australia uc services
TRANSCRIPT
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Australia Unified
Communications Services
Report 2009
An Analysis of the Unified Communications Services Market Opportunity in
Australia
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Table of Contents
Chapter 1 .................................................................................................................................. 3
Executive Summary .................................................................................................................... 3
Overview ................................................................................................................................... 3
Chapter 2.6
Unified Communications Services Definition and Methodology .......................................................... 6
2.1 Unified Communications Services Definition and Framework .......................................................6
2.2 Unified Communications Framework ........................................................................................9
Chapter 3 .................................................................................................................................. 11
Unified Communications Services Market Opportunity Analysis ......................................................... 11
3.1 Market Dynamics .................................................................................................................. 12
3.2 Market Drivers and Market Restraints ...................................................................................... 13
3.3 Total Addressable Unified Communications Services Market Opportunity ......................................15
3.4 Analysis by Unified Communications services Segments .............................................................17
Chapter 4 .................................................................................................................................. 25
Unified Communications Competitive Analysis ................................................................................25
4.1 Competitive Framework of the Australia UC Services Market.......................................................32
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1
Executive Summary
OVERVIEW
The Australian UC (Unified Communications) Services market was worth $608.7million in 2008.
The market is forecasted to grow at a CAGR of 5.7 percent from 2008-2015. Revenues are
forecasted to reach $895.5 million by 2015.
The impact of mergers and acquisitions in the UC industry in the last 12 months has heightened
competition from a services play. The two most notable acquisitions in UC have been Avaya
acquiring Nortel and Cisco acquiring Tandberg. It means that the market is narrowing in terms
of market participants. From a systems integration standpoint, it means that some channels will
find it challenging to compete with some of the more established UC services players.
The global recession in the last 12 months has driven the demand for technologies such as
video and collaboration in the Australia market. Across government departments, education,
healthcare organisations, retail, and financial services organisations there was a need to cut
spending on travel and video emerged as one of the technologies that would help drive travel
costs down. Several large multinational organisations have also cut back on travel significantly
and are now encouraging the use of videoconferencing solutions. Managed services including
monitoring, managing and maintaining the network will be critical and only the global service
providers and telecom service providers are in a strong position to offer this solution.
Apart from video and collaboration, the other widely discussed offering is unified
communications in the cloud. The pay per use model has been widely talked about in the
downturn. UC as a Service is still in its early stages of growth in Australia. The market will see
more of a hybrid model deployed in the next few years. A hybrid model would mean that an
organisation would own its voice solutions and have its video or web conferencing solutions be
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managed by a solution provider. For many large organisations in Australia, voice and contact
centre related applications are mission critical and its still something the customer wants to
own. Organisations are still reluctant to allow a third party to manage these solutions. There is
still concern around security and, as such, the hybrid model will be common for most large and
medium sized organisations.
There are less than 10 players in Australia with a hosted UC offering encompassing the key
applications such as voice, video, e-mail, presence, IM, mobility and contact centre applications.
Telstra launched its T-suite offering earlier this year. Telstra has increased the offerings
available on T-Suite to allow customers access to Microsoft's online services such as Exchange
Online, SharePoint Online, Office Communications Online and Office Live Meeting. All four
services are available from $24.95 per user per month for businesses with up to 100 staff. T-
Suite was built to address the small and medium business market, and with Microsoft online
services, Telstra is able to expand its reach to enterprise customers. NEC also recently launched
its hosted UC solution called the Applications Net solution. The solution is something NEC is
targeting at smaller companies and start ups. Price per user per month starts from around $5 a
month. This is the base level offering and includes a blog, IM, its web 2.0 application and a
mailbox. A lot of innovation is taking place at this space with players such as IBM, Google and
Cisco also offering hosted solutions for their customers. Hosted UC Services accounted for 53%
of the total Australia UC Services market in 2008 with the majority of the revenues coming from
web conferencing services, hosted e-mail, voice and audio conferencing solutions.
UC Services will see good growth due to the complex nature of how various technologies are
interconnecting with one another. Technologies will no longer only span one single application
such as IP telephony. They will increasingly be integrated with other technologies such as video,
social networking and web 2.0 applications, mobility, contact centre and ultimately to the
business process applications. This integration will drive the need for consulting and design as
well as managed services capabilities. At this point, consulting services is what the larger
organisations are buying and this segment accounted for only 7.0% of UC Services revenues in
2008. Some of the offerings in this category include network and infrastructure assessment,
voice and wireless assessment which would help clients understand the potential risks involved
in a UC deployment. For most organisations with less than 150 seats in the Australia market,
they will likely not pay for this type of engagement. Consulting firms and large global SIs such
as Fujitsu, Accenture, IBM, and Unisys are some of the organisations that will look to grow this
part of their services offerings.
A managed service is an important growth area in the Australia UC services market. For large
and medium sized organisations, managing all applications 24/7 and ensuring that there is no
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downtime is critical. They also have a need for easy accessibility to technologies such as
Telepresence and videoconferencing. These factors will drive the demand for end to end
managed services offerings. This segment is expected to grow at a CAGR of 9.0% from 2008-
2015.
Telstra and Alphawest/Optus are the dominant players in the Australia UC Services space.
Complex deployments that involve managing video, Telepresence, collaboration, mobility and to
offer hosted services will be some of the key solutions that the telecom vendors have to offer.
Due to unique telecommunications related skill sets and offerings, they will be a threat to some
of the large system integrators in the Australia UC Services market. Other major players in the
Australia UC Services market include IBM and Dimension Data.
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2
Unified Communications
Services Definition and
Methodology
2.1 UNIFIED COMMUNICATIONS SERVICES DEFINITION AND FRAMEWORK
Exhibit 1 illustrates the Unified Communications Services Definition and Framework.
Exhibit 1 Unified Communications Services Definition and Framework
Source: Frost & Sullivan
Unified Communications (UC) Services
ProfessionalServices
Managed UCServices
Hosted UCServices
Consulting Services
Implementation Services
MaintenanceServices
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Unified Communications (UC) Services consists of services rendered for the UC applications i.e.
telephony, email, mobility, conferencing and collaboration, unified client, unified messaging as
well as presence and integrated UC applications. The continuum of UC Services includes:
1. Professional Services2. Managed Services3. Hosted Services4. Maintenance Services
1. Professional Services is the act of providing advice, skills and expertise in particulardomains to customers. It runs the full gamut of consulting and implementation services
and consists of the following:
Consulting Services include planning and design, capacity planning, performanceassessment and audit, migration consulting, project engineering, design review and
project management.
Implementation Services include system integration, migration services, configurationmanagement, project management, site survey, site preparation, staging, piloting,
installation, testing, monitoring, performance management and training.
2. Managed Services is defined as an on-going management and monitoring of customer-premise based communication systems/ applications by a third party service provider. It
includes a predefined level of accountability for the operation of a customers
communications system.
3. Hosted Services is defined as on-going management and monitoring of unifiedcommunications applications residing at service providers premises.
In both managed and hosted UC services environments, the service provider iscompletely responsible for the delivery of services including design, building, operating
as well as managing, and monitoring the communication systems and infrastructure.
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4. Maintenance Services refers to the act of maintaining and optimizing communicationsystems and infrastructure by service providers on a contractual or on-demand basis.
The services include:
Basic Maintenance services: Onsite monitoring and maintenance as well as break-fix maintenance services.
Advanced Maintenance services: Remote/Online monitoring, fault monitoring,online support, troubleshooting, analysis and reporting.
Maintenance services which are bundled with other types of services in a managed or hosted UC
service contract are not included in the maintenance services category. Revenues for these
services are accounted under managed or hosted UC services.
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2.2 UNIFIED COMMUNICATIONS FRAMEWORK
Exhibit 2 illustrates the major applications in the Unified Communications Stack.
Exhibit 2 Unified Communications Application Stack
Unified Communications (UC) is the amalgamation of disparate communications systems. UC
applications improve user productivity and enhance collaboration by integrating and converging
multiple enterprise communication channels.
Source: Frost & Sullivan
Presence
Presence
Presence
Presence
Enterprise Telephony
Email
Contact CenterUnified Client
Conferencing & Collaboration
Within
the
Enterprise
Outside
the
Enterprise
Unified Communications
Mobility
Unified Messaging
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Key Notes and Assumptions about the Unified Communications Services research:
This study looks at the Australian market only.
The study period for this research service is from 2008 to 2015, with 2008 being thebase year. Revenues for the forecast period reflect the potential services revenues from
UC based applications.
Revenues in this research service represent UC services sales from enterprise equipmentmanufacturers/vendors, telecommunication service providers and system integrators
who are part of the value chain for the provision of enterprise communication solutions.
Revenues are based on end-user prices, i.e., actual price paid by end-users for theservices. All revenues are reflected in Australian Dollars.
All revenues in this report are expressed in Australia dollars. In the case of historicalrevenues, US dollars have been converted at a standard rate of 1.17 (USD1=AUD1.17).
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3
Unified Communications
Services Market
Opportunity AnalysisSummary of Market Opportunity Analysis:
The Australia UC Services Market was worth $608.7 million in 2008 and revenues areexpected to reach $650.2 by 2010.
The CAGR (Compound Annual Growth Rate) for the period 2008-2015 is at 5.7%.
Hosted Services accounted for 53.0% of services revenues in 2008. The majority of thiscan be attributed to the revenues from hosted conferencing, e-mail and telephony
revenues.
Integration, which includes implementation, was the second biggest revenue contributorand this segment accounted for 16.0% of UC services revenues in 2008. This was
followed closely by the Maintenance segment which accounted for 14% of revenues in
2008. The overall revenue contribution from maintenance is expected to decline over the
forecast period.
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3.1 MARKET DYNAMICS
Exhibit 3 illustrates the market engineering measurement analysis in the 2008 Australia Unified
Communications Services Market.
Exhibit 3 - Market Engineering Measurement Analysis in the 2008 Australia Unified
Communications Services Market
Measurement Name Measurement Trend
Market age Growth stage ---
Revenues (2008) $608.7 million Increasing
Potential revenues (2015) $895.5 million Increasing
Base year market growth rate (2008) Nil Increasing
Forecast period market growth rate (CAGR) 5.7% Increasing
% of revenues by types of service
Consultation
Integration
Maintenance
Managed Services
Hosted Services
7.0%
16.0%
14.0%
10.0%
53.0%
Increasing
Increasing
Decreasing
Increasing
Decreasing
Degree of Competition High Increasing
Active Unified Communications SIs in Australia Less than 30 Increasing
Companies entering the market (2008) Less than 15 Increasing
Source: Frost & Sullivan
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3.2 MARKET DRIVERS AND MARKET RESTRAINTS
Exhibit 4 illustrates the Unified Communications Services Market Drivers.
Exhibit 4 - Unified Communications Services Market Drivers (Australia), 2008
Rank Driver 1-2
Years
3-4
Years
5-7
Years
1 IP Telephony adoption spurs the adoption of
UC applications thereby driving UC services
revenues
High High High
2 The need to have some of the more complex
solutions and applications such as video
managed by a service provider will drive the
need for Managed services
Medium Medium High
3 The need to understand how unified
communications will fit into the organisations
overall business processes which include its
ERP, CRM and Supply Chain segments will
drive uptake for consulting services
Low Low Medium
4 Growing interest around mobility applications
in UC will drive the need for the management,
deployment and integration of these
technologies. This will drive revenues for UC
services revenues for the service providers or
carriers in the UC domain
Low Medium High
5 UC offerings for the SMB market will increase
revenues for hosted UC services
Low Medium High
Source: Frost & Sullivan
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Exhibit 5 illustrates the Unified Communications Services Market Restraints.
Exhibit 5 - Unified Communications Services Market Restraints (Australia), 2008
Rank Restraints 1-2
Years
3-4
Years
5-7
Years
1 Lack of a convincing ROI model impedes the
adoption of UC technology thereby inhibiting
the adoption of UC services
High High Medium
2 High costs associated with some of the
services which include consulting and
managed services
High High Medium
3 Declining margins and price points from
services such as maintenance will curtail the
growth of overall UC services revenues
High High Medium
4 Increasing technical complexity and
integration of various UC technologies deters
companies from embarking on a UC
deployment
High Medium Low
5 Inability to have the right skill set of solution
specialists that understand integration across
voice, desktop and network components will
inhibit the uptake UC services revenues
Medium Low Low
Source: Frost & Sullivan
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3.3 TOTAL ADDRESSABLE UNIFIED COMMUNICATIONS SERVICES MARKET
OPPORTUNITY
Exhibit 6 illustrates the Unified Communications Services Market Opportunity in Australia.
Exhibit 6-Total Addressable Unified Communications Services Market Opportunity: Revenue
Forecasts (Australia), 2008-2015
Note: All figures are rounded; the base year is 2008. Source: Frost & Sullivan
608.7 626.4 650.2680.7 719.7
767.4825.4 895.5
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
900.0
1000.0
2008 2009 2010 2011 2012 2013 2014 2015
Revenue$(millions)
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Analysis of Total Unified Communications Services Revenue Opportunity:
The Australia Unified Communications Services Market was worth $608.7 million in 2008.Revenues are expected to reach $895.5 million by 2015. Frost & Sullivan is expecting
modest growth due to the decreasing price points in some areas of services such as
maintenance and as such that will have an overall impact on UC services revenues in
Australia.
Revenues are expected to grow at a CAGR (compound annual growth rate) of 5.7% from2008-2015.
Revenue for UC Services for the 2008 timeframe was driven by the financial services,education, government, professional services, retail and multinational organisations.
Most of the UC spending for the 2009-2010 timeframe will be driven by government andeducation. Financial services, which are one of the key revenue contributors in the UC
space, will increase its spending towards the end of 2009. Financial services saw a
decline in spending towards late 2008 right through to mid 2009 due to the global
financial crisis.
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3.4 ANALYSIS BY UNIFIED COMMUNICATIONS SERVICES SEGMENTS
Exhibit 7 illustrates the Unified Communications Services Segments.
Exhibit 7-Total Market Opportunity by Services Segments: Revenue Forecasts (Australia),
2008-2015
Note: All figures are rounded; the base year is 2008. Source: Frost & Sullivan
0
100
200
300
400
500
600
700
800
900
1000
2008 2009 2010 2011 2012 2013 2014 2015
Revenue$(million
s)
Consulting HostedServices Implementation Maintenance ManagedServices
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Exhibit 8 illustrates the Total Unified Communications Services Market Opportunity by Segments
in percentage terms.
Exhibit 8-Total Unified Communications Market Opportunity by Segments: Revenue
Forecasts in % (Australia), 2008-2015
Note: All figures are rounded; the base year is 2008. Source: Frost & Sullivan
%RevenueSplitbyServices 2008 2009 2010 2011 2012 2013 2014 2015Consulting 7.0% 7.3% 7.6% 7.9% 8.2% 8.5% 8.9% 9.3%
Hosted Services 53.0% 52.5% 52.1% 51.8% 51.4% 51.1% 50.9% 50.6%
Implementation 16.0% 16.0% 16.0% 16.1% 16.1% 16.2% 16.3% 16.3%
Maintenance 14.0% 13.9% 13.6% 13.3% 12.9% 12.5% 12.0% 11.4%
Managed Services 10.0% 10.3% 10.6% 11.0% 11.3% 11.6% 12.0% 12.4%
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Analysis of Total Unified Communications Services Segments:
Hosted Services accounted for 53.0% of services revenues in 2008. The majority of thiscan be attributed to the revenues from hosted conferencing, e-mail and telephony.
Hosted Services is forecasted to see good growth with the various offerings from service
providers such as Telstra for its T-Suite offering and NEC for its Application Net offering.
Many other system integrators are also developing hosted or cloud based UC offerings
which are expected to be released in the calendar year 2010. Alphawest/Optus also
plans to announce its hosted offering in early 2010. Hosted web conferencing services
continues to see good growth in the Australia market. With the drive towards saving
costs and deploying solutions as an operational expenditure, more organisations will
deploy technologies on a hosted platform. Several organisations still fear about security
issues and also want to own all technologies that are mission critical such as voice
applications.
Implementation was the second largest revenue contributor and this segment accountedfor 16.0% of total UC services revenues in 2007. Revenues from implementation are
expected to account for 16.3% of UC revenues by 2015. Implementation services include
system integration, migration services, configuration management, project
management, testing, monitoring, performance management and training.
Maintenance accounted for the 14.0% of total revenues in 2008. However over theforecast period, the overall revenue contribution from this segment is expected to
decline. Maintenance will account for 11.4% of total UC services revenues by 2015.
Whilst maintenance revenues will be an important part of UC deployments, it will be
viewed as a basic service in the contract and over time pricing from this segment is
forecasted to decline by greater than 10%. As such UC system integrators in Australia
will be forced to grow revenues in other services segments and will be forced to innovate
UC services portfolios to remain competitive. There is a growing demand for advanced
maintenance services which includes remote monitoring, fault monitoring, online
support, troubleshooting, analysis and reporting. To remain competitive many service
providers for UC services are adding more value add services to the maintenance
offering so that price erosion is limited. For large deals sold in the market that include a
large component of managed services and integration revenues, maintenance will
typically be bundled as part of the total contract.
Managed services are an important growth area for system integrators in the UC servicesmarket. This segment accounted for 10% of total UC Services revenues in 2008. The
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recent 12 months has seen good growth for this service in the contact centre segment
and also in verticals such as education, government and financial services in the move to
deploy more sophisticated wireless applications, voice, video and collaboration solutions
which also require a substantial element of monitoring how these applications perform
on the network. Over the forecast period, the service providers such as Telstra and
Alphawest/Optus have the ability to bundle in more value based services for this
segment due to its ability to offer other UC related telco services.
Consulting revenues accounted for 7.0% of total UC services revenues in 2008. The pre-sales engagement process of building a UC strategy to fit into the organisations overall
business processes is something that is affordable by larger organisations. Most of the
revenues were from the financial services segments and government departments. Due
to the high costs associated with this service, consulting is still viewed as a nice to
have service and will still account for less than 10% of UC Services revenues over the
forecast period.
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Exhibit 9 illustrates the CAGR (Compound Annual Growth Rate) of the UC Services Segments in
Australia.
Exhibit 9-CAGR of the UC Services Segments: (Australia), 2008-2015
Note: All figures are rounded; the base year is 2008. Source: Frost & Sullivan
10.0%
5.0%6.0%
2.6%
9.0%
5.7%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Consultation HostedServices Implementation Maintenance Managed
Services
TotalUC
Services
%CAGR(2008
2015)
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Key Messages:
The overall Australia UC Services market is expected to grow at a CAGR of 5.7% from2008-2015. This can largely be explained by the comparatively slow growth in the
maintenance sector over the forecast period. However, note that all other segments
grow at a higher rate.
Consulting is still at its early growth stages and will see uptake from some of the largeorganisations in Australia. This segment is expected to grow at a CAGR of 10.0 % in the
Australia UC Services market.
Managed Services will see good growth from the large system integrators and serviceproviders. Some of the recent large wins in the Australia market come with a managed
services component that involves managing all applications and the infrastructure.
Typically, service providers such as Telstra and Alphawest/Optus and global system
integrators such as IBM and Dimension Data will be at the forefront of securing such
large managed services deals.
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Exhibit 10 illustrates the Year on Year Growth Rates of UC Services by Segment in Australia,
2009-2015.
Exhibit 10-Year on Year Growth Rates: UC Services by Segment (Australia), 2009-2015
Note: All figures are rounded; the base year is 2008. Source: Frost & Sullivan
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
2009 2010 2011 2012 2013 2014 2015
YearonYe
arGrowth(%)
Consultation HostedServices ImplementationMaintenance ManagedServices
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Key Messages:
Although maintenance will see increased revenues over the forecast period, year on yeargrowth will be marginal from 2009-2015 from this segment.
Hosted services accounts for the majority of UC revenues in the Australia market and willstill be the largest revenue contributor by 2015. However, as it has a large base of
revenues, the growth from this segment over the forecast period will be between 2%-
8%.
Managed services and consulting services is forecasted to see good growth ofapproximately 6%-13% over the forecast period.
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4
Unified Communications
Competitive Analysis
Analysis of Major Australian UC Services Market Participants
Dimension Data is one of the leading UC system integrators in Australia. Its partnershipswith Microsoft and Cisco, both key vendors in the Australia UC market, have helped it to
secure some large contracts in the UC space.The economic downturn has caused them
to focus on opportunities in government where most of the large spending on UC
applications was in 2008-2009. One of their biggest wins on the video front has been
with the DET(Department of Education and Training) where they deployed over 2000
video endpoints on the Tandberg solution. Dimension Data and Tandberg won a
multimillion-dollar contract to provide upgraded core video conferencing infrastructure
for access by every school and TAFE in NSW as part of the states $158M Connected
Classroom Project. DiData and Tandberg will deliver a solution that will provide the
bridging technology to allow the DET to connect 2,200 locations via multi-site high-
definition video and audio conferencing. This is the largest-ever global order for
videoconferencing bridging technology. Other major wins for DiData Australia included
Xsastra, University of Wollongong, RMIT and Theiss.
3D Networks were Nortels leading channel partner in Australia in the 2007-2008timeframe. As a result of the Avaya pending acquisition of Nortel, 3D is focusing on
increasing its footprint in UC with Cisco and Microsoft. In recent months, it signed a deal
to be Mitels channel partner in the Australian market. Mitel has been one of the players
in the SMB space that has been witnessing good year on year growth in the Australian
market. Other major relationships it has are with Juniper for security solutions. The
company is witnessing good opportunities with several large and medium sized
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government agencies for Microsoft OCS integration. Close to 50% of its revenues come
from its maintenance business. 3D is trying to increase its revenues in managed and
consulting services. Major areas of focus in Australia include the education, hospitality
and healthcare segments.
NSC is the leading channel partner for Avaya in Australia. Having established itself as astrong player in the IP Telephony and contact centre domain, NSC is now building its
expertise in its UC practice. Its key partners are Microsoft, Avaya, Genesys, Verint and
Sun Micrososystems. Some of its major wins include Macquarie University, ANZ Bank
and News Limited. Key areas of focus in the 2010 timeframe include Utilities, Retail and
Education. NSC has a strong pipeline in the contact centre space and mainly in areas
such as speech, workforce optimisation, CTI and self service. They have a managed
services and a hosted offering that is witnessing good traction in the Australia market.
NSC has over 30 clients deploying solutions on the managed and hosted model and offer
hosted solutions such as voice, messaging, speech, recording, video and data networking
out of their data centres. One of NSCs main priorities in the next 12 months will be to
hire more technical specialists that have an understanding of not just contact centre and
voice but also integration across all major technologies in unified communications.
IBM Global Technology Services is one of the major UC Services players in the Australiamarket. The ability for IBM to offer a more holistic solution for the customer and the
ability to have a strong services focus globally allows it to be at the forefront of large UC
projects in Australia. It continues to work with Cisco as part of its Global Services
strategy in the Australia UC Services market but in recent months has increased its
relationship with vendors such as Avaya. Additionally, it has a strong relationship with
vendors such as Juniper for security and Rivermine for TEM (Telecom Expense
Management). The TEM solution is a total Managed offering from IBM and IBMs aim is to
help its customers reduce their telecom expenses by 10-15% across fixed, wireless and
data segments. For an organisation, this would mean that IBM would help them manage
new telecom contracts, handle billing and inventory management and also the purchase
of IP PBXs and wireless devices. Key verticals for IBM Services in Australia include
Education, Financial Services and Retail. IBM also offers services through its channels for
its IBM Lotus UC solution.IBM attained a market share of 6.6% in the 2008 Australia UC
Market. It was the second biggest vendor in the Australia e-mail market with a market
share of 32.6% in 2008. Given the large installed base IBM has and the strong
integration capabilities of its IBM services in Australia, IBM will be a key vendor in the
local UC Services market.
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Global Connect has been well known for its services play in the contact centre space.Although most of its work is predominantly in the contact centre space on the Avaya
offering, in recent months it has deepened its relationship with vendors such as Juniper
and Aruba to offer a broader range of services. Growth markets for Global Connect
include Western Australia, South Australia and Tasmania. The company has witnessed
demand for voice portal coupled with speech applications, predictive dialling and
analytical tools in the last 12 months. Demand has also been growing for managed
services although this still forms a small part of its overall revenues.
Alphwaest/Optus has witnessed major success in Financial Services, Government andEducation verticals. It has managed to successfully grow its play in the UC Managed
Services space and has garnered very large wins that involve integration in technologies
such as video, telephony and the contact centre. Some of its major wins include the ANZ
Bank, St George Bank, Department of Immigration and Citizenship and ATO. They have
witnessed good year on year growth from implementation and managed services
revenues. It continues to work very closely with Cisco, Microsoft, Nortel and Genesys in
the Enterprise space.
Telstra is one of the leading players in the Australia UC Services market and is extremelyfocused on innovating its offerings in the UC space. Telstra and Microsoft recently
unveiled Australia's first hosted IP telephony service integrated with Microsoft Office
Communications Server (OCS). This will enable Australian organisations to place Telstra
IP Telephony calls directly from applications such as Microsoft Outlook, Microsoft Office
Communicator and Microsoft SharePoint. Microsoft and Telstra have also announced the
availability of Microsoft Online Services on the Telstra T-Suite platform. Telstra has
witnessed good growth in the IP telephony space. Most of the successes in the last 12
months have been from the Education, Financial Services, Government and Retail
segments. From a video standpoint, Telstra has an alliance with Cisco and Polycom. The
recent pending Tandberg acquisition by Cisco would mean that decisions would have to
be made around integrating the Tandberg product line to its solution offering. Telstra has
also witnessed increased demand for audio services in the last 12 months. One of the
solutions to be launched will be Telstras audio conferencing solution integrated into the
WebEx offering. That solution is expected to be launched in November this year. This
would drive more audio conferencing revenues and drive the opportunity for it to be sold
as an integrated UC solution. Telstra continues to align its UC strategy with the key UC
product vendors in the market such as Cisco and Micrososft. Apart from working with
vendors such as Cisco and Microsoft, Telstra is also a leading channel partner for other
UC vendors such as Alcatel Lucent, NEC and Mitel.
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Fujitsu continues to have a deep relationship on the UC Services front with Cisco andMicrosoft. In March this year, Fujitsu acquired Kaz for $200 million.The acquisition was
in line with Fujitsus long-term objectives to grow its Australian business and provide
broader consulting, application and infrastructure services. Fujitsus current focus is to
build a UC roadmap in terms of its offering and growing its revenues beyond IP
telephony integration. It will focus heavily on Microsoft OCS and Exchange integration
and also building its capabilities around Ciscos UC applications. The main focus will be to
build its revenues in managed services due to some large deals it has secured in recent
months. It plans to have a Hosted UC solution by hosting UC applications in its own data
centres.
UXC announced wins for its Business Solutions Group, totalling more than $40 millionearlier this year. The wins by UXC subsidiaries range from Government and education to
commercial deals. Getronics Australia secured a contract with Linfox to support its 2000
strong ICT user base with support and a range of ongoing infrastructure projects.
Integ Communications won a four-year contract with the Attorney Generals office. UXC
and its subsidiaries have also signed contracts with Toll Holdings, Fosters, and LOreal.
Integ is one of Alcatel Lucents key channel partners in Australia and has been focused
on selling IP telephony, traditional telephony and contact centre solutions. Other major
partners include Genesys , F5, Juniper, Higher Ground and MRV Strategic Partner. Integ
launched a new hosted conference centre to target medium and large enterprise
customers. The Conference Centre, deployed on Alcatel-Lucent technology, is an
extension of its Integ telephony-as-a-service (iTaaS) market offering, which has been
available since September 2007.
HP is now working closely with Microsoft globally as part of the global alliance to developsolutions and a joint go to market strategy in the unified communications space. The
recent HP and Microsoft alliance will be an interesting one to observe, since Microsoft will
now be able to market to its clients a larger portfolio of solutions including
videoconferencing. This includes Telepresence by integrating its Office Communicator
client to HPs Halo solution. Additionally, as part of this alliance, HP will develop IP
phones. HP also announced an alliance with Alcatel Lucent to create a joint go-to-market
initiative to provide communications solutions to medium and large size enterprises and
public sector organisations. Alcatel-Lucent products in areas such as IP telephony,
unified communications, mobility, security and contact centres will be integrated with HP
IT solutions. These joint solutions will be offered to enterprises through HP resellers or
as managed services. For HP, the alliance will also mean that it will gain access to carrier
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markets for optical networking, MPLS and carrier Ethernet . Additionally, this alliance
allows HP to work on large contact centre accounts through Alcatels Genesys subsidiary.
HP has indicated that it is working with Cisco but to a lesser degree in the Australia
market.
Other smaller channels in the market are the second tier and third tier channels forAlcatel, Cisco, Mitel, Interactive Intelligence, Shoretel, etc. Typically, these channels sell
to SMB organisations for 50 seats and below and most deals sold are around basic
telephony, contact centre and conferencing solutions. The services element from this is
typically comparatively small and accounts for a very small portion of the UC services
revenues.
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Exhibit 11 illustrates the revenue split by types of UC Services players, 2008.
Exhibit 11-UC Services Revenue Split by Types of UC Services Players, (Australia), 2008
Note: All figures are rounded; the base year is 2008. Source: Frost & Sullivan
Vendors
3.9%
SystemIntegrators
31.2%
ServiceProviders
64.9%
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Key Messages:
Service Providers accounted for almost 65% of UC services revenues in 2008. Serviceproviders such as Telstra and Alphawest/Optus accounted for the bulk of revenues from
this segment. These vendors have demonstrated an ability to grow revenues in areas
such as managed and hosted UC services apart from the other services segments. This
trend is expected to continue and service providers will account for the majority of UC
revenues in the Australia market due to their ability to offer end to end management of
UC technologies. Global operators such as Verizon, British Telecom, AT&T, Orange
Business Services and T-Systems have been expanding their businesses into the Asia
Pacific region and some are currently offering UC services in the Australia market. Most
of the projects secured tend to be large global projects secured out of head office. Other
solutions sold apart from managed services include IP multimedia communication
services and WAN services.
System integrators accounted for 31.2% of revenues. The players that form the bulk ofsystem integrator revenue include Dimension Data, IBM Services, NSC, Getronics,
Fujitsu, Integ, 3D Networks, Data3, Commander, iVision and smaller system integrators
that represent some of the SMB vendors such as Shoretel and Interactive Intelligence.
This segment is a highly fragmented segment due to the various large and small
channels representing vendors such as Alcatel Lucent, Cisco, Avaya, Siemens and Mitel
to mention a few. Several of the smaller integrators sell more product solutions and have
low services revenues. In most instances, the services revenues are revenues from
professional services which involve integrating basic telephony applications.
Vendors, although still heavily reliant on channels for the sales and delivery of theirofferings, are starting to offer value added services to some of their large and top end
customers such as those in government and financial services. This segment accounted
for almost 4.0% of revenues in 2008 and is expected to witness a marginal increase in
its overall revenue contribution to UC services. Vendors themselves are faced with
challenges in growing product revenues and have in the last 18 months introduced high
end UC services as part of their direct offerings to customers. This, however, has caused
some level of discomfort with the channel community as they see the vendors competing
directly with them. Therefore, the revenue contribution from the vendor segment will be
low over the forecast period with the bulk of the services revenues coming from service
providers and system integrators.
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4.1 Competitive Framework of the Australia UC Services Market
Exhibit 12 illustrates the competitive framework of the Australia UC services market.
The market in Australia is split into 3 main clusters in terms of UC Services expertise.
At the top tier are the UC market participants that have been involved in some of thelarge scale deployments. Most of these market participants have established alliances
with Microsoft, Cisco and IBM and have garnered deals in Financial Services, Healthcare,
Government and Education. Dimension Data, IBM Global Technology Services, Telstra,
HP and Alphawest/Optus fall in this segment given that most of the large UC contracts
are in the hands of these participants. This tier of participants accounts for more than
50% of the Australia UC Services Market.
DimensionData
Telstra
IBMGlobalTechnology Services
Alphawest/Optus
Tier1UCServicesMarketParticipants
Integ
3D Networks
Getronics
HP
Touchbase
Geni
GlobalConnect
Data3
NSC
Fujitsu
iVision
Tier2UCServicesMarket
Participants
Smallandmediumsizedchannels focusing onsellingtelephony andcontactcentresolutions
Solution providersinsegmentssuchasvideoconferencing andcollaboration
Globaltelecomserviceprovidersthathaveafocusonmultinationalaccountsandhavetheabilitytooffernicheservicesinareas suchasvideoandtelepresence
Channelsthathaveafocusondesktopintegration
Tier 3UCServicesMarketParticipants
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Tier 2 looks at SIs in Australia that have been focusing on selling solutions such astelephony, contact centre, videoconferencing and have been able to increase revenues in
managed services, implementation and consulting in the last 12 months. The market
participants from this category also are major system integrators of key UC vendors in
Australia such as Alcatel Lucent, Cisco, Nortel, Avaya, IBM and Microsoft. Players such as
iVision have been focusing on videoconferencing but in recent months have established a
strong relationship with vendors such as Cisco to sell unified communications solutions.
HP although a large global systems integrator, has not been able to secure large wins in
the last 12 months and is still considered to be medium sized UC services player in the
Australia market. HP also previously worked closely with Cisco but in recent months has
shifted its focus to work closely with Microsoft.
Tier 3 UC Services market participants have been focusing on selling more productsolutions in areas such as telephony or contact centres and have not been able to secure
much revenue in UC services. Some of the system integrators in this segment have only
focused on selling desktop solutions from Microsoft or IBM but are now starting to offer
more UC applications and services as part of an overall solution. Several global service
providers such as Orange Services, Verizon and BT provide services for large global
contracts that have an Australia focus and also offer services in areas such as managed
services for voice, video and collaboration. However, these players have still not been
able to garner the deals that some of the tier 1 participants have secured in government,
education, financial services and healthcare. Several other system integrators in this
category have still not embarked on a full UC offering for its customer base and plan to
do so in the 2010 timeframe.
Other new system integrators will focus on selling software from vendors such as Googleand Skype. The market is still in its early stages for both these players and full UC
offerings for the large enterprise and SMB market has not been released in the market.
There will also be new channels focusing on selling software as a service solutions for
players such as NEC, Alcatel Lucent, Telstra, Alphawest/Optus.