Magic Quadrant for Unified Communications31 July 2013 ID:G00251797

Analyst(s): Bern Elliot, Steve Blood

VIEW SUMMARY

The enterprise UC market continued to mature over the past 12 months and is now considered byGartner to be entering the early mainstream adoption phase. Products and best practices both fordeployment and increasing end-user adoption will continue to mature during the next several years.

Market Definition/DescriptionThe primary goal of unified communications (UC) is to improve user productivity and to enhancebusiness processes. Gartner defines UC products (equipment, software and services) as those thatfacilitate the use of multiple enterprise communications methods to obtain that goal. This can includethe control, management and integration of these methods. UC products integrate communicationschannels (media), networks and systems, as well as IT business applications and, in some cases,consumer applications and devices.

UC offers the ability to significantly improve how individuals, groups and companies interact andperform. The UC products may be composed of a single vendor (stand-alone) suite, or customersmay deploy a portfolio of integrated applications and platforms spanning multiple vendors. In manycases, UC is deployed to extend and add functionality to established communications investments.

UC products are used by people to facilitate personal communications and by enterprises to supportworkgroup and collaborative communications and business workflows. Some UC products may extendUC outside company boundaries to enhance communications among organizations, supportinteractions among large public communities or for personal communications. UC applications areincreasingly being integrated or offered in concert with collaboration applications to form unifiedcommunications and collaboration (UCC) and, in some cases, are being integrated with businessapplications and workflows, something Gartner calls communications-enabled business processes(CEBPs).

It is useful to divide UC into six broad communications product areas:

Voice and telephony — This area includes fixed, mobile and soft telephony, as well as theevolution of PBXs and IP PBXs. This category includes options for voice and video that bypasstraditional connectivity methods, such as direct Internet-based connections.

Conferencing — This area includes voice (audio) conferencing, videoconferencing, Webconferencing that includes document and application sharing capabilities, and various forms ofunified conferencing capabilities.

Messaging — This area includes email, which has become an indispensable business tool, voicemail and various approaches to unified messaging (UM).

Presence and IM — These will play an increasingly central role in the next generation ofcommunications. Presence services, in particular, are expanding to enable the aggregation andpublication of presence and location information between (from and to) multiple sources. Thisenhanced functionality is sometimes called rich presence.

Clients — Unified clients enable access to multiple communications functions from a consistentinterface. These may have different forms, including thick desktop clients, thin browser clientsand clients for mobile devices, such as smartphones and tablets, as well as specialized clientsembedded within business applications.

Communications-enabled applications — This broad group of applications has directly integratedcommunications functionality. Key application areas include collaboration applications, contactcenter applications, notification applications, and consolidated administration, reporting and/oranalytics tools. Eventually, other applications that support business processes will becommunications-enabled; these might include integrating UC with hospital applications toimprove doctor-nurse transaction processing workflows or to improve doctor-doctorcollaboration activities, or adding communications to purchasing/order processing applications toimprove the accuracy and speed of those processes. When business applications are integratedwith communications applications to improve operations, Gartner calls them CEBPs.

The stakes for vendors in the enterprise UC market are exceedingly high and, in some cases,existential. The stakes for enterprise decision makers are also high due to the significant costs,visibility and business impacts of their choice. Five UC characteristics will have an important effect onthe success of a UC product and the satisfaction of users:

User experience (UX) — The quality and effectiveness of the overall user experience (UX) acrossall devices will heavily influence the effectiveness of the solution, its adoption rate and,ultimately, enterprise productivity. While consolidated administration and management areimportant characteristics of a successful solution, it is the high-quality end-user experience thatwill drive adoption and productivity.

EVALUATION CRITERIA DEFINITIONS

Ability to ExecuteProduct/Service: Core goods and services offered bythe vendor for the defined market. This includescurrent product/service capabilities, quality, featuresets, skills and so on, whether offered natively orthrough OEM agreements/partnerships as defined inthe market definition and detailed in the subcriteria.

Overall Viability: Viability includes an assessment ofthe overall organization's financial health, the financialand practical success of the business unit, and thelikelihood that the individual business unit will continueinvesting in the product, will continue offering theproduct and will advance the state of the art within theorganization's portfolio of products.

Sales Execution/Pricing: The vendor's capabilities inall presales activities and the structure that supportsthem. This includes deal management, pricing andnegotiation, presales support, and the overalleffectiveness of the sales channel.

Market Responsiveness/Record: Ability to respond,change direction, be flexible and achieve competitivesuccess as opportunities develop, competitors act,customer needs evolve and market dynamics change.This criterion also considers the vendor's history ofresponsiveness.

Marketing Execution: The clarity, quality, creativityand efficacy of programs designed to deliver theorganization's message to influence the market,promote the brand and business, increase awarenessof the products, and establish a positive identificationwith the product/brand and organization in the mindsof buyers. This "mind share" can be driven by acombination of publicity, promotional initiatives,thought leadership, word of mouth and sales activities.

Customer Experience: Relationships, products andservices/programs that enable clients to be successfulwith the products evaluated. Specifically, this includesthe ways customers receive technical support oraccount support. This can also include ancillary tools,customer support programs (and the quality thereof),availability of user groups, service-level agreementsand so on.

Operations: The ability of the organization to meet itsgoals and commitments. Factors include the quality ofthe organizational structure, including skills,experiences, programs, systems and other vehiclesthat enable the organization to operate effectively andefficiently on an ongoing basis.

Completeness of VisionMarket Understanding: Ability of the vendor tounderstand buyers' wants and needs and to translatethose into products and services. Vendors that showthe highest degree of vision listen to and understandbuyers' wants and needs, and can shape or enhancethose with their added vision.

Marketing Strategy: A clear, differentiated set ofmessages consistently communicated throughout theorganization and externalized through the website,advertising, customer programs and positioningstatements.

Sales Strategy: The strategy for selling products thatuses the appropriate network of direct and indirectsales, marketing, service, and communication affiliatesthat extend the scope and depth of market reach,skills, expertise, technologies, services and thecustomer base.

Offering (Product) Strategy: The vendor's approachto product development and delivery that emphasizesdifferentiation, functionality, methodology and featuresets as they map to current and future requirements.

Business Model: The soundness and logic of thevendor's underlying business proposition.

Mobility — User expectations of how UC solutions leverage mobility continue to escalate. Inaddition to demanding full UC functionality on mobile devices, users are starting to expectmobile devices to be integrated with desktop devices to allow for a more powerful workenvironment and to integrate UC with mobile consumer applications. In this year's MagicQuadrant evaluation, we again place extra weight on mobility as it remains a key differentiatorand requirement.

Interoperability — Enterprises wish to avoid "closed gardens" and vendor lock-in, while enablingintercompany B2B, business-to-partner (B2P) and business-to-consumer (B2C) federation.Additionally, many enterprises will find their needs best served by using several vendors, eitherbecause of legacy investments or to enable a best-of-breed configuration. This researchconsiders how vendors address these critical emerging interoperability requirements.

Cloud and hybrid — Integration of on-premises UC with cloud and hybrid UC services continuesto play an increasingly important role as these options mature. While these options areconsidered in this Magic Quadrant's evaluations, "Critical Capabilities for UnifiedCommunications" provides a more specific review of these capabilities.

Broad solution appeal — Successful UC solutions must be attractive to a broad and diverseaudience of enterprise decision influencers. In addition to the end users, enterprise decisioninfluencers span such diverse groups as IT, telecom, data communications, the audio-visualvideo group and members of the executive suite.

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Magic Quadrant

Figure 1. Magic Quadrant for Unified Communications

Source: Gartner (July 2013)

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Vendor Strengths and Cautions

Aastra TechnologiesAastra Technologies is using BluStar as a client to integrate UC functionalities with its multiple callmanagers. MX-One is the primary enterprise call manager and is sold across markets as Aastra's UCoffering; however, in addition to MX-One, BluStar also supports functions on other Aastra telephonyplatforms, including Aastra 5000 and Aastra Clearspan which are offered in specific verticals andregions. All UC applications now operate with VMware. Additionally, these include the high availability(HA) and fault tolerance (FT) functions, enabling warm or hot standby redundancy. The BluStar clientoperates on PCs, iPads and iPhones, and has added additional video capabilities this year.

Consider the Aastra suite if your organization is primarily focused on lower-cost telephony and UCfunctionality, and you are located in a region with Aastra partners. Enterprises should also ensurethat the UC functionality they need is included, since some functions (such as Web conferencing) arenot offered. Enterprises wishing to migrate existing Aastra telephony platforms toward UC shouldunderstand how their current environment fits the broader Aastra direction, including the BluStar

Vertical/Industry Strategy: The vendor's strategyto direct resources, skills and offerings to meet thespecific needs of individual market segments, includingvertical markets.

Innovation: Direct, related, complementary andsynergistic layouts of resources, expertise or capital forinvestment, consolidation, defensive or pre-emptivepurposes.

Geographic Strategy: The vendor's strategy to directresources, skills and offerings to meet the specificneeds of geographies outside the "home" or nativegeography, either directly or through partners,channels and subsidiaries as appropriate for thatgeography and market.

client.

Strengths

Aastra is able to leverage its installed base, especially in Europe, and generally has a lower totalcost of ownership (TCO) offering relative to other vendors.

Aastra leverages open standards to support integration with other vendors' UC solutions and abroad range of SIP endpoints.

Cautions

Although Aastra is adding new channel partners, the market share for its UC product in keymarkets such as North America remains limited. Some partners may have limited experiencesupporting UC functionality.

Aastra faces several financial challenges during the next few years. First, it must deal withlagging economies in countries where it has a significant presence, such as Italy, Spain, Beneluxand the Nordic region. Second, Gartner believes that Aastra's strategy of growth throughacquisition requires relatively larger R&D expenses to integrate the varied solutions.

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Alcatel-LucentThe OpenTouch Suite is a fully unified and integrated UC suite. In addition, elements of the UCportfolio are offered separately for scaling purposes or when desired as stand-alone solutions.Elements include OpenTouch Multimedia Services, providing the modular communications applicationcapabilities, and the OmniPCX Enterprise (OXE) Communication Server for analog, digital and SIP-based telephony functions. The suite operates on virtualized servers and supports a range of hard,soft and SIP-based clients, the functionality of which is also available on a range of mobile devices.Among other improvements, in the past year, Alcatel has significantly expanded its video capabilities,its mobile UC functionality support and the flexibility of transparently moving conversations (SessionShift) between devices in real time. Additionally, Alcatel-Lucent has increased the ability to overlayOpenTouch on third-party switches, providing a migration path for new customers.

Evaluate the OpenTouch Suite if you are looking for a complete software UC suite; however, ensurethat Alcatel-Lucent has sufficient service and support presence in your market.

Strengths

OpenTouch offers a full multiparty, multidevice and multimedia UC suite with a competitive TCOthat can operate as a complete solution, or as part of a multivendor UC solution.

The vendor's enterprise products can span provider and enterprise physical or virtualenvironments, which may prove useful for cloud-based, on-premises and hybrid offerings, andfor penetrating existing markets where its on-premises sales are not well-established (forexample, in the North American market).

Cautions

While Alcatel-Lucent Enterprise has benefited from stability in its management team, and theEnterprise division itself is profitable, the commitment by the parent company is again underquestion as it is now managed as a subset of the Focused Business segment, diluting thevisibility of Enterprise as a core and strategic business unit.

Alcatel-Lucent's overall financial performance reflects the challenging environment we have seenin the past 12 months (declining revenue, reduced gross and operating profitability, andnegative cash flows). To its credit, Alcatel-Lucent has refinanced its debt and is undertaking arestructuring program with the goal of reducing costs by €1.25 billion by the end of 2013. Still,the company's financial progress bears monitoring because it has (as of 31 March 2013) totaldebt of about €6.7 billion and its credit metrics remain challenged as compared to its peers.

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AvayaThe Avaya UC solution for midsize to large enterprises is based on the Avaya Aura solution set andincludes several client and application integration options. Key Aura components include SessionManager, a full conferencing suite with both Web and video in addition to audio, several messagingoptions, and avatar-based collaboration and presence services. Application integration with businessapplications is supported via the Agile Communication Environment (ACE) Toolkit, the AvayaDevConnect partner option and, more recently, via the introduction of the Avaya Aura CollaborationEnvironment. Avaya is extending its cloud capabilities and offers leading contact center solutions thatleverage its UC solution. During the past year, Avaya has expanded its portfolio, continued to improvethe integration across its elements and simplified its pricing model.

Consider Avaya Aura if you need to bring together heterogeneous environments (systems, servicesand devices) or have significant investments in Avaya that you wish to migrate toward a next-generation UC solution.

Strengths

Telephony and contact center remain central elements in Avaya's portfolio: Avaya's strength andbrand recognition in this area help it retain market visibility while it continues to strengthen itsoverall UC portfolio.

Avaya continues to improve its offerings and ability to compete in the evolving software andcloud markets.

The vendor is expanding its portfolio in key ways, including Avaya Aura CollaborationEnvironment for enabling a broader ecosystem of partner applications and Aura CloudEnablement for a partner-led cloud offering.

Avaya's integration capabilities have been expanded, allowing for stronger multivendor UCintegration options, including integration with Microsoft Lync.

Cautions

Avaya receives mixed to unfavorable ratings from some customers for channel partner support.As the vendor increasingly moves to an indirect channel model, it will need to improve itschannel presales and postimplementation support to prevent lags in addressing customer issuesand concerns.

Avaya must continue to demonstrate that it has increased adoption and market momentum forits broader UC portfolio, rather than solely for its telephony and contact center solutions.

The vendor must execute on its plans to consolidate its Flare Experience, Scopia, AuraConferencing and Avaya one-X clients across the various fixed and mobile platforms to improvethe consistency of the user experience and quality.

Avaya is challenged from a revenue standpoint, with revenue declines in each of the last fourquarters. Margins have remained relatively stable, as the vendor has reduced costs to maintainprofitability ratios. Debt levels remain high at $6.1 billion, but Avaya did successfully refinanceits debt to push out debt maturities to a later period.

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CiscoCisco offers a full UC suite, as well as a broad range of additional communications functions. Keyparts of the UC suite include Cisco Unified Communications Manager; Cisco Jabber, which includes thedesktop client; Cisco Unity Connection; Cisco WebEx, which is now also available as an on-premisesserver; multiple video options; and a broad range of fixed and mobile client and device options. Thevendor offers significant portions of its software on VMware, which can now operate on both the CiscoUnified Computing System (UCS) servers and other qualified servers. Cisco addresses emailrequirements via integrations with Exchange, Gmail and Zimbra. It offers several virtual desktopintegration (client virtualization) options, and offers additional integrated communications andcollaboration functionality, including its contact center, Cisco WebEx conferencing and WebEx Social(formerly Quad) products. The vendor leverages its UC software into a cloud portfolio branded HostedCollaboration Solution (HCS), which allows Cisco HCS partners to create UC as a service (UCaaS)offerings. The vendor made progress this year in simplifying and unifying its pricing model andmassive communications portfolio. Cisco also offers a useful service to assist enterprises in measuringand increasing end-user adoption of UC tools, and in developing best practices called CollaborationChange Management Services (CCMS).

Evaluate the Cisco UC solutions when you are committed to using a comprehensive networkingsolution that includes the UCC suite. Cisco is also attractive for large and multinational corporationsrequiring strong voice and video capabilities, as well as for firms that require full UC client support onleading mobile platforms.

Strengths

Cisco offers a full UC suite with strong, globally scalable support for IM/presence, video,telephony and multiple conferencing options. Additionally, full UC functionality is available onleading mobile platforms.

Prime Collaboration offers detailed monitoring, diagnostics and change management for voiceover Internet Protocol and video in a single platform with a scale to 150,000 endpoints.

Cisco's large data infrastructure client base, along with its strong global channel, services andsystem integration (SI) partners, position it well within enterprise UC buying and decision-making groups, including many IT and operations departments.

Through carrier and service provider partners, Cisco is advancing attractive hybrid on-premisesand cloud options. HCS is based on the same software as Cisco's on-premises offering, and bothsupport the same Jabber client. Additionally, Cisco has agreements for transferring licenses fromon-premises to hosted environments.

Cautions

Clients report that elements of Cisco's portfolio remain complex to understand and manage. Oneeffect of the complexity is that obtaining clear configuration and price quotes can be difficult,and understanding the various Jabber client and WebEx integration options can be challenging.

Gartner clients regularly report that they are pressured to use Cisco data communicationsnetwork infrastructure, and, in some cases, even the Cisco data center solution (UCS), toachieve an optimal UC deployment.

Cisco's Unified Workspace Licensing (CUWL) is a useful package to profile user requirements. Itoffers attractive discounting, compared with buying UC components separately. However, it'simportant to size requirements accurately based on user needs. Unless you have a clear roadmap for CUWL as your primary UC solution, Gartner advises against the five-year Cisco UnifiedCommunications Software Subscription term, because the three-year term better fits mostenterprises' planning and upgrade cycles.

The vendor's large networking business remains a hardware-based business model, whichimpacts the ability of Cisco Collaboration Technology Group to compete as a software applicationprovider.

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HuaweiHeadquartered in China, Huawei offers a broad portfolio of communications products and services. Itcompleted the reorganization of its networking division and is now increasing its marketing focus,including increasing its partner sales and support channels globally. The Huawei eSpace UnifiedCommunications solution is made up of a broad set of applications, telephony, presence, messaging,

multiple conferencing options, video, collaboration and contact center. The vendor has expanded itsmobile client offerings and has improved the usability of its soft clients. The solution runs on Huaweiservers, standard servers and virtualized platforms. eSpace also offers software APIs for integrationwith business applications and a Microsoft Lync integration.

Consider Huawei when looking for a comprehensive networking solution that includes the UCCfunctionality. Ensure that any needed local support is available. Huawei's strongest areas of supportare China and some countries in the Asia/Pacific region, Middle East, Eastern Europe, Africa andSouth America. Support in other regions should be validated.

Strengths

Huawei had $35 billion in revenue in 2012, is continuing its rapid growth, has a large base ofclients, and can leverage its strengths in the network and server business. Its solutions span thecarrier, large enterprise and small or midsize business (SMB) markets across the globe.

The vendor continues to grow its enterprise network and mobile device divisions and presence.It has also made progress in expanding its presence and partners in EMEA and North America.

Cautions

The capabilities of Huawei's broad communications portfolio and its support model can bechallenging to understand. This difficulty can be compounded by cultural differences that occurfor non-Chinese-based organizations, because most global regions are managed directly fromChina. Engagements requiring extensive professional services can be particularly challenging.

Huawei faces political, trade and intellectual property trust issues in some regions. Additionally,as a private company, the financial transparency makes deeper analysis difficult. To succeed inthose markets, the vendor needs to increase the confidence of decision makers globally.

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IBMIBM's Unified Communications core solution is based on IBM Sametime, which offers presence andIM, audioconferencing, videoconferencing, Web conferencing, and peer-to-peer voice and video. IBMalso offers mobile clients on all the leading devices/OSs. Sametime Unified Telephony (SUT) providesa telephony middleware layer that can connect to peer PBX or IP PBX providers, such as Siemens andAvaya. IBM Sametime desktop video and videoconferences can operate with meeting room systemsthrough partnerships with leading video providers, such as Cisco and Polycom. IBM approaches UCfrom a collaborative and social perspective; this includes IBM Social Business Enterprise StrategyAccelerator and IBM Connections Suite, which bundles the Sametime UC platform with IBM's Social,Analytics and Content Management capabilities into one offering. Similarly, IBM has a range of cloud-based UC and social offerings that fall under its SmartCloud brand. For example, IBM SmartCloudUnified Communications Dedicated is a private cloud offering for UC as a service.

Enterprises should consider IBM Sametime products if they have investments in IBM products orprofessional services that they wish to leverage or if they are committed to the IBM social businessstrategy. Enterprises that must operate in multivendor telephony environments and want aconsolidated UC client should consider Sametime Unified Telephony. Enterprises that want to leverageSametime for use with a standards-compliant telephony server should consider the Sametime UnifiedTelephony Lite client option.

Strengths

IBM has leading social software, Web conferencing, portals, business analytics and contentmanagement solutions. Together, these provide IBM the opportunity to integrate its UCsolutions into a broad range of environments.

The IBM brand, partner network and professional services organization assist Sametime inobtaining account visibility and marketing presence in executing custom integrations, and fordelivering vertical-specific solutions.

IBM's vision for collaboration and social business, as well as its emerging cloud options, providethe vendor with a direction for a next generation of UCC.

Cautions

IBM's UC deployments, especially those involving telephony, remain limited. IBM Notes emailhas not generated significant Sametime telephony pull-through, and the plan to integrate on-premises Sametime with cloud-based IBM SmartCloud for Social Business has not yetestablished itself as an attractive offer.

Although Sametime's PBX-neutral strategy has good points, the leading UC suites in the marketall now incorporate fully integrated telephony functionality. This leaves IBM at a disadvantagewith enterprises that want to consider single-vendor solutions for the entire suite. In addition,most of IBM's Sametime telephony partners now offer competing full UC suites.

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Interactive IntelligenceInteractive Intelligence's Customer Interaction Center (CIC) is an all-in-one software solution thatoffers both contact center and UC functionality. The solution is particularly attractive to enterprisesfocused on contact centers that also wish to offer integrated UC functionality enterprisewide for back-office and support functions. The solution includes telephony, audioconferencing, UM, rich presencewith IM, and a range of client and device options. The solution also integrates with leading third-partyWeb conferencing and video solutions, as well as with Microsoft and IBM UC environments. Thesolution is offered on-premises, in a cloud configuration or as a managed service. InteractiveIntelligence also offers an integrated, but stand-alone, business process automation solution calledInteraction Process Automation (IPA).

Enterprises should evaluate the CIC solution when seeking to integrate UC with contact centerfunctionality, or when looking to augment Microsoft Lync with telephony or contact centerfunctionality.

Strengths

Interactive Intelligence has shown strong and consistent financial growth during the past 10years, and has an established record for delivering successful products and innovations in theUC market.

The vendor has seen success with its innovative and attractive hybrid offering, which allowsenterprises to convert on-premises deployments to cloud-based deployments, or vice versa. Thisflexibility eliminates many perceived risks of either approach, and can be conducted withminimal disruption to users.

Cautions

The vendor and its UC product have limited visibility in a market that is increasingly dominatedby larger vendors. Additionally, availability in some global regions, such as parts of EasternEurope and Asia, may be limited.

CIC is best-suited for enterprises with the contact center as their primary need, but that alsowish to have integrated, enterprisewide UC.

The CIC mobile clients are limited and based on mobile Web access, rather than on morecapable native clients.

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MicrosoftThe Lync 2013 release offers several significant improvements over its Lync 2010 predecessor,including broader mobile client capabilities, improvements to its telephony and video functionality,and partial Skype integration. Lync offers a full suite of UC functionality that Microsoft continues toimprove with each release. Lync integrates with Office, SharePoint and Exchange, and the Lyncpartner ecosystem continues to grow at a rapid pace. For cloud delivery, Microsoft offers Lync Onlineas part of the Office 365 suite. Lync Online allows users access to a subset of the on-premises Lyncsolution, notably with limited external telephony and video access.

Enterprises that wish to align closely with the Microsoft Office product family should consider the Lyncsolution and understand how it might change their business processes and worker productivity.Enterprises considering deploying Lync telephony and video should understand the limitations andinfrastructure requirements, how they will support branch offices, and how they will obtain globalthird-party support if needed.

Strengths

Microsoft Lync continues to make significant gains in the market and is attractive to a broadrange of enterprises. In many cases, it is initially deployed for the IM, presence and Webconferencing functionality, with gradual incremental deployments of telephony and video addedas follow-on phased deployments for specifically targeted groups or regions.

Microsoft integration of Skype with Lync will enable an attractive model for B2B and business-to-consumer collaboration.

Companies report that, once deployed, Lync functions can be readily integrated into businessprocesses and applications, providing new, different and effective ways to perform tasks. Often,these new functions are achieved by deploying Lync enhancements from a growing list ofecosystem partners.

Cautions

Few IT managers report that they have completely eliminated their PBXs in Lyncimplementations. Typically, Lync telephony is deployed for a subset of employees, whileIM/presence and Web conferencing is deployed across the broader employee base. Thisscenario, coupled with an unclear Lync Online telephony road map and weak branch survivabilityoffering, suggests that most enterprises should plan for a hybrid Lync plus traditional IP PBXdeployment.

While some Microsoft partners are starting to offer a comprehensive one-stop shop for all Lync-related equipment and services, these offers are still emerging. As a result, Gartner clients oftenreport that multiple partners are required to obtain a complete deployment, which can bedifficult (e.g., different partners for telephones, gateways, servers and video multiprotocolconferencing units [MCUs]). This difficulty also extends to identifying, evaluating and obtainingpricing from Lync service and support.

Some enterprises express concern that Microsoft's bundling, combined with proprietaryprotocols, will leave them locked in a closed circle of choices and few non-Microsoft options inthe future. Bundling includes Exchange, Lync, SharePoint, Office, Skype and Yammer.

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MitelMitel has recently rebranded its offerings, simplifying how customers understand and buy thesolutions. Mitel now delivers three solutions: MiVoice, which offers call control platforms andendpoints (formerly Mitel Communications Director, UC360 and Mitel Desktop); MiCollab, whichdelivers all UC functionality that enables collaboration, including UC client; presence; IM; audio, Weband video collaboration; and UM (formerly Mitel Applications Suite, Unified Communicator Advanced,Mitel Collaboration Advanced and NuPoint UM); and MiContact Center, which provides a contactcenter solution. All three solutions can be deployed in various cloud configurations — private cloud,public cloud and hybrid cloud — using a single software stream. The vendor was an early leader inboth UC server and client virtualization. The solutions support integrated provisioning, administration

and maintenance functionality.

Organizations looking for a fully integrated UC approach at an attractive price, those looking forflexible cloud options and those evaluating telephony communications functionality to integrate withMicrosoft Lync should evaluate Mitel's UC solution.

Strengths

Mitel offers a mature and comprehensive UC software suite. It is based on software that can bedistributed or centralized in a data center. The solution runs on industry-standard servers, and iscertified on VMware virtualized environments. The same solution is also available as a cloudoffering. Mitel is also offering a UC desktop that can run with multiple desktop virtualizationoptions.

Mitel's product rebranding and bundling should make the solution more attractive to, and easierto sell into, the broader market.

The solution incorporates comprehensive single-point administration and capable mobile clientoptions, including GPS location service integration.

Cautions

Although Mitel has developed a strong product and market approach, in order to succeed, itmust establish awareness of its new brand against strong competition, and must ensure that itschannel partners are selling the full UC solution set.

Prospects should confirm that Mitel channel partner references match the architecture andgeographical requirements that they intend to deploy. While the Mitel product works well in adata center configuration, not all channel partners have the skills needed to work with largerdata center architectures.

Mitel's financial picture has improved since last year's Magic Quadrant research. While thevendor has posted revenue declines in each of the last three quarters, its profitability ratios arestable and cash from operations has improved in the last two quarters. Also, Mitel recentlyrefinanced its outstanding debt, pushing debt repayments to February 2019.

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NECNEC's Univerge 3C software offers a fully integrated, complete UC suite. It is based on a Web andservice-oriented architecture (SOA), on open standards (SIP, XMPP) and centralized administration.The suite functionality encompasses telephony, video, all forms of conferencing, presence, IM andmessaging. It includes multiple client options, such as hard phones, softphones and SIP phones, aswell as a full set of mobile capabilities for a broad range of mobile devices. The broader NEC portfolioincludes integrated support for contact centers and business application integration. Univerge 3Coperates on VMware and on Microsoft Hyper-V Server virtualization software.

Consider the NEC Univerge 3C solution if you want a complete software UC suite based on SOA thatcan be extended with the broader portfolio offered by a major global telecommunicationsinfrastructure provider.

Strengths

NEC is a financially strong, global firm with an established UC sales and support channel inmultiple regions.

The vendor has developed a forward-looking UCC architecture that includes a rich set of UCfunctions in a standards-based SOA environment, backed by a broad communications portfolio.The platform's virtualization capabilities and software architecture make it a good fit for datacenter environments, and the API and software development kits make it suitable for integrationwith business applications.

Cautions

NEC's UC solutions have limited brand recognition, compared with the leading competitors in theNorth American and European markets; as a result, NEC is often not included for considerationin these markets. To succeed, the vendor needs to advance its brand marketing for Univerge 3Cas a full UC suite.

Some of NEC's channel partners in the North American and European markets for the Univerge3C product lack the experience and skills needed to sell and deliver this broader product. Tosucceed, NEC needs to continue to expand its partner training programs. Buyers interested inUniverge should contact NEC to ensure that they are aligned with a partner that has the neededcompetencies.

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ShoreTelShoreTel positions a UC portfolio in an appliance architecture that is particularly well-suited todistributed organizations. The solution is known for its simplicity of installation and administration.Survivability is provided via ShoreTel's N+1 switch failover capability; in this configuration, a switchcan fail over to another switch anywhere in the network. UC services, such as IM, conferencing,application sharing and mobility, are provided by ShoreTel's Service Appliances and Mobility Router,integrated with its switch-based IP voice services. All switches and application appliances operateindependently, but are configured from a single ShoreTel Director Web application. The ShoreTelCommunicator desktop client provides integrated IP and UC applications for users, including peer-to-peer video and support for communications to room-based systems from strategic partners. Thevendor supports its own IP phones and the ShoreTel Dock for iPad and iPhone users, as well as SIPphones, SIP trunking and a full set of mobile options. The vendor offers basic and advanced contactcenter functionality, as well as Google Gmail and Microsoft Exchange UM integrations.

In 2012, ShoreTel acquired M5 Networks, a UCaaS provider, now branded as ShoreTel Sky. TheShoreTel Sky solution is not integrated with the on-premises offering, although some functions, suchas ShoreTel Mobility and ShoreTel Dock, are available for both.

Consider the ShoreTel offering if your company is a geographically distributed organization withmultiple small or midsize locations and wants a cost-effective, basic set of UC functions, with areputation for both simplicity and ease of use.

Strengths

ShoreTel offers a full UC suite in a distributed appliance architecture. The enhancements in 2013include new IM, conferencing and collaboration software, desktop docking stations for iPad andiPhone users, and support for smartphones and tablets.

The vendor continues to experience impressive above-industry-average market growth. WhileShoreTel's international business makes up only 12% of overall sales, the vendor isdemonstrating strong international revenue growth in EMEA and the Asia/Pacific region.

Users report high customer satisfaction because the solution is easy to use, has intuitive userand management interfaces, and has simple, transparent pricing and licensing structures.

Cautions

Although ShoreTel is experiencing strong growth, it is a relatively small vendor, with $300million in revenue in 2012, competing in a market increasingly dominated by the behemoths.This can make it difficult to gain visibility and sustain growth.

ShoreTel sales to large enterprises are primarily sold indirectly through its national and globalaccount resellers program. Many of its other resellers are new to ShoreTel and new to UC, andso may not have experience with users' requirements in the broader UC market, nor with largeenterprises.

The vendor does not have enterprise visibility outside the telecommunications area. Thisrequires ShoreTel resellers to offer integrated solutions from HP and other networking and videoequipment partners, making it difficult for ShoreTel to gain acceptance in larger enterprises as afull UCC provider.

ShoreTel continues to operate at a loss, but with break-even cash flow.

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Siemens Enterprise CommunicationsThe Siemens Enterprise Communications OpenScape portfolio offers a full and integrated suite of UCfunctionality meeting enterprise requirements, and OpenScape Cloud Services for SaaS UCdeployments. These can be licensed in several profile-based bundles. Functionality includestelephony, an integrated suite of conferencing options, IM and presence, video, and UM. Siemens alsooffers a broad range of hard, soft and SIP-based clients, the functionality of which is available onleading mobile devices, including dual-mode handsets. The OpenScape Fusion integration allows theclient to be imbedded within other application environments, including business applications, GoogleApplications and social media tools (such as LinkedIn, Facebook and Twitter). The OpenScape MobileCall Swipe option provides transparent real-time transfer of ongoing voice or video sessions amongdifferent devices. Siemens is demonstrating a next-generation UC platform, currently called ProjectAnsible, which includes an advanced user experience and strong integration options, and is scheduledfor general availability in 2014.

Evaluate the OpenScape UC suite if your company is looking for a standards-based, complete andcost-effective UC software suite that can, as needed, be extended via integration with third-partysolutions.

Strengths

OpenScape is a mature, fully functional, all-software, all-SIP UC solution; elements of theportfolio are also offered as stand-alone capabilities.

The suite offers multiple integration options; it can be integrated with leading collaboration andbusiness applications, such as those from IBM, Microsoft and Google, and it supports a range ofclient integrations.

As an early entrant into the all-software UC suite market, the OpenScape portfolio has beenproven to be effective as a complete and scalable software-based solution for several years. Thevendor continues to expand its offering with innovative and differentiating functionality.

Cautions

Siemens Enterprise Communications' lack of visibility in the large North American market hasresulted in slow adoption and acceptance of the OpenScape portfolio in that region. However,the vendor is investing in new channels and marketing programs, which are improving itsvisibility and penetration.

The vendor's recent UCaaS offering, which can be a hybrid complement to the on-premisesoffering, is intended to assist the vendor in entering the North American market. It must proveitself and prove effective, as it is entering a market that is rapidly being filled with large,established cloud vendors and disruptive alternatives.

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ToshibaToshiba's UC solution is based on the IPedge, which is a fully bundled and inclusive suite. It alsosupports the Strata CIX family of IP business telephone systems allowing support and migration ofexisting customers. In addition to telephony, Toshiba has leveraged technology partners to create asolution that includes several variations of UM: audioconferencing and Web collaboration with up to49 users, videoconferencing (up to eight parties), and XMPP and telephone status presence and IM.

Toshiba offers UC-integrated contact center functionality with CRM integration, as well as a range offixed and mobile client options. Toshiba has added the VIPedge Cloud-based Telephone Solution,which will provide both cloud and hybrid options, as well as plug-in integration for Microsoft Lync.

North American SMBs looking for a cost-effective, telephony-centric, basic UC solution shouldconsider Toshiba's on-premises and cloud offerings.

Strengths

Toshiba has an established reputation for reliable and cost-effective IP telephony solutions.Although the Toshiba UC solution scales up to 1,000 users, it does particularly well with smallbusinesses of fewer than 500 users, partly because the vendor is especially cost-effective in thisrange.

Toshiba is developing an attractive hybrid on-premises and cloud offering.

Cautions

The IPedge solution provides less UC functionality than many competitors. For example,conferencing functions do not integrate with third-party solutions, so separate investments areneeded if larger or more-extensive capabilities are required.

Most of Toshiba's sales efforts are concentrated in North America. The references provided forthis research were all focused on using the basic telephony functions, not the fuller UC suite.

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Vendors Added and DroppedWe 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 or MarketScopemay change over time. A vendor appearing in a Magic Quadrant or MarketScope one year and not thenext does not necessarily indicate that we have changed our opinion of that vendor. This may be areflection of a change in the market and, therefore, changed evaluation criteria, or a change of focusby a vendor.

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AddedNo vendors were added this year.

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DroppedDigium was dropped from this year's Magic Quadrant. The Switchvox UC product is intended for theSMB market, thus does not qualify for inclusion. The Digium Asterisk solution, which can becustomized to create a UC solution, is not included in the evaluation because it is not available as anoff-the-shelf solution.

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Inclusion and Exclusion CriteriaTo be included in this Magic Quadrant, solution providers must meet the following criteria:

Offer a unified solution in all six core communications areas defined in Gartner's UC model.Briefly stated, the six areas are: (1) telephony; (2) conferencing (including audio, Web andvideo, which can be offered via partnerships); (3) IM and presence; (4) messaging (which canbe offered via integration with email, voice mail and various forms of UM); (5) clients formultiple environments; and (6) the ability to be integrated with other business andcommunications applications, such as collaboration software, contact centers, and CEBPs.

Integrate the UC functionality in each area into a complete solution presented via a consistentinterface; nonintegrated functionality is not considered part of a unified solution.

Have a significant market presence in telephony and in three or more of the six corecommunications areas defined in Gartner's UC model; market presence can be demonstrated bysignificant market share or differentiating innovation. Vendor must have a minimum revenue of$150 million from enterprise communications.

Offer the UC solution in multiple global market regions, including North America, Europe andAsia.

Provide evidence of sales, revenue and operational investments that support market objectives— this research focuses on the large and very large enterprise market (vendors focusedprimarily on SMBs are not included).

Provide five references (three end users, two distribution partners) for enterprise on-premisesUC portfolio/products. These references should involve the complete portfolio; references forportions of the UC portfolio are considered, but do not carry as much weight as references withcomplete solutions.

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Evaluation CriteriaAbility to ExecuteGartner analysts evaluate UC product providers based on the quality, efficacy and overall maturity ofthe products, systems, tools and procedures that enhance individual, group and enterprise

communications. Ultimately, UC providers are judged on their ability and success in capitalizing ontheir vision (see Table 1).

Table 1. Ability to Execute EvaluationCriteria

Criteria Weight

Product or Service High

Overall Viability High

Sales Execution/Pricing Standard

Market Responsiveness/Record Standard

Marketing Execution Standard

Customer Experience Standard

Operations Standard

Source: Gartner (July 2013)

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Completeness of VisionGartner analysts evaluate UC product providers on their ability to convincingly articulate logicalstatements about current and future market directions, innovations, customer needs and competitiveforces, and how well these map to Gartner's overall evaluation of the market. Ultimately, UC productproviders are rated on their understanding over a multiyear time frame of how market forces can beexploited to create opportunities for providers and their clients (see Table 2).

Table 2. Completeness of VisionEvaluation 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

Source: Gartner (July 2013)

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Quadrant Descriptions

LeadersLeaders have a full UC offering, strong market presence and demonstrate success in the field. Theyhave a strong presence in related markets to expand their footprint in UC. These vendors and theirchannel partners have experience delivering UC to a broad range of enterprise types and into mostgeographic regions.

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ChallengersVendors in the Challengers quadrant offer solutions and capabilities with the potential to move into aleadership position, but are lacking in one or more critical areas. Typically, this lack is in the area ofmarket presence or in not being successfully sold in key regions. In other cases, the vendor is strongin all regions, but has elements of their portfolio that are not selling.

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VisionariesVendors in the Visionaries quadrant offer a strong and differentiating approach to one or more coreareas. However, these vendors have limited ability to execute across the entire set of requirementsand markets, or have marketing and distribution limits to their ability to challenge the leadingproviders.

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Niche PlayersVendors in the Niche Players quadrant offer solutions that are particularly strong in some, but not all,

UC areas, or they have a solution that has limited market reach or appeal.

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ContextThe enterprise UC market continued to mature during the past 12 months and is now considered byGartner to be entering the early mainstream adoption phase. This means that products are available,but may lack features or capabilities. This also means that the best practices for users, administratorsand system integrators have not yet matured. Key product deficiencies include lack of importantfeatures, lack integration options or lack of scaling for more demanding environments. Key bestpractices that are still maturing include those for selecting, pricing and deploying solutions, and thosepractices needed for increasing end-user adoption. Gartner believes it will take several years ofincremental improvements to address these early mainstream issues.

An important issue that remains to be addressed is intervendor UC federation, which would enablecompanies to more easily work with partners, suppliers, distributors and customers who are using adifferent vendor's UC solution. While most products offer support for basic IM federation based onXMPP and SIMPLE, deeper rich federation is lacking. While there are technical challenges tofederation, the major barrier is vendor competition; leading vendors wish to differentiate themselvesby offering strong federation between companies that use their own products. There are, however,some solutions, such as NextPlane, that offer UC federation brokerage services. Gartner expectsintercompany federation to improve over the next two years, as this is an important opportunity forbusiness productivity improvements.

The past year saw the continued maturation of most vendor solutions in key areas:

Hybrid and cloud UC (UCaaS) deployment options — Although these lag on-premisesdeployment maturity by one to two years, this remains a strong area of user interest andpotential value.

Mobility — A wide range of mobile technologies are having a significant effect on UC; theseinclude full UC functionality, such as real-time media, on mobile platforms, fixed-mobileconvergence and voice over wireless LAN (VoWLAN), as well as the displacement of desk phonesby integrated mobile phones.

Video — UC solutions are increasingly able to integrate multiple video options, includingdesktop, meeting room and video content management.

Administration and management — Integrated tools to assist in traffic and network monitoringand control are now considered essential, as are tools for usage reporting, consolidatedprovisioning and even analytics. These are particularly important to users who are integratingthe communications traffic with application traffic on the enterprise WAN, and for those who areusing UC to produce measurable change, including both user productivity gains and CEBP-basedtransformation.

Pricing and bundling improvements — Many vendors modified their UC bundles and marketoffers and now offer role-based pricing and bundles. These bundles allow enterprises to expandfunctionality based on more-targeted requirements of different types of workers (e.g., travelingworkers versus desk-bound workers). Also, many, but not all, have simplified their pricingmodels.

An area with mixed progress during the past year was support for standards. While most UC vendorsoffer standards-based capabilities, some clearly deprecate public standards in favor of proprietaryvariations of software, hardware or networks. Conversely, other vendors clearly work hard to supportthe most public versions of standards and environments. This is a strategic issue for enterpriseplanners, because proprietary approaches often result in limited and more expensive options. Forexample, fixed and mobile clients supporting HTML5, Web Real-Time Communication (WebRTC) orall-software video MCUs that support public scalable video codecs will offer significant price,performance and choice advantages. Similarly, support for SIP, SIMPLE and HTTP also allow moreand better options.

In larger organizations, UC should be perceived as a process of continuous improvement. Gartnerrecommends that enterprises prepare their UC plans so that they know where and how they mightevolve their environment and what the benefits would be. Planners should take a long-term view oftheir UC solution and expect considerable evolution during the next three years as the marketresponds to new technology influences. Key market influences include new mobile capabilities,consumer-based offerings, integrated cloud offerings and new standards based on HTML5.

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Market OverviewEnterprises continue to struggle to define UC road maps that accommodate conflicting goals,including UC portfolio consolidation, best-of-breed functionality, vendor lock-in avoidance, legacyinvestment optimization and user demand for advanced functionality. UC road map definition isfurther complicated by the emerging UCaaS options. Vendor solutions attempt to address these goalswith varying degrees of success.

From a competitive perspective, the relative positioning of the vendors changed very little this year,as all vendors made incremental improvements to their offerings. Cisco and Microsoft maintainedtheir strong leads. Both these vendors have large installed bases into which they can sell UCfunctionality; Cisco leverages its position in network infrastructure, while Microsoft leverages its emailand Office suite base. These two vendors compete fiercely in the market and both made significantadvances during the past year. Cisco advanced client capabilities based on the Jabber client, includingvideo, and now offers fully capable mobile client options. Cisco also continued aggressive marketingand sales programs. Microsoft advanced Lync's capabilities, including stronger mobile support and theintegration of Lync with Skype in the Lync 2013 release. Microsoft's relative positioning was hurt thisyear by their slow progress in addressing enterprise telephony requirements, or at least in defining

pragmatic telephony advice.

Other Leaders were Avaya and Siemens Enterprise Communications. Avaya consolidated its Aura UCsolution and improved its video, IM/presence and Web conferencing capabilities through acquisitions.It has also advanced a stronger market and support initiative, allowing it to regain credibility in itscustomer and distribution bases. Siemens Enterprise Communications advanced the standards-basedand open-integration focus of its OpenScape product, created stronger marketing and sales programsin North America, and is introducing a new UC client.

The vendors in the Challengers quadrant each pose threats to the Leaders, and all are large,established global companies. NEC, Alcatel-Lucent and Huawei all have complete UC solutions; toadvance competitively, they need to increase their visibility and sales in key markets. IBM approachesUC from a collaborative and social software perspective, and generally has high visibility globally. Toadvance in the UC market, IBM needs to increase the adoption of its complete UC portfolio, includingSametime Unified Telephony, which can be delivered as a component of the IBM Connectionsbusiness social platform.

Mitel is the sole vendor in the Visionaries quadrant. It offers a full UC suite, a broad range of mobileand integration options, and a leading approach to client and server virtualization. It has recentlyrebranded its offering and has pursued a more aggressive marketing program.

The Niche Players quadrant has vendors that offer strong solutions for some areas or regions. TheInteractive Intelligence UC solution is particularly effective for enterprises with both contact centerand UC requirements. ShoreTel, Aastra Technologies and Toshiba remain better-known for telephonythan for a broader UC portfolio.

As part of this research, vendors were asked to estimate the costs of several different configurations,including a 1,000-subscriber centralized deployment, a 5,000-subscriber distributed deployment anda 30,000-subscriber multinational deployment. They were also asked to detail what they wereincluding in their estimates and how they handled support. In general, server and user license pricingvaried from a low end of $200 to $350 per subscriber to a high end of $350 to $450; these wereestimates for a full UC suite without messaging, which means telephony, IM and presence, andconferencing. This included server hardware, but not telephone handsets. Installation andprofessional services were often $75 to $100 per user. However, vendors are often prepared to offersignificant discounts, which vary according to the competitiveness of the bidding process; discountingof 40% to 50% is common. Vendors offered support in several forms, making direct comparisonsdifficult; however, the most common response was that service costs average 12% to 15% of thepurchase price, excluding the cost of software assurance or license upgrade contracts.

Several vendors offer strong UC functionality in specific areas, but were not included in this MagicQuadrant, because the inclusion criteria required that vendors have strong on-premises solutions in atleast four of the UC technology areas. In the area of conferencing, Polycom and several other vendorsoffer strong solutions, but were not included because they do not offer solutions in other technologyareas. In the area of UM, AVST offers a best-of-breed solution. Esna offers a useful middlewareapproach for integrating disparate UC environments, including the integration of Google withenterprise telephony and video. Finally, UC service providers (e.g., AT&T, Google, Verizon and CSC)were not included in this research, because they do not offer on-premises solutions, but offer UCaaSor UC on a leased basis; those types of UC service solutions are described in "Magic Quadrant forUnified Communications as a Service, North America."

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