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Gartner's 2012 Magic Quadrant for Corporate Telephony

Analyst(s): Jay Lassman, Geoff Johnson, Steve Blood

VIEW SUMMARY

Telephony vendors struggle to grow market share and maintain profitability in a mature market. IT leaders must satisfy new requirements for voice and unified communications while staying within budget. Our criteria can help in the selection of the best vendor to meet short- and long-term objectives.

Market Definition/Description

This Magic Quadrant reviews technology vendors that design, manufacture and distribute a combination of hardware and/or software solutions for corporate telephony. These architectures focus on either centralized or distributed premises-based platforms that are dedicated for use by a single company, whether provisioned as stand-alone or as part of a unified communications (UC) suite. Furthermore, while the corporate telephony market is evolving from a model focused on producing innovations in proprietary hardware to one that uses standards-based hardware and software, vendors' strategies continue to focus on protecting their market share by maintaining the differentiation of their respective product portfolios to lock out competitors. This reality underscores the need for aligning a voice platform with an overall UC strategy. Decision criteria for corporate telephony should focus on scalable solutions that support Session Internet Protocol (SIP), desired levels of resiliency, desktop and mobile functionality, and the ability to integrate with enterprise IT applications while delivering the performance and voice quality demanded by users.

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Magic Quadrant

Figure 1. Magic Quadrant for Corporate Telephony

Source: Gartner (September 2012)

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Vendor Strengths and Cautions

Aastra Technologies

Aastra's MX-One is the company's global corporate telephony product. It can be configured as a centralized high-capacity server, a distributed single system over a large geographical area or a combination of both. MX-One supports a VMware virtualized environment with applications as virtual machines residing on a single host. The platform scales up to 15,000 SIP endpoints and 15 gateways per server. Aastra also serves the U.S. market with Clearspan, an enterprise version of the BroadSoft platform that many service providers use in their central offices. Additionally, Aastra's acquisition of Comdasys gives it direct control of its mobility strategy and demonstrates its intent to continue to add value to its product portfolio. Like other vendors, Aastra has also been challenged with the market downturn in Europe, but it has suffered less than many of its competitors due to prudent financial management. Aastra has a strong footprint in Europe and South America, and emerging businesses in North America and Asia. Its product portfolio for telephony is stronger than its developments in UC.

The MX-One is a proven telephony system with very good high-availability options, system management tools, a migration path to UC and support for mobile applications. Aastra customers using the MD110, the forerunner of the MX-One, as well as other private-sector and public-sector organizations, should consider Aastra based on the availability of certified MX-One sales and support capabilities.

Strengths

• Aastra has a strong history in delivering competitive telephony products, with a reputation for providing investment protection and a total cost of ownership (TCO) that is one of the lowest for corporate telephony.
• Aastra's acquisition of Comdasys strengthens the critically important mobility component for the MX-One.
• Aastra is a well-run business with a strong focus on profitability and expense management. Most recently, the vendor's activities in this category resulted in an upgrade to Positive using Gartner's financial performance model.

Cautions

• Aastra's investment in R&D (around 10% of sales) is much lower than many of its competitors, both as a percentage of sales and in actual dollars. This investment level limits the extent to which it can innovate, especially in the UC market. The lagging development of its UC portfolio may limit its appeal as a supplier of telephony.
• As a Canadian-based business with the majority of its business in Europe, Aastra's financial performance is doubly impacted by the challenging market conditions and the weakening of the euro to the Canadian dollar.
• Although Aastra has an established business in North America for the MX-One and Clearspan, resources for distribution and support are limited.

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Alcatel-Lucent

The Alcatel-Lucent OmniPCX Enterprise is the vendor's leading platform for corporate telephony. It supports analog, digital and Internet Protocol (IP) endpoints, and can scale to 15,000 IP users per server. The platform provides centralized intelligence, network management and user applications delivered across single or multiple site deployments. Premises-based and hosted versions are supported. Alcatel-Lucent markets the OmniPCX Enterprise platform as a stand-alone telephony system and as part of its OpenTouch UC suite. For businesses with up to 1,500 employees, the full OpenTouch UC suite is a single-server solution. Alcatel-Lucent also offers the OmniPCX Office for businesses with up to 200 users.

In 2011, Alcatel-Lucent announced it was exploring the sale of its Enterprise Business Group, which included its OmniPCX telephony, OpenTouch UC and Genesys contact center product portfolios, as well as its enterprise networking business. On 1 February 2012, Alcatel-Lucent confirmed the sale of Genesys to private-equity firm Permira and indicated that it will keep the remaining enterprise business. Customers and prospects should monitor Alcatel-Lucent for any signs of changes in the Enterprise Business Group's approach to innovation, product strategy and/or customer support. Alcatel-Lucent, as a whole, has expressed dissatisfaction with its overall 2Q12 financial results and has announced a program to reduce costs by €1.25 billion by the end of 2013, including a reduction in head count and a restructuring of or exiting from unprofitable markets. At the same time, the Enterprise Business Group posted an adjusted operating profit of 1.6% of revenue in 2Q12.

The OmniPCX product line is a proven telephony system with a UC road map and strong support for wireless and mobile applications. Organizations should consider the vendor based on the availability of Alcatel-Lucent certified sales and support capabilities in their respective regions. Likewise, current Alcatel-Lucent customers should carefully confirm availability of support before making continued investments with the vendor.

Strengths

• With OpenTouch, Alcatel-Lucent demonstrates a strong product development strategy and direction to migrate OmniPCX customers to UC.
• A cloud version provides OmniPCX Enterprise users with the option to benefit from a subscription-based pricing model for sites where it would be hard to justify the capital cost for a telephony infrastructure.
• Alcatel-Lucent has an established presence and a significant partner network in place across its home region of Western Europe.
• The Alcatel-Lucent data networking portfolio enables the company to offer a strong end-to-end value proposition for voice and data solutions that could also yield incremental pricing discounts.

Cautions

• The decision to sell the lucrative Genesys contact center business could create doubt over Alcatel-Lucent's commitment to the adjacent enterprise telephony market. The vendor must again earn the enterprise market's confidence.
• Although the OpenTouch architecture is the core direction for UC, the product is not yet a fully market-proven solution, with channel partners and support expertise in short supply.
• Although Alcatel-Lucent is making progress adding new customers and growing its business in North America, there are a limited number of OmniPCX certified dealers in that region.

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Avaya

During the past year, Avaya has continued to evolve and expand its solution portfolio. Through the acquisition of Radvision, Persony and Sipera Systems, it gained technologies for video and Web-conferencing capabilities, and a session border controller for security. In addition, Avaya has made progress on critical tasks following its 2009 acquisition of Nortel Enterprise Solutions (NES) — it has completed the normalization and stabilization of its products; and the management team is executing on its consolidated marketing strategy. However, Avaya has not yet set an offer date for a proposed initial public offering (IPO) of $1 billion of its common stock, which is intended to help debt repayment of about $1.4 billion due in 2014.

Avaya Aura is a highly scalable telephony platform with local and enterprisewide failover options that extend to SIP and time division multiplexing (TDM) trunks, or a combination of both. The Aura platform also supports a migration plan to UC, and real-time processing of SIP sessions for emerging multimedia business applications. Avaya has also focused on the scaling of IP Office Server Edition for midsize enterprises, the addition of the AvayaLive Connect cloud offering, and the advancement of its Avaya Connect and DevConnect channel partner options. Avaya has made a lot of progress simplifying software and hardware upgrades for Communication Server (CS) 1000 customers, which also enables continued use of NES telephones. Organizations can also draw on Avaya's full range of networking, contact center, security, video, UC and collaboration products. Avaya has complete product portfolios for telephony, contact center and UC, as well as the ability to meet the requirements of globally situated enterprises. In addition, IP Office is a good fit for small or midsize businesses (SMBs).

Consider Avaya Aura if you need to bring together heterogeneous environments; require a contact center as part of UC; need video, mobility and business application integration; or have significant investments in Avaya that you wish to migrate toward a next-generation UC solution.

Strengths

• Avaya expertise deploying Aura Session Manager enables selective location-independent deployment of telephony and UC applications and services throughout the organization. Aura Session Manager supports the routing of sessions and sharing of applications between Avaya and non-Avaya IP-PBX systems.
• Avaya's Agile Communication Environment (ACE) platform enables the vendor to deliver SIP-based communications-enabled business processes (CEBPs), as well as solutions that interoperate with UC and business applications from disparate vendors. The ACE platform also reinforces Avaya Aura's ability to enable back-end processing of SIP sessions required by high-performance, real-time communications applications.
• Avaya's pricing is usually competitive relative to its peer group. Users of older Avaya Aura and CS 1000 releases will benefit from generous license upgrade credits.
• Avaya Aura System Manager provides a single management interface for administrators to manage the Avaya Aura core, Communication Manager, CS 1000 and related applications, including messaging, conferencing, contact center, data networking and branch gateways.

Cautions

• Some Gartner clients report uneven availability of quality Avaya technical support personnel, which has resulted in longer-than-desirable response times. Similarly, it takes an undue amount of time for Avaya to generate maintenance contract pricing and render accurate bills to customers. Avaya is addressing this with a new automated quoting process and new lookup tools, which reduce quote time; a combined invoice for hardware and software that simplifies billing is now in place.
• Avaya has been slower than some of its competitors to introduce a virtualized and consolidated Aura option for organizations that prefer running a core telephony platform in a VMware environment. While Avaya plans for the first release to be available by the end of 2012, prospects should confirm that Avaya support personnel and channel partners have the required certifications.
• Avaya continues to receive a Caution rating, according to the Gartner financial rating methodology. Despite slow and steady improvements since the acquisition of the NES assets, Avaya reported a year-over-year revenue decline of about 9% in its FY12 second quarter ending 31 March and third quarter ending 30 June. Avaya reports that the decrease in revenue was, in part, driven by limited quality issues in its infrastructure solution product portfolio, which have now been addressed. Given its high debt level, Avaya's financial performance should be monitored.

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Cisco

Cisco Unified Communications Manager (Cisco Unified CM) is the core platform for the vendor's collaboration services, providing not only voice, but also integrated video, mobility, session management, security, presence and messaging, allowing enterprises to use what they have as they add services and move to UC. The platform is highly scalable and has an established worldwide presence. For more than the past three years, Cisco has consistently been No. 1 among corporate telephony vendors for total shipments of telephony user licenses. The vendor benefits from its leadership position in data networking, and is expanding its relationships with IT professionals by offering UC solutions that include data center virtualization and cloud-based deployment options. Cisco offers significant portions of its software on VMware, which can operate under Cisco Unified Computing System (UCS) servers and other qualified servers.

With its global distribution network and comprehensive product portfolios, Cisco is a strong contender for virtually any organization's voice communications infrastructure, especially those inclined toward using Cisco for end-to-end solutions that include network gear, voice, UC, video and collaboration requirements, as well as requirements for UC client support on Apple and Android products.

Strengths

• Cisco's virtualized version of Cisco Unified CM runs in a VMware environment and can reduce the need for dedicated servers. The server options include Cisco UCS as well as HP and IBM servers that comply with Cisco's published requirements. Cisco's virtualized data center environment leverages many of the customer's data center infrastructure components, such as data center management tools, storage and facilities, as well as supporting georedundancy and high-availability requirements.
• Virtualized instances of Cisco unified messaging (UM) and contact center applications can also operate in a VMware environment.
• Cisco has many certified dealers, system integrators, service providers and network outsourcers able to satisfy global and regional requirements for organizations of almost any size.

Cautions

• Cisco's bundled pricing model is value-based and may increase TCO. To optimize costs, prospective buyers should compare the pricing for Cisco's bundled and unbundled solutions and licenses in the context of their own UC road map to determine which licensing approach represents the best financial alternative.
• Many Gartner clients report that choosing Cisco as their sole-source provider for IP telephony, the data network, Web conferencing, video, etc., can lead to reduced negotiating leverage and higher costs (see "Applying the Vendor Influence Curve to Unified Communications" [Note: This document has been archived; some of its content may not reflect current conditions.]).
• Unlike Cisco's corporate telephony competitors, which are receptive to clients' use of virtually any brand of networking equipment, Cisco representatives and its dealers often discourage using a non-Cisco network infrastructure by suggesting that performance of Unified CM will not be optimal. However, Cisco telephony does run equally well on other vendors' networks (see "Debunking the Myth of the Single-Vendor Network" [Note: This document has been archived; some of its content may not reflect current conditions.]).

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Digium

Digium continues to make progress in penetrating global enterprise telephony markets with its Asterisk telephony solution and its Switchvox telephony-oriented UC solutions, which are based entirely on open-source software. Digium's road map plans for Asterisk 12, Asterisk Scalable Communications Framework (SCF) and Switchvox are designed to support increasingly larger enterprises and greater UC functionality.

Switchvox is a prepackaged solution that is configured and managed through an intuitive user interface. The system is an all-in-one design that requires fewer internal resources to support it than Asterisk; the latter is a build-it-yourself system that will need dedicated resources, but the open-source software is free. Digium's Asterisk 10 and Switchvox 5.5 products are suitable for small businesses or small offices of large organizations that want a low-cost, SIP-based, distributed telephony architecture.

SMBs should consider Digium if they understand the benefits and modest risks of using open-source software for a telephony solution and a migration path to UC.

Strengths

• Asterisk offers free open-source telephony software, in conjunction with a per-user-based subscription licensing model that provides ecosystem support.
• Asterisk provides customers with the capability to customize their IP telephony system to meet their needs, and to add UC capabilities at their own pace.
• Digium's business model and development road map for Asterisk have been embraced by SMBs that accept and manage the use of open source and its whole-of-life-cycle internal support requirements. The vendor's customers typically understand the support required for installation, configuration, operations, integration and life cycle planning, but accept it as a trade-off for perceived better control and TCO of their communications environment.
• Asterisk products are intended for deployment on commodity hardware, such as IBM, HP, Dell servers, Ethernet switches and SIP phones. Its virtualization uses Linux, VMware ESX, Xen, Debian or other open-source solutions; the platform also runs on Amazon's Elastic Compute Cloud.

Cautions

• Large, multisite organizations might not find an open-source platform suitable for telephony requirements due to the internal ecosystem required for support. However, some are using Asterisk for large-scale, inexpensive voice mail deployments.
• While Digium has a very enthusiastic development community, users recognize the business risks of using Digium's open-source solutions, given that the privately held company is relatively small, compared with its corporate telephony competitors. However, customers have source code that is maintained by a large community of users that could continue the project with or without Digium.

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Huawei

Huawei has been added to this Magic Quadrant because it is in the process of launching a global enterprise networking business unit. Headquartered in China, Huawei offers a broad portfolio of communications products and services, and addresses the market through its new enterprise networking division. The telephony and UC application, branded eSpace, is based on the SoftCo family of hardware and software platforms. The solution offers telephony (IP-PBX) functionality, conferencing, PC client and UM, as well as contact center functionality and integration options with Microsoft, IBM and others. In 2012, Huawei added collaboration functions to the eSpace solution.

Consider Huawei for a telephony solution in regions where its carrier and large enterprise business resources are significant enough to provide capable support — primarily in China and some countries in the Asia/Pacific region, Middle East, Eastern Europe, Africa and South America.

Strengths

• Huawei had $32.3 billion of revenue in 2011. Its new enterprise networking business group (which covers telephony and unified communications and collaboration [UCC] products and solutions) stated 2011 revenue of $3.8 billion. The global contract sales revenue of Huawei Enterprise Business Group increased strongly in 2011, compared with 2010, following heavy investment in the expansion of its global distribution plans and R&D directed at enterprise solutions.
• With solutions for large enterprise and SMB markets across the globe, the vendor has a large base of clients, and can leverage its strengths in the network and server business.
• Huawei's enterprise communications architecture can scale to very large enterprise deployments. Furthermore, the vendor is developing large-scale telephony, UC multimedia converged solutions and virtual contact center clouds for communications service providers (CSPs) to sell as multitenant solutions to their traditional enterprise customers.

Cautions

• Huawei faces political, trade and intellectual property trust issues in some regions. To succeed in the corporate telephony market, as well as other technology-focused markets, the vendor needs to overcome these barriers by increasing the confidence of decision makers.
• Huawei's enterprise business has a strong base in China, which is one of the fastest-growing markets in the world. It also has an increasing presence in other emerging economies, such as Brazil, Russia, India and China, as well as the Middle East and Africa. However, Huawei is finding it difficult to enter the North American and Western European enterprise telephony markets, not only due to global economic uncertainty, but also due to the difficulty in finding channel partners willing to invest in a telephony market that is barely growing.
• Enterprises need to scrutinize the ability of Huawei to build a support model that includes not only technically qualified personnel and network operations centers, but also a logistics capability for managing and delivering spare parts for critical and noncritical components. Similarly, the vendor needs to demonstrate that it has an ecosystem that supports hardware and software updates and upgrades.

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Microsoft

Microsoft Lync 2010 supports enterprise telephony as part of a full UC suite. While Microsoft is not listed as one of Gartner's top vendors in telephony, it is a Leader in the UC market (see "Magic Quadrant for Unified Communications"). The inclusion of IP phones from a variety of third-party providers enables Lync to address a broad range of telephony users. The availability of worldwide emergency dialing that meets regional regulatory requirements and branch survivability solutions enables organizations to better plan their networks for the deployment of Lync. While feedback from early adopters has been positive, many users continue to indicate they are not yet ready to replace their PBX systems. Many are limiting use of Lync for telephony for non-mission-critical applications until they are satisfied Lync's real-time telephony functionality, performance and resiliency are proven. In addition, some are using Lync for nontelephony functions, while continuing to rely on an external voice platform.

Lync is an appropriate choice for organizations committed to adding Microsoft UC to knowledge workers' desktops, complete with telephony. Given that we believe Microsoft is positioned to deliver enhanced capabilities for Lync Server and Lync Online during 2013, a phased migration would provide the lowest risk and the opportunity for organizations to acquire new technical competencies, including desktop, networking and telecom support. However, organizations considering Microsoft for UC should complete a full analysis of user requirements before displacing the IP-PBX altogether.

Strengths

• Microsoft has strong brand awareness for UC with midsize and large organizations. It has used its volume license agreement very effectively to seed the opportunities to deploy Lync for instant messaging, voice, video and Web conferencing.
• Microsoft is a financially viable company. It also has huge mind share and the marketing and sales resources to influence telephony buyers. Furthermore, the vendor has made a significant R&D funding commitment to continuously develop its UC portfolio.
• Microsoft's collaboration-centric approach and deep integration with the Office portfolios give it credibility as a solution to top-level business process issues. Consequently, it has strong sponsorship at the senior level in many organizations.
• Microsoft's vision for an integrated and UC user interface has been transformational; it has created new market opportunities and has enabled planners to develop their overall IT strategies to better leverage voice communications while improving business processes.

Cautions

• Organizations that do not have a volume licensing agreement with Microsoft will pay a higher incremental cost for the right to use Microsoft Lync than organizations that do have a volume licensing agreement.
• Although the development of Lync Mobile is promising, with the release of mobile clients, Microsoft is still behind its UC competitors in terms of product development for mobile devices, especially voice over IP (VoIP) and videoconferencing from smartphones and tablets.
• Gartner clients report that Microsoft Lync functions best in environments with Windows-based PCs and Exchange Server for Outlook email. Organizations using disparate operating systems and email applications should ask Microsoft about its plans to support non-Microsoft environments in the future.
• Microsoft Lync telephony feature availability is dependent on which third party is supplying the desk phones. Clients report limitations associated with features such as music on hold, multiple appearances of the same directory number on the same phone, and local intercom calling between managers and their staff, which typically includes administrators and executive assistants. Organizations planning a Lync implementation should investigate which IP phone providers can best support their respective requirements to avoid losing features, especially those frequently used by managers and executives.

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Mitel

Although an established corporate telephony vendor, Mitel's recent decision to refocus investments in the midsize enterprise market is yielding financial performance improvements. To support its goals for midmarket telephony, and to eliminate being in competition with its dealers, Mitel has been shifting to indirect sales via channel partners and maintaining its long-term presence in the global telephony market. Mitel was an early adopter of VMware and virtualized communications solutions. It has extended its collaboration in virtualization with VMware and delivery of IP telephony and UC as a virtual appliance to simplify installations. The Mitel Communications Director (MCD) enterprise licensing package, which is targeted at customers that require resiliency and high-availability features with failover, includes redundancy. In keeping with its established product architecture for deploying advanced applications, users access Mitel UC functionality through the Mitel Applications Suite (MAS), which supports a UC client for desktops and mobile devices. MCD and its associated components can be deployed either premises-based, hosted, cloud or in combination, as well as in a VMware virtualized environment.

Consider Mitel if you are looking for the ability to run industry standard servers, such as HP, Dell and IBM, or, in a virtualized environment, with the option to interoperate with Microsoft Lync or to use Mitel's UC client.

Strengths

• Mitel's support for a virtualized environment can streamline communications infrastructure costs, simplify the implementation and reduce ongoing operating costs.
• The vendor's increased focus on implementations with up to 2,500 users has been improving its ability to be more responsive to market requirements and is providing cost-effective bundled pricing that is significantly lower than its a la carte model.
• Mitel's financial performance has improved during the past two years. According to Gartner's financial model, Mitel has a Positive financial rating, which improves the vendor's overall viability in the market.
• Mitel has had success with its managed services offering in the U.S. market; it is offered through direct and indirect channels, and achieves high customer satisfaction ratings. It includes Mitel's TotalSolutions managed service offering with NetSolutions network services. The turnkey program provides fixed costs, full service and warranty, and includes software upgrades.

Cautions

• Although Mitel has developed a strong product, it is taking time to develop brand awareness against stronger competition in the large business segment. As a result, it continues to struggle to establish needed market momentum.
• Although improving, many Mitel dealers have not yet developed experience installing and supporting Mitel solutions in a virtualized environment. Evaluate the skills and experience of the channel partner, in addition to the potential costs and benefits of the technology.
• Prospects should confirm that Mitel channel partner references match their UC and geographical requirements, and verify that support personnel have been trained and certified on current product releases.

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NEC

NEC is a strong global player with two main alternatives for the corporate telephony market. Its Univerge SV8500 IP communications server supports 4,000 endpoints in a single server and up to 192,000 endpoints in a single system with multiple servers. The platform is targeted at NEC users who prefer a migration to IP and UC, while leveraging their investments in the NEC Univerge product family. Univerge 3C is a softswitch intended mainly for new telephony and UC installations, but can also bring its broad range of capabilities to Univerge SV8500 users. One Univerge 3C system with multiple servers supports up to 30,000 endpoints.

NEC users and prospects should consider NEC for solutions requiring scalability, high availability and multiple levels of redundancy, with a good migration path to UC.

Strengths

• NEC is a large, diversified, global supplier of corporate telephony with financial strength, extensive internal resources, and channel partners in North America, EMEA, Central and Latin America, and the Asia/Pacific region, including large distributors, CSPs and dealers.
• The vendor has sustained its strengths in selected vertical markets, such as hospitality, healthcare, government and education. It provides appropriate customized and scalable telephony solutions based on Univerge SV Series or Univerge 3C software.
• NEC uses multiple servers and virtualization for Univerge 3C software solutions deployed in various network locations for dynamic load balancing. A range of media gateways provides remote survivability. NEC's SIP implementations are certified with major CSPs, which facilitate normalizing and terminating SIP transport provisioned by dissimilar CSPs.

Cautions

• Although most of NEC's Univerge 3C deployments and experiences have been in North America and Europe, the vendor is in the process of expanding its market penetration globally.
• Enterprise telephony buyers should contact NEC to ensure that they choose NEC's on-premises, hosted, distributed, centralized or cloud telephony options appropriately, and that their channel supplier can support that solution and its emerging alternatives effectively.
• NEC's extensive product lines are targeted at SMBs as well as large enterprises, so not all dealers have experience designing, installing and supporting large deployments. Prospective buyers should contact NEC to confirm that there are appropriate NEC channel partners.

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ShoreTel

Although ShoreTel's technology has been particularly well-suited for SMBs with distributed communications requirements, the vendor continues to make progress among enterprises with more than 1,000 users who are centralized or have many branch offices and retail sites. ShoreTel scales from 10 to 20,000 users on a single platform. The acquisition of M5 Networks in March 2012 gives ShoreTel an opportunity to offer a portfolio of cloud-based voice services and other applications, while growing its U.S. presence. The ShoreTel architecture is particularly well-known for its simplicity of installation and administration. Survivability is provided via ShoreTel's N+1 switch failover capability; a switch can fail over to another switch anywhere in the network. ShoreTel also supports a full set of mobile options. ShoreTel 13 adds video connectivity, with room-based systems supported by video providers such as Polycom and the LifeSize division of Logitech.

Consider ShoreTel if your company is distributed and is looking for telephony and mobility capabilities that are easy to install, have very intuitive management and user interfaces, and have UC functions that can integrate with Microsoft Lync or utilize ShoreTel's own UC client.

Strengths

• ShoreTel's focus on customer satisfaction throughout the implementation cycle and beyond translates to consistently high satisfaction ratings from its channel partners and customers.
• Enterprises can expand ShoreTel system capacity for software, trunks and users by adding switch modules that can be administered from a centralized interface, regardless of where the platforms are physically located.
• In a market that has been essentially flat, ShoreTel's year-over-year growth has been steady, with revenue growing 29% from 2010 to 2011. The public company continues to be cash-flow positive, and the number of ShoreTel employees grew by about 50% during the same period, excluding those who joined as a result of the M5 Networks acquisition. User licenses were also up sharply, as were the number of new customers.

Cautions

• ShoreTel 13 includes support for VMware; however, the solution currently requires use of ShoreTel appliances at remote sites to provide native failover capabilities.
• ShoreTel products are primarily sold through dealers, and some may not have experience with users' requirements that include VMware expertise.
• The vendor sells mainly through partners in North America. However, it is achieving revenue and channel growth in global regions, such as Canada, Mexico, Australia and European countries. Gartner recommends that channel coverage should be evaluated for deployments extending to sites outside of North America.

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Siemens Enterprise Communications

Siemens Enterprise Communications is 51% owned by private-equity firm the Gores Group and 49% by Siemens after a 2008 joint venture. It sells enterprise telephony and UC solutions, as well as related managed and professional services. The vendor's flagship telephony platform is OpenScape Voice platform, which has been achieving sales growth in European and South American countries, and continues to gain momentum in North America. The platform is designed as a software application that is optimized for a data center environment, and is deployed on any commercially available server. The architecture is inherently multitenant, enabling OpenScape Voice to support private, hybrid or public cloud deployments, and supports session management. The OpenScape UC Suite can be virtualized on VMware or any open virtualization, format-compliant hypervisor. A single OpenScape Voice node can be scaled seamlessly up to 100,000 users and 500,000 voice and UC users in a single system configuration.

OpenScape Voice solutions will appeal to midsize to very large organizations, as well as to Siemens Enterprise Communications customers that want to upgrade older HiPath 4000 and Hicom 300 installations. Very large organizations should also consider the OpenScape Voice platform for its ability to be deployed globally as a single, highly resilient system that customers can centrally manage from a choice of geographically different locations. The OpenScape UC Suite offers investment protection as OpenScape Voice customers transition to UC.

Strengths

• For new systems, Siemens Enterprise Communications offers competitive pricing for the purchase of "right to use" and subscription-based licenses.
• The vendor can support international companies that choose to overlay and/or standardize on its technologies for telephony and UC.
• The multitenant capabilities of OpenScape Voice will be useful to organizations looking to adopt software as service (SaaS) models for telephony, where offered by service providers.
• Siemens is offering to support HiPath 4000 for the foreseeable future, and provides financial incentives that enable organizations to plan phased migrations to OpenScape, especially during times of uncertainty regarding the economic climate.

Cautions

• 65% of the vendor's business is with European organizations where the economy continues to be very challenging. However, because Siemens Enterprise Communications is privately held, it's hard to assess its financial viability. An executive briefing from senior management might be requested to provide additional visibility into the vendor's financial results.
• Although sales have been improving in North America, the vendor needs to further expand its distribution network and technical support, not only to win new business, but also to curtail erosion of its installed base. Furthermore, growth in North America may not compensate if there is any shortfall in other regions.
• While the number of migration proposals for HiPath installed-base customers is growing, and support contract renewals are also increasing for current HiPath customers, Siemens Enterprise Communications needs to do a much better job of winning new business for its new OpenScape solutions.

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Toshiba

The IP-capable Toshiba Strata CIX Series telephony platform supports up to 1,000 users. The newer Toshiba IPedge system also has a capacity of up to 1,000 users. IPedge is a pure IP solution built on a Linux-based platform featuring telephony, voice mail, UM, IM/presence and SIP trunking capabilities in single-server architecture. Although the Strata CIX and IPedge solutions are positioned to customers in the same size segments, the CIX solution supports digital and IP devices, while IPedge is a pure IP-based solution. The solutions can be networked together as necessary. Toshiba also offers a VIPedge cloud-based VoIP service, which is being sold by the same dealers in Toshiba's distribution network.

The vendor's products will appeal to midsize and large organizations with centralized requirements or the need to support remote sites in vertical markets (such as retail, automotive, banking, financial services and government) with a plan to move gradually to UC.

Strengths

• All Toshiba Strata CIX Series systems use the same applications, endpoints, cabinets and interfaces, with the capability to support a wide range of wired and wireless devices, as well as softphones.
• The IPedge provides optional survivability for IP telephones, softphones, UC clients and messaging applications, with the ability to reregister to a secondary (backup) system if the primary system fails. Both outgoing and incoming calls automatically follow the IP telephones to their new location on the secondary system through an AudioCodes gateway. The Strata CIX provides the same survivability for IP telephones and softphones.
• Toshiba offers a unique, centrally managed national accounts program. This sales approach will appeal to organizations with locations that cross regional boundaries. The plan offers uniform pricing of products and services for applications that require deployment across multiple sites.
• In the U.S., Canada, the U.K., parts of the Asia/Pacific region and Japan, Toshiba continues to provide reliable system performance, cost-effective price points, and migration capabilities to IP technology and UC. The vendor is known for producing reliable and affordable voice-oriented offerings.

Cautions

• Although parent company Toshiba is a large diversified manufacturer and marketer of electronics and electrical products, the communications business does not have any presence in the large enterprise market in EMEA, nor does it have a global strategy that focuses on IP telephony requirements outside the U.S., Canada, the U.K., parts of the Asia/Pacific region and Japan.
• The maximum capacity for the Strata CIX Series and IPedge is 1,000 users on a single system. For additional capacity and distributed configurations, enterprises can network multiple systems. Toshiba can supply an optional AudioCodes gateway for the automatic rerouting of incoming calls to an alternative Strata CIX or IPedge system in the event of a failure.
• Organizations could find it challenging to integrate platforms such as Microsoft OCS and Lync with Toshiba's Strata CIX and IPedge, because the solutions require the integration of various servers to achieve full UC functionality.
• The IPedge solution has received limited traction to date. Most Toshiba dealers do not have experience with IPedge implementations or support. Before moving forward with an IPedge contract, prospects should gain assurance that their specific partner has the expertise to install IPedge or that the dealer has effective relationships in place with Toshiba to address potential implementation issues.

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Vendors Added or Dropped

We 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 may change over time. A vendor appearing in a Magic Quadrant or MarketScope one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. This may be a reflection of a change in the market and, therefore, changed evaluation criteria, or a change of focus by a vendor.

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Added

Huawei was added to the Magic Quadrant this year.

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Dropped

There were no vendors dropped from the Magic Quadrant this year.

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Inclusion and Exclusion Criteria

To be included in the corporate telephony Magic Quadrant, solution providers must meet the following minimum criteria:

• Demonstrate an IP-based corporate telephony application that provides enterprisewide call routing and management for enterprises with more than 800 voice users, including switchboard operations across multiple wired and wireless networks.
• Have a product offering that includes the management of legacy telephony environments, including media gateways; the connection of IP with circuit-switched-based networks; and functions such as call admission control, survivability, codec management, echo cancellation, and access to emergency services and agencies. The systems must also integrate with UC functionality.
• Have a significant market presence in telephony that can be demonstrated by significant market share or differentiating innovation. Vendors must have a minimum revenue from enterprise communications of $150 million.
• Offer systems in multiple global market regions, including North America, Europe, Central America and Latin America, 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 on SMBs are not included).
• Provide multiple references for enterprise on-premises portfolios/products.

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Evaluation Criteria

Ability to Execute

This research provides guidance for planners who are responsible for updating or replacing a telephony system. Gartner analysts evaluate corporate telephony solution vendors based on the breadth, quality and overall maturity of their applications, processes, tools and procedures that enhance individual, group and enterprise communications. Ultimately, these vendors are judged on their ability and success in capitalizing on their vision:

• Product/Service: Core products providing telephony capabilities, offered by vendors that compete in and serve the enterprise market segment. This category includes the vendors' current product capabilities, as defined in the market definition, as well as the respective road maps vendors offer that enable organizations to migrate to UC.
• Overall Viability (Business Unit, Financial, Strategy and Organization): Includes an assessment of the organization's overall financial health, as well as the financial and practical success of the business unit, especially under current market conditions. Also included is the potential of the business unit to continue to invest in the product, offer the product and advance the state of the art in the company's broader portfolio of products.
• Sales Execution/Pricing: The vendor and channel capabilities in all presales activities and the operational structure that supports them. This category includes deal management, value selling, pricing and negotiation, presales support, and the overall effectiveness of the sales channel, direct and indirect.
• Market Responsiveness and Track Record: The ability to respond to current market conditions and the disruptive influences of UC. This evaluation assesses how a vendor might change direction or modify its portfolio to achieve competitive success, as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the vendors' history of market responsiveness, as tracked in our market share and sizing research.
• Marketing Execution: The clarity, quality, creativity and efficacy of marketing programs designed to deliver the organization's message to influence all markets, promote the brand and business, increase product awareness, and establish a positive identification with the product, the vendor and the channel in the minds of buyers. This mind share can be driven by a combination of publicity, promotions, thought leadership, word of mouth and sales activities, as well as Gartner's inquiry process.
• Customer Experience: Sales and support relationships, products and programs that enable customers to have a positive experience and achieve their respective goals for a corporate telephony implementation. This assessment includes the availability of technical and account support, and the number of channels through which this is available. Also included are customer support programs (and the quality thereof), and the availability of user groups and SLAs. Gartner's feedback from clients through the inquiry process is included in our analysis.
• Operations: The ability of the organization to meet its goals and commitments, especially in the current climate. Factors include the quality of the organizational structure, especially global operations, skills, experiences, programs, systems and other vehicles that enable vendors to operate effectively and efficiently on an ongoing basis.

Table 1. Ability to Execute Evaluation Criteria

Evaluation Criteria	Weighting
Product/Service	High
Overall Viability (Business Unit, Financial, Strategy, Organization)	High
Sales Execution/Pricing	Standard
Market Responsiveness and Track Record	Standard
Marketing Execution	High
Customer Experience	High
Operations	High

Source: Gartner (September 2012)

Completeness of Vision

Gartner analysts evaluate telephony solution providers based on their ability to convincingly articulate logical statements about current and future market directions, innovations, customer needs, and competitive forces, and how well these map to Gartner's overall understanding of the marketplace. Ultimately, these providers are rated on their understanding of how market forces can be exploited to create opportunities for providers and their clients:

• Market Understanding: We evaluated vendors for their understanding of how customer needs are changing (both for users and the IT group responsible for managing telephony). It was especially important to see how vendors proposed to complement, or compete with, UC collaboration solutions.
• Marketing Strategy: A clear, differentiated set of messages for telephony and enhanced communication consistently delivered by executives and senior employees, and promoted through websites, advertising, customer programs and positioning statements.
• Sales Strategy: The strategy for selling telephony products that uses an appropriate and profitable balance of direct and indirect sales, marketing, service, and communications affiliates that extend the scope and depth of market reach to selective markets.
• Product Strategy: The vendor's approach to telephony product development and delivery, with road maps for consolidation where necessary. Important factors include the migration to software, support for SIP and the ability to build scalable solutions that are consistent with the needs of target markets.
• Business Model: The logic of the vendor's underlying business proposition for the direction of the communications market.
• Vertical/Industry Strategy: Some vendors articulate a specialization for vertical markets by leveraging intellectual capital, technology, or an alignment with a sister or parent company. Also evaluated is the telephony solution provider's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, especially in the current climate, where the propensity to spend varies among segments.
• Innovation: The IP telephony market has reached maturity. Vendors need to demonstrate the necessary innovation to capture market share and grow in associated markets, with a combination of technology and services to grow revenue beyond the market average.
• Geographic Strategy: The telephony market has historically been fragmented, with most players receiving income from their traditional home market. The requirements of many of Gartner's end-user clients are global. A vendor should demonstrate how it directs resources, skills and product offerings to meet the needs of international clients, directly or through channels, to market to the needs of clients.

Table 2. Completeness of Vision Evaluation Criteria

Evaluation Criteria	Weighting
Market Understanding	High
Marketing Strategy	High
Sales Strategy	Standard
Offering (Product) Strategy	High
Business Model	Standard
Vertical/Industry Strategy	Standard
Innovation	Standard
Geographic Strategy	High

Source: Gartner (September 2012)

Quadrant Descriptions

Leaders

Leaders are high-viability vendors with broad portfolios, significant market shares, broad geographic coverage, a clear vision of how telephony needs will evolve and a proven track record of delivering telephony solutions. They are well-positioned with their current product portfolio and likely to continue delivering leading products. Leaders do not necessarily offer a best-of-breed solution for every customer requirement. However, overall, their products are strong and often have some exceptional capabilities. Additionally, these vendors provide solutions that present relatively low risk.

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Challengers

Challengers are vendors with strong market capabilities and good solutions for specific markets. However, overall, their products lack the breadth and depth of those in the Leaders quadrant. Challengers do not always communicate a clear vision of how the telephony market is evolving, and they are often less innovative or advanced than Leaders. Vendors in this quadrant often have excellent telephony functionality, but lack brand awareness in the market.

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Visionaries

Visionaries demonstrate a clear understanding of the telephony market and provide key innovations that point to the market's future. However, these vendors may be relatively new to the telephony market, with very good potential to grow while in the process of expanding their regional and global sales and support capabilities.

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Niche Players

The vendors in this quadrant offer telephony solutions that focus on a segment or segments of the market, or a subset of telephony functionality. Customers aligned with the focus of a niche solution provider may find its offerings to be a good match for their limited needs. Niche Players often offer strong products for particular geographical or vertical market subsets, but may have some weaknesses in one or more important areas.

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Context

Companies are increasingly focusing their business strategies and acquisition decisions around UCC technology; it is supplanting the historical domain of corporate telephony (see "Key Issues for Voice Applications, 2011" and "Key Issues for Unified Communications, 2011"). This shift presents IT planners with new user needs and technological integration challenges, especially as telephony applications become more mobile, and as knowledge workers increase their reliance on conferencing, video, IM and collaboration tools to fulfill group tasks.

Organizations will continue to invest in IP telephony platforms after having mapped out telephony's role in a clear UC strategy. As users' communication habits evolve, infrastructure and operations leaders should consider new telephony and UC vendor relationships, as well as the use of managed services, outsourcing, hosted and cloud-based solutions. Employment of IP-PBXs will vary according to current investments, maturity of an organization's network infrastructure and incumbent vendor strategy.

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Market Overview

The telephony market recovery that started toward the end of 2010 has slowed in 2012. Following a 17% decline from 2008 to 2009 that mirrored the global economic downturn, shipments rebounded by 10% in 2010. However, Gartner projects that the compound annual growth rate (CAGR) for telephony shipments will be 2.2% from 2011 through 2016.

Some of the key trends in corporate telephony are:

• Microsoft continues to enhance the corporate telephony component of Lync with new features and improved resiliency. However, although adoption has been increasing, organizations are still opting to keep corporate telephony on an established, more proven core platform. In addition, Cisco Unified Communication Manager, already a strong telephony platform, now offers a fully integrated UC suite with scalable support for IM/presence, video and telephony conferencing.
• As uncertain economic conditions persist globally, European-based vendors (such as Aastra, Alcatel-Lucent, ShoreTel and Siemens Enterprise Communications) have been seizing opportunities to win business with competitively priced platforms that offer improved system management capabilities and realistic road maps for gradually migrating to UC.
• An increasing number of companies are using session management capabilities to support policies for routing sessions between networks and endpoints. This approach provides managers with alternatives for creating a homogeneous voice platform that can interoperate with disparate communications platforms across the business, and can facilitate the migration to UC while enabling investment protection.
• As the topic of virtualized telephony environments becomes increasingly popular among enterprises, most vendors are investing to meet this need (see "Communication Server Virtualization"), while also addressing IT leaders needs to improve the enterprise's resiliency and disaster recovery capabilities and to reduce server and operations costs.
• Vendors are increasing the bundling of communications capabilities to include not only voice, but also capabilities such as presence, IM, conferencing and mobility. Organizations must have a UC strategy in advance of buying into communications bundles. While offers may look attractive and are often appropriate for some users, the added cost of a software subscription means buyers will likely be overpaying for features that are used by a minority of users.

The Telephony Market Today

During 2011 and the beginning of 2012, Gartner witnessed two major trends:

• Continued aggressive discounting (ranging from 50% to 65% for corporate telephony systems) that began in 2009, especially for large global telephony deals. This trend reinforces the need for buyers to use the RFP process and be strategic about vendor selection (see "How to Develop a Comprehensive RFP for Unified Communications" [Note: This document has been archived; some of its content may not reflect current conditions.] and "Four Best Practices for UC RFP Review").
• The bundling of individual telephony/UC functions into a single license. Bundling combines valuable components around core telephony, such as presence services, UM, mobility and softphone clients, into an aggregated license that will cost less than the total for individual licenses (see "Best Practice: Having a 'Big Picture' View of IP Telephony Will Give the Buyer More Control" [Note: This document has been archived; some of its content may not reflect current conditions.]).

With users becoming more mobile, organizations are interested in twinning incoming corporate telephony calls at the desktop with mobile devices (see "Critical Capabilities for Corporate Telephony"). Enterprises are gaining buying power with mobile operators. They are able to negotiate on-net rates for lower-cost or flat-rate calling between mobile users and their enterprise networks. As IT welcomes mobile devices to the enterprise, organizations will demand solutions that integrate the mobile phone more tightly into the corporate telephony solution and employees' preferred smartphones.

The Future of Telephony Vendors

The enterprise voice market includes the provisioning of holistic voice communications for all wired and wireless users. Typically, architectures support distributed on-premises solutions, as well as centralized, virtualized and hosted platforms dedicated for use by a single organization.

Some technology providers may not meet all your organization's requirements as they refine their strategies for profitability and sustainability. Evaluate a telephony vendor's ability to support one or more of the following future directions and capabilities:

• Supports real-time voice, video and conferencing capabilities across the enterprise network, integrated with collaboration capabilities, such as IM, email and desktop sharing. Migrating between different communications channels should be seamless for users and offer a lower TCO for the IT group than managing separate communications channels.
• Demonstrates the value of session management and control, and supports policies for the ways that sessions are established between network endpoints across multiple technology platforms and managed for quality and cost controls. This approach elevates the role of the corporate communications platform to that of network and session manager. It is an alternative option to creating a homogeneous voice platform integrated with multiple communications channels across the business. Evaluate vendors with this approach for their ability to offer enhanced routing capabilities, extending contact center technologies as a value-added component of communication beyond the customer service center.
• Offers an open telephony platform that supports integrations and partnerships with conferencing and collaboration applications from disparate vendors. Vendor solutions should focus on managing voice across wired and wireless endpoints.
• Enables system integration with and support for competitive UC products to complement and supplement their telephony solutions. Over time, enterprises will need a global capability to support knowledge worker groups across diverse geographies.
• Provides a scalable hosted alternative that supports capabilities for service providers to offer communications-as-a-service solutions.
• Includes established network and system management tools that leverage the efficiencies and opportunities for cost savings afforded by IP technology, such as managing voice and data communications through a common Web-based user interface; remote provisioning of new extension users; and performing moves, adds and changes without the need to deploy technicians.

Gartner's 2012 Magic Quadrant for Contact Center Infrastructure, Worldwide

Analyst(s): Drew Kraus, Geoff Johnson, Steve Blood

VIEW SUMMARY

The contact center infrastructure market has been consolidating, yet some lesser-known offerings may warrant strong consideration. Companies must evaluate vendors' technology and ability to deliver in relevant regions.

Market Definition/Description

Gartner defines contact center infrastructure as the products (equipment, software and services) needed to operate call centers for telephony support and contact centers for multimedia support. This type of infrastructure is used by customer and employee service and support centers, inbound and outbound telemarketing services, help desk services, government-operated support centers, and other types of structured communication operations.

Contact center interactions can be people-assisted or automated self-service, using interactive voice response (IVR) and speech recognition technologies, for example. These channels for interaction use both live agents and messaging technology and include voice, Web, email, instant messaging, Web chat, social media, video and mobile devices.

Contact centers require a wide range of functions, architectures, features and services to be effective. Three major architectural approaches that are common in the market are integrated "best-of-breed" components, all-in-one bundled suites, and service-based solutions. They are offered in the form of time division multiplexing (TDM) circuit-switched solutions, Internet Protocol (IP)-based solutions (including Session Initiation Protocol [SIP]-based solutions) and hybrids of the two.

Contact center infrastructure includes a wide range of related technologies, such as:

• Telephony infrastructure
• Multimedia contact routing and prioritization engines
• IVR and voice portals for self-service applications, including speech-enabled self-service
• Outbound dialing/proactive contact
• Virtual routing applications for multisite and work-at-home scenarios
• Presence tools
• Tools for integration with CRM software
• Data mart and analytics systems
• Computer-telephony integration (CTI)/Web services interfaces
• Email response management
• Web chat
• Collaborative browsing
• Social media
• Live and prerecorded video
• Knowledgebase self-service
• Workforce optimization tools, including contact center workforce management, session recording and e-learning
• Workflow routing and management
• Mobile customer service applications

Increasingly, contact center managers prefer to purchase much, or all, of their contact center infrastructure from a single source in the pursuit of easier and enduring integration. Therefore, leading contact center infrastructure vendors offering complete portfolios of solutions, comprising their own products and those of partners and other strategic suppliers, are being favored. One of the service-based models, that of hosted, multitenant systems (also known as contact center as a service [CCaaS]) is still an emerging alternative and not yet widely deployed in the market, but is gaining attention as cloud approaches increase. There are no CCaaS providers that currently offer a substantial-enough global presence to warrant inclusion in this document. Coverage of the CCaaS space is provided in other Gartner documents, including "Competitive Landscape: Cloud Contact Center as a Service Market, North America, 2011" and "Emerging Technology Analysis: Contact Center as a Service."

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Magic Quadrant

Figure 1. Magic Quadrant for Contact Center Infrastructure, Worldwide

Source: Gartner (June 2012)

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Vendor Strengths and Cautions

Aastra

Solidus eCare Multimedia Contact Center and Solidus eCare Lite are likely candidates when developing a shortlist of contact center infrastructure solutions for existing Aastra MX-One and Aastra 700 telephony platforms (respectively), but also can be considered as bundled suite capabilities that can integrate to third-party communications platforms. The global footprint of the flagship Solidus eCare is expanding, but there is still some inconsistency in different countries such that other platforms may be stronger solutions.

Strengths

• Solidus eCare scales from as low as six seats with Lite to thousands of seats with Multimedia Contact Center. Bundled with the MX-One and Aastra 700 platforms, Solidus eCare is becoming the common contact routing offering across the company's various enterprise telephony platforms providing improved scalability and consistency of solutions relative to prior offerings from the company.
• Aastra has a large installed base across the globe from which to upsell its contact center solutions. The company's focused sales and marketing efforts have enabled it to positively increase its revenue contribution to the business.
• Virtualization of both the telephony and contact center application platforms enables Aastra to offer a software-oriented contact center proposition at very competitive rates.

Cautions

• Although the company has centralized development and marketing for its Solidus eCare portfolio, the Aastra businesses it serves are federated on a country or regional level, in some cases with a different product portfolio, making it difficult for large organizations to standardize on contact center solutions.
• Aastra has made strides in advancing the functionality of its Solidus eCare solution, but product development lags that of major competitors, potentially limiting the appeal to organizations that want to differentiate customer service through the use of advanced technology, including areas such as predictive dialer, advanced Workforce Optimization, and voiceXML support.
• Success of Solidus eCare in North America, the largest contact center market, is limited by a lack of market presence and customer awareness. This limits the company's ability to grow its market presence in this market and in some cases limits its ability to secure business from North America-based global companies.

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Alcatel-Lucent

Alcatel-Lucent (ALU) has three contact center platforms to address the enterprise market. OmniTouch CC Standard Edition (OTCC SE) is a native application for its Omni PCX Enterprise telephony platform offering voice-only capabilities in environments including those with several hundred or more agents. Following the sale of Genesys to a group of private equity firms in early 2012, ALU also now resells and supports the Genesys G8 Suite for multimedia and more-complex contact center requirements. ALU's Genesys Compact Edition (GCE) targets environments with fewer than 150 agents by combining the Genesys suite with an ALU-developed simplified system management interface and integrations to ALU's collaboration suite. ALU's OTCC SE offering is a likely candidate when developing a shortlist of contact center infrastructure solutions for an organization requiring standard call center functionality, while the Genesys platforms will satisfy larger, more complex requirements.

Strengths

• ALU has a large installed base of OmniPCX Enterprise across Europe and a competent set of channels that can support requirements for OTCC SE.
• Following many years of working together with Genesys, ALU has the sales and support processes in place, as well as the logistics, to continue to effectively provide the Genesys portfolio and its own OTCC SE and GCE platforms through its channel partners. ALU is currently Genesys' largest channel partner in terms of revenue generated.
• Despite the sale of Genesys, ALU has retained much of its previous talent and leadership in the contact center domain, which should enable a smooth transition to a product strategy focused on the company's OTCC SE and GCE offerings.

Cautions

• In recent years, ALU's focus for development and sales of contact centers was more on the Genesys portfolio than OTCC. Although significant investment in growing the Genesys business was the right thing to do (while Genesys was part of ALU), limited development on OTCC SE has left ALU with a dated call center platform lacking in multimedia functionality.
• Following the sale of the most profitable part of the enterprise business, ALU is faced with returning the enterprise business to profitability, which could be achieved through reducing the investment in development at a time when the OTCC SE platform needs it the most.
• While ALU's commitment to reselling the Genesys suite of products is commendable for maintaining consistency for customers, a question arises over the profitability of multitier distribution, given that ALU relies on channel partners to sell the majority of its products. Organizations may find it easier and more cost-effective to work directly with Genesys' channels and system integrators.

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Altitude Software

Altitude uCI is an IP-based multimedia contact center suite that can run either as an adjunct computer-telephony integration (CTI) server to leading enterprise PBX and IP-PBX platforms, or independent of the telephony infrastructure, as an IP contact center platform with Altitude V-Box, an Asterisk-based IP-PBX platform. Altitude is especially strong in supplying contact center technology to the business process outsourcing (BPO) vertical but also has references in most other vertical markets. It has better brand awareness in Iberian and South American markets than in other geographies but is not limited to those. Organizations that wish to build a contact center infrastructure independent of enterprise communications infrastructure can consider Altitude uCI as a contender.

Strengths

• Despite changes in venture capital ownership, Altitude has retained consistency in its leadership team and product operations. This should be reassuring for customers in a market that is undergoing turmoil.
• BPO is a market in which Altitude has notable strengths from both a product and pricing perspective. There is an opportunity for organizations in other vertical markets to leverage Altitude uCI strengths in rapid application development and flexible licensing terms which have helped the company establish success in the BPO vertical.
• The Altitude uCI suite offers a comprehensive range of applications, including multimedia inbound and outbound contact routing, social media, voice self-service, call recording and workforce optimization, scripting, knowledgebase, cloud platform, and integrated desktop tools. Altitude Studio is the common application development tool for the suite of applications.

Cautions

• Altitude's focus on growing its strength in the BPO vertical is also a weakness in that it does not have as strong a brand awareness in other verticals, especially with Gartner clients. Consequently, it is not included in as many opportunities as it potentially could be.
• While Altitude has reseller relationships with some Tier 1 integrators, these are also companies with largely stronger relationships with Altitude's competitors. Consequently, Altitude has to spend more effort in sales and marketing than channel relationships would normally demand. This is difficult for smaller companies like Altitude with fewer sales resources.
• There is a danger that Altitude's focus on meeting the needs of the outsourcing market will distract the company from more aggressively meeting the needs of the broader enterprise contact center market.

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Aspect

Aspect's Unified IP offers a unified multimedia contact center application suite for midsize to large implementations, including several best-of-breed applications. Aspect Contact provides a solution targeting small and midsize contact centers closely tied to Microsoft's Lync unified communications offering. Consider Aspect when needing to integrate with multiple PBX/IP telephony environments or when wanting to decouple the timing of your contact center and telephony investment decisions.

Strengths

• The unified architecture of Aspect's Unified IP products provides common application development, management and reporting tools. They incorporate the company's best-of-breed technology, including call and multimedia routing, an IVR/voice portal, outbound dialing, agent workforce optimization and unified communications. Users can manage multiple sites or workgroups through a unified command-and-control interface, which can also be extended to support the company's "signature" (legacy) contact center platforms.
• The company's Aspect Application Foundation, scheduled for general availability in the second half of 2012, will provide a set of packaged integration tools for developing integrations to Microsoft Lync, SharePoint and Dynamics unified communications and collaboration (UCC) and CRM tools. If well-engineered, these integrations are expected to be of interest to companies looking to leverage their investment in Microsoft applications.
• Aspect's considerable experience in contact center products and markets can be helpful to companies with complex requirements. Aspect also has good global reach for sales and support.

Cautions

• Aspect traditionally charges premium pricing for ongoing maintenance services, but its service team has received varied reviews from Gartner clients for several years in succession. Aspect customers and prospects must evaluate the impact of this pricing on the solution's total cost of ownership and check references to validate that the service team's skill level is commensurate with the service pricing.
• The company lacks an enterprise PBX/IP-PBX installed base of its own into which to sell its products. As such, and in the light of the lack of "greenfield" opportunities for large contact centers in North America and Western Europe, Aspect must attempt to sell into the PBX installed bases of other vendors, which can be a challenging task. The company's efforts to overcome this challenge by enhancing its ability to integrate with corporate investments in Microsoft solutions are an unproven strategy at present.
• Aspect's financial performance is solid, although the company is not growing its installed base aggressively. In an industry undergoing consolidation, the lack of growth in its installed base may affect Aspect's revenue streams in the long term.

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Avaya

Avaya's heritage Avaya Aura Call Center Elite supports midsize to large telephony-oriented call centers. The Avaya Aura Contact Center (AACC) and Customer Experience Management Suite for Midsize Enterprise both target multimedia contact center environments and can serve to add multimedia capabilities to existing or new Avaya Aura Call Center Elite telephony-centric deployments. Consider Avaya's call and contact center offerings when looking for solutions that include several best-of-breed applications for contact center environments ranging from simple to complex customer service requirements.

Strengths

• AACC Orchestration Designer provides a single application development environment spanning self-service and assisted service, telephony and multimedia contact flows, as well as agent workflows. Avaya's Workforce Optimization Suite offers a broad set of third-party-developed workforce optimization capabilities, including strong analytics capabilities when combined with the Avaya IQ reporting and analytics toolset.
• Avaya Aura Control Manager offers a very strong set of system management and partitioning capabilities. It enables enterprises to support multiple contact center operations on a single infrastructure instance while providing user groups the ability to control their own routing rules and customer data. In addition, it allows user groups to provide backup assistance to one another for disaster recovery or supporting activity spikes.
• Avaya has a strong vision for leveraging its Agile Communications Enablement (ACE) platform to extend consistent customer service delivery models across a variety of customer interaction domains, including business processes, whether inside or outside the traditional, structured contact center environment, and across a variety of vendors' communications and collaboration solution sets.
• Avaya holds the top market share position in contact center routing in terms of end-user revenue and agent shipments globally, with more than a 35% market share in both categories. This provides the stability associated with strong product and service revenue and a large installed base into which additional products and services can be sold.

Cautions

• Despite the enhanced capabilities enabled by AACC, many heritage Avaya customers are opting to simply upgrade to the telephony-centric Avaya Aura Call Center Elite offering. This perpetuates a more costly multiplatform development environment and requires Avaya to develop and support a wide variety of integration offerings to support customers' technology adoption plans from a variety of starting points.
• Gartner continues to hear some dissatisfaction among Avaya customers regarding its channel partners' ability to adapt and improve their technical skills to install and support AACC solutions. Potential buyers must also evaluate the stability of the platform and the skills of their Avaya channel partner to deliver reliable solutions in this rapidly evolving technology environment. They should also insert terms into the contract regarding the conditions that trigger a channel partner to escalate an installation or support issue that warrants direct involvement of Avaya corporate resources.
• Avaya has expanded its sales channel coverage with the 2009 acquisition of Nortel, but some heritage Nortel channel partners lack contact center applications expertise. Customers and prospects must check references from the combined Avaya and Nortel channel partner bases to ensure that the partner has a track record for installing and supporting solutions that match their own environment and requirements.

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Cisco

Cisco's contact center offerings include: (1) Unified Contact Center Enterprise (UCCE), targeting large enterprises and those requiring advanced functionality; (2) Packaged Contact Center Enterprise (PCCE), targeting contact centers with fewer than 1,000 agents and wanting a smaller IT footprint than the full CCE solution; and (3) Unified Contact Center Express (Unified CCX) for small to midsize centers that do not require advanced functionality. A fourth offering, Cisco Unified Intelligent Contact Management Enterprise (Cisco Unified ICM), provides network-level routing and can support multivendor environments. Consider Cisco's contact center offerings if your company is committed to Cisco's Unified Communications Manager or prefers an end-to-end Cisco infrastructure.

Strengths

• Cisco's Unified Contact Center portfolio supports a broad set of functionalities, including call and third-party-developed multimedia routing, network-level routing, IVR/voice portal, and outbound dialing.
• Cisco's Packaged Contact Center Enterprise, offering call control, call routing, IVR and reporting on a single server, with optional functionality such as multimedia routing and call recording (among others) on additional servers, was introduced in late 2011 and is being met with strong positive acceptance by channel partners, although actual deployments are just beginning to take place.
• Cisco's strong corporate brand recognition and respect among IT decision makers and influencers and its broad global reach, combined with increased marketing efforts from its contact center business unit, have enabled the company to grow its contact center market share, often at the expense of more established competitors.
• Several of Cisco's key channel partners have strong contact center consulting and system integration skills to deliver highly customized and complex contact center solutions. Customers that choose one of Cisco's stronger channel partners can find that Cisco solutions can support highly complex contact center environments.

Cautions

• Cisco Unified ICM can support integration to third-party telephony environments but is frequently too expensive and underfeatured for most enterprise contact center environments. In new deployments, the offering is typically used as a "steppingstone" to convert the customer to the company's UCCE or UCCX premises-based contact center products.
• Although Cisco's Unified Contact Center Express product supports a tightly bundled application suite scaling up to 400 agents, the company does not offer an all-in-one contact center application suite capable of scaling to large-enterprise sizes.
• Cisco's ability to support system partitioning — to support "internal cloud" deployments enabling multiple contact centers within a large company environment to manage their own operations and data on shared infrastructure — is not as strong as that provided by some of its competitors. In 2012, the company plans to introduce contact center capabilities on its Hosted Communications Server (HCS) to support customers' cloud-based contact center service providers and enterprises that want to support multiple contact center user groups running fully separated operations.

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Enghouse Interactive

The Enghouse Interactive Contact Center: Enterprise offering (formerly the Syntellect Customer Interaction Management offering) targets midsize to large premises-based contact center environments and has recently added support for virtualized cloud environments. The Enghouse Interactive Contact Center: Cloud offering (formerly its CosmoCom offering) targets service provider environments globally. Consider Enghouse Interactive Contact Center: Enterprise when looking for a premises-based or virtualized multimedia contact center routing solution that can leverage a variety of IP-PBX infrastructure environments. Consider Enghouse Interactive Contact Center: Cloud when looking for a multitenant enterprise offering for "private cloud" environments or when looking for a platform from which to offer cloud-based solutions as a communications service provider (CSP).

Note that at the time of this writing, Enghouse had recently announced the acquisition of Zeacom to address the small and midsize contact center market, although product and service integration plans have not yet been announced.

Strengths

• Enghouse Interactive Contact Center: Enterprise offering targets midsize to large contact center environments. It is a tightly integrated multimedia contact center application suite that uses CTI to existing PBX investments to leverage existing telephony investments. This offering has its strongest regional presence in North America, with increasing growth in Western Europe.
• Enghouse Interactive Contact Center: Cloud offering comprises a broad suite of highly scalable and fully featured contact center infrastructure applications, including call and multimedia routing, contact recording, and outbound dialing, and is commonly sold into service provider environments. This offering has its strongest regional presence in the EMEA region, particularly among telcos and cable operators, with a growing presence in North America and Asia/Pacific.
• Over time, Enghouse Interactive is expected to increasingly share technologies across its two otherwise very separate technology sets. An early example of this shared-technology approach can be found in the company's newly released Web-based agent interface, intended to provide a consistent agent experience across its premises- and cloud-oriented product lines.

Cautions

• Enghouse Interactive is a new brand and lacks significant brand recognition. Although the company wishes to use its former Syntellect business to enhance its ability to sell its cloud offerings into North America, and to use its former CosmoCom market presence to enhance its ability to sell its Enterprise offering into other geographies, there is no guarantee that either effort will be successful, and the company risks losing focus on doing either effort well.
• Enghouse Interactive offers multiple separate and distinct contact center infrastructure offerings for distinct markets and must now work through the process of looking for and operationalizing synergies in product development, sales, customer support and marketing. Such efforts often result in near-term missteps in many areas.
• Enghouse Interactive's lack of a consistent product offering set and presence across all geographies makes it difficult for the company to meet the needs of large global enterprises.

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Genesys

Consider Genesys' Customer Interaction Management (CIM) platform and related offerings when looking to support large, complex contact centers, including those that require significant customization to address differentiated customer service needs. Because it is telephony-vendor-agnostic, CIM should also be considered when there is a requirement to integrate with multiple PBX/IP telephony environments or when separating contact center and PBX and IP telephony decisions. Genesys Express supports midsize contact centers needing multimedia functionality with integration capabilities across a variety of vendors' telephony environments.

Strengths

• The Genesys CIM platform and other components of its contact center portfolio support a broad suite of highly scalable and fully featured contact center infrastructure applications. These include call and multimedia routing, network-level routing, voice response, contact recording and outbound dialing, workforce management and analytics. Customers continue to report that CIM version 8 software provides strong integration across the application suite, using consistent management, administration and reporting systems and tools.
• The company has a strong vision for decoupling contact center applications from telephony infrastructure; for extending contact center capabilities into unified communications environments and enterprise workflow beyond the contact center; and for integrating social-media-based communications into structured contact center activities. In 2011, Genesys sold more solutions based on its SIP Server platform, capable of supporting a "PBX free" environment for contact centers, than those based on its traditional T-Server platform, indicating the company's strengthening performance in selling its emerging technologies. Some of Genesys' investments in its product portfolio, including growth in R&D, target capabilities intended to lower total cost of ownership.
• Genesys can provide strong consulting and system integration services either directly or through its professional services partners. Genesys has a good ability to support global customers.
• Following the sale of the company by ALU to a group of private-equity firms, Genesys has emerged from under the threat of losing its competitive advantage as a PBX-independent solution provider. Under new ownership with a mandate to grow the business, Genesys has shown strong growth in sales of its newer solutions, including WFO, SIP Server and Performance Management (analytics) in 2011, indicating the company's continued strong performance in selling to more technologically aggressive early adopters.

Cautions

• Genesys' CIM solutions are often more costly and customized to a user's particular environment than those of competitors and are often not as cost-effective, as well as being too complex to deploy and manage for small and midsize contact center deployments.
• Genesys offers its Genesys Express platform targeting midsize enterprises, but the company does not have a good track record for penetrating this market segment. The difficulty is due to several issues, including product price and complexity and a lack of sales focus on the midmarket.
• Following its breakout from former parent company Alcatel-Lucent, Genesys is now owned by a combination of private-equity investors whose holding portfolios are based largely on high-growth companies. Genesys solutions typically targets large and complex contact center environments, but the company is facing increased competition in this target market, and it is unclear whether demand from this market will continue at previously seen rates. To deliver the expected growth, Genesys will likely enter new segments, as well as working to sustain its position in existing segments. If Genesys cannot deliver the growth rates that its new investors target, their commitment to invest in the company and its product development and sales over the long term may wane.

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Huawei

Huawei's eSpace unified communications (UC) multimedia contact center infrastructure portfolio is quite complete with hardware and software solutions offered in all logical layers (automatic call distributor [ACD], endpoint devices and software clients, "green" thin-client agent terminals, middleware, and application integration and security). Huawei can now be considered for its eSpace contact center deployments in China and Asia/Pacific, emerging economies worldwide and increasingly in Western countries following the effective launch of its Enterprise Business Unit with worldwide operations. Its North American market entry is a work in progress.

Strengths

• Huawei has a very complete suite of enterprise contact center solutions for customers ranging from small and midsize businesses (SMBs) to clusters of 20,000 agents and has supplied some of the world's largest contact center installations. Its third-party partner ecosystem provides complementary contact solutions for specific industry verticals and system integration, particularly in large enterprises, telecommunications, government, finance, electricity, transport and energy. Huawei is aggressively developing large-scale multimedia converged solutions and virtual contact center clouds for BPO and multitenant operations.
• It has made heavy investment in appointing master distributors in 30 territories worldwide. Contact center solutions are being sold through newly appointed distribution channel partners and CSPs worldwide. Huawei's deployment of contact center labs, development centers of excellence, R&D and distribution centers, and logistics is now global. In the BRIC countries (Brazil, Russia, India and China) and emerging economies, it typically has greater sales and support coverage than its competitors. While much of Huawei's sales had previously been within its home market, China, most of the company's business is now outside Greater China. New sales are occurring in Western Europe.
• If it maintains its present trajectory, including establishing a strong presence in both North America and Western Europe, expect Huawei to become a Tier 1 global enterprise contact center provider by 2016, especially with large-scale cloud contact-center-as-a-service solutions sold through CSPs.

Cautions

• Huawei's investment in its global enterprise distribution channels is very new. It has a limited track record outside China to date and could experience growing pains due to its heavy investment and rapid channel expansion agenda. Markets in emerging countries have their own complexities. Western contact center markets are already well-served and consolidating.
• Recognition of the Huawei brand in enterprise networking and contact centers in Western markets is low at present. Recognition of its contact center capabilities is likely to come initially through very large-scale projects where its most capable global-scale system integrators operate. Midmarket success will come through persistent effort in mobilizing its sales channels, certified engineer training and recruiting effective network integrators. Enterprise buyers need to evaluate how their experience of the Huawei channel's preparedness applies to their business.
• Users should not expect Huawei's contact center solution portfolio to appear as an all-in-one suite, but as preconfigured solutions for particular industry verticals. Its initial products are relatively stand-alone and best-suited to integration into a best-of-breed environment. While its products are technically capable of delivering fully integrated contact center infrastructure environments, the channel delivery and support skills of Huawei's channel partners will be an early constraint and determinant of Huawei's ability to deploy contact centers for enterprises.

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Interactive Intelligence

Interactive Intelligence's Customer Interaction Center (CIC) offering provides an all-in-one suite of contact center applications across a wide range of scalability requirements. Consider CIC when looking for a tightly integrated set of contact center applications, especially for environments that contain multiple PBX and/or IP-PBX vendors, or when wanting to decouple the timing of your contact center and telephony investment decisions.

Strengths

• Interactive Intelligence's Customer Interaction Center contact center suite uses Web services and provides a common set of application development, management and reporting tools across a range of its applications. Its efficient use of server resources and consistent administrative and management tools across applications makes the system particularly appealing to IT decision makers.
• Interactive Intelligence continues to compete successfully for midsize and large contact center deals and continues to grow at a pace well above the market average. The company is improving its brand recognition in North America and is making steady progress to increase its sales and marketing footprint globally. These efforts include the acquisition of several key channel partners globally to help establish a direct, in-region presence for the company to support direct sales and to assist channel partners where specific skill sets may be lacking.
• Interactive Intelligence is finding success in selling its hosted and hybrid (on-premises and hosted) solutions in enterprises of various sizes. The company is finding its strongest adoption of its hosted offerings in the United States, although it is also offered through additional data centers in Europe, Australia and Japan, with plans to expand into the Latin American market in 2012.

Cautions

• Despite making investments in its sales channel program to support enterprises outside North America, the company does not match the global coverage provided by some of its larger competitors. Companies should evaluate the ability of Interactive Intelligence and its channel partners to meet their needs in relevant geographies.
• Some of Interactive Intelligence's contact center applications are less feature-rich than competitive best-of-breed offerings.
• Not all of Interactive Intelligence's channel partners are strong in designing, installing and supporting contact center environments. Prospects should check channel partner references for environments that match their scalability and complexity needs, and verify that support resources have been trained and certified on current product releases.

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Mitel

Mitel's Contact Center Solutions (CCS) Enterprise Edition supports a broad suite of contact center infrastructure applications, including call and multimedia routing, voice response, outbound dialing, call recording and workforce management. The Business Edition of its product offers a subset of the features available in the CCS Enterprise Edition, targeting contact centers with 25 or fewer agents. Consider Mitel when looking for contact center solutions associated with Mitel Communications Director telephony and unified communications environments.

Strengths

• Mitel has recently increased the scalability and resiliency of its CCS Enterprise Edition to better address the midsize- and large-enterprise markets and has charged its channel partners with pursuing small- and midsize-company accounts while Mitel's direct sales organization focuses on large-enterprise and multinational accounts. Mitel reports that it has several customers supporting more than 1,000 concurrent agents.
• Mitel has a strong network of channel partners, particularly for small and midsize enterprises in North America, with adequate coverage in Western Europe and Asia/Pacific. The company has recently increased the contact center training and certification requirements for its channel partners, which should lead to improvements in the overall skill level of its sales channels.
• Mitel offers strong integration with Microsoft communications products and can deliver combined solutions to midsize contact center environments through channel partners certified to deliver both product sets.

Cautions

• Mitel has limited ability to support large contact center environments and customers with multinational requirements. The company has limited market presence and awareness globally and lacks the financial resources for rapidly increasing awareness of its brand.
• Not all of Mitel's channel partners are skilled in contact center deployments. Prospective customers should check local references.
• Mitel's contact center sales are primarily limited to Mitel telephony environments.

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NEC

NEC's flagship multimedia contact center offering, Univerge 3C, supports contact centers ranging from SMBs to thousands of agents. Consider Univerge 3C solution when your organization has a significant commitment to NEC telephony (whether you have, or plan, an NEC unified communications deployment or not). The scale and functionality of your contact center needs should be clearly known and deployed within individual countries to avoid the integration limitations of NEC's portfolio and its marketing in multiple countries rather than globally.

Strengths

• NEC's Univerge 3C unified communications and collaboration architecture announced in March 2012 provides further consolidation of the company's contact center offering for midsize and large contact center environments, which had been served by separate offerings in the past.
• NEC has a large installed base of PBXs and contact centers in several countries, which are amenable to upgrading with additional seats, contact center products and services. It has particular strengths in the hospitality, government and health verticals.
• NEC has built on its previous investments in both appliance-based IP telephony and software-based UCC solutions in its Univerge 3C Contact Center solutions, reflecting the most popular approaches in the Asia/Pacific and North America markets that it addresses.

Cautions

• NEC's adoption of multimedia customer service functions within its contact center solutions and its integration of popular tools, such as Microsoft Lync and customer-facing IM and Web chat, are slower than its competitors.
• Its contact center portfolio sales are primarily to enterprises with significant existing NEC telephony environments. Gartner sees limited results from NEC's attempts to broaden the appeal of its contact center solutions in order to displace other vendors.
• NEC operates on a particular-country basis (mainly in Asia/Pacific and North America). Its multiple contact routing products for different geographies limit its ability to support multinational companies with a cohesive contact center product set worldwide. Multinational corporations considering contact centers that need a uniform product that can be installed and operated worldwide should evaluate its Univerge 3C contact center solution, which has been developed as a consistent solution for global multinational companies.

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SAP

SAP's Business Communications Management (BCM) is an IP-based software application platform that supports a multimedia contact center as a single integrated suite. It is natively integrated to a range of SAP's business application software, including SAP CRM, SAP ERP, SAP Business ByDesign and SAP analytics applications. It is also available as a stand-alone platform independent of application software, and available through all SAP offices on a global basis and selected partners offering contact center solutions. SAP BCM is a likely candidate for consideration for any organization using the SAP business application suite. It is also a consideration for organizations looking for a stand-alone platform independent of existing enterprise communications platforms.

Strengths

• As a part of the SAP group, the contact center software division benefits from the global reach and financial security of a leading business application software supplier.
• SAP's BCM platform is a scalable contact center suite with built-in multitenancy capabilities, which position it well as either an external cloud solution or as an internal, private cloud capability where a single BCM platform supports a number of enterprise operations.
• Integration with SAP's business application suite enables organizations to identify the business value of the communications solution faster than if it were a separate communications platform requiring significant integration effort during initial system implementation.

Cautions

• As a smaller business unit within the larger SAP business, the BCM unit is challenged to leverage the SAP sales organization where there isn't an opportunity to sell in other SAP applications.
• Organizations that have not deployed SAP for business process may not consider BCM as a viable alternative because it is perceived as being specifically integrated with the SAP application suite.
• Because BCM is a software-only solution, organizations will need to ensure support is maintained for third-party peripherals, such as gateways, session border controllers and, where deployed, handsets. It will be important to find a partner that is prepared to provide a service for all components of the contact center solution.

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Siemens Enterprise Communications

Siemens Enterprise Communications' (SEN's) OpenScape Contact Center (OSCC) portfolio supports a variety of offerings, including OSCC Enterprise for large and complex environments, OSCC Agile for midsize contact centers, OpenScape Cloud Contact Center for those wanting public cloud solutions, particularly in Western Europe, and OpenScape Office Contact Center for those looking for a combined unified communications and contact center solution for SMBs. Consider OSCC offerings when looking for well-featured contact center applications running in existing or potential Siemens telephony and unified communications environments, including those requiring multisite and multinational deployments.

Strengths

• SEN's OSCC offering is a well-integrated multimedia contact center application suite. SEN continues to fill out functionality within the suite. SEN has a good vision for extending its OSCC capabilities into unified communications environments.
• SEN appears to be regaining momentum in the contact center space, evidenced by two successive years of increasing system shipments, with particularly strong performance in Germany and in emerging markets such as Latin America and Eastern Europe. The company continues to show evidence of a renewed focus on product development and investment in growing brand awareness.
• Siemens has strongly pursued openness through its development of a service-oriented architecture environment. Siemens also employs an all-software approach in its contact center infrastructure suite, including the underlying OpenScape Voice switching/softswitch environment.

Cautions

• Despite Siemens' refocusing on its contact center business, the company still struggles to overcome a legacy association with technically strong, but undermarketed, solutions. This continues to result in Siemens sometimes not even being considered for some large contact center opportunities — even within its own installed base of telephony users.
• SEN's OpenScape Cloud Contact Center solution is based on technology from inContact and does not leverage OSCC technology. As a result, customers cannot easily migrate from a cloud-based solution set to a premises-based one, or vice versa, nor can they easily support a hybrid solution with part of the solution based on premises and part operating in the public cloud, yet acting as a single, tightly integrated solution.
• Although SEN has expanded OSCC's functionality and scalability, the offering does not address the needs of very large or highly customized contact center environments. As a result, SEN will resell and support Genesys' CIM and related offerings to address these customer environments, although this is happening with less frequency than in the past.
• The company sells primarily to Siemens PBX/IP-PBX environments.

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Vocalcom

Vocalcom's Hermes.Net application platform supports a range of products and modules that provide inbound and outbound voice calls, multimedia (including social) and interactive voice response. It is available as a stand-alone suite or as an adjunct server of leading IP-PBX platforms, most notably Avaya Aura Communications Manager. In some countries, Vocalcom's solutions can be supported in a software as a service (SaaS) model either directly by the company or through partners. Most of its business is in the French and Iberian markets and associated outsourcing destinations, where it has strength in, but not limited to, the telemarketing and outsourcing sectors. Its SaaS model will be attractive to organizations looking for utility subscription. Organizations that wish to build a contact center infrastructure independent of enterprise communications infrastructure can consider Vocalcom Hermes.Net as a contender.

Strengths

• Hermes.Net is a comprehensive inbound and outbound multimedia platform. It is software-oriented and is offered as either a right-to-use license or subscription licensing.
• Vocalcom is an established business with a core competence in providing solutions for the outbound/telemarketing vertical, especially in the French and Iberian markets and their respective offshore locations in North Africa and South America.
• In 2011 Vocalcom received private backing from Apex Partners to help it invest and grow into new markets and continue to develop its product portfolio.

Cautions

• Hermes.Net in stand-alone mode uses Dialogic PowerMedia Host Media Processing (HMP) at its core for processing contact center sessions. The current supported version is dated, and Vocalcom has had to develop proprietary work-arounds to address HMP's weaknesses in key capabilities, such as virtualization and greater scalability.
• Vocalcom has limited brand awareness outside of its core markets in Southern Europe, South America and Africa and lacks investment in marketing to appeal to new opportunities.
• Vocalcom's focus on satisfying its customers in the outsourcing market distracts the company from more aggressively targeting enterprise contact center environments.

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ZTE

ZTE's Next Generation Contact Center (NGCC) suite supports highly scalable multimedia contact center capabilities. Consider ZTE's Next Generation Contact Center (NGCC) suite for deployments in China and in emerging economies, particularly when needing price-competitive solutions that scale to thousands of agents, such as in CSPs and contact center BPO environments. Enterprises will need to evaluate how ZTE's very large-scale contact center solutions apply to them.

Strengths

• ZTE's NGCC suite is designed for CSPs to provide many multitenant virtual centers for their enterprise customers, especially for call center service outsourcing. ZTE offers its AnyService@ZXNGCC multimedia unified contact center product based on its new ZXMSQ10 SoftACD switch and system or its ZXNGCC all-IP-based contact center switching solution. Reflecting some of its very large installations in China, it can support 134,400 agents in single module with 8.6 million busy-hour call attempts. ZXNGCC virtual call center technology can support 255 virtual call centers with up to 50 groups in each virtual call center.
• ZTE's new enterprise networking division will significantly change its approach from marketing and selling contact center solutions almost exclusively through CSPs, to effectively leveraging other channel partners for sales and support within two years. This will serve to enhance the company's ability to sell and support complex contact center solutions for enterprises.
• Beyond its present strength in the domestic Chinese market, ZTE is growing its sales of its next-generation contact center offering in emerging markets globally. Although ZTE has a limited number of enterprise customer premises deployments, the company's strength in the contact center market is in selling NGCC as a platform for CSPs, channel partners and network integrators to offer multitenanted hosted or cloud services for enterprises and outsourcers.

Cautions

• ZTE has limited ability and experience in providing enterprise contact center solutions outside of China and parts of the Middle East, Africa and Latin America where it is established. This limits its appeal to global enterprise customers but is attractive to enterprises needing contact center services in those geographies that are not well-served by Western vendors.
• Recognition of the ZTE brand is low among multinational organizations in the global contact center market, but most customers will be buying CSP-branded solutions. ZTE currently does not focus on providing enterprise contact centers through channels other than through CSPs in the way that its competitors do and is thus not an intuitive prospect for shortlisting. ZTE's new enterprise networking division's market entry into North America and Western Europe is an embryonic work in progress.
• Because ZTE uses a sales model in which it sells NGCC to CSPs, which in turn sell or host NGCC for enterprises, it can be difficult to find CSP partners with a strong understanding of the dynamics and best practices in contact center environments, particularly in emerging economies. ZTE does not provide a bundled contact center suite, so buyers must evaluate ZTE's emerging channel partners' capabilities in virtual contact center deployment, CTI and multimedia Web services. Expect both CSPs and the newly recruited network integrator channel partners to be challenged by the demands of enterprise contact center integration prior to 2015.

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Vendors Added or Dropped

We 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 may change over time. A vendor's appearing in a Magic Quadrant or MarketScope one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. This may be a reflection of a change in the market and, therefore, changed evaluation criteria, or a change of focus by a vendor.

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Added

In January 2012, Alcatel-Lucent sold its Genesys contact center business to a group of private-equity investors led by Permira. Genesys now operates as an independent competitor in the contact center market. Alcatel-Lucent continues to also sell its own proprietary contact center offerings, as well as reselling Genesys solutions where appropriate for customer demands. As a result, Alcatel-Lucent and Genesys have returned to a state of appearing as separate entities on this quadrant.

Enghouse Interactive has also been added. The company name represents the more tightly coupled offerings of formerly separate Syntellect and Cosmocom offerings owned by Enghouse Systems.

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Dropped

Following Alcatel-Lucent's sale of its Genesys contact center business to a group of private equity firms, the listing of the formerly combined entities, Alcatel-Lucent (Genesys) has been dropped from this Magic Quadrant.

The formerly separately operated Syntellect and Cosmocom have been merged and rebranded as Enghouse Interactive. As a result, the listing Syntellect (Cosmocom) has been dropped from this Magic Quadrant.

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Inclusion and Exclusion Criteria

To appear in this Magic Quadrant, vendors had to show all the following capabilities:

• Market share among the top performers in at least one geographic region (see "Market Share: Contact Centers, Worldwide, 2011") or, failing that, sufficient differentiation to obtain market presence.
• Sufficient sales and operational presence to support their market objectives.
• Demonstrable solutions in most of the contact center infrastructure portfolio areas defined earlier. At a minimum, offerings must include multimedia contact routing and prioritization, IVR or voice portal capability, and CRM integration tools.
• Evidence of an ability to generate significant interest from leading client segments.

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Evaluation Criteria

Ability to Execute

Gartner analysts evaluate contact center infrastructure technology providers based on the breadth, quality and overall breadth and maturity of their applications, customer support capabilities and ability to deliver solutions that enable contact center operations in formal contact centers in companies, outsourcers, and/or service providers. Ultimately, contact center infrastructure technology providers are judged on their ability and success in capitalizing on their vision (see Table 1).

Table 1. Ability to Execute Evaluation Criteria

Evaluation Criteria	Weighting
Product/Service	high
Overall Viability (Business Unit, Financial, Strategy, Organization)	high
Sales Execution/Pricing	standard
Market Responsiveness and Track Record	standard
Marketing Execution	standard
Customer Experience	standard
Operations	standard

Source: Gartner

Completeness of Vision

Gartner analysts evaluate contact center infrastructure technology providers based on their ability to convincingly articulate logical statements about current and future market directions, innovations, customer needs and competitive forces, and how well these map to Gartner's overall understanding of the marketplace. Ultimately, contact center infrastructure technology providers are rated on their understanding of how market forces can be exploited to create opportunities for providers and their clients (see Table 2).

Table 2. Completeness of Vision Evaluation Criteria

Evaluation Criteria	Weighting
Market Understanding	high
Marketing Strategy	standard
Sales Strategy	standard
Offering (Product) Strategy	high
Business Model	standard
Vertical/Industry Strategy	standard
Innovation	standard
Geographic Strategy	standard

Source: Gartner

Quadrant Descriptions

Leaders

Leaders are high-viability vendors with broad portfolios, significant market shares, broad geographic coverage, a clear vision of how contact center needs will evolve and a proven track record of delivering contact center products. They are well-positioned with their current product portfolio and likely to continue delivering leading products. Leaders do not necessarily offer a best-of-breed solution for every customer requirement. However, overall their products are strong and often have some exceptional capabilities. Additionally, these vendors provide solutions that present relatively low risk.

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Challengers

Challengers are vendors with strong market capabilities and good solutions for specific markets. However, overall, their products lack the breadth and depth of those of in the Leaders quadrant. Challengers do not always communicate a clear vision of how the contact center market is evolving and they are often less innovative or advanced than the Leaders. Vendors in this quadrant often excel at selling contact center functionality to their installed base of private branch exchanges (PBXs) or IP telephony.

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Visionaries

Visionaries demonstrate a clear understanding of the contact center market and provide key innovations that point to the market's future. However, these vendors typically lack the ability to influence a large portion of the market, have not yet expanded their sales and support capabilities on a regional basis, or do not yet have the funding to execute with the same capabilities as the Leaders.

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Niche Players

The vendors in this quadrant offer contact center products that focus on a segment of the market or a subset of its functionality. Customers aligned with the focus of a Niche Player may find its offerings to be a good "fit" for their needs.

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Context

Over the past several years, the contact center market has been consolidating. Not only has the number of vendors serving the space declined over time, but the scope of those vendors' solutions has broadened as the vendors seek to secure more of their customers' "wallet share" and as buyers seek to reduce integration costs and the challenges often inherent in managing multivendor environments.

Three vendors — Avaya, Cisco and Genesys (formerly part of Alcatel-Lucent) — in combination now make up more than two-thirds of agent shipments for the global market. However, other vendors continue to grow by employing a variety of strategies. These strategies include, among others:

• Focusing on differentiated technology for various enterprises' needs
• Offering solutions that target the service provider
• Targeting innovation toward niche applications, such as dialer solutions
• Offering cloud-based services to complement their premises-based offerings or to serve as hybrid premise/cloud solutions
• Targeting emerging markets that may offer faster market growth rates and more greenfield opportunities than those in mature markets, such as North America, Western Europe and developed portions of Asia/Pacific

Although some best-of-breed "point solutions" will remain relevant, customers are increasingly moving to adopt broader contact center solutions as tightly integrated suites or more loosely integrated portfolios from "cornerstone" vendors, and all vendors covered by this report offer significant functionality beyond basic phone call routing and prioritization. Furthermore, many enterprises are recognizing the potential synergies between their customer-facing contact center infrastructure and software solutions, with their current or planned investments in internal-facing unified communications architectures and must consider how these investment strategies can coexist and potentially share communication and collaboration components such as enterprise telephony, presence and conferencing applications.

This research captures Gartner's view of the general state of the market and evaluates vendors' capabilities on a global basis. It is not intended as specific advice for any one user company's situation. Companies planning to acquire new or replacement contact center infrastructure should contact Gartner analysts to discuss how this generalized model applies in their specific country, as well as how it applies to their specific business environment and needs.

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Market Overview

The dynamics shaping the contact center infrastructure market vary, region by region and often country by country. The contact center infrastructure market is largely a mature market in North America, Western Europe and developed portions of Asia/Pacific, with most sales being expansions of, or replacements of, existing systems. When combined, the North America and Western Europe markets accounted for more than 60% of agent shipments globally in 2011. However, contact center infrastructure is still an emerging technology in many other geographies around the globe, especially those experiencing rapid industrialization and growth of service industries, such as the BRIC countries — with many forecast to grow at double-digit compound annual growth rates through 2016 (see "Forecast: Contact Centers, Worldwide, 2007-2016, 1Q12 Update"). Overall, contact center agent shipments grew 11% in 2011 relative to the prior year. Japan registered the largest percentage year-over-year growth at more than 50%, due in large part to a resurgence in shipments from market leader Avaya. Most other regions also registered double-digit year-over-year growth; however, North America and Western Europe registered year-over-year growth ranging from the middle to high single digits.

The market has traditionally been dominated by the leading vendors in the enterprise telephony market — a market that has also experienced some consolidation in recent years. However, market barriers are not so high as to prevent other vendors from entering. Avaya and Cisco accounted for more than half of all agent shipments globally in 2011. However, Genesys (formerly part of Alcatel-Lucent) is a strong telephony-independent market player, and Huawei has shown strong market share gains over the past two years as a result of the company's substantial investment in launching its enterprise networking business unit. Some smaller players continue to find defendable market niches, either through low price, geographic or vertical market specialization, differentiating technologies, or combinations of these (see "Market Share Contact Centers, Worldwide, 2011" and "Market Share Analysis: Contact Centers, Worldwide, 2011").

Contact center infrastructure solutions have traditionally been hardware-centric, but most vendors' solutions are now shipped as software that the customer can run on properly configured commercial, off-the-shelf servers, although some still require proprietary components. The majority of shipped solutions are based on Internet standards, including TCP/IP in telephony and Session Initiation Protocol (SIP), which enables the systems to more readily support operationally or geographically separate contact centers on a centrally deployed system and provide for greater scale in the application platform. The use of Internet standards also enables contact center functionality to be embedded into third-party applications, such as CRM or ERP systems. SIP also enables tighter integration of modules within contact center vendors' portfolios of products, although the promise of intervendor interoperability continues to be difficult to achieve..

The market has been consolidating over time, and incumbent vendors are looking to expand their solution portfolios to incorporate additional capabilities that commonly play a role in contact center "ecosystems." These capabilities include IVR, outbound dialers, contact center workforce management, recording, e-learning, Web chat, email response management, live and prerecorded video, desktop collaboration, analytics, workflow, and mobility. This creates challenges to vendors that grow through acquisition or that develop their offering sets as a collection of separate, point solution offerings, in that a portfolio approach (rather than a more tightly integrated suite approach) results in an environment in which customers must manage and administer component systems separately.

In 2012, various broad trends are influencing the planning and deployment of enterprise contact center infrastructure, representing a change from a more conservative market seen in the prior publication of this Magic Quadrant document. Included among these trends are the following:

• Infrastructure consolidation and centralization projects among companies that operate multiple contact centers — These companies increasingly are looking to leverage the location-independent nature of IP-based infrastructure to reduce duplication of infrastructure investments. In response to the interest in consolidation and centralization of infrastructure, most vendor solutions now support VMware or Hyper-V for system virtualization.
• Momentum for multimedia routing, including email response management, Web chat and customer collaboration solutions — These solutions, which have been traditionally purchased from best-of-breed or point solution providers, are now increasingly being evaluated within the portfolio of the traditional ACD vendors.
• Contact center workforce optimization functionality — Once almost solely limited to point solution providers, workforce optimization functionality is now included in many contact center infrastructure suites or portfolios. This functionality encompasses varying combinations of contact recording, agent evaluation, workforce management, coaching and e-learning tools, postcontact survey, and agent performance speech analytics.
• Increasing awareness of social media influences and the potential impact on contact center operations — Many companies are now considering the potential impact of social media-based interaction on customer service activities, although actual adoption of social CRM solutions in contact centers remains primarily limited to companies that take a more aggressive approach to technology adoption.
• Growing interest in adding tighter linkage between customer service operations and both internal- and external-facing mobile applications — Mobile applications are seen as a way to provide customers with easier access to self-service information by supporting a visual interface to option selections and data that previously was available only to those accessing the company using a more traditional computer interface. These solutions can also provide customers with additional information and options based on real-time information regarding contact center operations, such as expected wait times and callback options. Mobility can also be used for internal-facing applications, such as providing real-time and historical performance dashboards and access to staffing and monitoring capabilities while the contact center manager or director is away from his or her desk.

Many companies fitting a mainstream or conservative technology adoption profile have begun to embrace the use of multimedia customer communications, primarily in the form of adding email response management and, in some cases, Web chat functionality to their environments. Meanwhile, those with more aggressive technology adoption profiles have begun to embrace rich presence to incorporate subject matter experts directly into customer service processes. Technologies such as video and desktop collaboration with customers remain niche functionalities in contact center infrastructure, with limited and specialized commercial deployment. Companies — regardless of their particular technology adoption profiles — should review Gartner's "Hype Cycle for Contact Center Infrastructure, 2011" to help develop road maps for the ways that new technologies should be brought into their respective environments to address customer relationship strategies. In some cases, this may involve evaluating the ability of a system to provide a wide breadth of functionality, not all of which may be implemented at the time of the system's initial deployment.

Gartner's 2012 Magic Quadrant for Social Software in the Workplace

Analyst(s): Nikos Drakos, Jeffrey Mann, Adam Sarner

VIEW SUMMARY

As interest in social software increases, market consolidation is beginning in earnest and buyers' attention is focusing on fewer vendors. Market volatility will remain high as vendors jostle for position, so buyers will need to remain cautious.

Market Definition/Description

This Magic Quadrant covers vendors whose software products are used mainly within enterprises, primarily by employees but also by external customers, suppliers and partners, to support work teams, communities and social networking.

Buyers in this market are looking for persistent virtual environments in which participants can create, organize and share information, as well as find, connect and interact with each other.

Business use of these products varies in its degree of formality and openness — from information sharing and project coordination within a small, homogeneous group, to the sharing of best practices within a business unit, to the encouragement of networking and information exchange between employees across a whole organization or with external participants in other organizations.

In general terms, products that compete in this market help users to:

• Find out about each other personally or professionally
• Mine their networks of contacts and acquaintances for advice, references and referrals
• Form teams, communities or informal groups, and invite external participants from other organizations
• Work together on the same work objects
• Discuss and comment on their work
• Organize work from their perspective
• Identify relevant work
• Discover other people with common interests
• Alert users to information or events that might be relevant to them
• Learn from others' expertise

Specific uses of products in this market include:

• Sharing team information and coordinating project-related activities by adding permanence and structure to ad hoc communications.
• Empowering communities of experts and interested parties — bonding people by specific interests, capturing best practices, disseminating lead-user innovation and providing an informal support network.
• Facilitating social interaction by helping people establish and strengthen personal relationships, develop trust, and ultimately reduce friction and accelerate the business processes in which people engage.
• Accessing relevant knowledge and expertise that can be used to formulate a plan of action when decisions need to be made.

Gartner covers the market for social CRM in a separate Magic Quadrant as those products support very different use cases, and are bought by buyers in different roles. Although there is some overlap between the vendors in these Magic Quadrants, their products invariably have functionality specific to the different use cases.

We have extended slightly the scope of this Magic Quadrant to include external use cases, and will no longer publish a separate Magic Quadrant for externally facing social software. Although some products still focus on internal or external use cases, this differentiation is no longer sufficient to warrant a separate Magic Quadrant. The impact of this change on the number of vendors included in the present Magic Quadrant is minimal — only one vendor (Huddle) that appeared in 2011's "Magic Quadrant for Externally Facing Social Software" appears in this Magic Quadrant because of the change in scope. For more details, see "Changes to the Social Software Magic Quadrants."

This Magic Quadrant covers a broad set of products, vendors and use cases. One subsegment that is attracting growing attention — to judge from inquiries from Gartner clients and interest from prospective buyers — comprises products bought specifically for enterprise social networking by organizations less interested in using them as platforms for managing content or delivering other services. We shall take a closer look at this subsegment — which includes products such as salesforce.com's Chatter, Microsoft's Yammer, Tibco Software's tibbr and VMware's Socialcast — in a separate "Critical Capabilities for Enterprise Social Networking" report, to be published later in 2012.

Magic Quadrant

Figure 1. Magic Quadrant for Social Software in the Workplace

Note: blueKiwi was acquired by Atos in April 2012, and Yammer was acquired by Microsoft in June 2012. The acquired vendors appear under their original names, and in Yammer's case separately from its acquirer, as no major changes to their businesses are likely in the short term.

Source: Gartner (September 2012)

Vendor Strengths and Cautions

Acquia

Acquia is in the Visionaries quadrant. It provides commercial support and enterprise services relating to the open-source Drupal distribution. Acquia sells products and services to support and host internal and external-facing Drupal websites.

Strengths

• Ecosystem: Drupal is proven in large, high-profile deployments. It has an active developer community with 600,000 members, a track record of community support and a growing ecosystem of service providers. Open-source communities are typically larger and more active in development work than those of proprietary vendors. The Drupal community has contributed over 10,000 modules.
• Viability: Acquia is an organization funded by venture capital that offers a commercially supported version of Drupal and is led by Drupal's founder, which puts it very close to the open-source project's activities. Acquia partners with about 500 consulting and development organizations to provide a range of services, including community strategy, Web strategy, design, implementation, development and performance-tuning services.
• Platform: Drupal is a rich and extensible platform for social publishing that provides much more control over content layout and editorial workflow than typical enterprise social networking products.

Cautions

• Complexity: Drupal's richness and flexibility can be a source of unneeded complexity for those looking for a quick "off the shelf" implementation. Reference customers cited concerns with the quality of documentation and the effort required to improve sluggish performance.
• Features: Acquia is only now adding native support for mobile devices, such as the Apple iPhone and iPad, and for Research In Motion BlackBerry and Google Android apps.
• Support: Acquia is growing in terms of number of employees, revenue and its ecosystem of partners, but it remains smaller than most of the vendors in this Magic Quadrant.

Atlassian

Atlassian is in the Challengers quadrant. Atlassian Confluence is known as a wiki-centric collaboration product, but it is being transformed into a social platform for the creation and sharing of content by employee teams, project teams and communities.

Strengths

• Viability: Atlassian has approximately 350 staff worldwide, growing revenue and a very large customer base, including many customers with large deployments.
• Functionality: Confluence has some of the richest browser-based content creation functionality, which, coupled with improved sharing, activity streams, notifications, mobility and other improvements, make it a strong collaboration product, particularly for documentation and product development support roles.
• Customer experience: Buyers choose Confluence, one of the most cost-effective products, for both its low cost and its capabilities — their appreciative comments include "the cost-benefit of Confluence is outstanding" and "exceeded expectations."

Cautions

• Vision: Confluence is not the main product in Atlassian's portfolio — its biggest seller is Jira, an issue-tracking system. Although Confluence is evolving fast enough to keep up, it is not leading the sector. The recently introduced cloud Confluence OnDemand offering has not yet achieved critical mass, and important functions such as mobility features have only just been added.
• Focus: Atlassian's products are typically bought by IT departments, and tend to do best in deployments that involve technical users.
• Strategy: Atlassian has historically relied on a "low touch" marketing and sales model, which some large organizations may find unsuited to their needs. Atlassian is enhancing its operations to address this issue, but this will take time.

blueKiwi

blueKiwi is in the Niche Players quadrant. Its was one of the first products to base the user experience on activity streams. In 2012, blueKiwi was acquired by Atos, Europe's second-largest IT services provider.

Strengths

• Platform: blueKiwi offers comprehensive functionality, with strong support for participation, social networking analytics, microblogging, rich media (including video), extensive community management, polling and ideation. It combines these in a single platform that can simultaneously support internal networking, external communities and social media engagement.
• User experience: blueKiwi places strong emphasis on ease of use and an engaging user experience. As one reference customer said, its product is "easy to deploy and use."
• Viability: The acquisition by Atos could help blueKiwi become visible to more organizations and give it a credible cloud strategy with a strong multiregion presence (via Atos's Canopy offering). Already, as part of Atos, blueKiwi's sales and its service capabilities have strengthened, and its pace of development has accelerated.

Cautions

• Viability: Despite being one of the first vendors to offer a product in the enterprise social software market, blueKiwi has limited market presence. Also, Atos's commitment, and its ability as a consulting company, to succeed with blueKiwi's product in a highly competitive market have yet to be tested.
• Innovation: Although blueKiwi's product has some much-liked capabilities (such as easy external participation) and is the subject of plans for more advanced ones (such as a recommendation engine), its evolution is following, rather than leading, that of the overall sector.

Cisco

Cisco is in the Visionaries quadrant. Cisco WebEx Social is a modular platform for social collaboration with a strong emphasis on mobility, video and unified communications (UC) support.

Strengths

• Viability: Cisco has made significant investments in WebEx Social. This product's recent name change (from Cisco Quad) and alignment with the well-known WebEx brand and product family signal further commitment to this market. However, Cisco expects its products to lead their respective markets, so WebEx Social needs to improve its market position.
• Vision: Cisco sees social software as part of a broader UC user experience and platform that integrates seamlessly with mobile devices, real-time communications, and the capture and sharing of rich media, including high-definition video.
• Platform flexibility: WebEx Social can be deployed on a large scale, from the cloud, on-premises and through virtualized hardware. It combines a broad set of capabilities, including rich profiles, social graphs, activity streams, communities, social metadata and a "unified post mechanism" (for conversations, blogs and wikis), all on top of a common policy and permissions model, a common content store, and a "pluggable" framework that integrates with content management, instant messaging, voice, conferencing and video services from Cisco or other vendors.

Cautions

• Ecosystem: Although WebEx Social benefits from Cisco's global network of resellers and service partners, many are not wholly familiar with this type of product or the change management issues that need to be addressed to ensure successful implementation. Also, the ecosystem — comprising, for example, third-party developers — for the evolution of the product remains nascent.
• Customer experience: WebEx Social is a relatively young product and experiencing "growing pains." One reference customer commented that although Cisco helped with deployment, it required some effort to smooth out certain performance issues.

Huddle

Huddle is in the Niche Players quadrant. Huddle offers a software-as-a-service (SaaS) product for structured document-centric collaboration. It targets collaboration between organizations, as well as internal collaboration.

Strengths

• Innovation: Huddle is evolving fast, with monthly releases and new functions. These include "intelligent" file synchronization that automatically replicates the most relevant files (based on usage frequency and other learned properties) between desktops, mobile devices and shared workspaces, and PDF annotation on mobile devices.
• Focus: Rather than try to do everything, Huddle focuses on the important use case of collaboration and team support involving participants from external organizations, with an emphasis on mobility and file sharing.
• Ecosystem: Huddle works with a variety of, typically cloud-based, technology partners to add functionality to its products (such as support for editing Microsoft Office documents on mobile devices using Quickoffice).

Cautions

• Functionality: Despite having a full set of features for team file sharing, Huddle lacks many advanced social features, such as filtered activity streams and social analytics.
• Strategy: Despite its success in penetrating many organizations, Huddle still merely complements existing collaboration and social networking solutions, rather than displacing them.

IBM

IBM is in the Leaders quadrant. IBM Connections was one of the first products to target the social software market specifically. Other products in IBM's portfolio — such as Sametime, Notes/Domino, FileNet Content Manager and WebSphere Portal Server — broaden the applicability of Connections.

Strengths

• Ecosystem and viability: IBM has extensive resources and well-developed channels, and it continues to expand its ecosystem of system integrators and third-party suppliers to support its offerings. IBM also plays leading roles in the industry bodies developing standards such as OpenSocial and ActivityStrea.ms.
• Vision: IBM identifies social business as an important part of its strategic future. It has developed a program combining its expertise in services, consulting and technology implementation to help clients and prospects in different industries develop social business strategies and adopt social technologies.
• Customer experience: Connections is increasingly used in more demanding situations by large organizations. Several reference customers with over 10,000 users commented on the product's straightforward implementation — their praise included "cannot do without it" and "phenomenal" (though one balked at a proposal to use Connections as a replacement for Microsoft SharePoint). IBM was also able to help with customization, but reportedly with "high service costs."

Cautions

• Pace of innovation: IBM is keeping up with the functionality race (with, for example, improved social analytics, mobility, activity streams, open social support, file sharing and user experience improvements), and it makes interim releases, extensions, plug-ins and mobile application updates available throughout the year. However, it releases major updates only annually, which might put it at a disadvantage to nimbler competitors with continuous test/release cycles, and might frustrate users who now expect much more. One factor that makes it hard for IBM to move faster is that, despite its investments in cloud delivery (SmartCloud), only a small fraction of its core user base is ready to accept this mode of delivery.
• Complexity: Although Connections is an off-the-shelf product that requires no other products in order to be used, IBM often needs to introduce other products to address more diverse requirements. This results in complex deployments that demand extensive installation and customization work.

Igloo

Igloo is in the Niche Players quadrant. It offers a SaaS solution that bridges internal and external collaboration and networking.

Strengths

• Functionality: Igloo is a pure SaaS vendor that issues regular quarterly releases. Recent enhancements include multi-operating-system desktop support with Web Distributed Authoring and Versioning (WebDAV); HTML5 support for multiple devices; improved analytics through a partnership with MicroStrategy; support for multiple languages and localization; and the concept of "channels" for organizing and publishing content around specific themes.
• Viability: Igloo has made progress during the past 12 months and expanded its operations beyond North America, but it remains a small vendor with only about 60 employees.

Cautions

• Visibility: Although Igloo has large corporate customers, it must continue to improve its visibility and reputation as an enterprise vendor, especially with senior executives.
• Platform: For customers wanting to go beyond the solution's built-in functionality, there is some pre-integration available with Web conferencing products and business applications, such as those of salesforce.com. However, packaged integration with other platforms (such as Microsoft SharePoint) and applications is generally limited. General standards-based integration possibilities include widgets, programming APIs and HTML embedding.
• Customer experience: Although reference customers were generally positive (their appreciative remarks included "excellent product"), some reported that some IT help was needed for deep customization.

Jive

Jive is in the Leaders quadrant. It continues to gain enterprise-scale customers thanks to its broad product capabilities and substantial visibility.

Strengths

• Viability: Jive's initial public offering (IPO) in 2011 made it the first of the major social software startups to go public. According to Jive's financial results as of August 2012, the company continues to grow strongly. Gartner believes that Jive is the largest vendor that specializes in workplace social software, and the third-largest vendor overall in terms of revenue in the adjacent social CRM market. Jive is using its increased financial strength to boost its operations, product development and cloud strategy, which includes setting up regional data centers.
• Ecosystem: Jive's partnership program is more developed than those of most competitors. Jive has big consulting and agency names on board — Accenture, Capgemini, Cognizant, PwC and SapientNitro — that are building practices dedicated to Jive.
• Vision: Jive's vision for social software is broad and strong. It includes embracing major new use cases as they emerge within its customer base. Jive says it is making a "big" shift toward packaged solutions, as opposed to being a platform. In 1Q12, it launched Social Intranet, Customer Service and Social Marketing & Sales solutions, and it will build more specific solutions over time in the same areas. Jive has also released Jive Anywhere, which gives users the ability to pull information contextually from other applications and Web pages into the Jive network. Jive Anywhere can also monitor Web activity to offer relevant information proactively within the Jive interface.

Cautions

• Focus: Jive's early success with large deployments for enterprise customers exposes it to the risk of falling foul of the "innovation dilemma," whereby a vendor places so much emphasis on the current needs of its largest customers that it falls behind in terms of innovation and consideration of their future needs. Having navigated the transition to publicly quoted company, Jive needs to maintain its focus on sustainable differentiation.
• Integration: Reference customers mentioned a need for improved integration with CRM and content management systems, as well as improved internationalization capabilities.
• Social analytics: Jive's use of its investments in Proximal Labs to develop adaptive intelligence is a potential differentiator, but, apart from incremental enhancements to several modules, this functionality will not be available until 2013.

Liferay

Liferay is in the Niche Players quadrant. It offers a portal-centric platform for organizations looking to develop and integrate social interaction and community support in a flexible environment.

Strengths

• Integration: Liferay's Social Office collaboration and social interaction capabilities are available in a no-cost Community Edition from the Liferay Marketplace. In addition, a licensed and supported Enterprise Edition of Liferay Social Office will be sold from the Marketplace in 3Q12. Both editions install into a Liferay Portal and include built-in content management (with hooks to alternative systems), as well as Microsoft Office integration.
• Ecosystem: Liferay has a healthy developer and partner ecosystem, with thousands of developers and an active marketplace.
• Strategy: Liferay is one of the few remaining specialist vendors in the portal space, and is seeking to extend its position into collaboration and networking. Its broad platform capabilities and open-source, low-cost, support-based model are attractive to many buyers.

Cautions

• Focus: Although there is some evidence that Liferay Portal is being used to provide collaboration and social networking in the context of large portal deployments, Liferay is still relatively unknown in this market.
• Customer experience: Liferay's portal platform capabilities add flexibility and power when customization is needed, but can take longer to deploy than others. One typical reference customer commented that his organization chose Liferay for its "breadth of capabilities," but Liferay has less experience of supporting social initiatives than other vendors in this Magic Quadrant.
• Innovation: Despite an active open-source development community and several enhancements (such as a separate module for desktop and mobile file synchronization [Liferay Sync], personal sites and a simple installer for Social Office), Liferay is generally following, rather than leading, in terms of collaboration and social capabilities. Its pace of innovation is also hampered by the reluctance of many Liferay customers to accept cloud deployment options (90% use Liferay on-premises).

Microsoft

Microsoft is in the Leaders quadrant because of its very robust ecosystem and the broad market penetration of SharePoint Server. (Note that Yammer, which Microsoft acquired in June 2012, is assessed separately in this Magic Quadrant.)

Strengths

• Integration: Microsoft Windows, Office, Exchange, Lync and SharePoint all work best with each other, offering IT organizations at least the appearance of simplicity in terms of training, usability, extensibility and management. Customers typically buy SharePoint for its breadth of capabilities as a platform and alignment with other Microsoft products, and because of their overall business relationship with Microsoft through, for example, Enterprise Agreements.
• Functionality: Given all the tools, components and services available from Microsoft's SharePoint ecosystem, and all the features available in the base product (such as content management, search, portal, document-centric programming, traditional team collaboration and social software), SharePoint has arguably the broadest range of capabilities of any offering on the market.
• Viability: Judging by comments from Gartner clients, we believe that more enterprises are considering using SharePoint (or the SharePoint Online component of Office 365) to meet their collaboration and social software needs than any other platform.

Cautions

• User experience: SharePoint's "out of the box" user experience has not kept up with market expectations. Some reference customers mentioned a need for customization, as well as usability issues with group/community creation, and with the rigidity of the discussion functionality. One reference customer commented tellingly: "It's not perfect, it's not horrible, but it must overcome its legacy."
• Functionality: The long lead-time between releases means that it is only in its next version that SharePoint will be able to deliver common capabilities such as activity streams, reasonable mobile support and an acceptable user experience. Gartner expects it to be on general release by early 2013.
• Pace of innovation: Despite the availability of Office 365 and SharePoint Online, the overwhelming majority of large Microsoft customers still depend on on-premises deployments, with many of them still using 2007 versions. The acquisition of Yammer might help Microsoft innovate more quickly, but it will need to perform a complex balancing act to satisfy the requirements of a conservative customer base and demanding end users, while managing two related, but radically different and slightly overlapping, products. (See also the separate assessment of Yammer in this document.)

Moxie Software

Moxie is in the Niche Players quadrant. Its Collaboration Spaces is a relatively new product for employee collaboration and networking, as well as collaboration with partners and customers.

Strengths

• Functionality: Moxie offers broad support for document collaboration, media galleries and video, including transcoding and streaming, "idea storms" and idea leaderboards, optimized mobile browser displays and native applications for iOS devices, rich profiles, activity feeds, recommendations, people search, file storage and synchronization, as well as a bundled Autonomy search engine. An integrated knowledgebase enables crowdsourced content to be verified before internal or external publishing.
• Strategy: Moxie offers all-inclusive packaging with straightforward pricing and an emphasis on initial use-case consulting, as well as follow-on services and access to Moxie Insight (a research group offering thought leadership) to help ensure adoption and business impact.
• Architecture: Moxie emphasizes the seamlessness of the user experience when navigating internal collaboration spaces and external-facing customer communication spaces, which Moxie also supports with a related product. This is particularly important for activities that span both domains (such as customer service/support and product development).

Cautions

• Ecosystem: Moxie has introduced an integration platform called Spaces Connect and continues to build relationships with channel and service partners, but it could do more to attract independent developers and provide a marketplace for extensions and plug-ins.
• Focus: Moxie's main focus is its multichannel customer engagement offerings. Collaboration Spaces is a complementary product that fits in naturally with Mozie's core offerings, but the company needs to enhance its presence and increase its appeal as a general-purpose social software vendor beyond its "natural" primary buyers.
• Customer experience: So far, there have not been many large-scale deployments of Collaboration Spaces, so the ability of system and organization to operate effectively at a large scale in this market is unconfirmed.

Novell

Novell is in the Niche Players quadrant. Its Vibe suite is usually deployed for project and team collaboration, networking, and knowledge management for internal and external teams.

Strengths

• Functionality: Vibe is a capable suite that combines strong traditional collaboration capabilities, including support for documents, process workflow and e-forms, as well as rich social networking functionality. Recent enhancements include offline support with file synchronization (Vibe Desktop) and Microsoft Office integration.
• Integration: Vibe offers pre-integration with Novell's email, presence and instant messaging systems, as well as with those from other vendors and custom applications. Vibe is also bundled with the Novell Open Workgroup Suite, which includes the GroupWise email and calendaring product.
• Customer experience: Reference customers praised Vibe's ease of installation and use, adding that end users found the file sharing and project collaboration support particularly useful.

Cautions

• Strategy: Novell has embarked on a major attempt to add value for, and thereby stabilize, its GroupWise customers, after dropping initiatives to enter new product areas last year. Vibe plays an important role in demonstrating Novell's continued commitment to the broader communication and collaboration space. At the same time, Vibe's future depends largely on Novell's ability to succeed with this strategy (see also "MarketScope for Email Systems").
• Viability: Novell needs to work quickly to revitalize Vibe and improve its visibility beyond its customer base and IT buyers.
• Ecosystem: Despite fostering developer communities through an open-source edition for some time, contributions to this product have been limited in terms of plug-ins, extensions and enhancements.

OpenText

OpenText is in the Niche Players quadrant. It offers OpenText Social Communities, which supports internal associates and external customers.

Strengths

• Viability: OpenText is financially stable and has a large installed base of customers on which it can build to expand its presence in the social software market.
• Integration: OpenText Social Communities benefits from integration with OpenText's Content Server, which provides records management and content library services. Also, a major integration program has helped rationalize overlapping product lines in a product portfolio built up over the years through acquisitions.
• Scalability: OpenText has customers in industries such as government and the utility sector that support large user populations. It has a tiered licensing model based on the number of CPUs, which encourages deployments to large user bases.

Cautions

• Focus: Although OpenText recently invested in platform rationalization for several social software offerings, it must do more to build its presence and credibility in this market.
• Vision: Although sold as stand-alone software, OpenText's social software offering may be best suited to customers with an existing investment in OpenText, or for those considering social software as part of an overall information management strategy.
• Pace of innovation: Although OpenText continues to make necessary investments in mobility, core functionality and cloud delivery (such as with its acquisition of EasyLink, a cloud-based service provider), there is little to differentiate it from its competitors in this market, beyond the additional value derived from the rest of its product portfolio. Given that its customers primarily have on-premises deployments, OpenText might struggle to keep up with nimbler competitors.

Saba

Saba is in the Niche Players quadrant. Its offerings combine collaboration, Web conferencing, social learning and performance management capabilities in a unified solution called Saba Social Enterprise.

Strengths

• Viability: Saba is an established public company with over 850 employees, a strong partner program and a worldwide presence, along with strong global cloud service capabilities.
• Innovation: Saba offers native mobile clients and YouTube-like rich-media content management that includes video, Web conference recordings and a "dynamic people profile" that combines social tagging with a "Klout-like" influence and reputation score, along with formal accreditations to identify experts. A new "freemium" service (Saba People Cloud) offered by a new business unit aims to accelerate innovation and user adoption. Saba also offers a fully unified solution for social talent management that combines social rewards and recognition features with formal people and team management processes. In addition, Saba incorporates into its social solution learning functionality that adds social learning, as well as the ability to assign and take formal courses (based on standards-compliant learning content from any content provider).
• Strategy: This vendor is combining Saba Meeting for real-time online collaboration and conferencing with asynchronous collaboration and business networking in a unified collaboration offering. Saba also combines what it calls "strategic people process solutions" — in other words, learning and people management — with social collaboration in a unified platform. In addition, Saba can exploit its presence in adjacent learning, performance management and Web conferencing markets.

Cautions

• Focus: Saba is a leader in the corporate learning system and talent management market. Its social collaboration support in the field of talent management and learning is strong, but it must do more to establish itself as a major player for general-purpose collaboration and social interaction in other contexts.
• Functionality: Although Saba has broad functionality — particularly taking into account its related real-time conferencing, social learning and social talent management products — there are some functional shortcomings. These include limited capabilities for document authoring, file synchronization and browser previewing of shared documents.

salesforce.com

salesforce.com is in the Leaders quadrant. Chatter, its social networking tool, is used for employee networking, information sharing (especially for sales and customer support activities), executive communications, and capturing and discussing ideas.

Strengths

• Vision: saleforce.com has a strong vision for social software. Its broad "social enterprise" vision covers areas like CRM and human capital management, in addition to collaboration within the workforce.
• Integration: Chatter can be used independently, but its value increases when used in combination with salesforce.com's other business applications. Business events such as contract updates and customer interactions then appear in activity streams to be discussed or "followed," while conversations, responses and ideas become easily accessible from within relevant business records.
• Pace of innovation: Chatter supports a broad range of internal and CRM-related use cases, although not in equal depth. Chatter's development focuses on adding depth and filling gaps in areas such as idea management, brand and reputation monitoring, social campaigns and social sales collaboration.

Cautions

• Architecture: salesforce.com's broad vision is backed by fast-paced development and a string of social- and workforce-technology-related acquisitions (such as GroupSwim, Heroku, Dimdim, Manymoon, Radian6, Rypple, Stypi, Buddy Media and GoInstant). Although positive overall, this approach could introduce overlaps and complexity for both salesforce.com and its customers, if not handled properly.
• Focus: Although salesforce.com has always supported collaboration in the context of CRM processes, it is a relatively recent entrant to the general collaboration space and is investing heavily to extend its core product, as well as in marketing to increase its market presence. But despite signs of success as a networking tool, Chatter is still not perceived as a general-purpose collaboration tool to support structured tasks, ongoing projects and formal communities. Most of the Chatter projects Gartner encounters build on existing salesforce.com deployments, rather than starting afresh as independent social software choices.
• Functionality: Chatter is still evolving and has recently benefited from integration with real-time capabilities such as chat, screen sharing and audio/video sharing (Chatter Messenger, via the acquisition of Dimdim); stream filtering and recommendations; Microsoft SharePoint integration (Chatter for SharePoint); and an active marketplace for Chatter apps (ChatterExchange). However, gaps remain in areas such as end-user creation tools, document conversion/reviewing and self-service site publishing.

Socialtext

Socialtext is in the Niche Players quadrant. It has a comprehensive set of collaboration and social capabilities used for internal collaboration, information sharing and networking. Following an investment by Bedford Funding (a private equity firm), Socialtext is closely aligned with, but organizationally independent of, Peoplefluent, a talent management company also owned by Bedford Funding.

Strengths

• Innovation: Socialtext was one of the first vendors in the social software market, and its product has a broad range of capabilities. Recent enhancements include more templates, native mobile clients, and a visual matching, recommendations and exploration engine (Socialtext 360).
• Vision: Socialtext was one of the first vendors to position a product (Socialtext Connect) as a "social layer" for providing profiles, activity feeds, personalization and general "social context" to other applications.
• Integration: Socialtext offers pre-integration with Microsoft SharePoint, with salesforce.com, with a desktop client for rich activity feeds and file integration, with the WordPress blogging engine, and with the Bugzilla issue-tracking engine, as well as a rich integration framework to other business applications.

Cautions

• Focus: Socialtext is a small organization with only about 50 employees. Bedford Funding's recent investment in Socialtext and commitment to keep its product independent are generally positive developments, but Socialtext has seen high turnover in its executive ranks during the past year. Furthermore, the planned integration with Peoplefluent's technology might distract attention from Socialtext's product, and eventually lead to its being subsumed, especially if it underperforms as an independent offering.
• Ecosystem: Socialtext has a growing number of partners, as well as an active private developer community (SocialDev). However, Socialtext needs to do more with its partners to keep up with competitors.
• Customer experience: Although reference customers were generally positive in their feedback and praised the product's flexibility, they identified a need for easier customization and UI improvements. Feedback about customer service was also mixed.

SuccessFactors

SuccessFactors, which was acquired by SAP in February 2012, is in the Visionaries quadrant. SuccessFactors Jam is used for employee communication, project collaboration, and skill/expertise tracking and reporting as part of overall performance management.

Strengths

• Strategy: SuccessFactors Jam is offered both separately and as part of the SuccessFactors Business Execution (BizX) Software suite that mainly targets HR buyers. Jam is used for expertise tracking, recruitment and onboarding, informal learning and employee engagement. The introduction of a freemium offering aims to accelerate adoption.
• Innovation: SuccessFactors' broad set of capabilities includes innovative features such as the following: conversion of Microsoft Office documents and PDF files to a format that can be displayed, edited and discussed in a browser; rich profiles with dozens of attributes (including badges); activity feeds with private messaging; rich-media/video content authoring and desktop recording; and decision-making support (with "responsible, accountable, consulted and informed" [RACI] and strengths, weaknesses, opportunities and threats [SWOT] models, and radar charts).

Cautions

• Focus: SuccessFactors' Jam and SAP's StreamWork solutions have been brought together under a newly established social software team within SuccessFactors. One of the challenges for this team will be to improve the visibility and market traction of these solutions, not only as part of a broader business suite but also as general-purpose independent products.
• Road map: SuccessFactors needs to execute carefully with respect to rationalizing SuccessFactors Jam and SAP StreamWork, two complementary but also overlapping products.
• Customer experience: Reference customers made positive comments about smooth deployment and overall satisfaction, but one cited difficulties in managing deployments with isolated subnetworks.

Telligent

Telligent is in the Visionaries quadrant. Telligent Community is used for creating branded customer, partner and prospect communities. Telligent Enterprise is used for employee communities, as well as for project and team collaboration.

Strengths

• Functionality: Telligent has advanced community capabilities directed at externally facing audiences and social CRM (Telligent Community 7.0) and workforce implementations (Telligent Enterprise 4.0). In addition, it has a broad range of capabilities for document sharing, rich editing and full email integration, as well as seven types of user profile with reputation scoring. Recent enhancements include richer content management through an OEM agreement with Sitecore, deeper integration with Microsoft SharePoint, improved analytics for both historical and near-real-time reporting, and information filtering.
• Flexibility: As well as winning deals on the strength of its partnerships, Telligent wins business due to its flexibility in hosting and integration. It offers solutions on-premises, in private clouds and in public clouds on both a single-tenant and a multitenant hosted basis. It is also flexible about pricing, offering both subscription-based and perpetual license options.
• Viability: Gartner estimates that Telligent grew its revenue for the second year in a row in 2011, with its total rising by 30% to about $22 million.

Cautions

• Focus: Telligent performs effectively in several use cases, which shows it has functional breadth, but it has yet to be generally considered the best at any one use case. It displays the most strength in relation to community support.
• Acquisition target: Although Telligent continues to grow, it is still below the $50 million annual revenue target that we believe it must reach in order to survive independently. Telligent continues to prove its strength in the community market, but its reliance on integrations and its smaller scale, along with the continued consolidation of the social software market, might increase the chance of it being acquired.
• Analytics: Reference clients have said that Telligent Analytics 3.x can be buggy, which is a problem in environments where accurate analysis and insights are of paramount importance.

Tibco Software

Tibco is in the Challengers quadrant. Its enterprise social networking product, tibbr, offers a broad set of capabilities and is used for information distribution, communication and collaboration.

Strengths

• Platform: tibbr is available as SaaS or an on-premises product for the same price. In addition to its core social networking functionality, tibbr offers tibCast, a set of UC tools running in the context of the activity stream, which include: videoconferencing, audioconferencing, desktop sharing, voice memos, instant messaging and presence; "smart widgets" to embed tibbr components in other applications; tibbr Geo, an HTML5 mobile app that geo-tags posts so that they can be accessed later by users in the same location; a "subject"-based information organization architecture popular among information managers; and FlipView, a magazine-style view of enterprise content enabled by a tibbr iPad application.
• Integration: tibbr capitalizes on Tibco's strong integration background with "out of the box" bidirectional connectors for enterprise applications (such as Microsoft SharePoint and those of Oracle, SAP and salesforce.com), personal social networking sites (such as Facebook, Twitter and LinkedIn), and third-party cloud apps (such as Google Docs, Box and Adobe Connect).
• Viability: tibbr can draw on Tibco's resources, ecosystem, visibility and customers.

Cautions

• Strategy: Although Tibco has joined this market at a time of growing interest in social software, and has executed reasonably well so far, in the long term it will need to do more to differentiate tibbr from the offerings of numerous competitors.
• Functionality: Although tibbr offers integration with a variety of third-party platforms, its range of built-in application functions is limited beyond social networking, particularly in terms of creating and managing tasks and documents (for example, desktop file synchronization, file version control and browser-based document authoring).
• Customer experience: Tibbr is a relatively new product and although feedback from reference customers was generally positive, there was also mention of setup glitches that required patches and performance troubleshooting.

VMware

VMware enters the Magic Quadrant as a Challenger, following its acquisition of Socialcast, an enterprise social networking vendor.

Strengths

• Road map: Beyond its core networking capabilities, VMware is enhancing Socialcast's connectivity and integration options and analytics (with shared customizable dashboards), and plans to embed project management (Socialcast Strides), richer messaging with inbox management, and real-time chat/presence services.
• Vision: Socialcast by VMware can be deployed on-premises or as a cloud service for internal social networking. Socialcast technology is also integrated with VMware Horizon Application Manager for centralized policy-driven access to cloud applications.
• Viability: Socialcast by VMware draws on the resources and ecosystem of VMware, and benefits from access to VMware's customer base. A free option for up to 50 users is helping it gain broader visibility.

Cautions

• Focus: VMware is increasing its commitment to Socialcast and to end-user computing applications in general at the same time as it is gaining traction in the growing social software market. However, Socialcast is only a small part of VMware's business, and unless Socialcast achieves a leading position in this market, it could be sidetracked by other priorities at VMware.
• Strategy: VMware is respected by technologists in both its user base and its ecosystem, but must improve its access to business decision makers and to partners that can handle change management.

Yammer

Yammer, which was acquired by Microsoft in June 2012, is in the Leaders quadrant. It offers a popular enterprise social networking product for communication, information distribution and collaboration. (Note that Microsoft's other offerings in this market, which include SharePoint in particular, are represented separately under Microsoft in this Magic Quadrant.)

Strengths

• Strategy: Yammer has a strong focus on user-friendly, cloud-based, mobile-first, social networking capabilities. These were inspired by Facebook, but have been enhanced with enterprise control features. Yammer's early entry to this market with a successful freemium option gave it broad visibility, and it continues to grow.
• Vision and road map: Yammer is likely to use the popularity of its core enterprise social networking capabilities to solidify its use as a "place" for conversations and information sharing. It is also likely to do more to establish itself as the "social layer" for other applications within organizations, and to accelerate integration with Microsoft Office, Dynamics and other Microsoft applications.
• Platform: Yammer follows an agile methodology that helps it innovate quickly by continually making improvements. These include "live engagement testing" of different feature options and rapid iterations that account for what has and has not worked in practice. This approach results in improved usability and higher voluntary adoption rates than for competing products.

Cautions

• Focus: Although Yammer's new status as part of Microsoft is already adding to the visibility and credibility of its offering as an enterprise product, there is uncertainty about Yammer's long-term prospects within Microsoft. The management and product development styles of Yammer and Microsoft are very different and might clash, while promoting and supporting two different but somewhat overlapping products could cause confusion.
• Customer experience: Although feedback from reference customers was positive overall (and one organization went so far as to say that Yammer "has changed the way we communicate"), there was mention of difficulties in getting approvals from internal risk managers and in organizing content in predefined categories.

Vendors Added or Dropped

We 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 may change over time. A vendor's appearance in a Magic Quadrant or MarketScope one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. It may be a reflection of a change in the market and, therefore, of changed evaluation criteria, or of a change of focus by that vendor.

Added

• Cisco
• Huddle
• Tibco Software
• Yammer
• VMware

Yammer was acquired by Microsoft in June 2012, but has a separate entry in this Magic Quadrant as no major changes to its business are likely in the short term.

Drupal-Acquia now appears as Acquia.

Dropped

• Cornerstone OnDemand
• Ektron
• EPiServer
• MindTouch
• Mzinga
• XWiki

The main reason why these vendors are not included in the 2012 Magic Quadrant is that they did not meet the qualitative market relevance requirements for a product packaged, marketed, sold and used to support teams, communities and networks mainly within an organization — that is, not packaged, marketed or used mainly for any other purpose. These vendors generally focus on other related but distinct markets.

Inclusion and Exclusion Criteria

This Magic Quadrant includes only vendors that met all of the following qualitative criteria.

Qualitative Market Relevance Criteria

To be included, a vendor must offer a product that is packaged, marketed sold, and used to support teams, communities and networks mainly within an organization — that is, not packaged, marketed or used mainly for any other purpose.

The relevant product must support the following minimum functionality "out of the box" — without the need to purchase any other products:

• User profiles.
• Group spaces that can be private, semiprivate or open.
• Content sharing — the ability to upload, store, organize and share documents or other content.
• Discussions and conversations.
• Blogs that enable end users to publish entries, for display in reverse chronological order, and that permit others to comment on them.
• Wikis that enable group authoring of collections of pages, with support for "click to edit," change tracking and internal linking.

Quantitative Market Presence Criteria

• Worldwide, the vendor has at least 50 employees in its organization dedicated to developing, marketing or supporting the relevant social software product.
• In its latest fiscal year the vendor generated at least $7 million in revenue that can be attributed exclusively to the relevant product.
• The vendor had at least 10% year-on-year growth in terms of revenue.
• The vendor has among its paying customers at least 10 organizations with active deployments for at least 5,000 users (that is, excluding freemium and open-source users).
• At least 150,000 named users (or equivalent) among all the paying organizations are licensed to use the vendor's relevant product and are actively using it (excluding unsupported freemium and open-source users).
• The vendor has a presence in at least three geographic regions, with some personnel dedicated to the relevant product.
• The vendor has at least five partner organizations that are authorized to distribute, resell or support the relevant product.

Evaluation Criteria

Ability to Execute

Product/Service: The overall product/service functionality rating for each vendor was reached by evaluating specific functionality that is already available and, in particular, the extent to which the product goes beyond the baseline functionality required for inclusion. Examples of the functions and features we looked for are social network analysis, browser-based productivity suites, dynamic activity streams, document repository integration, social tagging, social bookmarking, social search, general analytics, expertise location, group formation based on common interests, content/people ratings, people/content recommendations, offline support and native mobile clients. We also took into account the product's ability to serve large numbers of users (over 5,000). In addition, we gave each product a subjective "usability" score.

Overall Viability (Business Unit, Financial, Strategy, Organization): Key aspects of this criterion are the vendor's financial health, including funding, who is investing in and backing its activities, its profitability, the overall size of its collaboration and social software business (in particular, numbers of dedicated employees), and the degree to which the vendor is committed to this part of its business.

Sales Execution/Pricing: This criterion concerns the vendor's ability to sell to large organizations, its price transparency, the straightforwardness of its sales process, the consistency of its revenue growth during the past 12 to 24 months, and its opportunity to move existing customers to products with new or additional capabilities.

Market Responsiveness and Track Record: Not rated, as we could not identify sufficiently independent and measurable factors related to market responsiveness that would make a difference to the vendors' relative positions.

Marketing Execution: We looked for evidence of mind share, thought leadership and brand recognition, and for any specific marketing initiatives (white papers, events, microsites and social media campaigns) that may have helped to promote them. One particularly effective approach is for senior executives to be active participants in online conversations via blogs, comments and industry forums. We also took into account the size of each vendor's marketing organization.

Customer Experience: We collected customer feedback from vendor-supplied references, discussions with users of Gartner's inquiry service and other customer-facing interactions, such as those at Gartner conferences. Customers' experiences were rated based on the vendor's ability to help customers with professional services and ongoing support. We also looked at the presence of active customer communities for peer support.

Operations: Factors considered included the quality of the vendor's organizational structure — skills, experiences, programs, systems and other vehicles that enable it to operate effectively and efficiently on an ongoing basis. We also looked at numbers of technology and service partners and for any training and certification programs.

Table 1. Ability to Execute Evaluation Criteria

Evaluation Criteria	Weighting
Product/Service	High
Overall Viability (Business Unit, Financial, Strategy, Organization)	High
Sales Execution/Pricing	Standard
Market Responsiveness and Track Record	No Rating
Marketing Execution	Standard
Customer Experience	High
Operations	High

Source: Gartner (September 2012)

Completeness of Vision

Market Understanding: Each vendor needs to demonstrate a strategic understanding of collaboration and social software opportunities, such as an understanding of the business value of social interaction support, the complementarity of related capabilities (content, portal and communications services), an urgency to pre-integrate them, and a tolerance and acknowledgment of other existing but related technologies from other vendors. We also looked for an overall vision of the market that focuses on supporting people-centric activities, rather than a formal, process-centric view of collaboration.

Marketing Strategy: The degree to which each vendor's marketing approach suits (and/or exploits) emerging trends and the market's overall direction. In particular, we looked at the use cases promoted in each vendor's marketing messages to specific buyers, online activities, and any programs for educating and "priming" the market connected with social interaction support (for example, freemium, "try before you buy," open-source and hosted versions). We also assessed the quality of each vendor's online presence.

Sales Strategy: We looked at the level of channel activity, and any opportunities for cross-selling or converting large numbers of early adopters to high-end or broader deployments; the vendor's visibility to business and IT decision makers; and the availability of clear pricing information.

Offering (Product) Strategy: We assessed the degree to which each vendor's product road map reflects demand trends and opportunities to create demand and seeks to fill gaps and remedy weaknesses. We also looked at the breadth of each vendor's offering in relation to the inclusion of additional capabilities or pre-integration with other services (such as email, IM, presence, Web conferencing and Internet Protocol telephony); interoperability with business applications; and mobile support. In addition, we rated each vendor's cloud delivery plans, and the availability of a marketplace that encourages partners and developers to add value to the product.

Business Model: Not rated, as we could not identify sufficiently independent and measurable factors that relate to each vendor's business model that would make a difference to the vendors' relative positions.

Vertical/Industry Strategy: Not rated, as we could not identify sufficiently independent and measurable factors that relate to each vendor's vertical-market strategy that would make a difference to the vendors' relative positions.

Innovation: The degree to which each vendor invests in R&D for relevant tools, and the extent to which it demonstrates "creative energy." Examples of innovation are location-based "check-in" and geotagging; document format "round-tripping," whereby the look and feel of documents is preserved when converting them to and from conventional formats and online editing formats; gamification capabilities, such as the ability to earn and spend virtual currency; the ability to comment inside previewed documents; remote wiping of offline data stored on mobile devices; automatic file synchronization between desktop and shared folders; and instant search results.

Geographic Strategy: We examined each vendor's strategy to direct resources, skills and offerings to meet the specific needs of customers in regions other than that in which its corporate headquarters is located, directly or through partners, channels and subsidiaries, as appropriate for that geography and market. We also rated each vendor's ability to deliver cloud services via region-specific data centers.

Table 2. Completeness of Vision Evaluation Criteria

Evaluation Criteria	Weighting
Market Understanding	High
Marketing Strategy	Standard
Sales Strategy	Standard
Offering (Product) Strategy	Standard
Business Model	No Rating
Vertical/Industry Strategy	No Rating
Innovation	High
Geographic Strategy	Standard

Source: Gartner (September 2012)

Quadrant Descriptions

Leaders

Leaders are well-established vendors with widely used social software and collaboration offerings. They have established their leadership through early recognition of users' needs, continuous innovation, overall market presence, and success in delivering user-friendly and solution-focused suites with broad capabilities.

Challengers

Challengers offer solutions that have a strong market presence or that are otherwise strong, and they have the market position and resources to become Leaders. But these vendors may not have the functional breadth, marketing strategy or pace of innovation of Visionaries. Challengers have established presence, credibility and viability, and once their products move beyond a "good enough" baseline, they are likely to use their customer base to overtake competitors and enter the Leaders quadrant.

Visionaries

Visionaries demonstrate a strong understanding of current and future market trends, such as the importance of a flexible and transparent collaboration environment, as well as the value of mutual reinforcement of tools that encourage user contributions and tools that encourage bottom-up group and structure formation. Their products and product road maps display a tendency for innovation, especially in terms of architecture and lightweight integration, while their marketing and R&D efforts are often boosted by alignment with marketplaces and developer ecosystems. Visionaries do no exhibit the scope of delivery of Challengers or Leaders, but have demonstrated strong vision across a range of capabilities.

Niche Players

Niche Players provide useful, focused technology, understand the market's changing dynamics, and strive to evolve their products' capabilities. However, they are held back by a narrow range of functionality, a lack of clarity in their road map about how and when they will remedy this shortcoming, or by a lack of market traction. Many of the smaller Niche Players may enjoy considerable success relative to their size, but they need to exploit every opportunity to improve their positions before their competitive differentiation erodes. As the social software market matures, pockets of specialization may solidify. Therefore, a viable alternative strategy for a minority of the smaller vendors is to focus on niche sectors for specific industries or activities. Many of these vendors are unlikely to break out of the Niche Players quadrant, even though their businesses may remain viable in the long term.

Context

During the time Gartner has been monitoring this market new vendors have appeared hoping to attract buyers with cloud-based, mobile and Facebook-like social networking functionality, and established vendors have added social capabilities to existing offerings in an attempt to rejuvenate and add value to them.

The result is a fairly heterogeneous market with different kinds of social software product and vendor competing for buyers' attention. The types of vendor include:

• Specialist social application vendors
• Established enterprise platform vendors, such as Microsoft and IBM, that are either incrementally refining social capabilities or acquiring them
• Business application vendors, such as salesforce.com, that are seeking to increase the value of their products and sell social capabilities mainly to support specific business activities

Enterprises continue to invest in social software because they need to support more fluid communications, improve visibility across their organizations, stimulate idea sharing, and support expertise location and information sharing within teams and around projects. Activity streams, social analytics and social networking software continue to grow in popularity as tools to achieve these objectives. Mobility support (especially for media tablets) and gamification support have also emerged as important factors.

Market Overview

The past 12 months have seen increased market consolidation, with the following major developments:

• blueKiwi was acquired by Atos, the second-largest professional services provider in Europe.
• Following an investment by Bedford Funding (a private-equity technology investment fund), Socialtext, while remaining an independent product, has become closely aligned with Peoplefluent, a talent management solution provider also owned by Bedford Funding.
• SuccessFactors, which had previously acquired one of the early enterprise social networking vendors (CubeTree) and the social learning vendor Jambok, was itself acquired by SAP.
• In perhaps the most unexpected acquisition, Microsoft bought Yammer (see also "Yammer to Give Microsoft Needed Dynamism in Enterprise Social Networking").

In late 2011, we also saw Jive become a public company with an IPO and a listing on the Nasdaq stock market. This has given Jive a broader basis from which to expand its offerings and operations.

As prominent vendors attract more customers and solidify their presence in this market, life will get harder for the smaller vendors. Some of the large vendors currently benefiting from general interest in social software will also need to do more to remain competitive.

Five Routes to Sustainable Differentiation

Given the high degree of heterogeneity in this market, how to achieve sustainable differentiation is one of the most common questions raised. What will be sufficiently different and compelling about a product to make it more attractive and valuable than rival offerings?

Although there is plenty of scope for technical innovation in relation to specific functionality — in the fields of social analytics and gamification, for example — it will become more difficult for vendors to compete on the basis of functionality differences. Social capabilities such as rich dynamic profiles, activity streams, embedded messages and self-service groups that once were available only from specialist vendors are now becoming commonplace.

Prospective buyers looking for vendors that can sustain differentiation should favor those that:

1. Bundle social software with IT infrastructure services to impress IT architects by aligning and pre-integrating social capabilities with a broad set of infrastructure services, such as directory services, content repositories, application and portal servers, and UC services.
2. Offer a "biz app" bundle to impress business decision-makers by aligning social capabilities with business applications, such as those for CRM, talent management, software development, project management and IT operations support.
3. Develop a horizontal social layer offering to become the repository of the "enterprise social graph" by recording relationships between people and anything that might interest them. This involves a broad integration strategy to "socially enable" every other application or repository in order to draw interaction and engagement data from them, as well as to direct attention and traffic to them (see "Use This Framework to Plan the Evolution of Social Networking Your Organization").
4. Focus on underserved activities by providing embedded social applications for specific end-user activities, such as rich content creation, content reviews, project management, task management, process modeling, data collection and reporting, decision-making, idea management and inbox management. In this way, social capabilities can provide a fluid and conversational supporting context and a product can set itself apart from the competition by offering best-in-class built-in support for specific activities. Note that many activity-specific functions are aimed directly at end users, who are often dissatisfied with the cumbersome nature of officially supported alternative tools for these activities.
5. Treat workers as individuals, bypass IT and business decision-makers and generate demand among individual workers by offering instant gratification, simplicity, continual improvements, "coolness," and an overall emphasis on "getting things done," rather than ensuring control and conformity with sanctioned but outdated technology.

Understanding these five routes to differentiation is important for buyers because this knowledge will help them match their business priorities with vendors' products and strategies:

• Buyers without pressing short-term priorities and wanting products well suited to their overall information management strategy may be best served by vendors that take the "IT bundle" route.
• Buyers looking for "social enablement" for an existing business process may be best served by vendors taking the "biz app bundle" route.
• Buyers ready to make high-risk but potentially high-reward investments in broad social enablement with a view to transforming specific business activities should favor vendors taking the "horizontal layer" route or focusing on underserved activities.

Finally, all organizations should be aware of the most prominent vendors trying to engage directly with their employees. An organization that prudently pursues a conservative strategy aiming to minimize risk by engaging slowly with traditional IT suppliers could actually achieve the opposite result, if individual employees shun official systems and "do their own thing."

Given the differing backgrounds of many of the vendors, the differences in their strategies, and the increased consolidation activity, we expect this market's volatility to remain high. Buyers should therefore remain cautious. They must know their priorities and which activities to support in order to choose appropriate vendors and products.

Notable Absences From This Magic Quadrant

Some important vendors did not meet all the inclusion criteria for this Magic Quadrant. They typically lack sufficient market penetration in terms of relevant use cases, or they target areas of functionality not covered by the inclusion criteria — but they should still be of interest to prospective buyers of social software for the workplace.

Box offers an online enterprise content collaboration service that combines user-friendly, cloud-based, document-centric capabilities (including online viewers, content integration with dozens of repositories, Web documents and desktop synchronization) with collaboration and networking (including @mentions, discussions, comments, tasks, tags and activity feeds), along with different computing platforms and mobile devices. Box has built an extensive partner ecosystem with over 200 integrations, including with Microsoft SharePoint, Office and Outlook, EMC Documentum, VMware, Citrix Systems, Good Technology, Mobile Iron, Jive, Google Apps, NetSuite, SAP StreamWork, DocuSign, eFax, FedEx and salesforce.com.

Google offers a broad cloud-based bundle of services as Google Apps for Business, which includes email, calendar and file synchronization features, a browser-based office suite and simple site-publishing capabilities for a competitive all-inclusive per-user subscription. An optional archiving and e-discovery service is also available. Integration with other consumer-grade Google services such as Google+, Google Maps, YouTube and Google Translate is possible, but without business support or SLAs. Currently, interest in Google Apps for Business is mainly focused on its email component, but Google's ability to influence the overall social software market will increase, particularly after the expected addition of Google+ to the bundle of supported services.

IntraLinks is best known for its secure data-sharing platforms in the banking and finance industries, but it also has a growing presence in the field of life sciences. Its core products are configured to support specific collaboration and information sharing in specific contexts, such as clinical study management communications and board communications, across organizations. IntraLinks' SaaS product includes team workspaces, task automation, search and document-sharing capabilities, and integrates with systems such as those of salesforce.com and Microsoft SharePoint.

Oracle WebCenter is becoming Oracle's centerpiece for user engagement in general. It has several components relevant to this Magic Quadrant, in addition to support for portal, content management, Web experience management, search and mashup/application development. Oracle Social Network, a new platform in the Oracle WebCenter family, will add a horizontal layer of social capabilities, such as support for activity streams, content sharing and conversations. Oracle Social Network is available as part of Oracle's Cloud Social Services offerings, initially with Oracle Fusion Applications such as Oracle Fusion Customer Relationship Management and Oracle Fusion Human Capital Management, is integrated with Oracle WebCenter, and will also be available as a stand-alone capability. Oracle Social Network can be integrated with other applications in the cloud or on-premises.

10 Hot Cloud Startups to Watch in 2013

10 Hot Cloud Startups you should watch (in alphabetical order).

1. AppZero

What they do: Help companies migrate server applications to the cloud.

Headquarters: Andover, Mass.

CEO: Greg O'Connor. He previously served as founder and president of Sonic Software, acquired in 2005 by Progress Software.

Founded: September 2010

Funding: $10 million in angel funding from BDC Venture Capital, Covington Capital and private investors.

Why they're on this list: Moving applications from traditional IT systems to the cloud isn't easy. AppZero encapsulates an application and its dependencies in a "virtual application appliance," without a virtual machine (VM). The result is an application that is flexible, "hypervisor-agnostic, cloud independent, and fast." Current customers include Pabst Blue Ribbon.

AppZero also staged a solid push in Startup50 voting, winning the overall competition with 17 percent of the vote total. Why does that matter?

What voting proves to me is that the startup is focused enough on marketing and PR to effectively get its message out. It also shows that the message resonates well enough to entice third-parties to support it. If you think this is trivial, you're forgetting that plenty of technically superior startups have failed over the years because they failed to connect with prospective customers.

Market Potential and Competitive Landscape: Gartner predicts that the cloud Infrastructure-as-a-Service (IaaS) spending will exceed $72 billion, (42 percent CAGR) by 2016. Competitors include dinCloud, Eucalyptus, RingCube, Nebula and Rackspace.

2. Aryaka Networks

What they do: Provide cloud-based WAN optimization and application acceleration services.

Headquarters: Milpitas, Calif.

CEO: Ajit Gupta, who previously founded Speedera and served as its President and CEO until it was acquired by Akamai for approximately $500 million.

Founded: November 2008

Funding: The company has raised $45 million in three rounds of funding. The most recent round was a $25 million Series C led by InterWest Partners, with participation from Presidio Ventures, a Sumitomo Corporation Company, and existing investors Nexus Venture Partners, Trinity Ventures and Mohr Davidow Ventures.

Why they're on this list: WAN optimization is typically too costly for the middle market. Aryaka zeroed in on this problem and determined that the best way to drive down costs and democratize the technology was to deliver WAN optimization as a service.

Aryaka first built a delivery network comprised of globally distributed POPs. Enterprise locations connect into the Aryaka network over existing Internet links (or using a direct L2 connections) to one or more POP. Provisioning can be accomplished in minutes -- rather than days or weeks as with hardware-based solutions.

To boost application acceleration, Aryaka runs TCP optimization technology, as well as bandwidth scaling and application-specific proxies. Aryaka also provides access to Internet-based SaaS and cloud services, which help customers avoid middle-mile congestion problems that Internet-based connectivity solutions experience.

Moreover, Aryaka has a solid management team. CEO Ajit Gupta Founded Speedera and sold it to Akamai for $500 million. The management team has a solid track record in the traffic acceleration space. Aryaka also finished second in Startup50 voting with more than 12 percent of the total.

Market potential and competitive landscape: According to IDC, the WAN optimization market should have topped $1.3 billion by the end of 2012. There are some major incumbents in this market, though. Riverbed owns about 50 percent of the market, while Cisco, F5, Blue Coat and Silver Peak are all formidable foes.

That said, the IT market as a whole is slowly moving away from box-heavy infrastructures -- the delivery model of the above providers -- and to services. Moreover, the middle market is grossly underserved by existing solutions, and even many large enterprises are reluctant to deploy hardware at branch offices, which will greatly benefit from a service like this.

3. Blue Jeans Network

What they do: Develop cloud-based videoconferencing tools that bridge various available services.

Headquarters: Mountain View, Calif.

CEO: Krish Ramakrishnan, who formerly served as CEO for Topspin, which was acquired by Cisco in 2005. At Cisco, he served as GM of the Server Virtualization business unit.

Founded: November 2009

Funding: The company has raised $48.5 million from New Enterprise Associates, Accel Partners and Norwest Venture Partners.

Why they're on this list: Today, various videoconferencing systems do not interoperate. Cisco videoconferencing units don't talk to Polycom which don't talk to Google which don't talk to Skype and so on. Imagine if this were the case with telephony. If you were a Sprint customer, you could only talk to other Sprint customers. If you wanted to talk to someone on AT&T or Verizon, you'd need to download special software.

[Related: Videoconferencing in Action: From Skype to 3D Holograms]

Blue Jeans leverages the cloud to turn videoconferencing calls into a "meet me" service, where each party dials into the videoconference from whichever system they prefer to use. The end point hardware becomes irrelevant -- kind of like how the handset is irrelevant when placing a call.

On its roadmap, Blue Jeans intends to eventually take users from the audio-only calling market and shift them to video calls. Customers include Facebook, Match.com, Foursquare and the Sierra Club.

Market potential and competitive landscape: According to Wainhouse Research, the videoconferencing infrastructure market represents a $700 million/year market. However, this is a crowded space. In addition to incumbents like Polycom and Cisco, cloud-based newcomers, such as Join.me and FuzeBox, will challenge Blue Jeans. That said, Blue Jeans is the only tool I'm aware of that stitches an array of conferencing services together.

4. BrightTag

What they do: Develop cloud-based data integration tools.

Headquarters: Chicago, Ill.

CEO: Mike Sands. Prior to joining BrightTag, Sands was part of the original Orbitz management team and held the positions of CMO and COO.

Founded: 2009

Funding: They've raised $23 million to date from Baird Venture Partners, EPIC Ventures, I2A Fund, New World Ventures and TomorrowVentures.

Why they're on this list: Today, if a Website owner wants to work with multiple third-party services (e.g. Google Analytics, ad networks, social, etc.), they have to conform to an outdated construct of putting the vendor's code (or "tag") on every page of their Website that they want to track. In doing so, the site owner is not in control over the data collected, they introduce site performance issues with more code being pushed through their consumers' browsers, and they create silos of data across each vendor's service, not to mention creating privacy issues with regard to data collection practices.

BrightTag intends to simplify how Websites connect to their partners by providing a single point of integration for any data-driven service. The company's platform replaces traditional "tag-centric" methods of connecting sites to marketing services with real-time, direct integration through the cloud.

Clients include Yahoo! Japan, Gap, Macy's, Levi's, Bebe, Tommy Bahama, Crate & Barrel, JetBlue Airlines, Orbitz, Starwood, US Cellular, Transunion and Allstate.

Market landscape and competition: This market is new enough that there aren't good market estimates on it. Google, Adobe and IBM offer competing tag container solutions.

BrightTag argues that most competing solutions on the market are "tag containers." As browser-based tags continue to proliferate -- either fueled by the advent of tag management solutions or from continued industry growth -- both data collection and the site users' experience become slow and unstable.

BrightTag cloud-based service eliminates vendor tags altogether and connects data directly. There are no "tags" in a point-of-sale system or a mobile app or email. According to Web analytics firm BuiltWith 30 percent of the top internet retailers have employed a tag management system and of those 43 percent are using BrightTag.

5. Cedexis

What they do: Develop tools that provide visibility into cloud and CDN performance, and then help users act on that information.

Headquarters: Portland, Ore.

CEO: Marty Kagan, who previously served as vice president of engineering for Jive Software.

Founded: Q4 2009

Funding: They landed a $7 million Series A round in mid-2011 from Madrona Ventures Group and Advanced Technology Ventures (ATV).

Why they're on this list: Let's face it, the roadblock for many cutting-edge cloud services, especially those using rich media, is the poor performance and unpredictability of the public Internet. Cedexis' mission is to improve "the Web experience of billions of Website visitors each month by providing visibility into the performance of clouds and CDNs."

Cedexis Radar is a free community that crowd-sources visibility into cloud and CDN performance from the end user perspective. It has global reach and is updated over 1 billion times a day.

Cedexis Openmix is a paid Cloud SaaS offering that uses Radar, and other real-time data, to dynamically route Website and Web application traffic around outages and service degradations.

The newest product, Cedexis Fusion, is a Big Data tool that aggregates third-party data, including pre-built integrations for New Relic, AppDynamics, Akamai, Level3, Edgecast, ChinaCache, SoftLayer and many others, to further improve the availability and performance of customer Websites and Web applications.

Customers include Mozilla, Dior, Nissan, Volkswagon, LeMonde, France Television, Yves Roche, NBC News, Accor Hotels, EuroDisney, L'oreal, and Via Michelin.

Market landscape and competition: According to Gartner's 2012 Magic Quadrant for Application Performance Monitoring, the APM market should have hit $2.14 billion by the end of 2012 (a 9 percent increase over 2011). Meanwhile, Markets and Markets believes the CDN market will grow to from $2.1 billion in 2011 to $7.4 billion by 2017.

Competitors include CA (through its Nimsoft acquisition) and Zenoss.

6. dinCloud

What they do: Help small- to mid-sized businesses migrate and provision desktops, servers, storage, networking and applications to a Virtual Private Data Center.

Headquarters: Los Angeles, Calif.

CEO: Kevin Schatzle. Prior to joining dinCloud, he was President of Allied Digital Services' U.S. subsidiary.

Founded: January 2011

Funding: The company has secured an undisclosed amount of angel funding.

Why they're on this list: Most enterprises know they should virtualize their infrastructures, but they struggle with where and how to start. According to dinCloud, virtualization and cloud computing aren't just about hosting servers alone, or giving customers virtual machines in the cloud. They are about business provisioning and helping businesses transform their physical environments to virtual ones.

dinCloud's software enables the rapid migration/provisioning of desktops, servers, storage, networking and applications to a Virtual Private Data Center. Customers can control as much of this infrastructure as they want through an online cloud orchestration and management platform, dinManage.

High-profile partner Microsoft says that it worked with dinCloud to help save a financial services customer 50 percent on IT spending. In this case, dinCloud hosts 250 virtual desktops, 30 virtual servers, and provides second site back up in the cloud.

Named customers include LANDesk, Grant Thornton International, King's Hawaiian and National Asset Direct. dinCloud also finished fourth in Startup50 voting with 8.5 percent of the vote total.

Market landscape and competition: Gartner predicts that the cloud Infrastructure-as-a-Service (IaaS) spending will exceed $72 billion, (42 percent CAGR) by 2016. Competitors include AppZero, Eucalyptus, Nebula, RingCube and Rackspace.

7. HyTrust

What they do: Develop virtualization security tools.

Headquarters: Mountain View, Calif.

CEO: John De Santis serves as CEO. Eric Chiu co-founded the company and is its president. De Santis was formerly chairman and CEO of TriCipher, a software security infrastructure company acquired by VMware in 2010. After the acquisition, he served as VP, Cloud Services for VMware. Chiu was previously VP of Sales and Business Development for Cemaphore Systems.

Founded: April, 2009

Funding: HyTrust has raised $16 million from Trident Capital, Granite Ventures and Epic Ventures, as well as strategic corporate investors such as Cisco and VMware.

Why they're on this list: Virtualized and cloud infrastructures create new security, control, management and compliance challenges for IT staffs. Organizations take big risks when they move to the cloud or rely on virtualization when critical applications and sensitive information are not properly secured.

The HyTrust Appliance delivers access control, enforcement of policy across virtual infrastructures, hypervisor hardening, and audit-quality logging among other features. By addressing these requirements, HyTrust is able to provide organizations with the control and visibility required for them to virtualize Tier 1 applications, meet corporate governance requirements, and avoid costly downtime or other possibly more serious business disruption.

Customers include AIG, U.S. Army, Northrop Grumman, Pepsi, McKesson, Home Shopping Network, Federal Reserve Bank of Chicago, UC Berkeley, State of New Mexico, and Denver Museum of Nature & Science.

Market landscape and competition: The cloud security market is incredibly crowded, but HyTrust has carved out a solid niche by focusing on hypervisor vulnerabilities. Competitors include Altor Networks (now Juniper) and Catbird.

8. Nebula

What they do: Provide OpenStack-based appliances that let businesses deploy and manage private clouds.

Headquarters: Palo Alto, Calif.

CEO: Chris Kemp, who was previously CTO for IT at NASA, where he also co-founded the OpenStack project

Founded: April 2011

Funding: In September 2012, the company raised a $25 million Series B round led by Comcast Ventures and Highland Capital Partners. Kleiner Perkins, William Hearts II, Maynard Webb, Scott McNealy, Innovation Endeavors participating and Google's first three investors (Andy Bechtolsheim, David Cheriton and Ram Shriram) also participated.

Why they're on this list: OpenStack is shaking up the cloud infrastructure landscape, serving as the main open-source alternative (sorry CloudStack) to VMware. CEO Chris Kemp co-founded OpenStack while he was at NASA, and along with Rackspace, Nebula is a key driver helping to make OpenStack a viable alternative to closed cloud systems.

NASA and several other government agencies use OpenStack for their own private clouds. Nebula delivers its private cloud solution as an appliance.

Market potential and competitive landscape: Cloud market predictions are all over the map (Forrester predicts that the global cloud computing market will grow from $40.7 billion in 2011 to more than $241 billion in 2020, while Deloitte predicts that cloud-based applications will only replace 2.34 percent of enterprise IT spending in 2014 rising to 14.49 percent in 2020, while also pushing down costs in the process). We do know, though, that the cloud deployment and management market will be large.

This sector is a land grab as of now, but there is a ton of competition already, including VMware, AWS, Citrix (CloudStack), dinCloud, AppZero, Eucalyptus, Rackspace, OnApp, Piston and many others.

9. OnApp

What they do: Provide cloud services, including IaaS, CDN and storage services.

Headquarters: London, U.K.

CEO: Ditlev Bredahl. Before founding OnApp, Ditlev led UK2 Group's hosting companies as Managing Director and CEO.

Founded: July 2010

Funding: To date, OnApp has raised $20 million in two rounds of funding. The latest B round of funding was led by UK private equity firm LDC.

Why they're on this list: If you're a traditional hosting provider, you have either already transitioned to being a cloud provider or you are scrambling to do so.

OnApp's mission is to remove the entry barriers to the cloud for Web hosts, telcos, ISPs, MSPs and other traditional service providers. OnApp developed a turnkey system that enables service providers to create their own cloud services, using their existing servers or data centers, with no up-front software investment required.

The OnApp Cloud platform takes care of all core cloud management/orchestration functions, such as cloud deployment, VM management, failover and autoscaling.It also includes the capabilities lacking from most enterprise-focused private cloud platforms, but which service providers absolutely depend on, such as support for different utility and plan-based billing models; the ability to bill for every hardware resource in your cloud; and user management, limits and permissions.

The latest version of the OnApp Cloud platform includes a built-in SAN, a global CDN with video streaming support, DNS management, autoscaling, load balancing and a range of other features. Customers include PEER1 Hosting, GMO, UK2 Group, Dediserve and eApps. OnApp finished third in Startup50 voting with 9.6 percent of the total.

Market landscape and competition: OnApp is targeting a public cloud IaaS market currently estimated at $6.2 billion, according to Garter, and a CDN market estimated at $2.5 billion, according to Markets and Markets.

Competitors include Boomi and ScaleUp Technologies. With its recent service upgrade, OnApp now also competes with CDN providers.

10. SaaS Markets

What they do: Provide the cloud-based infrastructure that enterprises can use to launch mobile app and SaaS stores.

Headquarters: San Mateo, Calif.

CEO: Ferdi Roberts, who previously held senior executive positions at Yahoo, Cisco, and Ariba.

Founded: 2011

Funding: They have not disclosed funding details.

Why they're on this list: As BYOD becomes more common and as the "appification" trend continues unabated, enterprises must find ways to approve and control these apps. SaaS Markets intends to address this problem by giving enterprises the tools they need to launch their own app and SaaS stores.

App qualification is managed by the SaaS Markets Application Partner team, which runs SaaS applications through a series of rigorous tests. MarketMaker, the SaaS Markets platform, includes a search engine to make it easy to find all relevant apps, and evaluate and test them side-by-side in terms of capabilities, interface, features and cost.

Currently, SaaS Market also offers more than 1,300 pre-qualified SaaS apps for tasks that range from managing social media outbound messages to project management to cash flow management to security.

Customers include the Montana Chamber of Commerce, Association of Washington Business, Park City, UT Chamber of Commerce and Auburn, WA Chamber of Commerce.

Market landscape and competition: Forrester Research is projecting the SaaS software market to increase 25 percent in 2013 to $59 billion, a 25 percent increase. In 2014, Forrester projects the market to total $75 billion. Competitors include App47 and AppCentral.

By Jeff Vance