posted by: Mark Cortner
The recent news of a joint venture between Siemens AG and The Gores Group, a private equity firm, fulfilled the long-anticipated search for a partner to solidify the future of Siemens Enterprise Communications (also known as SEN). The cloud that has surrounded SEN over the last several years while searching for a partner has frequently obscured its vision and product advancements related to unified communications (UC).
SEN has a large global installed base, though the company has had difficulty reaching the same level of presence in the North American market as other industry leaders such as Avaya, Cisco, and Nortel. SEN has successfully protected its core installed base in EMEA, its strongest global region, through the transition from circuit-switched to IP-based telephony and now to UC with its OpenScape portfolio. Siemens has truly been a visionary with respect the UC; being one of the first to recognize a shift in the telephony industry from hardware platforms to software applications and an industry leader in the adoption of open standards and technologies such as SIP, SOA, and presence-based communications within its UC platform.
The news of the partnership undoubtedly will contribute to SEN’s ability to protect its installed base, though the joint venture announcement alone will not address the obstacles preventing SEN from expanding its global market share, especially in the North American market. SEN has orchestrated several impressive and in some ways groundbreaking successes with its OpenScape product portfolio, including a technology licensing agreement with IBM for its Lotus Sametime Unified Telephony application and British Telecom for hosted telephony and unified communications services. SEN has one of the least predatory approaches to the market, fully embracing the concept of open applications and platforms. But an overwhelming weakness is its channel strategy and ability to execute within its largest growth market opportunities, North America and APAC.
SEN should be applauded and recognized for its vision and the evolution of its product portfolio, but must now apply this same level of leadership to establishing an effective and sustainable growth market channel strategy. Gore and Siemens AG intend to invest a combined $500M in the joint venture in addition to R&D spend. The primary focus of this investment should be centered on getting back in the game through programs aimed at raising customer awareness and establishing an effective channel. The early adoption of unified communications by large enterprises will open the door to many new growth opportunities, and with the proper execution, SEN can stake a growing claim to the global UC market.
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