Have UC Vendors Given Up On Innovation?

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When was the last time an iPhone-like innovation happened in the Unified Communications (UC) space? Or for that matter, in the larger, more encompassing enterprise communications? The answer is, probably never. I am not just referring to user experience, but across the entire spectrum of technological innovation in this market. From my tracking of the UC industry over the last 10+ years, new product launches are never radical breakthroughs but rather product extensions camouflaged as innovations.

Have you ever wondered why innovation happens so fast in the consumer world compared to enterprises? Not that consumers are any more discerning than enterprise CIOs. I think it is because they have the freedom to switch. Even if I am tied down to a mobile plan, my window of loyalty is about 14 months. For vendors in the consumer market, innovation has a direct correlation with customer churn and profitability.

I thought it is worthwhile to spend some time on why there is such shortage of innovation in the UC industry.

Reason 1: Innovation is a culture

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Not many UC vendors nurture innovation or out-of-the-box thinking. I have worked with many of them as employee, analyst and consultant. The one common characteristic that I see across all these organizations are that they are large, monolithic and steeped in the old way of doing business. A good percentage of their employees have been with them for an average 15+ years. Some start and end their careers with the company. While this may be a good thing in some aspects, in many ways this stifles new thinking. The general attitude is, “we have done it this way for many years and will continue down the same trodden path in future.”

I see some encouraging signs though. Some UC vendors are hiring new grads in an effort to get the perspective of Gen Y users. Others are taking R&D out of their labs and doing extensive usability testing on ‘real’ users. But these are just instances of best practices, far from becoming a culture.

Reason 2: Vendors can get away with little innovation

If you are a frequent attendee of industry conferences, you would agree with me. Year after year, the themes seldom change. Many of the vendors have their enterprise customers locked down in their environments. The cost of switching is too steep. Managing change is nightmarish. And, the solutions from one vendor to another are not vastly different in order to warrant a switch based on functionality. Under these circumstances, why go overboard innovating? The business still runs, profitability is good though it can be better, and more importantly, there is no reason to believe that innovation can bring dramatic changes to my top-line or bottom-line. It can, if we are radical enough, get it right, and continue to innovate, because what is radical today could be ordinary tomorrow.

Reason 3: The perception of innovation is vastly different

The way customers view innovation is vastly different from how UC vendors see it. In 2011, Cisco and Avaya decided that there was great, untapped potential in ‘enterprise-grade’ tablets. Their argument was that the iPads of the world were more consumer devices and did not offer enterprise-grade features for secure, reliable access to resources, tools and infrastructure. Their enterprise-grade tablets were at least three times as expensive as their consumer counterparts, needed docking stations that were priced between $300 – $1,000 and integration with backend infrastructure that could run to tens of thousands of dollars. The devices flopped as neither were they user-friendly nor did they justify the cost.

There was the belated realization that these enterprise users were happy to carry their personal devices to the workplace and be more productive. All it needed was ensure proper administration and security for these devices. In other words, a BYOD strategy.

Reason 4: Vendors think in terms of sales, market share. They seldom think as users.

The most that companies do to ‘capture’ user feedback is conduct focus groups. How many of us are capable of expressing what exactly we need and how we are going to use it in focus groups without any embellishments or omissions? I have been in focus groups where the moderator, ever so gently, steers the participants towards the answer that his/her client wants to hear. Now, if we are going to rely on such formats to get customer feedback, how will this impact product development?

Reason 5: Vendors seldom walk the talk

I recently read a post by fellow blogger Luis Ramos titled Can Lync Fly? The idea was to see if Lync video would work on a plane. The grand conclusion of the article was that it was very difficult and he could do it partially after several compromises. Now, contrast this with a Facetime call on an airplane using an iPhone 4. Now why didn’t Microsoft think of making Lync work on an airplane? Isn’t the phrase ‘anytime, anywhere access’ flogged to death by UC and mobility vendors?

It is not all gloom and doom for the industry. Smaller startups innovate in order to survive. Unfortunately, only a handful of them survive and sustain. Acquiring small innovative startups has become fashionable in the UC industry. But once acquired, their innovation gets smothered by old-school mismanagement. Like a Zimbra or a DimDim… or a Skype.