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Magic Quadrant for Unified Communications10 August 2015 ID:G00269532

Analyst(s): Bern Elliot, Steve Blood

VIEW SUMMARY

Gartner considers the large enterprise UC market to be mature, though product capabilities, marketfocus and vendor strengths vary. As a result, enterprises should carefully match their own priorities tovendor strengths before committing to a solution.

Market Definition/DescriptionThis document was revised on 22 October 2015. The document you are viewing is the correctedversion. For more information, see the Corrections page on gartner.com.

The focus of this research is large enterprise unified communications (UC) solutions that are intendedfor on­premises deployment. Midsize UC solutions are covered in "Magic Quadrant for UnifiedCommunications for Midsize Enterprises, North America." Cloud UC products are covered in "MagicQuadrant for Unified Communications as a Service, North America With Additional Regional Presence."

The primary goal of all unified communications (UC) solutions is to improve user productivity and toenhance business processes as related to communications and collaboration. Gartner defines UCproducts (equipment, software and services) as those that facilitate the use of multiple enterprisecommunications methods to obtain that goal. This can include the control, management and integrationof these methods. UC products integrate communications channels (media), and 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 (stand­alone) suite, or enterprises maydeploy a portfolio of integrated applications and platforms spanning multiple vendors. In many cases,UC is deployed to extend and add functionality to established communications investments.

UC products are used by individuals to facilitate personal communications, and by enterprises tosupport workgroup and collaborative communications and business workflows. Some UC products mayextend UC outside company boundaries to enhance communications among organizations, and tosupport interactions among large public communities or for personal communications. UC applicationsare increasingly 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 or are being targeted at vertical user groups.

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

Telephony — This area includes fixed, mobile and soft telephony, as well as the evolution of PBXsand IP PBXs. This category includes options for voice and video that bypass traditional connectivitymethods, such as direct Internet­based connections.

Conferencing — This area includes multiparty 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 — Instant messaging allows individuals to send text and other information toothers or to groups in real time. Presence services allow individuals to see the status of otherpeople and resources.

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

Communications­enabled applications — Integrating communications directly with businessapplications and with a broader context is something Gartner calls "communications­enabledbusiness processes (CEBP)." These integrations improve the accuracy and speed of processes andworkflows, and, in some cases, enable new digital business opportunities. These also enablestronger targeted vertical solutions.

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, visibilityand business impacts of their choice. Six UC characteristics will have an important effect on the success

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, service­level 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 positioning

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of a UC product and the satisfaction of users:

User experience (UX) — The quality, intuitiveness and effectiveness of the overall UX across alldevices will heavily influence the effectiveness of the solution, and its adoption rate, usage and,ultimately, enterprise productivity. While consolidated administration and management areimportant characteristics of a successful solution, it is the high­quality end­user experience thatwill drive adoption and productivity.

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 expect mobiledevices to be integrated with desktop devices to allow for a more powerful work environment andto integrate UC with mobile consumer applications. In this year's Magic Quadrant evaluation, weagain place extra weight on mobility as it remains a key differentiator and requirement. Gartnerrecommends that enterprises consider adopting a mobility­first strategy, where UC applicationsare designed first around the mobile UX and then extended for PCs.

Interoperability — Enterprises wish to avoid "closed gardens" and vendor lock­in, while enablingintercompany B2B, business­to­partner (B2P) and business­to­consumer (B2C) federation.Additionally, many enterprises will find their needs best­served by using several vendors, eitherbecause of legacy investments or to enable a best­of­breed configuration. This research considershow vendors address these critical emerging interoperability requirements.

Cloud and hybrid — Integration of on­premises UC with cloud and hybrid UC services continues toplay an increasingly important role as these options mature.

Broad solution appeal — Successful UC solutions must be attractive to a broad and diverseaudience of decision influencers. Influencers span the traditional IT audiences, as well as, morerecently, consumer­oriented departmental and internal project groups.

Developer network — As communications becomes verticalized, integrated with businessapplications and moved to mobile devices, the role of developer partners will become increasinglycritical.

Magic Quadrant

Figure 1. Magic Quadrant for Unified Communications

Source: Gartner (August 2015)

Vendor Strengths and CautionsALEAs of 1 October 2014, ALE, operating under the Alcatel­Lucent Enterprise brand, has been operating asan independent company. The majority share of the company was acquired by China Huaxin, a Chineseinvestment company that had existing partnerships with Alcatel­Lucent. The separation of ALE from theparent company is largely completed, and full separation is expected by the end September 2015.

statements.

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.

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 pre­emptivepurposes.

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.

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ALE's UC solution remains the Alcatel­Lucent OpenTouch Suite, which is a fully unified and integratedUC solution. It scales to 5,000 users and 15,000 endpoints. Above those limits, the components can bedeployed physically separate, but as a single logical system. The Alcatel­Lucent OmniPCX EnterpriseCommunication Server scales from 100 users to 100,000 users in a single image, and can be deployedalong with the OpenTouch Suite. ALE has introduced a universal client called Alcatel­Lucent OpenTouchConversation that operates across leading devices, consolidating both user experience and licensing.The OpenTouch Suite can be deployed as an overlay on third­party telephony switches, providing amigration path for new customers.

Existing customers should evaluate the OpenTouch Suite if they are looking for a complete software UCsuite. New potential customers should ensure that ALE has sufficient service and support presence intheir market.

Strengths

OpenTouch offers a full multiparty, multidevice and multimedia UC suite with a competitive totalcost of ownership. The solution can operate on­premises, in the cloud or with hybrid functions.OpenTouch can operate as a complete UC suite or as part of a broader multivendor environment.

The vendor has a strong telephony market share in Europe from which to sustain continuedinvestments in broader UC product and market development.

Gartner believes that the acquisition by China Huaxin was a positive development, because itimproves the clarity of ALE's future, and allows it to more clearly focus on enterprise UC productsand markets.

Cautions

While the independent ALE has a stable and experienced management team and is now anestablished independent company, it must prove that it can execute and grow in this highlycompetitive market.

ALE lacks significant visibility in North America, limiting its appeal to those multinationalcompanies with a strong need for support in that market.

AvayaAvaya's lead UC product for enterprises is the Avaya Aura Platform, while Avaya IP Office Platform isthe lead UC product targeted at small or midsize businesses (SMBs), with fewer than 2,500 endpoints.Other elements in the UC portfolio include Avaya Aura Conferencing and Scopia Video Conferencing,which Avaya plans to integrate into a single conferencing solution in the coming year. Additional UCelements include Avaya Aura Messaging, Avaya Multimedia Messaging and Avaya EngagementDevelopment Platform (formerly Avaya Aura Collaboration Environment). Avaya also offers a broadrange of UC desktop, mobile, phone and video clients and endpoints. Its lead contact center solutionsare Avaya Aura Contact Center and Avaya Aura Call Center Elite. The vendor continued to advance itsUC cloud and managed service offerings, which are based on the same solution as the on­premisesversion and are offered through partners as well as directly by Avaya. Avaya continues to reduce,simplify and clarify its pricing model, and now offers UC solutions in several suite configurations.

Consider the Avaya Aura platform if you need to bring together multivendor environments (systems,services and devices), have a focus on communications­enabling your business processes andapplications, have significant investments in Avaya that you wish to migrate toward a next­generationUC solution or if the enterprise has significant contact center requirements.

Strengths

Telephony and contact center remain central elements in Avaya's portfolio. The vendor's strengthand brand recognition in these areas help it retain market visibility while it continues to strengthenits overall UC portfolio.

Avaya Engagement Development Platform (EDP) and Avaya Snap­ins enable developers to quicklycreate unique communications­enabled workflows and processes. The Esna Technologiesacquisition, which closed on 28 May 2015, strengthens Avaya's middleware capability andsimplifies integration with business applications, such as Salesforce.

Avaya continues to make progress on specific lead products and services, as well as in simplifyingpricing and go­to­market strategy. Together, these changes make it easier for prospects tounderstand the offers and for partners to position the Avaya UC solution.

The Avaya architecture provides customers with choice and flexibility; both its UC and contactcenter (CC) capabilities can be deployed on­site, in the cloud or in hybrid environments.

Cautions

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

Avaya continues to lose market share to the broad range of competitors in this evolving market.

While Avaya continues to consolidate its UC clients around Avaya Communicator, elements of theuser experience remain fragmented.

Avaya's financial score remains at "Caution" under Gartner's published methodology for rating ITvendors' financials. Avaya deserves credit for posting positive cash from operations for the lastthree quarters, and its profitability metrics (gross margin, EBITDA margin and operating margin)stack up well with its peers. However, Avaya needs to stabilize its revenue, given that it hasposted a year­over­year revenue decline in each of the last 13 quarters; also, the company's debtlevel remains heavy, with a net debt­to­reported EBITDA ratio of 7.9x, which is significantly higherthan its peer group.

Cisco

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CiscoCisco offers a full UC suite of integrated on­premises and cloud­based applications and services. Thesolution is based on Cisco Unified Communications Manager and brings together voice, video,telepresence, messaging, presence and conferencing. Cisco packages these services into variousconfigurations, which include the Cisco Business Edition 7000 (BE7000) series for large enterprises, theCisco Business Edition 6000 (BE6000) series for SMBs of less than 1,000 users and as a cloud­basedservice called Cisco Hosted Collaboration Solution (HCS) offered by Cisco partners. Cisco also provides afull range of endpoints, including phones, desktop collaboration endpoints, room systems andimmersive solutions, as well as Cisco Jabber, its mobile and desktop client.

Key additions to the portfolio during the past year include a new WebEx user experience, WebExPersonal Rooms, significant video infrastructure scalability improvements, Collaboration Meeting Rooms(CMR) Cloud hosted video bridging service, and Spark, an enterprise mobile messaging application thatsupports chat, video and file sharing, and works with WebEx. In June 2015, Cisco acquired Tropo, acommunications platform as a service (cPaaS) solution with a large developer community of 200,000that will speed development of communications integrated with targeted vertical and mobileapplications.

Cisco UC is an attractive solution for midsize, large and multinational corporations requiring strongvoice, video or conferencing capabilities. It is also attractive to enterprises that require full UC clientsupport on leading mobile platforms, including Apple, and those that wish to leverage Cisco'snetworking infrastructure. Cisco UC is available on­premises, in the cloud and as a hybrid optionthrough a network of global partners.

Strengths

Cisco offers a globally scalable, full UC suite, with good­quality user experience across all leadingmobile devices, and strong telephony and market­leading conferencing capabilities.

Prime Collaboration provides unified management for voice and video networks, includingautomated, accelerated deployment; provisioning; real­time monitoring; proactivetroubleshooting; license management; and long­term trending and analytics. Prime Collaborationcan scale to 150,000 endpoints per server instance.

Over the last year, Cisco has expanded its existing cloud offerings, adding CMR Cloud and Spark,acquired Tropo, and executed the initial steps of its hybrid UC strategy.

Through carrier and service provider partners, Cisco is advancing attractive hybrid options. CiscoHCS is based on the same software as Cisco's on­premises offering, and both support the sameJabber client.

Cautions

Clients report that some user and administrator experiences across multiple UC functions arefragmented, rather than seamless; for example, VoIP, IM/presence and conferencing were notmanaged by Prime Collaboration.

Cisco's Unified Workspace Licensing (CUWL) is a useful package to profile user requirements. Itoffers attractive pricing, compared with buying competitive UC components separately. However,it's important to size requirements accurately based on user needs, in order to avoid overinvestingin capabilities that then go unused.

As the Collaboration Technology Group's product mix shifts to software applications and cloud,Cisco has been slow in making the needed complementary changes in its channels and partnerprograms.

HuaweiHeadquartered in China, Huawei offers a comprehensive portfolio of communications products andservices. The Huawei eSpace Unified Communications solution is made up of a broad set of applications,telephony, presence, messaging, multiple conferencing options, video, collaboration and contact center.In the last year, Huawei continued to expand its mobile workspace capabilities, adding social andcollaboration mobile applications including WeChat­like features and functions, as well as a free­formdoodle application that can enable or share whiteboard like capabilities. The eSpace solution runs onHuawei servers, standard servers and virtualized platforms. It also offers software APIs for integrationwith business applications (for example, IBM Sametime and Microsoft Lync integration via a singleEcosystem Software Development Kit [eSDK]).

Consider Huawei when looking for a comprehensive networking solution that includes UCC functionality.The vendor operates in many regions, although support in North America, Western Europe and Japan islimited. Ensure that any needed local support is available.

Strengths

Huawei had $46 billion in revenue in 2014, a year­over­year revenue gain of about 20%. Itssolutions span the carrier, large­enterprise, SMB and consumer markets across the globe. Thesebroad strengths provide a broad base across which to grow the vendor's UC solutions.

The vendor has a full UC product portfolio and continues to make progress expanding its presenceand partners in emerging markets, including some countries in Europe.

Huawei offers its extensive UC solution set both as part of broader bundles of IT services andtechnology, or incorporated into off­the­shelf products like UC and IP telephony.

Cautions

In many regions, Huawei controls project decision making and operations directly from its officesin China. As a result, this can pose communication challenges for engagements requiring

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extensive professional services or customization outside of China.

The vendor faces political, trade and intellectual property trust issues in the U.S. market.

Huawei has limited public references available in Western Europe and North America; customers inthese regions should check with local sales or partners to determine the experience level of in­region partners.

IBMIBM now uses the IBM Connections brand as a broad umbrella term, which can indicate differentsolutions when applied to its cloud offering than when applied to its on­premises offering. This researchfocuses on the IBM on­premises UC solution called IBM Sametime Complete, which is part of thebroader IBM Connections Suite. In addition to Sametime, the broader Connections Suite includes socialsoftware, content management and social analytics.

IBM Sametime Complete offers rich presence, chat, meetings, a mobile client, real­time collaboration,HD video, and SIP­based telephony and video integration. Because IBM's broader approach is to blendsocial business and UC functionality into a broader social communications solution, elements of IBM'sSametime solution are also offered as separate solutions in order to meet a range of enterpriserequirements.

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 Connectionsstrategy. Additionally, enterprises that must operate in multivendor telephony environments and want aconsolidated UC client should consider Sametime Unified Telephony.

Strengths

IBM has leading social software, Web conferencing, portal, business analytics and contentmanagement solutions, and is a Leader in the Magic Quadrant for Social Software in theWorkplace.

The IBM brand, partner network and professional services organization assist Sametime inobtaining account visibility and marketing presence, executing custom integrations, and deliveringvertical­specific solutions.

IBM's approach offers an open framework for coexisting with legacy communicationsinfrastructure, rather than competing with it.

Cautions

While IBM Notes and IBM Connections have a positive effect on Sametime in the market, theyhave not generated significant Sametime UC pull­through.

IBM is focusing its strategy on social solutions and has not invested in its Sametime UC solution atthe same pace as most competing UC vendors.

There are significant differences between IBM Connections Suite, the on­premises offering, andIBM Connections Cloud, IBM's SaaS platform for collaboration. This can lead to confusion andincorrect expectations by planners.

Interactive IntelligenceInteractive Intelligence's Customer Interaction Center (CIC) is an all­in­one software solution that offersboth contact center and UC functionality. The solution is particularly attractive to enterprises focused oncontact centers that also wish to offer integrated UC functionality enterprisewide for back­office andsupport functions. The solution includes telephony, audioconferencing, UM, rich presence with IM, and arange of client and device options. CIC also integrates with leading third­party Web conferencing andvideo solutions, as well as with Microsoft Skype for Business. The solution is offered on­premises, in acloud configuration or as a managed service.

In 2015, Interactive Intelligence introduced PureCloud Communicate, a multitenant, enterprise­grade,distributed cloud architecture that leverages Amazon Web Services. The offering includes real­timeenterprise collaboration, content management and IP PBX capabilities. It is not a direct upgrade fromthe on­premises CIC solution, and is currently only a limited introduction in select markets, with moreto follow later in 2015.

Enterprises should evaluate the Interactive Intelligence CIC solution when integrating UC with contactcenter functionality, or when looking to integrate Microsoft Lync with Interactive Intelligence's contactcenter functionality.

Strengths

Interactive Intelligence has seen success with its innovative and attractive flexible deploymentoffering, which allows enterprises to convert on­premises deployments to cloud­baseddeployments, or vice versa. This flexibility eliminates many perceived risks of either approach, andcan be conducted with minimal disruption to users.

The vendor reports that, while it is known for its contact center product, it is finding that many ofits customers purchase both UC and contact center solutions from it.

Interactive Intelligence's financials are good. It has had several years of very good growth and hasmanaged its investor relations through changes to its profitability metrics as it transitions to amore cloud­based revenue stream. The vendor is profitable and generates cash from itsoperations.

Cautions

Interactive Intelligence and its UC product have limited visibility in a market that is dominated by

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larger vendors. Additionally, despite investments in its sales channel program, global coverageremains limited in some regions, such as parts of Eastern Europe and Asia.

CIC's Web and videoconferencing capabilities are not as robust as its competitors and may notmeet the needs of an enterprise that has sophisticated conferencing requirements.

CIC is best­suited for enterprises with the contact center as their primary need, but that also wishto have integrated, enterprisewide UC. As a result, CIC may not be a cost­effective solution forenterprises without strong contact center requirements.

MicrosoftMicrosoft has rebranded its Lync UC solution as Skype for Business (SfB). As part of the rebranding,Microsoft released new clients with a redesign of the UI inspired by Skype to simplify adoption by users.The new SfB Server 2015 offers a full suite of UC functionality that Microsoft continues to improve witheach release. Significant improvements this year are in the area of video, with the addition of the SfBVideo Interop Server, which allows native integration with certain third­party video teleconferencingsystems, the ability to make video calls over the Internet with Skype consumer users and the SurfaceHub team collaboration device that integrates with SfB meetings.

In addition to the on­premises SfB Server solution, Microsoft advanced SfB Online as part of the broadOffice 365 portfolio. The broader online suite includes Office applications such as Word, Excel,Exchange, SharePoint, Yammer, Office, Delve, Power BI and Dynamics CRM. Microsoft also continued toexpand the range of client devices supported and the SfB capabilities on these devices. However,enterprises should be aware that SfB Online currently offers only a subset of the SfB Server capabilities,most notably with significant limitations in public switched telephone network (PSTN) connectivity.Microsoft has announced plans to introduce PSTN functionality to SfB Online later in 2015. The vendoralso has partners capable of hosting and operating SfB Server for enterprises as part of an Office 365configuration, and while this approach does overcome many of the limitations of SfB Online, it alsointroduces complexity and cost.

Enterprises with a significant number of employees who can benefit from the SfB collaboration modelshould consider how it might be leveraged into their business processes and to improve workerproductivity. Enterprises considering deploying SfB telephony or video should understand the topologyand infrastructure requirements, how they will support branch offices, and (if relevant) how they willdeploy and obtain global third­party support. Enterprises with advanced telephony feature requirementsshould also ensure that the needed functions are supported.

Strengths

Microsoft continues to make significant gains in the UC market and is attractive to a broad rangeof enterprises. In many cases, it is initially deployed for its IM, presence and Web conferencingfunctionalities, with gradual incremental deployments of telephony and video added as follow­onphased deployments for specifically targeted groups or regions.

Microsoft is able to bundle the SfB product with its well­established broad range of business andoffice products, enabling it to leverage its dominant position in enterprise IT.

The vendor continues to advance a strong partner strategy, helping it to address the diverse rangeof enterprise requirements on a global basis.

Microsoft's SfB solution is most effective when a significant number of users do not require a deskphone.

Cautions

Enterprises regularly report dissatisfaction with the quality and capabilities of theaudioconferencing and videoconferencing functionalities. As a result, these enterprises oftenmaintain separate conferencing services that can be used when required.

Microsoft has announced intentions to deliver PSTN and other services in Office 365, and tointegrate these with on­premises telephony in some cases. However, the public roadmap todaydoes not include the detail required for planning and for comparing the options. Additionally, insome cases, it appears that Microsoft will be directly competing with some partner offers in thenear future.

Enterprises deploying SfB with in­house staff find that multiple partners are required to obtain acomplete deployment, and that this poses challenges (for example, different partners fortelephones, gateways, survivable branch servers, remote support and network monitoring);additionally, this approach can lead to release­level incompatibilities. This approach also createsdifficulty obtaining an accurate total cost for SfB service and support.

Power telephony users such as executive administrators and receptionists find handling multiplecalls simultaneously through SfB challenging, with transferring calls around taking more steps;certain related features are also limited (for example, providing music on hold to parked callers).

MitelMitel offers the MiCollab UC suite as the common UC solution across its multiple call managementplatforms. MiCollab 7, scheduled to be generally available in August 2015, will extend the new UC clientbeyond the current MiVoice Business platform, to include support for all Mitel's enterprise callmanagement platforms. Mitel's primary call management platforms are MiVoice Business, which targetsmidsize to large enterprises, and MiVoice MX­One (of Aastra Technologies heritage), targeted at largeand very large enterprises. Other Mitel call processing platforms that it is planned that MiCollab willsupport include MiVoice Office 400 and MiVoice 5000 (of Aastra heritage). Mitel supports video nativelyin MiCollab and on the Mitel MiVoice Video Phone. The vendor also offers integration with Vidyo virtualmeeting rooms. Mitel intends to continue to maintain the platforms and upgrade the legacy base toMiCollab UC functionality. Mitel has two contact center offerings — MiContact Center Solidus, whichscales for the midmarket and larger, and MiContact Center Enterprise Edition (former prairieFyre

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Software) which scales up to 1,200 agents. The vendor offers its UCaaS MiCloud service directly andthrough partners, based on MiCollab, MiVoice and MiContact Center, as well as private UC cloudofferings for these and other call control platforms.

Organizations looking for an integrated UC approach at an attractive price should consider the MiCollaband MiVoice call management platforms. Enterprises with existing Aastra investments should consultthe MiCollab roadmap.

Strengths

Mitel has expanded its market reach significantly with the Aastra acquisition, and has leveragedthe synergy across the two companies. This has increased the overall competitiveness of Mitel inboth EMEA and North America, where, according to Gartner, in 4Q14, the combined company isthe No. 1­ranked telephony vendor in Western Europe, No. 4 in North America and No. 4worldwide.

With the acquisition in April 2015 of Mavenir, which offers a software­based network solution formobile carriers, Mitel positions itself into market adjacencies for offering value­addedcommunications services, including UC, for mobile operators as voice over Long Term Evolution(VoLTE) comes to market.

The Mitel MiVoice, MiCollab, MiContact Center and MiCloud solutions provide a mature andcomprehensive software suite. They are based on a common software architecture that can bedistributed or centralized in a data center.

Cautions

Mitel supports multiple platforms under the MiVoice brand, and while these leverage the commonMiCollab UC functions, each also requires its own Mitel development and marketing resources.

To succeed, Mitel must advance and integrate its MiCollab and cloud solutions across a broad baseof clients and products. It will be up against strong competition, and must ensure that its channelpartners are able to sell more than the base PBX function.

Mitel's multiple call management platforms can cause uncertainty for prospects unfamiliar with theportfolio. Prospects should understand which of the options best meets their needs and select aMitel partner that matches that platform.

Using pro forma numbers (as if Aastra were part of the financials for the 12 months leading up toMarch 2015), Mitel's financial rating comes out at "Positive" under Gartner's publishedmethodology for rating IT vendors' financials. Also, now that the Mavenir acquisition is completed,Mitel has an annual pro forma revenue of more than $1 billion and a larger addressable market,but it added debt in the transaction and has a net debt­to­reported­EBITDA ratio of over 3.0x,which is higher than the 1.2x net debt­to­reported­EBITDA ratio it had prior to the deal, meaningthat Mitel will need to deliver the growth and synergy savings expected from its combining withMavenir.

NECOver the last year, NEC continued to situate its UC offering within the broader context of the smartenterprise. This enables NEC to accentuate its comprehensive IT portfolio and to expand its channelpartner base, opening up discussions that encompass enterprise business and infrastructure, along withUC.

NEC's Univerge 3C software offers a fully integrated, complete UC suite. It is based on a Web­ andservice­oriented architecture (SOA), and on open standards, with enterprise scalability, security andcentralized administration. The suite functionality encompasses telephony, video and all forms ofconferencing, presence, IM and messaging. It includes multiple client options, such as hard phones,softphones and SIP phones, as well as a full set of mobile capabilities for a broad range of mobiledevices. The broader NEC portfolio includes integrated support for contact centers, and businessapplication integration and cloud delivery options.

Consider the NEC Univerge 3C solution if you want a complete software UC suite based on SOA that canbe extended with the broader portfolio offered by a major global telecommunications infrastructureprovider. Enterprises with existing NEC telephony platforms may consider Univerge 3C as a migrationpath.

Strengths

NEC is a financially strong, global firm with established UC sales and support channels in severalregions.

The vendor's broader market message, along with a shift toward global market programs, shouldhelp it to advance in worldwide markets.

NEC has a forward­looking UCC architecture that includes a rich set of UC functions in astandards­based SOA environment, backed by a broad communications portfolio. The platform'svirtualization capabilities and software architecture, along with the increased software­definednetworking (SDN) and software­defined data center (SDDC) capabilities of the broader NECportfolio, make it a good fit for data center environments.

Cautions

NEC is still building on its global brand identity in the market and, as a result, may not be as well­known compared with some of its competitors. To succeed, the vendor needs to continueadvancing its global brand marketing.

Some of NEC's channel partners in the North American and European markets, and many outsideof those markets, are not enabled to support Univerge 3C. To succeed, NEC needs to continue to

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expand its partner base and its partner enablement programs. Buyers interested in Univerge 3Cshould work with the vendor to ensure they will be working with a partner that has the neededcompetencies.

ShoreTelIn June 2015, ShoreTel introduced its new Connect product. While Connect draws from the existingShoreTel 14 distributed architecture, it incorporates significant upgrades, enabling the same software tobe used in both customer on­premises deployments and in ShoreTel's own cloud UCaaS offering.

The on­premises offering, branded Connect Onsite, uses the existing appliance approach and can bedeployed at multiple physical enterprise sites, eliminating a single point of failure. The cloud version,branded ShoreTel Connect Cloud, leverages the same software, but is offered as a UCaaS service. TheShoreTel cloud service can also serve as an active backup for an on­premises deployment. ShoreTelalso offers additional on­demand functionality that can be leveraged into on­premises or clouddeployments.

The ShoreTel UC solution is well­suited to distributed organizations, and is known for its simplicity ofinstallation and administration. The Connect solution supports the full set of UC functionality, from peer­to­peer video and support for communications to room­based systems from strategic partners. Thevendor supports its own IP phones and ShoreTel Dock for iPad and iPhone users, as well as SIP phones,SIP trunking and a full set of mobile options. The vendor offers basic and advanced contact centerfunctionality, as well as Google Gmail and Microsoft Exchange UM integrations.

Consider the ShoreTel offering if your company is a distributed organization with multiple small ormidsize locations and wants cost­effective UC functions. ShoreTel is well­established in North America;enterprises planning deployments in other regions should validate service availability.

Strengths

The new ShoreTel Connect Onsite solution is based on the existing distributed appliancearchitecture. The same software is now also the basis for ShoreTel's UCaaS solution, ConnectCloud. Together, these enable hybrid deployments as well as redundant appliance deployments asdesired.

Users of earlier ShoreTel solutions report high customer satisfaction because the solution is easyto use, has intuitive user and management interfaces, and has simple, transparent pricing andlicensing structures. These characteristics have been incorporated into its new product.

ShoreTel's financial results have generally been stable since the acquisition of M5 Networks, and ithas posted top­line growth and non­GAAP profitability in each of the last eight quarters. Also,ShoreTel has been generating positive cash from operations.

Cautions

The ShoreTel Connect product is new to the market. While the vendor does have references,Connect has not been in the market long enough to establish a track record. Additionally, whilethe sales and support channels have had training, their level of experience with the new productwill vary.

The vendor does not have enterprise visibility outside the telecommunications area, which willmake it difficult for ShoreTel to gain acceptance in enterprises as a full UCC provider, especially asit is competing with more established providers.

The solution is primarily geared toward small and midsize organizations of under 2,000 users.

UnifyIn the last two years, Unify has gone through several significant transformations. These transformationsinclude rebranding itself as Unify, undertaking a complete turnover of senior management, introducinga new cloud­based solution called Circuit, making significant changes in its go­to­market approach andundertaking major staff reductions.

The Unify OpenScape UC portfolio offers a full and integrated suite of UC functionality. OpenScape isoffered in three configurations, targeted at different market segments and requirements. OpenScapeEnterprise is for midsize to very large enterprises (200 to 500,000 users), OpenScape EnterpriseExpress is an all­in­one UC solution targeted at midsize enterprises (200 to 2,000 users), andOpenScape Business is targeted at single and multisite SMBs (five to 2,000 users).

Unify also continues to advance several forward­looking initiatives. The OpenScape Fusion integrationallows the OpenScape client to be embedded within other application environments, including Microsoft,IBM, Google Apps and social media tools (such as LinkedIn, Facebook and Twitter). Another significantUnify initiative is Circuit. Circuit is a SaaS­based collaboration solution that leverages an individual's"conversational" context, which is to say the individual's history of communication and conferencingactivities, as well as topics that have been tagged as relevant. In addition to the contextual information,Circuit supports video, conferencing, file and screen sharing, and other collaborative functions. Unify'sroadmap is to provide deeper integration of Circuit into the OpenScape portfolio and into third­partycommunications solutions.

Evaluate the OpenScape UC suite if your company is looking for a standards­based, complete and cost­effective UC software suite that can, as needed, be extended via integration with third­party solutions.Enterprises with HiPath 4000 can also consider OpenScape as a migration path.

Strengths

The OpenScape family of UC solutions is mature and offers a full suite of UC functionality. It isavailable in a variety of configurations targeted at different market segments, and is able to

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operate with various existing telephony deployments.

Unify continues to emphasize an open and interoperable approach, offering multiple integrationoptions; it is being integrated with leading collaboration and business applications, such as thosefrom IBM, Microsoft and Google.

The vendor is proactively addressing the changes occurring in the telecommunications andcommunications industry. This includes making organizational and market decisions that allow itto better compete in growth segments, while reducing commitment to markets in decline.

Cautions

Unify must continue the year­over­year growth it experienced in 2014 in the large North Americanmarket; as a point of reference, in the previous four years (2010 through 2013), Unify has shownyear­over­year declines.

While continuing to enhance its OpenScape portfolio, Unify has placed significant resources onCircuit as its next­generation UCaaS solution. The market demand for this type of solution has yetto be determined.

Unify's restructuring has likely put the vendor in a better position to become profitable, butbecause it is privately held, its lack of financial disclosure makes it difficult for industry analystsand customers to assess whether the company is making progress. Earlier in 2015, there werepublicly available financial analyses from credit rating agencies that contemplated a redemption ofthe company's debt. This redemption has occurred, which is a positive development as far as thecompany's liquidity through early 2016 is concerned. Nevertheless, despite the debt redemption,end users should take note that Unify's transformation plan remains subject to a high degree ofexecution risk and will be challenged by a difficult competitive environment.

Vendors Added and DroppedWe review and adjust our inclusion criteria for Magic Quadrants and MarketScopes as markets change.As a result of these adjustments, the mix of vendors in any Magic Quadrant or MarketScope maychange over time. A vendor appearing in a Magic Quadrant or MarketScope one year and not the nextdoes not necessarily indicate that we have changed our opinion of that vendor. This may be a reflectionof a change in the market and, therefore, changed evaluation criteria, or a change of focus by a vendor.

AddedNo vendors were added to this Magic Quadrant. However, Alcatel­Lucent Enterprise Division wasacquired by China Huaxin and rebranded as ALE.

DroppedNo vendors were dropped from this Magic Quadrant.

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. Brieflystated, the six areas are: (1) telephony; (2) conferencing (including audio, Web and video, whichcan be offered via partnerships); (3) IM and presence; (4) messaging (which can be offered viaintegration with email, voice mail and various forms of UM); (5) clients for multiple environments;and (6) the ability to be integrated with other business and communications applications, such ascollaboration 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 minimum revenue of$150 million from enterprise communications.

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

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

Provide five references (three end users and two distribution partners) for enterprise on­premisesUC 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.

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 enterprisecommunications. Ultimately, UC providers are judged on their ability and success in capitalizing on theirvision.

Table 1. Ability to Execute EvaluationCriteria

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Evaluation Criteria Weighting

Product or Service High

Overall Viability High

Sales Execution/Pricing Medium

Market Responsiveness/Record Medium

Marketing Execution Medium

Customer Experience Medium

Operations Medium

Source: Gartner (August 2015)

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 themselves and their clients.

Table 2. Completeness of VisionEvaluation Criteria

Evaluation Criteria Weighting

Market Understanding High

Marketing Strategy Medium

Sales Strategy Medium

Offering (Product) Strategy High

Business Model Medium

Vertical/Industry Strategy Medium

Innovation Medium

Geographic Strategy Medium

Source: Gartner (August 2015)

Quadrant DescriptionsLeadersLeaders have a full UC offering and 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.

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 strong inall regions, but has elements of its portfolio that are not selling.

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

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.

ContextEnterprises developing UC plans face difficult choices. At a high level, they must choose between alonger­term commitment to an on­premises approach versus a cloud strategy. This will have asignificant effect on defining their roadmap and on selecting the specific vendors and solutions.Developing a UC deployment roadmap is often complicated because planners will often need to leverageexisting telephony and video investments, and because the specific needs will vary between differentgroups within an organization.

Gartner considers UC to be an "early mainstream solution," which means that, while solutions areavailable from multiple vendors, the best practices for UC users, administrators and system integrators

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have not yet matured. Key solution deficiencies include lack of important features, lack of integrationoptions, lack of client functionality or missing functions on mobile devices, or lack of scaling for more­demanding environments. Key best practices that are still maturing include those for selecting, pricingand deploying solutions, and those needed for increasing end­user adoption. Gartner believes it willtake several years of incremental improvements to address these early mainstream issues.

Enterprise planners must also expect considerable change in technology and requirements as they seeknot only to leverage UC investments to make their employees more effective, but also to leverage theseinvestments into new work processes. Areas to consider include:

Business process integration — Significant advances, such as Web Real­Time Communication(WebRTC), are making it easier to integrate communications directly into business applications.

Hybrid UC — Many vendors are advancing solutions that allow mixing of on­premises and cloudoptions, making the migration choices better.

Federated UC — Federation will provide some enterprises with significant competitive advantage,as they are able to collaborate more effectively with partners and customers.

Tactical use of point conferencing solutions — Enterprises are finding that using UC enablesconsiderable savings in conferencing. This is then coupled with specific video solutions forfunctions that are lacking in the UC solution.

New generation of UC clients — Many vendors are now working on a new generation of UC clientthat leverages context, analytics and persistent omnichannel meetings, and which is highlyeffective on mobile platforms.

Real­time workgroup extensions for UC — Increasingly, Gartner is seeing enterprise interest inextending their UC functionality with a range of functions that include project­focused interactions,activity streams, contextual file storage and the ability to stay in continuous communication.

Market OverviewThe last year saw several significant changes in the vendor positioning in this Magic Quadrant — somedriven by strategy, some driven by market performance and some driven by changes in technology. Inthe Leaders quadrant, Microsoft and Cisco maintained their strong leads in the market. Cisco executedwell in the market and on its strategy for evolving its next generation of UC services. Microsoft'ssolution continues to attract significant market growth. However, the rebranding of Lync to Skype forBusiness created confusion for many users. The confusion has been exacerbated by the mixedmessages Microsoft is delivering regarding what Skype for Business functionality will be available aspart of Office 365 and when it will be available, versus what will be delivered through partners and howlong before that partner functionality will be displaced by Microsoft's own offer. The result is a lack ofclarity regarding Microsoft's UC roadmap.

Avaya remained in the Leaders quadrant. It made year­over­year improvements in its portfolio andmarket execution. However, it continues to be selected on the basis of its telephony, rather than theother elements of the portfolio, which keeps it from advancing in the broader UC market. Mitelremained in the Leaders quadrant with both a good UC vision and market execution. Its acquisition ofMavenir provides a longer­term vision and potential as a cloud solution provider with strong mobilecapabilities.

This year, ShoreTel moved into the Visionaries quadrant based on its Connect product's ability to handledistributed and hybrid cloud deployment. IBM remained in the Visionaries quadrant based on itspositioning of UC as part of a broader collaboration and social portfolio.

NEC and ALE maintained their positions year over year in the Challengers quadrant. Both vendors havefull UC solutions, and now need to execute better to advance.

Niche Player vendors typically offer strong solutions in specific markets, but not across the broaderspectrum of UC markets. Unify moved from the Visionaries quadrant to the Niche Players quadrant.While Unify has made significant organizational, rebranding and product changes, including the releaseof the Circuit cloud product, it has not grown its UC market share at a pace with the broader marketand in North America. Huawei, while strong in certain markets, is not established in other key markets.Interactive Intelligence continues to excel where its UC solution can be coupled with its contact centeroffering.

Several vendors offer strong UC functionality in specific areas, but were not included in this MagicQuadrant, because the inclusion criteria required that vendors have a full on­premises UC solution. Inthe area of conferencing, Polycom and several other vendors offer strong solutions, but were notincluded because they do not offer solutions in other technology areas. In the area of UM, Applied Voice& Speech Technologies (AVST) offers a best­of­breed solution, but not a full UC suite. Esna (recentlyacquired by Avaya) and gUnify (recently acquired by Vonage) offer a useful middleware approach forintegrating disparate UC environments, including the integration of Google with enterprise telephonyand video. Finally, UC service providers (e.g., AT&T, Google, Verizon, Orange Business Services andHP) were not included in this research, because they do not offer on­premises solutions, but rather offerUCaaS or UC on a leased basis; those types of UC service solutions are evaluated in "Magic Quadrantfor Unified Communications as a Service, North America With Additional Regional Presence."

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