Microsoft Lync opens up unified communications market

Microsoft's Lync could shake up a unified communications market that has historically been dominated by an elite group of vendors

The unified communications market has been dominated by an elite group of vendors since the phrase was coined back in the mid-1990s.

The likes of Cisco, Avaya and ShoreTel have carved out a reputation as the go-to providers when it comes to business-class unified communications (UC). However, the wind of change is blowing through the enterprise, as there is now a new kid on the block.

There are not many instances where Microsoft could be called the new kid, but in the context of unified comms it is a small fish in a big pond. Although still regarded as a niche player by many analysts, its Lync platform is starting to cause quite a stir.

Microsoft has a habit of launching products that are almost dismissed by analysts, then quietly tinkering under the hood for a while before presenting a solution of tangible value. This is exactly what has happened with Lync.

Initially launched as Microsoft Communicator in 2003, Lync has endured a perilous journey to become what it is today.

What is Lync?

Lync is a fully fledged UC platform incorporating voice, video, presence, mobile, conferencing and chat. There are two primary flavours of Lync on the market, each offering different levels of functionality.

Lync Server allows unfettered access to the platform features; the cloud-based Lync Online comes bundled with Office 365 but lacks PBX capabilities.

It doesn’t take a market analyst to see that the business world is increasingly software-driven. Cloud and mobile computing have refocused the lens through which we view enterprise technology. This is especially true of small and medium-sized enterprises (SMEs), which might not have the capital to deploy expensive infrastructure.

This shifting paradigm poses a clear risk to the traditional model of UC and its vendors. Jon Arnold, principal analyst of telecom consultancy J Arnold & Associates, says that traditional UC vendors are “simply not built” to serve the cloud-focused market.

“SMEs generally can’t afford the up-front investment in premise-based UC, so the cloud works for them on many levels,” he says.

Arnold’s observation rings true in the sales of telepresence hardware. According to a recent IDC study, global sales of such hardware fell 6.2% in the first quarter of 2014 and while this is only one facet of unified comms, it highlights how quickly the landscape is changing. UC market leader Cisco took the biggest hit, with its video hardware revenues shrinking 22.4%.

Refusing to sit idly by as its lunch disappears, Cisco has recently announced a $1bn investment in cloud infrastructure over the next two years; but is this a case of too little, too late?

Blair Pleasant, president and principal analyst of Commfusion and co-founder of UCStrategies, says that Lync is “a huge threat” to the big market players.

“The majority of companies I speak with are already deploying Lync for IM and presence, and those that haven’t are considering it,” she says. Her observation is backed up by recent statistics, which suggest that 90% of Fortune 500 companies are now using Lync in one form or another.

“Within the next five years, after Lync Voice becomes more fully featured and stable, it is going to become a very viable alternative,” she predicts.

It wouldn’t be Microsoft if there wasn’t controversy

While industry pundits still describe Lync as one to watch, Microsoft seems confident it is already winning the race. Toward the end of 2013, BJ Haberkorn, director of Lync product marketing, claimed the firm was “shipping more enterprise voice lines than any other technology company in the world”.

This statistic highlights just how pervasive Lync is becoming, although Avaya was quick to jump on the claim, calling it “bold”. It’s not just competitors that have questioned Haberkorn’s announcement, though; feathers have also been ruffled among industry watchers.

I don’t think it’s fair to say that Microsoft is the leader in enterprise voice at this point. The companies I speak with aren’t rushing out to deploy Lync Voice

Blair Pleasant, Commfusion

Arnold says that Microsoft needs to do a better job at sharing accurate data on live deployments. “It's one thing to talk about lines shipped, but another to make claims about lines in active service,” he says.

Pleasant agrees, saying she is sceptical about how Microsoft arrived at such a statistic. In a recent UCStrategies podcast, she said: “I don’t think it’s fair to say that Microsoft is the leader in enterprise voice at this point. The companies I speak with aren’t rushing out to deploy Lync Voice.”

Haberkorn, though, insists the company is sticking by its controversial adoption figure.

“Based on a comparison of our internal sales information to the telephony shipments of every PBX maker, including Cisco and Avaya, as provided by analyst firm T3i, Microsoft is now shipping more voice lines to organisations with 400 or more users than any other technology company in the world,” he told ComputerWeekly.

It’s all in the voice

Putting figures to one side, there is a shortcoming with Lync and it’s a significant one. While Lync Server acts as a credible PBX alternative, Lync Online does not and this presents something of a problem.

Lync Online appeals to one market in particular – the small to medium enterprise. The primary reason it appeals to SMEs is because it embodies the cloud ethos; but the cloud-based version of the product lacks one of the most intrinsic methods of business communication. Of course, Lync Online offers peer-to-peer voice, but that falls short of “unified communications” in that it doesn’t offer public telephone network (PSTN) connectivity.

Microsoft recently announced at its Lync Conference that voice was on its way; until then, the cloud-based version of the software is not reaching its true potential. When pushed for a timeframe, Microsoft said that it had “made it a priority to deliver PSTN calling capabilities to Lync Online”, but was unwilling to offer any further details.

Read more about Microsoft Lync

Who will win the war?

Effortless collaboration plus painless communication equals productivity, and the most astute and progressive of corporations adopted UC some time ago. However, the technology has generally been reserved for larger organisations with deep pockets and abundant internal resources.

It is this fact that has allowed Microsoft to shake things up. Lync opens up the world of UC to a whole new market. Software-driven cloud services have an inherently democratising effect, giving SMEs access to tools they could only have dreamed of a few years ago.

Lync has one or two other aces up its sleeve and one of them is integration with Microsoft products. Businesses are looking for solutions that tie into existing applications and no vendor is better placed to offer this than the owner of Windows, Office, Exchange etc.

“We all use Microsoft and UC needs Microsoft integration to be effective,” says Arnold. “Lync will work seamlessly on the desktop by its nature, whereas UC vendors face challenges in getting their solutions to do the same.”

Lync has one last thing going for it – Skype. The consumer-focused application already has a user base of 280 million and while Microsoft has not quite figured out how to tap into this resource yet, everyone agrees it is of tremendous value.

Of course, Lync won’t be for everyone. The key UC players have a loyal user base and – on top of this – are taking decisive action to ensure their products meet the needs of today’s market

Arnold says: “A lot of this comes down to what enterprise IT is most comfortable with. Many will be wed to a network-based architecture, where services and applications are secondary – this is Cisco's customer base, and Microsoft will not steal them away.”

However, even if the top players do manage to hold onto their user base and harness the cloud, and even if Microsoft’s claims continue to be called into question, there is still no denying that Lync is winning customers and is here to stay.

Microsoft might be the new kid on the UC block and it might have taken over a decade to understand in which direction to point Lync, but now even the sceptics realise that it is a significant entrant in the market.

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