01 March 2007

The corporate communications business model : time for a change!

Until the recent advent of so called IP communications, corporate communications services were siloed and the market was dominated by historical telecom equipment vendors.

A few years ago, the model was challenged as VoIP was pushed into the corporate IT infrastructure. At the same time, broadband internet connections have become more and more commonplace both for home & corporate users who were given the opportunity to experiment rich & cheap communications technology, while mobile communications reached out the masses.

This has resulted in a drastic change of the corporate communications paradigm : from proprietary technology to open standards, from client/server architecture to peer-to-peer, from multimedia to unified communications.

All leading technology vendors have jumped on the bandwagon, with different strategies to achieve the same goal : to protect their revenues. As a matter of fact, innovation is far below expectations at the end of the day.

But they missed out the fact that, so long as network continuity & interoperability is guaranteed, unification is not achieved at the infrastructure level but rather at the end user level :

  • The Network side is the job of integrated fixed & mobile network service providers

  • The End user side is the job of device manufacturers & software companies

Indeed, mobile devices & portable applications are bound to supersede any other type of end user equipment for the corporate user who will expect a true unified & seamless communications experience both at and away from the workplace.

This is why the driving forces of corporate unified communications will no longer be telecom equipment vendors but network service providers & end user experience champions who will have succeeded in the residential market segment.

Recent news illustrate this ongoing trend :
  • Yahoo! has partnered with Nokia Siemens,

  • Microsoft has partnered with Motorola, Philips & Nortel,

  • Cingular Wireless has partnered with Apple in the US,

  • SFR mobile has taken over Tele2 Internet broadband business in France,

  • Skype has a miriad of hardware device manufacturer partners,

  • Orange business services has partnered with Microsoft to provide hosted unified communications services

  • Google, who has partnered with Cap Gemini, is targeting the corporate market with its Google Apps suite,
and the hosted solutions business model (outsourcing & midsourcing) is more and more appealing to companies of all sizes.

However, as opposed to the home market, the corporate market does require professional & consulting services on top of the technology offer. On that front, Microsoft, along with IBM & HP clearly have a distinct advantage. This is also why technology integrators are taken over by service providers.

The reshaping of the business model is also an opportunity for open source initiatives to go mainstream in the corporate segment so long as they are backed up by established firms like Red Hat & Novell, should they recall that “marketing comes first, management next and engineering last” - but not least!