsers with hosted solutions, off-the-shelf web cameras, and existing network infrastructure has accelerated the popularity and growth of web-based video conferencing market and has helped to drive its adoption into new industries and applications. As video communication solutions now support reservationless On-demand conferencing, they let employees hold impromptu meeting, without pre-scheduling these meetings – allowing them to collaborate when they need to, with whomever they need to, provided both parties have access to video conferencing systems.

Vendors are recognizing the market opportunity and value of video conferencing solutions for the SMB market and are making available systems that are affordable and easy-to-install/ use/manage because SMBs typically don’t have the IT staff to support these solutions. In some instances these solutions can be managed remotely by VARs and service providers. However, they are still a ways away from a price that will explode mainstream adoption in the global SMB markets.

Key Drivers for Video Conferencing Solutions in the SMB Market:

• Availability of affordable HD/SD Video Conferencing Systems, both web and on-premise based Video Conferencing solutions
  
• Support for Unified Communications
  supporting integration of video with UC desktop and smartphone applications
  
• Support for end-to-end video solutions
  
• Increasing employee productivity and enhancing organizational efficiency
  
• Better and more interactive real-time communication and collaboration between employees
  
• Need to interconnect distributed branch offices (within country and international locations), better interaction with outsourcing partners
  
• Enhance the ability of distributed workforce to communicate and collaborate among themselves, and with customers/ partners
  
• Save travel costs and meeting expenses
  
• Ability to utilize off-the-shelf video cameras and headsets
  
• Increased bandwidth availability and lower cost of high bandwidth connectivity
  
• Increased adoption of rich media communications – video
  
• Scaling knowledge by making domain experts more accessible and productive
  

Applications/Markets — Horizontally across all mid-market companies’ sales, marketing, training (for distributed employees, partners, and customers), recruitment, and product development are the key application segments. Vertical industries including financial services, professional services, technology, manufacturing, healthcare, oil and gas, law, entertainment and education are among the top adopters of video conferencing solutions. New applications for video conferencing are being launched with greater frequency as deployment increases; increases in travel costs are prompting SMBs to interview potential employees as this allows one to interact virtually face-to-face.