G11.2012 caa s_magic quadrant for unified communication as a service caas north america

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Magic Quadrant for Unified Communications asa Service, North AmericaPublished: 19 November 2012

Analyst(s): Daniel O'Connell, Bern Elliot

UCaaS is a cloud-based delivery of integrated UC capabilities spanningvoice, messaging, conferencing and presence. Businesses of up to 5,000employees are starting to deploy UCaaS, with expansion to larger accountsexpected in 2013 as offerings from larger UCaaS suppliers mature.

Market Definition/DescriptionUnified 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 broadcommunications functions for both:

■ Voice and telephony. This area includes fixed, mobile and soft telephony, as well as theevolution of PBXs and Internet Protocol (IP) PBXs. This also includes live multimediacommunications, 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, voicemail and unified messaging (UM) in various forms.

■ Presence and instant messaging (IM). These play an increasingly central role in next-generationcommunications, enabling the aggregation and publication of presence and location informationfrom and to multiple sources. This enhanced functionality is sometimes called "rich presence."

■ Clients. Unified clients enable access to multiple communication functions from a consistentinterface. These may have different forms, including thick desktop clients, thin browser clientsand mobile PDA clients, as well as specialized clients embedded within business applications.

■ Communication applications. This broad group of applications has directly integratedcommunication 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 integratedwith communication applications, Gartner calls these "communication-enabled businessprocesses."

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, obviatingtraditional handsets in certain cases.

Magic QuadrantFigure 1. Magic Quadrant for Unified Communications as a Service, North America

Source: Gartner (November 2012)

Vendor Strengths and Cautions

8x8

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. Thecompany's focus has traditionally been on small or midsize business (SMB) cloud VoIP. Starting in2010, it offered a richer UC suite of services, and in the past 12 months, it has been targeting largeraccounts in the 1,000-employee range. The current mobility offering supports both smartphonesand tablets (iPhone/Android), PBX features, single-number reach, and unified messaging. In the

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third quarter of 2011, 8x8 acquired cloud contact center specialist Contactual to fulfill marketdemand for integrated cloud UC and contact center solutions.

Most 8x8 users leverage the company's existing broadband infrastructure (that is, DSL or cablemodem). While providing a lower-cost basis, UCaaS delivered via broadband typically lacks thereliability and service quality demanded by enterprise clients. As 8x8 seeks to expand into themidsize market, the company has started to deliver services over more robust carrier-gradenetworks (such as the customers' existing IP Multiprotocol Label Switching [MPLS] and Ethernetnetworks).

The core 8x8 offering is branded as Virtual Office. The richer Virtual Office product includes Webconferencing and multiparty videoconferencing, Internet fax and call recording. Services areavailable across the U.S. 8x8 is preparing for a Canadian launch in the fourth quarter of 2012, with aplanned European launch in 2013. Supporting approximately 250,000 end users, 8x8 is one of thelargest North American suppliers of UCaaS. However, 8x8 is just starting to crack the 1,000-plusemployee barrier.

Consider 8x8 if you are a small or midsize enterprise looking for a cost-effective UCaaS solution.

Strengths

■ 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 usersactivate themselves with a limited amount of remote support, which facilitates shorter 12-monthcontracts.

■ 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, mobilityand conferencing. The multiparty videoconferencing and Web-conferencing offerings areparticularly strong for an SMB solution.

Cautions

■ The contact center functionality (acquired from Contactual) is not yet fully integrated into the8x8 UCaaS solution. Gartner expects an integrated contact center functionality by the thirdquarter of 2013.

■ The company has only recently been delivering business-grade services over IP MPLSnetworks with committed SLAs. 8x8 has traditionally supported its price-sensitive customersover 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.

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■ 8x8 does not have a strong brand, despite supporting approximately 250,000 cloud UCendpoints.

AT&T

AT&T is a global communications service provider (CSP) headquartered in Dallas, Texas, while theUC group supporting business accounts is based in New Jersey and Massachusetts. AT&T hasmore than five years of experience in cloud telephony through its BroadSoft-based Voice DNAservice targeted to SMBs. This solution is VoIP-centric, with limited UC functionality, such asmobility and UM.

The cloud UC solution evaluated in this research is based on the Cisco Hosted CollaborationSolution (HCS) platform, complemented with AT&T's internally developed UC infrastructure. It ismarketed to larger-enterprise accounts and is marketed in the U.S., Canada and 46 countries. AT&Tis now in a "controlled introduction" of its next generation of UC products as of the fourth quarter of2012. This AT&T terminology means that there are active and paying customers, with sales focusedon a select base of accounts.

The new AT&T UC Services offering comes in two variations, both of which are based on theunderlying 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 fullUC suite, including presence, IM, conferencing (audio, Web and video) and UM, in addition tothe 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 samefunctionality that you will be deploying.

Strengths

■ AT&T has strong brand-name recognition and global data centers that the UCaaS offeringleverages.

■ The company has robust wireless capabilities that are integrated into the UCaaS offering. Therecently introduced AT&T Toggle (bring-your-own-device mobile management with separatework and business personas) further enhances its mobile portfolio.

■ AT&T possesses a large base of existing business telephony accounts that represent anattractive target market for AT&T UCaaS.

■ The AT&T UCaaS solution includes significant amounts of internally owned and developedfunctionality (for example, Web conferencing, presence and messaging, much of it from theInterwise 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 andMicrosoft Lync.

Cautions

■ AT&T has been very slow in bringing its UCaaS offering to market (which Gartner believes ispartly due to a broader AT&T operations support system/business support system upgradedelay). AT&T is in a controlled introduction in the fourth quarter of 2012. This lag to marketreduces its ability to compete effectively, and users should expect AT&T functionality to lagbehind 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 thisresearch. However, AT&T states that it possesses numerous paying customers (controlledintroduction), as well as customer trials, both in North America and globally.

■ While having its own AT&T UC Central client allows incremental functionality and bettermargins, R&D on the AT&T client may not be sufficient to allow it to remain as attractive andfunctional versus those of competitors, which are using Cisco and Microsoft UC clients (whichAT&T UC Voice also supports).

■ AT&T currently lacks a complementary cloud contact center offering.

Azaleos

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 serviceprovider. Accenture is the majority owner of Avanade. The announcement indicated that Azaleos willfold in under the Avanade brand and will operate as an Avanade business unit, providing Avanade'scurrent 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 byExchange, SharePoint, Active Directory and Lync. Azaleos has offices and network operationscenters in Seattle, Washington, and Charlotte, North Carolina. Azaleos provides managed servicesin private cloud, on-premises or mixed hybrid architectures.

Azaleos is one of Microsoft's top partners. When Azaleos offers the products in an on-demandmodel, it has a solution similar to, and somewhat in competition with, Microsoft Office 365. BecauseAzaleos uses standard enterprise versions of these products, operated with Azaleos' ownmanagement (ViewX) and virtualization tool, the feature functionality is comparable to that availablein the Microsoft on-premises releases. The Azaleos managed services for Lync, SharePoint andExchange are currently available in all global markets. Telephony (but not IM/presence andconferencing) is a new (and therefore smaller) part of the Azaleos business. Azaleos' telephonyoffering is based on Lync technology, through both on-premises PBX integrations and its cloudoffering.


Consider the Azaleos solution if you are looking for UCaaS versions of the Microsoft Lync,SharePoint and Exchange solution suite.

Strengths

■ Azaleos has a strong Microsoft partnership, with extensive experience operating and managingthe 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 andcontrol capabilities than what is available with Office 365.

Cautions

■ 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 alsomight 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 becomea factor.

■ Full UC solutions will require two contracts — one for Microsoft licensing and a second forAzaleos support (including the platform, network, service management and data center).

■ Although quite experienced with IM, presence and conferencing, Azaleos has less experienceoffering the full Lync solution — including mobility, video and telephony.

CSC

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 multiplebusiness units. In the area of UC, CSC offers managed services and private cloud across suchvendors as Avaya, Cisco and Microsoft. CSC is also one of the earlier companies to market with aCisco HCS-based UCaaS deployment and has multiple referenceable clients. This Cisco UCaaSsolution includes a strong mobility capability, although actual mobile implementations are in theearly 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 beevaluated in this Magic Quadrant). There is a professional services organization for assisting withmultivendor UC environments (for both cloud and customer premises equipment [CPE]), particularlyacross the Avaya, Cisco and Microsoft platforms. UCaaS customers opting for CSC networkservices 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 solutionbased on Cisco HCS.

Strengths

■ CSC is a well-established hosting, managed services and cloud infrastructure provider withdata centers and customers around the globe.

■ CSC has a growing base of referenceable UCaaS customers on the Cisco HCS platform. SomeCSC customers have more than 1,000 activated users, with plans to expand to 50,000 usersover two years.

■ The company offers a good product road map and will be offering contact center with HCSwhen 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 solutionand to facilitate license transfers. This is accompanied with professional services expertise forworking in a multivendor UC environment (for example, Avaya, Cisco and Microsoft).

Cautions

■ The CSC customer portal remains limited as it is focused on VoIP. Integrated portal support forthe 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 andadapting this new offering.

■ CSC customers report inconsistent customer service (often because various CSC businessunits are not well-integrated), with a mix of satisfied and unsatisfied customers. Thischaracteristic is not specific to CSC UCaaS, but across CSC's IT support services in general.

Google

Google offers a rich set of UC and collaboration capabilities through Google Docs, Gmail, GoogleTalk, Google Voice and Google+ Hangouts. Low-cost email remains the anchor application that isdriving adoption, with advanced email capabilities available (for example, encryption and archivingfor an additional fee) for more rigorous IT requirements.

Selected business customers have adopted Google Docs as a cost-effective replacement forMicrosoft Office Suite. IM and presence (via Google Talk) are embedded in Google Calendars andGoogle Docs to promote collaboration across the business. A multiparty video capability is nowavailable through Google+ Hangouts. Google offers an integrated mobility capability for bothAndroid and iPhone devices. However, mobility is tied to Google Voice, which is not integrated intothe enterprise environment. Nonetheless, the UCaaS bundle is deep (outside of voice) and includesIM, presence, Web conferencing, videoconferencing, mobility and email.

During the past year, Gartner has witnessed increased Google commitment to the enterprisesegment, 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 customersupport and provides limited guidance on product road maps. Some popular Google products lackdeep 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 securingenterprise voice, and have an IT department that is comfortable securing support through Googlepartners (as opposed to Google directly).

Note that Google did not respond to requests for supplemental information, although Google didreview the draft contents of this document before publication. Gartner's analysis is therefore basedon other credible sources, including public information, Gartner analyst experience with Googleofferings and more than 10 discussions with users of this product suite.

Strengths

■ Service pricing remains very competitive. Users secure a broad set of IT capabilities for a singleannual 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 capabilityto 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 topublic-sector customers to fulfill regulatory requirements.

Cautions

■ Google Voice is a consumer offering that cannot be integrated into the enterprise ITmanagement. In addition, Gartner has seen less promotion of Google Voice, as evidenced bythe nonoccurrence of a previously planned European launching.

■ Traditional enterprise telephony support is the notable weak link with Google UCaaS. Googlerelies on partners such as Esna for integration with business PBXs and cloud telephony (forexample, BroadSoft).

■ The Google UCaaS product suite is complex for businesses to understand. Businesses must becareful to identify what products are generally available (as opposed to "preview") and whatproducts support enterprise controls.

■ Enterprises may find that consumer products (often free) that they are counting on to be offeredin a business version may instead be terminated with limited notice. Google is not shy aboutterminating products that fail to secure market adoption or are incompatible with Google'sevolving technical direction.

■ The Web-conferencing capability available with Google+ Hangouts is adequate for internal teamusage. However, it lacks the scale and feature richness of the industry stalwarts.


Microsoft

Microsoft Office 365 provides cloud delivery of the firm's IT software applications originallydesigned for on-premises deployment. The offering consists of four core applications: ExchangeOnline, SharePoint Online, Lync Online and Office Professional. There are also a range of supportapplications 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 customersreport that the Microsoft Office 365 service availability actually exceeds what they could provide viatheir 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 messagesthat 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 includesingle-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 thatoffer value-added services. Gartner believes that direct support is the most efficient model in NorthAmerica. Channels will provide more value in the future, as Microsoft matures its real-timeapplications 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 (Gartnerestimates 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/presenceand talk capabilities between the two. These are forward-looking statements, and actual availabilityremains 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 focuson 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 announcedthat the Lync product team will now be merged and led by the Skype unit that Microsoft acquired in2011, 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 mobilitylimitations. Many customers will opt to select a few proven cloud products that Microsoft hasshown to excel at via the cloud (for example, messaging and IM/presence).

Strengths

■ 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. Thecompany 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 andinclude 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 withMicrosoft applications.

■ User adoption has been significant; led by Exchange Online, and then with additional interest inSharePoint 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.

Cautions

■ Lync Online telephony is the least mature of the services in the Microsoft UCaaS portfolio. Theuse of Lync Online for voice beyond pure Lync-to-Lync calling is limited, and enterprises shouldnot 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 thatMicrosoft has not explicitly articulated these details.

■ Customers continue to report that problem escalation can be sluggish (which Gartner attributesto 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'son-premises version.

Mitel

Ottawa-based (Canada) Mitel uses the Freedom brand to promote consistent UC services acrossdevices and delivery (cloud or CPE). The core business focus is on small and midmarket accountsof up to 3,000 employees. A virtualized architecture based on VMware allows applications to beshared on CPE and cloud. At present, Mitel's cloud offering, branded as Mitel AnyWare, does notinclude the full base of functions available with the CPE version.

Mitel AnyWare capabilities include telephony, UM, mobility, audioconferencing/Web conferencingand contact center. A forthcoming cloud release will include IM, presence and video (at which timeit will have feature parity with Mitel CPE). Mitel runs and operates its UCaaS platform. Sales areconducted both directly and through the existing base of CPE channels (often in a co-sellingarrangement). This model relieves Mitel channels from the complexity and costs of running theirown UCaaS platform. The Mitel UCaaS solution is available across the 50 U.S. states as well as inother global regions (Europe and Asia/Pacific).

Consider the Mitel solution if you are looking for a UCaaS suite from a newly established UCaaSprovider. While larger enterprises can be served, current North American Mitel clients to date aresmall to midsize.


Strengths

■ The Mitel UCaaS suite is based on virtualizing its established on-premises product. It includesstrong 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 abroad market base.

■ Mitel AnyWare includes a Web portal to enable enterprises to manage users, profiles, callhandling and telephony customization.

Cautions

■ Mitel is new to the North American software as a service (SaaS) market, and while itunderstands the technology well, it will have to prove that it can advance in this competitivenew market.

■ A segment of Mitel's existing CPE channels are unlikely to make the transformation to clouddelivery (which possesses a different business model and requires a different technicalexpertise).

■ 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

PanTerra Networks is a California-based, privately held UCaaS supplier that operates a proprietaryplatform branded as WorldSmart. The company focuses on supporting the SMB market with acloud UC solution that is low touch (specifically, does not require extensive IT support). WorldSmartis especially practical for highly distributed organizations that have remote sites with low employeeconcentrations (that is, below 10 employees). Throughout the years, PanTerra has expanded thefeature 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 strongermobile offering for smartphones/tablets (including PBX feature sets, IM/presence and UM). In thesecond half of 2012, PanTerra introduced a managed service capability that can be integrated withcarrier-class networks (IP and Ethernet). Finally, there is an ancillary cloud storage capabilitydesigned 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.

Strengths

■ 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 ITresources. Special emphasis is directed to Web-based (thin) clients to minimize the required ITsupport.

■ Customers value PanTerra's call center functionality (with call recording), which providessufficient functionality for many SMB accounts.

Cautions

■ PanTerra lacks brand recognition in a highly fragmented UCaaS market.

■ The PanTerra solution focuses on SMB accounts, with limited customer accounts above 300employees.

■ The multipronged distribution strategy — inside sales, master agents, value-added resellers(VARs) and competitive local-exchange carriers — has yet to enable PanTerra to distinguishitself in the marketplace.

■ The PanTerra Web-conferencing component has a limited feature set. Many users prefer to useit mainly for internal communications, and they rely on a third-party Web conference tool forexternal usage.

ShoreTel

Northern California-based ShoreTel acquired New York City-based UCaaS provider M5 Networks inthe first quarter of 2012 for $168 million. The core objective of the acquisition was to provide parentShoreTel with a cloud delivery option for the increasing base of customers requesting UCaaS. Theformer M5 unit is now branded as ShoreTel Sky. Key benefits that the ShoreTel parent companybring to ShoreTel Sky are a stronger brand, a larger sales force (particularly on the West Coast inthe U.S.), and a richer set of UC features that can be ported (that is, ShoreTel CPE functionality canpotentially be enabled on ShoreTel Sky). UCaaS is now delivered out of three U.S. data centers. Afourth 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. Startingwith a cloud VoIP and contact center foundation, ShoreTel Sky now has IM, presence, UM, mobilityand videoconferencing. Through the past year, ShoreTel Sky has been securing a larger accountbase. Gartner estimates that ShoreTel Sky now supports approximately 10 accounts with more than1,000 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 acombined cloud UC and contact center capability.

Strengths

■ Users are attracted to ShoreTel Sky's complementary contact center capability. Areas ofcontact center strength are analytics, automated call flow implementation, and support forcustomer service and sales agents.


■ The ShoreTel integration is proceeding well. ShoreTel Sky has already integrated the ShoreTelMobility offering (previously Agito).

■ ShoreTel Sky is one of the larger and more experienced North American UCaaS providers. Thecompany has invested heavily in network tools for automating the provisioning process andsupporting a high-quality network.

■ The company has a tradition of strong customer service.

Cautions

■ The current video capability is only single-party (that is, between two people), with VideoGraphics Array (VGA) quality.

■ ShoreTel Sky lacks a Web-conferencing capability. Gartner expects that ShoreTel Sky willsecure the Web-conferencing functionality from the parent company's CPE platform in the firsthalf of 2013.

■ ShoreTel Sky's offering has traditionally been priced at a premium as the company focuses onhigh-end customer service.

■ ShoreTel Sky's offering and ShoreTel's CPE offering are two separate platforms. Userstherefore have to evaluate the features and functionality of each platform separately.

Thinking Phone Networks

Thinking Phone Networks is a Massachusetts-based, privately held UCaaS provider. It uses aproprietary platform that includes open-standards-based Web APIs to facilitate UC applicationintegration. UCaaS is branded as ThinkingSuite, which is offered across North America. There isnow a U.K.-based data center supporting European sites of North American accounts. The majorityof customers have been secured through an internal sales force. In the past 18 months, ThinkingPhone expanded its base of channel partners, including CSPs, VARs and master agents. Channelswill be used to reach Europe-based companies starting in 2013.

Thinking Phone has a VoIP and contact center legacy. Customers are supported over carrier-classnetworks as opposed to broadband. The company has invested significant resources in tools tofacilitate customer provisioning, network performance management, customer MACs and otherback-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 tosupport a few clients of above 5,000 endpoints (Gartner estimates six to eight clients above 5,000endpoints).

Consider Thinking Phone Networks for midsize deployments seeking a broad portfolio of UCservices based on a proprietary platform.


Strengths

■ The Thinking Phone UCaaS offering is strong in mobility (with PBX feature set and IM/presenceextended to smartphones/tablets) and videoconferencing (six-way desktop videoconferencing).

■ The integrated analytics capability leverages business data in such areas as workforcescheduling, agent productivity tracking, best-practice identification and related businessprocesses.

■ Thinking Phone provides a strong combined cloud VoIP and cloud contact center valueproposition.

■ 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 tosupport larger accounts (Gartner estimates six to eight clients of above 5,000 endpoints).

Cautions

■ Thinking Phone has limited brand recognition, despite its ability to support midsize enterpriseaccounts. 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 expandingmarket awareness. A number of partners are also supporting other cloud UC options.

■ The UCaaS offering does not currently offer an internally supported Web-conferencingcapability (but is expected to in the first quarter of 2013). Currently, Thinking Phone UCaaSintegrates with third-party tools — Citrix GoToMeeting, Cisco WebEx and IBM Sametime.

Verizon

Verizon is a global CSP headquartered in New Jersey. Its lead UCaaS offering is with the CiscoHCS platform for midsize to large accounts. There is also a cloud VoIP offering (using the BroadSoftplatform) targeted to SMBs. This Magic Quadrant analysis concentrates on Verizon's Cisco HCSoffering because of its enterprise focus.

Verizon initially struggled to get the Cisco HCS offering to a market-ready status, in part due to thechallenges 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 CiscoHCS offering is both generally available in North America and possesses active accounts with anexpanding pipeline. Gartner expects Verizon to introduce the HCS offering to Europe in 2013.

The BroadSoft platform, now branded as Virtual Communicator Express (VCE), focuses on VoIPservices for the SMB market. VCE also includes a limited base of UC functionality in the areas ofmobility, IM/presence and third-party integration with Google UC applications.


Enterprises seeking a branded Cisco cloud UC offering with strong mobility capabilities shouldconsider Verizon UCaaS.

Strengths

■ The Verizon Cisco HCS UCaaS offering is now generally available, with more than 10,000enterprise customer endpoints (across multiple accounts) activated and deployed.

■ Verizon possesses a strong base of complementary skills and assets that have the potential tomake Verizon a formidable UCaaS supplier — global footprint, wireless solutions, IP/Ethernetnetworks, 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 leveragedwith the newer Cisco, and existing BroadSoft, UCaaS solutions.

Cautions

■ Verizon continues to have a methodical product development process prone to schedulingdelays. Early UCaaS indicators reveal that competing system integrators and applicationspecialists are faster at introducing new services.

■ Gartner remains skeptical as to whether Verizon can effectively support multiple parallel cloudUC 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 tooperate synchronously. This is particularly true for midsize accounts.

■ The company has experienced a fair amount of management and workforce turnover as Verizonleadership seeks to transform the company from a legacy network provider to an IT solutionprovider.

West

West is based in Omaha, Nebraska, and it now offers three distinct UCaaS solutions across a singledelivery platform. The first is the Smoothstone solution (West acquired Smoothstone in the secondquarter of 2011 for $120 million), branded as VoiceMaxx. This is the most mature solution, withroughly a decade of experience supporting cloud UC customers. Gartner believes that West is oneof the top North American suppliers of cloud UC endpoints in terms of market share (Gartner'sestimate is 150,000 or more total endpoints). In the past year, West has recently integrated itsInterCall conferencing functionality to its platform.

The second solution is based on Cisco HCS, branded as VoiceMaxx CE, and has been generallyavailable since the fourth quarter of 2011. West now has a few thousand endpoints operating withVoiceMaxx 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 UCaaSsolutions share a common delivery platform, architecture and set of data centers. This MagicQuadrant rating will focus on the first two (as the Microsoft Lync offering was too late for inclusion inthis research).

The company prefers to supply its customers with a bundled data network (many accounts rely onWest for its IP/MPLS and Ethernet services), complemented with Cisco routers and handsets todeliver greater control and better performance. West has traditionally focused on clients above 250employees and has been a UCaaS pioneer relative to supporting larger UCaaS deployments ofmore than 1,000 employees, with some (Gartner estimate of five clients) now exceeding 5,000employees.

In addition to its UCaaS solutions, West offers a collection of communications solutions forautomated alerts/notifications, emergency communications solutions, contact center/interactivevoice response (IVR) services, social media interaction and mobile solutions. These solutions havelargely 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.

Strengths

■ The VoiceMaxx (Smoothstone) offering is a mature and stable cloud UC solution. Starting withVoIP and contact center as the foundation, it now supports IM/presence (the AMP client), Webconferencing (via West InterCall), UM and mobility.

■ Midsize accounts value the combined cloud UC with contact center functionality, which alsoincludes IVR, analytics and workforce optimization.

■ West UCaaS customers report satisfaction with customer service. A single supportrepresentative 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 tomarket faster than many of its competitors.

Cautions

■ 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 runindependently, with limited product integration.

■ Gartner is concerned about West's ability to support, maintain and evolve three parallel UCaaSsolutions: Smoothstone, Cisco HCS and Microsoft Lync.

■ The West (from the Smoothstone acquisition) mobility capability (Mobile Connect) is serviceablebut is not leading-edge. For example, it presently does not offer tablet support or provide a richPBX feature set (West does support Cisco and Microsoft clients to meet the more-advancedneeds).


■ West has a reputation for slightly higher pricing than market averages as it focuses on strongtechnical support and a robust underlying network.

Vendors Added or Dropped

We review and adjust our inclusion criteria for Magic Quadrants and MarketScopes as marketschange. As a result of these adjustments, the mix of vendors in any Magic Quadrant orMarketScope may change over time. A vendor appearing in a Magic Quadrant or MarketScope oneyear and not the next does not necessarily indicate that we have changed our opinion of thatvendor. This may be a reflection of a change in the market and, therefore, changed evaluationcriteria, or a change of focus by a vendor.

Added

Azaleos, CSC, Mitel and 8x8 were added. ShoreTel has replaced M5 Networks (which ShoreTelacquired in the first quarter of 2012).

Dropped

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'sUCaaS 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 UCtechnology platform.

Cypress was removed because its new parent company, Broadvox, has changed its businessfocus.

Siemens Enterprise Communications was removed because its cloud UC focus for the NorthAmerican enterprise market is on private UC cloud infrastructure.

Inclusion and Exclusion CriteriaFor inclusion in this Magic Quadrant, solution providers must support the following capabilities:

■ The UCaaS delivery model. Typical characteristics include a multitenant or virtualized UCinfrastructure that is owned, maintained and hosted by the provider. Users then purchase aservice (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 integratedconferencing (audio, video and Web), IM/presence, and messaging.

■ The UC functions must be well-integrated; specifically, VoIP-centric solutions will not beconsidered.


■ 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 thefollowing ways:

■ UCaaS annual revenue exceeding $25 million.

■ Differentiating service innovation and mind share with North American enterprises (3,000employees 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 topockets 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 theUCaaS offering that they represent) are not considered for this Magic Quadrant analysis.

Evaluation Criteria

Ability to Execute

Gartner analysts evaluate UCaaS providers based on the breadth, quality and overall maturity oftheir applications, processes, tools and procedures that enhance individual, group and enterprisecommunications. Ultimately, UCaaS providers are judged on their ability and success in capitalizingon their vision (see Table 1).


Table 1. Ability to Execute Evaluation Criteria

Evaluation Criteria Weighting

Product/Service High

Overall Viability (Business Unit, Financial, Strategy, Organization) High

Sales Execution/Pricing Standard

Market Responsiveness and Track Record Standard

Marketing Execution Standard

Customer Experience Standard

Operations Standard


Completeness of Vision

Gartner analysts evaluate UCaaS providers based on their ability to convincingly articulate logicalstatements on current and future market directions, innovations, customer needs and competitiveforces 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 createopportunities for providers and their clients (see Table 2).


Table 2. Completeness of Vision Evaluation Criteria

Evaluation Criteria Weighting

Market Understanding High

Marketing Strategy Standard

Sales Strategy Standard

Offering (Product) Strategy High

Business Model Standard

Vertical/Industry Strategy Standard

Innovation Standard

Geographic Strategy Standard


Quadrant Descriptions

Leaders

Vendors in the Leaders quadrant have been delivering complete UCaaS solutions for more than ayear, have clients with more than 1,000 subscribers and have more than 100,000 total endpoints inservice. These vendors offer comprehensive and integrated UCaaS solutions that directly, or withwell-defined partnerships, address the full range of market needs, including the ability to servicelarge accounts. These vendors have defined migration and evolution plans for their products in coreUCaaS areas and are using their solution sets to acquire new clients, as well as to expand theirfootprints in their client bases to new functional areas.

Challengers

Vendors in the Challengers quadrant have the potential to deliver to large national enterprises, andare poised to move into the Leaders quadrant but have not yet done so. They have yet to bridgethis gap because their UCaaS solution is missing selected elements, they are unable to providereferences on the full suite, or they are still evolving their customer support.

Visionaries

Vendors in the Visionaries quadrant are close to, or are already, delivering differentiating UCfunctionality or services but have not yet established themselves in the market (for example, supportaccounts above 1,000 endpoints). For instance, a vendor may have added useful social orcollaboration 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 aprovider visionary.

Niche Players

Vendors may be in the Niche Players quadrant for different reasons. Some may have majorelements of their portfolio not unified or may lack important functionality in their solution. Othersmay be in the Niche Players quadrant because they are an on-premises UC vendor that is largelyunproven 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 sellnationally (that is, beyond their core territory).

ContextThe North American UCaaS market has evolved significantly through 2012 in three core areas: theemergence of branded CPE platforms now supporting UCaaS; the maturity of selected UCaaSplatforms; and limited adoption by the Fortune 1000 community. First, Cisco is the lead brandedCPE vendor supporting UCaaS through some 20 active channel partners (many of which areevaluated in this Magic Quadrant). Microsoft now offers UCaaS directly via Office 365, while alsosupporting a cloud-enabled version of Lync for channel partners (this model shares multiplesimilarities 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, ShoreTeland Toshiba, to name a few. These traditional CPE vendors believe it is essential to support bothpremises and cloud UC to maintain market relevancy. In parallel, larger customers tend to reveal apreference 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 isparticularly true of the application specialists that operate with homegrown infrastructure. The 2012generation of video, mobility and contact center functions are more capable and integrated. Usersreport that portals have also improved in the past year in terms of ease of use, reporting capabilitiesand 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 offeringsnow support multiparty high-definition video, a notable improvement from 2011's single-party VGAquality video. Mobile users can increasingly secure PBX feature set functionality integrated withtheir 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 provensuccessful. Larger Fortune 1000 organizations require such proof points before makingcorporatewide technology commitments. In addition, they generally prefer working with brandedvendor solutions from larger delivery partners.


UCaaS still has two barriers to overcome. First, it has few proven success stories for largeenterprises. The back-office provisioning tools for onboarding 10,000 or more endpoints are stillmaturing and not fully proved. Second, many of the accounts of more than 1,000 employees thathave opted for UCaaS are initially only deploying cloud VoIP (as opposed to the broader array of UCfunctions). Today's deployments are primarily regional, spanning a single country or geographicallyneighboring countries. There are few panregional implementations (for example, supporting amultinational 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 firstyear in which any participants have achieved a position in the Leaders quadrant. These participantsbring to market a broad mix of UC functions while demonstrating the capacity to support enterpriseaccounts exceeding 1,000 endpoints (sometimes into the 5,000-employee range). User feedbackreveals 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 AmericanUCaaS deployments) of users no longer even use hard phones, instead relying solely on mobiledevices and softphones.

Gartner's expectations for UCaaS in 2013 are twofold. First, UCaaS will start supporting globaldeployments spanning multiple regions. Many of the UCaaS participants in this Magic Quadrantalready 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.

Market OverviewUC 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 bevia premises-based solutions. IT culture and real or perceived infrastructure control requirementsboth favor premises-based deployments. However, cloud UC (known as UCaaS) continues to gaincustomer mind share as the technology matures. Gartner has experienced a significant uptake inUCaaS 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. Theinfrastructure 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 (typicallymonthly) rather than making capital investments for dedicated infrastructure. Another UCaaS benefitis that the user does not incur the technology risk of purchasing infrastructure from a vendor thatlater exits the market (for example, Nortel).

The majority of UCaaS deployments to date have focused on a single platform vendor (with emailbeing the exception). UCaaS suppliers have yet to demonstrate strong interest in cross-vendorinteroperability. 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.

Key Participants

The UCaaS participants in this 2012 Magic Quadrant emanate from four primary sources:

■ Application specialists

■ CPSs

■ Technology vendors

■ System integrators

Application specialists are typically private or small public companies that focus on UCaaSdelivery. 8x8, PanTerra Networks, Thinking Phone Networks and West (formerly Smoothstone) arethe Magic Quadrant participants grouped into this category. They have been the pioneers of UCaaSand continue to lead the market through 2012. They typically started from a cloud VoIP businessmodel, migrating to UCaaS application specialists focusing on strong customer service.

Through 2012, the application specialists have been expanding to larger accounts, in some casesup to 5,000 employees (see Note 1). They have also experienced moderate success in getting theiraccount 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 acompelling feature (for example, a 1,500 user UC deployment that also supports 75 contact centeragents).

Many application specialists operate with an internally developed UC infrastructure. They thenintegrate with corporate IT tools, such as Outlook (Microsoft Calendar), Internet Explorer (MicrosoftWeb browser), iPhone (Apple smartphone) and Androids (Google smartphones). To date, the use ofproprietary UCaaS platforms has not been a major inhibitor to adoption in the SMB sector. Theapplication specialists have a reputation for strong customer service and support, which is viewedas 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 CiscoHCS 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 wirelessassets, and through 2012, this group has remained committed to the UCaaS market. They typicallyleverage third-party vendor platforms, led by BroadSoft, Cisco and potentially Microsoft.

The CSPs' financial clout, strong brand and experience in real-time communications make themlogical candidates for UCaaS market leadership. Through 2012, the CSPs have been signingcontracts with midsize and larger enterprise accounts. The midsize accounts are starting to getactivated. 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 serviceproviders. 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 bedelivered through channel partners, not directly served by Cisco).

Microsoft leads with its Office 365 offering, which consists of a broad suite of Microsoft business ITservices, of which UCaaS is one. The Office 365 delivery model allows users to purchase cloudUCaaS either directly from Microsoft or through channels. Most UCaaS participants view Microsoftas both a potential partner and a potential threat. The threat perspective became more prominentfollowing 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 traditionallyprovided managed UC services and are now entering the UCaaS space. CSC is the lone systemintegrator in this UCaaS analysis, but Gartner expects more active UCaaS participation from suchsystem integrators as HP, Dimension Data, IBM, Presidio and Xerox in 2013 and beyond. Systemintegrators focus on larger accounts serviced over carrier-grade networks.

Pricing

Market pricing for UCaaS varies widely. Key factors influencing price include deployment size,contract duration, the specific UCaaS supplier, features subscribed to, and any additionalcustomized 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, allfeatures subscribed to) typically ranges from $30 to $45 per user per month. Simpler VoIP-centricsolutions range from $13 to $22 per user per month. Gartner expects annual price erosion as themarket matures, more vendors enter the market, service delivery becomes more efficient, and usersgain market savvy.

Hybrid Deployment

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 thecloud, with others on-premises. The main factor driving hybrid implementations is the need to fullydepreciate on-premises assets, such as an IP PBX purchased two years ago. Other reasons thatbusinesses 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 geographicalsegmentation. A functional segmentation example is a deployment in which messaging and VoIPare delivered via the cloud, while IM/presence and conferencing are delivered on-site. In contrast, ageographical 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 inelongated and expensive integrations. A significant amount of planning is required between theenterprise and UCaaS supplier to define the hybrid architecture (that is, getting the old to work withthe 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 inhybrid architectures have shown to be particularly difficult.

The complexity of tackling hybrid requirements is one reason why larger enterprises (above 5,000employees) have been slow to adopt UCaaS. The ensuing professional services costs can destroythe 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, theuser community becomes more comfortable with alternative UCaaS technology, and UCaaSproviders secure automated tools to support hybrid environments.

Recommended ReadingSome documents may not be available as part of your current Gartner subscription.

"Magic Quadrants and MarketScopes: How Gartner Evaluates Vendors Within a Market"

"Best Practice: Pricing for Unified Communications as a Service and for Outsourced UC"

"Magic Quadrant for Unified Communications"

"Cisco's Cloud UCC Offering"

"SWOT: Microsoft, Unified Communications as a Service, Worldwide"

"What You Need to Know to Succeed in the UCC Market"

"A Technology Framework for Enterprise Unified Communications"

"Toolkit: How to Develop an Effective Unified Communications and Collaboration Road Map"

"UC 'in the Cloud' and On-Premises: Examples of Hybrid Solutions"

"What You Need to Know to Succeed in the UCC Market"

Note 1 Deployment Size

Cloud UC deployments supporting more than 5,000 employees remain more the exception than therule. Larger deployments above 5,000 tend to focus on a limited set of UC services. We expectlarger, richer UCaaS deployments through 2013.

Note 2 Hybrid Deployment

This Magic Quadrant analysis considers hybrid implementations as long as the majority offunctionality is delivered via the cloud. However, vendors leading with hybrid implementations havetheir ratings reduced for not being fully cloud-enabled. Cisco, Google and Microsoft are all brandedvendors 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 mostbusiness environments.

Evaluation Criteria Definitions

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 includesan assessment of the overall organization's financial health, the financial and practicalsuccess of the business unit, and the likelihood that the individual business unit willcontinue investing in the product, will continue offering the product and will advancethe state of the art within the organization's portfolio of products.

Sales Execution/Pricing: The vendor's capabilities in all pre-sales activities and thestructure 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, beflexible and achieve competitive success as opportunities develop, competitors act,customer needs evolve and market dynamics change. This criterion also considers thevendor's history of responsiveness.

Marketing Execution: The clarity, quality, creativity and efficacy of programs designedto deliver the organization's message to influence the market, promote the brand andbusiness, increase awareness of the products, and establish a positive identificationwith the product/brand and organization in the minds of buyers. This "mind share" canbe driven by a combination of publicity, promotional initiatives, thought leadership,word-of-mouth and sales activities.

Customer Experience: Relationships, products and services/programs that enableclients to be successful with the products evaluated. Specifically, this includes the wayscustomers receive technical support or account support. This can also include ancillarytools, 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. Factorsinclude the quality of the organizational structure, including skills, experiences,programs, systems and other vehicles that enable the organization to operateeffectively and efficiently on an ongoing basis.


Completeness of Vision

Market Understanding: Ability of the vendor to understand buyers' wants and needsand to translate those into products and services. Vendors that show the highestdegree of vision listen to and understand buyers' wants and needs, and can shape orenhance those with their added vision.

Marketing Strategy: A clear, differentiated set of messages consistentlycommunicated 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 ofdirect and indirect sales, marketing, service and communication affiliates that extendthe scope and depth of market reach, skills, expertise, technologies, services and thecustomer base.

Offering (Product) Strategy: The vendor's approach to product development anddelivery that emphasizes differentiation, functionality, methodology and feature sets asthey map to current and future requirements.

Business Model: The soundness and logic of the vendor's underlying businessproposition.

Vertical/Industry Strategy: The vendor's strategy to direct resources, skills andofferings to meet the specific needs of individual market segments, including verticalmarkets.

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 tomeet the specific needs of geographies outside the "home" or native geography, eitherdirectly or through partners, channels and subsidiaries as appropriate for thatgeography and market.


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