Network and Telecom Strategies Blog

Cisco + Tandberg: A New Open, Interoperable Product Portfolio?

posted by: Mark Cortner

Earlier this week, Cisco and Tandberg provided an initial peek at plans for an integrated product portfolio that will be disclosed following the closure of Cisco’s pending acquisition of Tandberg. In the announcement, the companies stated that they believe that competition and industry expansion will be best served through open standards and interoperability. I recently posted thoughts on Cisco’s release of its proprietary telepresence protocol to the public domain and its intention to propose the protocol as an open industry standard as is an initial step to drive interoperability standards in telepresence. The release indicates that Cisco will create an open architecture that enables greater interoperability with third-party systems beyond "telepresence" systems.

I’m curious to learn how this architecture will deviate from Cisco’s current visual collaboration architecture(s). I agree that one important factor related to industry expansion will be interoperability between vendors in all visual collaboration categories—immersive telepresence, room-based videoconferencing systems, personal systems, and infrastructure elements such as MCUs. The degree of customer acceptance and adoption achieved by video-based solutions will depend greatly upon how each type of solution can interoperate with other systems—from the same vendor and different vendors, both internal and external to the enterprise. I find that enterprise perceptions of video-based collaboration vary significantly, as many are still wary of past interoperability and limitations on system utility. I believe Cisco and Tandberg are on the right track, they realize that without widespread interoperability, the past barriers to video adoption will be difficult to overcome and new growth segments such as personal systems will not reach their market potential ... it will be interesting to see how the "open and interoperable" strategy will unfold and translate into actual product strategy and implementations.
 

IBM Lotusphere 2010: A UC(C) Perspective

posted by: Mark Cortner

Last week, IBM Lotus held its annual Lotusphere conference in Orlando, FL. The conference attendance, dominated by faithful developers and partners, was solid although I suspect the numbers were slightly down from prior years – but given the economic environment, IBM should be pleased.

The time allocated to Lotus’s unified communications and collaboration (UCC) strategy during the keynote session was more limited than in recent years.  The UCC content emphasized gains in momentum, delivery of the most recent update to Sametime (8.5), and customer successes with IBM’s telephony integration middleware solution, Sametime Unified Telephony (SUT). The content touched on the importance of driving business value from UC through mobility and video-based applications, and the extension of UC to business applications and processes (i.e., CEBP) - but overall, the content dedicated to UCC was minimal.

In the past, IBM has more openly shared roadmap and release details for the upcoming year – one reason this may have been approached differently this year is that over the past several years, IBM had essentially fallen behind in the UC platform market and pre-announcements were necessary. I believe Lotus has closed much of the gap with its competitors now and as a result, is not under the same market pressure to disclose its future plans to maintain their customer base or have meaningful conversations with new prospects. I hope that IBM will take this opportunity to move more aggressively in the UC(C) than in the past, by exploiting two of the most significant announcements in the keynote: (1) cloud-based service alternatives (i.e., LotusLive) developed in conjunction and partnership with IBM Research (aka LotusLive Labs) and, (2) changing the use paradigm and driving innovation for communications and collaboration activities and events through Project Vulcan, an experience concept reminiscent of Google Wave.

Polycom + Juniper = Cisco + Tandberg?

posted by: Mark Cortner

The alliance announced earlier this week between Polycom and Juniper Networks is targeted to deliver “an intelligent service provider solution for assured-quality, managed video services over a converged network” … and also targeted as response from both companies to Cisco’s pending acquisition of Tandberg. The alliance will allow enterprises to extract more business value from visual collaboration applications by enabling HD videoconferencing and telepresence traffic to traverse common network facilities with guaranteed quality levels. The alliance will deliver services, touted as the first “conferencing-aware” network solution by mid 2010.

The announcement indicates a deepening of the relationship between Polycom and Juniper, with Cisco’s competitive overlap increasing over the last several years and now punctuated by the pending acquisition of Tandberg. The stakes are high for both Polycom and Juniper; the announcement cites market estimates that project the annual growth rate for the visual collaboration market to be nearly 20% and reach a market size of $900 million by 2015.

The alliance will leverage Polycom's Open Collaboration Network strategy, providing an open and interoperable collaboration solution – a key point of differentiation directed at Cisco that partially dissolved with Cisco’s announced royalty-free licensing of its proprietary telepresence protocol to the industry. But the most powerful claims by Polycom and Juniper are that their alliance will provide a solution that improves network utility with lower bandwidth consumption and much higher session resiliency as compared to its “leading competitor”, aka Cisco-based networks. The game is on …

A Step Forward for Telepresence

posted by: Mark Cortner

The prospects for telepresence systems to expand beyond today’s vendor-specific islands of visual collaboration took a step forward this week. Cisco announced the release of its proprietary telepresence protocol to the public domain at its Networkers Live 2010 conference in Barcelona. Cisco will license the protocol, the Telepresence Interoperability Protocol (TIP), royalty-free to all industry players. The protocol is not an industry standard, but is actually intellectual property that Cisco is making available to the industry in an attempt to facilitate intercompany telepresence applications and usage. Cisco intends to propose the protocol as an open industry standard and is an initial step to drive interoperability standards in telepresence. The impact of enabling essentially a defacto standard for telepresence interoperability will allow the telepresence offerings, and most significantly the multi-screen systems, from all licensees to interoperate with each other as well as those systems developed by Cisco.

The announcement by Cisco was accompanied by news that Tandberg, LifeSize, and Radvision have already licensed the protocol. The videoconferencing industry has seen some significant consolidation in the last several months – Cisco is in the process of acquiring Tandberg and LifeSize was acquired by Logitech in late 2009. The licensing of the protocol is a significant step forward, though the news that Tandberg was a initial licensee is not a surprising step given its pending acquisition by Cisco (this would have been more significant if Tandberg, a dominant player in the global market, was not in being acquired by Cisco). The notable vendors absent from the initial licensee list including Polycom and Sony, although Cisco has indicated that some industry players (unnamed) are still in the process of reviewing the protocol license.

Cisco’s Acquisition of Tandberg

posted by: Mark Cortner

The first hurdle to Cisco’s proposed acquisition of Tandberg appears to have been cleared—earlier today Cisco announced that it now controls 90% of the shares in Tandberg. Cisco received acceptances representing 89.1% of the outstanding shares and purchased an additional 2% of the outstanding shares in November, resulting in control of 91.1% of the shares and voting rights in Tandberg. The process to clear this initial hurdle took slightly less than 60 days from when Cisco’s original acquisition bid was presented to Tandberg shareholders and will cost Cisco $3.4 billion, an increase from its initial offer of $3.0 billion. The remaining hurdles include the satisfaction or waiver of the remaining conditions to the offer through the Oslo Stock Exchange and approval from the U.S. Department of Justice.

The effect on the videoconferencing market and Cisco’s market share will parallel that following Cisco’s acquisition of WebEx in early 2007 for $3.2 billion. The acquisition of WebEx vaulted Cisco into the collaboration market and positioned Cisco as the market leader overnight. The successful acquisition of Tandberg will similarly position Cisco as a global market leader in videoconferencing, significantly augmenting its current market position developed over the past several years with its own high-end telepresence solutions and high-definition room-based videoconferencing systems.

I anticipate Cisco will quickly add integrated capabilities between its Unified Communications Manager and WebEx applications with the Tandberg videoconferencing product lines to facilitate pull-through and refresh system opportunities. With this acquisition, Cisco has improved its overall market position in the unified communications and collaboration markets (these are rapidly blending together) and has created another strong product basis to successfully cross-position with other elements of its portfolio. In terms of the chess-match between Cisco and Microsoft for leadership in the UC market ... advantage Cisco.

Good News for Wideband Voice

posted by: Mark Cortner

The recent announcement by Verizon that it will deliver all of next-generation network multimedia content over its IP-based core network, facilitating the convergence of fixed and wireless networks, is good news for wideband voice technology. The voice market is attempting the ride the wave of hype and interest in high-definition technology with the wideband voice although several practical implementation obstacles currently limit the benefits and value of wideband voice.

The fact that a significant proportion of voice calls sourced from enterprise telephony systems must traverse the PSTN for call completion renders the use of wideband voice to intra-enterprise participants is one obstacle. In addition, the use of mobile phones is increasingly common within the enterprise—many users utilize simultaneous ring, mobile extension, and mobile UC client capabilities provided in conjunction with an enterprise’s IP-PBX system to receive calls on their mobile phones instead of their desktop handsets. The impact of both of these use case scenarios diminishes the effective use and benefits of wideband voice.

The announcement from Verizon indicates that the function of network transport and media transcoding will be separated; if any media transcoding is required the primary responsibility will fall to the participating endpoints—the network will provide a media conversion function only in cases where the endpoints do not share a common codec. If the wideband voice community can convince the fixed network and wireless network endpoint vendors (nimble) to support wideband voice, the networks (not so nimble) most commonly utilized to transport voice traffic to business partners, customers, and in many cases an enterprise’s own employees, will no longer be an impediment to the use of wideband voice.

UC and Virtualization

posted by: Mark Cortner

The recent announcement from Avaya related to its new virtualized UC offering is an interesting development for the UC industry. The single-server UC solution is based on Avaya’s Aura architecture which was introduced earlier this year. In early 2008, Mitel announced a single-server solution that signified the first application of virtualization technology to enterprise real-time communications applications.

Avaya’s initial virtualization solution, Aura System Platform, is currently targeted to the midsize market with a maximum scalability of 2400 users. The solution includes the core components within Avaya’s Aura architecture—Communications Manager, Voice Messaging, SIP Enablement Services, Application Enablement Services, Utility Services, and Media Services deployed on a single server.

I fully expect more announcements soon from the UC industry that take advantage of virtualization for not only asynchronous applications but also real-time communications and collaboration applications. I also expect the scalability of virtualized UC solutions to rapidly increase; anticipate that single-server offerings will evolve to effectively address enterprise requirements within the next year … and one step closer to cloud-based UC.

Personal Telepresence

posted by: Mark Cortner

The same week Cisco announced an agreement to acquire Tandberg, another interesting and potentially disruptive development occurred in the visual collaboration market—LifeSize announced a new high-definition videoconferencing product that may redefine and expand the market for telepresence solutions. The product, LifeSize® Passport™, is approximately the size of a netbook and delivers a personal “telepresence” experience at a price point below $2,500 USD.

Lifesize’s Passport supports 720p HD video at 30 frames per second and HD audio and requires only 1 Mbps of bandwidth. The current release of Passport supports point-to-point HD video, although one would suspect that a multi-point version is in its future. In addition, and other evidence point related to the growing acceptance of Skype in the enterprise, Passport supports Skype as an audio source enabling the product to directly connect with any Skype user worldwide. The product also connects with other LifeSize and standards-compliant enterprise videoconferencing systems.

LifeSize has broken some new ground with Passport—including form factor, integration with Skype, and price point. I suspect that other industry players will follow quickly and further dilute the telepresence category (by positioning high-definition video and telepresence as one and the same). With that said, new videoconferencing products such as Passport will undoubtedly continue to add value by enabling the proliferation of and expanding the use of videoconferencing by enterprises. The support for Skype audio is a great step forward though this would be enhanced further with the ability to interoperate with Skype video too …

 

UC and Catalyst 2009: Closing Thoughts

posted by: Mark Cortner

I had the opportunity to interact with a broad spectrum of enterprises this week at Burton Group’s Catalyst Conference North America held this past week in San Diego, CA. The majority of my conversations with attendees focused on the topic of UC. I found that many of the discussions were in step with the types of conversations that I frequently with clients related to this subject: what are other enterprises planning and currently implementing to support UC and how should a business navigate the evolving competitive landscape fo UC solutions?

I was also interested to hear how a number of enterprises were giving strong consideration to pursuing approaches to UC that challenge the status quo – specifically the use of software or unified clients to replace the use of wired IP handsets and the interest in cloud-based UC services that can be used to augment (or replace) the premises-based systems and platforms positioned by the major vendors. I don’t predict a rapid shift to ether of these approaches but I believe it’s important to recognize that enterprises are wary that UC is “old wine in new bottles” and as a result may be more open to adopting a less traditional view toward endpoint strategies and service delivery models while transforming their communications and collaboration environments.

 

Avaya + Nortel, Not Quite Yet

posted by: Mark Cortner

Last week, Nortel announced that it had entered into a “stalking horse” agreement with Avaya for Nortel’s enterprise solutions business unit for $475M. The stalking horse agreement essentially sets a minimum bid for the auction of the business unit and will be filed with the bankruptcy courts. The auction process allows other qualified bidders to submit higher or otherwise better offers over a 45 day period and then the bankruptcy courts in the United States and Canada will have final approval of the winning bid once the bidding process is complete.

So, at this point, Avaya has not “purchased” Nortel’s enterprise business unit but has rather committed to purchase the business for $475M pending competitive bids. What is the likelihood that Avaya will ultimately “win” Nortel’s enterprise business unit? The same process just recently played out with auction of Nortel’s CDMA and LTE wireless infrastructure businesses. Nokia Siemens Networks entered into a stalking horse agreement with Nortel for these assets in mid-June and today it was announced that Ericsson submitted the winning bid for these assets. The initial stalking horse agreement was for $650M and Ericsson’s winning bid was for $1.13B. The auction process increased the purchase price by roughly 75%.

I’m not sure Nortel’s enterprise business unit will achieve as high a valuation as the wireless infrastructure business. The stalking horse bid for the CDMA and LTE assets was approximately valued at 33% of 2008 revenues and the winning bid was just short of 60% of 2008 revenues. In contrast, Avaya’s stalking horse bid for Nortel’s enterprise business unit is currently valued at roughly 20% of 2008 revenues. Who are other likely potential bidders in the auction? Alcatel-Lucent and Siemens Enterprise Communications could be candidates. Both could benefit from Nortel’s installed base in North America, although I suspect that Nortel’s customers would be uneasy with either. Nortel expects the auction process to be very active; perhaps there are many others that will aggressively bid but I’m not convinced …