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UC Market Deployment Data: Just the Facts Please
by Russell Bennett, UC Insights
From time to time I hear a range of opinions (and we all know that pithy joke about opinions) regarding the rate of unified communications (UC) deployment and adoption. These opinions range from:
Sometimes these notions come from those with a vested interest in their own point of view, and sometimes from journalists who are just looking for a story line in a ‘slow news week’.
We know that UC is a relatively new technology (c. 2007) and without doubt the adoption and deployment of UC has possibly been slowed by a range of factors:
So is UC going to replace telephony? Is it a hot technology or a passing fad? And much more importantly (to those of us who have invested money, time and energy in UC) should we stay the course or bite the bullet and go work for Mark Zuckerberg?
Since I greatly prefer data to opinions, anecdotal evidence and ‘stories’, I decided to dig deeper.
Market data for UC deployment is difficult to acquire, since:
Even with telephony (a technology that we should have a handle on by now), the solid data on market share doesn’t exist. I know this because when I was at Microsoft, I effectively had a paid subscription to every analyst company, every industry journal and other source of commercial data that was available. Furthermore, it was all stored electronically and was indexed and searchable. In multiple tries over 6 years, the best I could find was quarterly data on telephony line sales that was used by analysts to assert that Vendor A was the market leader or that Vendor X was losing market share to Vendor Y.
There is a lot that could be said about why such conclusions, based on only 1 quarter of data, are invalid but that isn’t the purpose of this paper. Furthermore, data released by vendors is not the most reliable for a range of obvious reasons; the less obvious reasons are issues with data quality. Data quality issues include missing and/or erroneous data; but also emanate from non-comparable data (i.e. ‘apples and oranges’) as well as pre-Y2K data that were ported from legacy systems to ERP systems with a commensurate loss of information.
The great thing about IP networks and technology is that there is so much data that can potentially be analyzed. Furthermore there are no legacy database issues with UC, so the search for the data on UC deployment is just a matter of knowing where to look and what to look for.
Following the example of Google, Bing, et al., what is needed is a ‘crawler’, which is a program that that traverses the Internet gathering information. General search engines work by crawling, caching and indexing information in web sites. For this task we have built a UC crawler, looking for traces of SIP and XMPP network elements at the edge of company networks.
UC systems that are deployed by companies only within the LAN and do not pass traffic across the Internet are impossible to detect, for obvious reasons. The good news here is that most of the UC market leaders have shipped some form of WAN communications feature, even if it is only SIP Trunking. Also note that companies using Cloud UC systems are passing traffic across the Internet by default.
The traces that we are seeking are quite distinct from any other kind of traffic (e.g. email). Therefore, a positive indication can be counted as authoritative evidence of UC deployment. While the absence of a positive indication does not indicate the lack of UC deployment, we suspect that the ‘false negatives’ are fewer than the positives (see estimates later).
Having retrieved the set of positive indications, in order to make the data useful, we had to cross match that with company size, geographic and market sector data so that we could conduct some multi-dimensional analysis. What we have now is a work in progress since the data set is combined from a range of sources and some data is not available for all companies, so there are some duplicate entries and some missing categorization data. However, because the sample size is so large we can estimate that the data anomalies are sufficiently small that the data is statistically significant and the result set is commercially significant.
The data set currently covers nearly 357,000 companies and non-commercial entities (governmental, education, not-for-profit) of all sizes worldwide and shows evidence of UC deployment in nearly 8,500 entities. While this is only 2.4% across the board, there is a marked difference between large organizations, including large publicly listed companies, and small private companies.
It is to be expected that the prevalence of UC deployment is strongly correlated with organizational size, since large organizations were the original UC target market. There are nearly 38,000 large organizations in the result set and over 5.5% of these (i.e. ~2,100) have deployed UC; with deployment among the Fortune 500 reaching nearly 33%. Also predictable is that the preponderance of large organization UC deployments are in North America, since most of the UC vendors are US based. However, UC deployment has also been detected in 36 countries outside of North America.
When analyzed by Market Sector, there are some expected and some unexpected results. Of the latter, at the top end is Higher Education (shown as ‘Education’ in the pie chart that follows), and at the bottom end, Telecommunication Services.
Higher Education and UC
Clearly, both students and faculty in Higher Education are highly receptive to new ideas and technology; plus they are probably also offered a very good deal from the technology vendors. However, looking deeper into this sector, we find that academic research is not conducted exclusively among researchers from the same institution: far from it. Collaboration across institutions is the norm in academia, probably stemming from professional relationships that are developed in conferences and seminars focusing on highly specialized areas of research. I said in another paper recently that the essence of the UC ROI is in the efficient creation and communication of complex ideas. This is what academicians do for a living, so it should not be a surprise that the Higher Education sector is leading the deployment of UC.
Telecommunications Services and UC
It would be easy to jump to some incorrect conclusions about why Telecommunications Services companies are in the smallest sector in terms of (internal) UC deployment, e.g.:
However, there is probably a much simpler explanation. Partly because of the monopoly position that the PTTs held before deregulation, and partly because of post-deregulation consolidation (particularly in North America) there are actually far fewer Telcos than there are, say, Universities or Financial firms. That being said, the majority of Telcos that are deploying UC internally are European.
Small Private Companies
As has been stated above, UC was originally targeted at large enterprises, so it is unsurprising that only 2% of the small private companies in the result set have deployed UC. However, given the large sample size (>300k companies) the absolute number is 3x that of the large organizations with more than 6,400 deployments. I have written in other papers on UC federation that there is a strong incentive for small companies who are members of the value chain of larger companies to join the larger company’s federation network. This would go some way to explain why the Industrials sector among small companies makes up 24% of total deployments, compared with only 7% among large organizations. Clearly, further work is needed here.
The list of tracked entities is constantly being expanded although, given that the result set is >350k companies and organizations, the ‘80/20’ rule probably applies here. The data is refreshed every week and the number of entities that deployed UC in January was growing at a rate of approximately 0.3% per week. However, seasonal factors could be an explanation for that, since the deployment rate has now slowed. As we get more data points, the longer term trend will start to emerge.
With regard to how many UC deployments are hidden behind firewalls, we can only estimate. Based on a quick study, we think that we are detecting around 70% of deployments. So there may be an additional 3,600 deployments that we can’t yet detect. More thought needs to be given to that.
Another goal is to reliably detect the vendor of the UC system under deployment. Once again, this isn’t impossible, since every vendor has a specific signature: much as I know that 41.38% of the visitors to my web site use Internet Explorer. However, there is more security implemented in UC for obvious reasons so any data we can capture will probably only be an approximation.
Other Uses of This Data
I said at the beginning of this article that I wanted to present some accurate and authoritative data on UC deployment in an attempt to end the debate on whether UC has any legs as a commercial technology; hopefully I have succeeded. However, the full data set will be of vital interest to any company whose business is in any way related to the UC market, including:
Clearly, this data would be of use in:
Those who are interested in gaining access to this data will find further information in the market data section of this site.
There are many customer case studies and other articles readily available showing that UC is in active use and is adding value to the companies that have deployed it. However, with the data presented above, there should be no further doubt that UC has passed through the ‘early adopter’ phase and, arguably has ‘crossed the chasm’. Now that we are hopefully through the worst of the 2008 economic crisis, UC ecosystem vendors are clearly starting to capitalize on their investments over the last 5+ years and are hoping to develop more business with the commercially significant number of companies that are deploying UC.
Anyone who has read the Michael Lewis book ‘Moneyball: The Art of Winning an Unfair Game’ (or recently watched the movie) will know that those who have right data, at the right time and interpreted in the right way seem like magicians compared to those who don’t. Furthermore, anyone who has seen the 1992 movie ‘Glengarry Glen Ross’ will know that the prize for second place in the monthly sales competition is a set of steak knives.
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