A Sea Change in Business Communications

As organizations grow in size and become more geographically dispersed, corporations find themselves on a seemingly perpetual search for business communication solutions that boost employee productivity and effectiveness, and show a substantial—if not instant—return on investment.

Over the past five years, there has been steady movement for organizations of all sizes to leverage the Internet for all types of communications: written, spoken and seen. As a result, a wide variety of vendors, both large and small, have emerged to take a piece of the multi-billion dollar markets in real-time data conferencing, teleconferencing and video-centric communications.

Web Conferencing, Voice over Internet Protocol (VoIP), Instant Messaging (IM) and, most recently, the notion of Presence is among the newest technologies that are changing the way large organizations and enterprises communicate. Since 1999, thousands of companies around the world have chosen to embrace the power and inherent flexibility of these business communication initiatives for a variety of compelling reasons: reduced travel, revenue generation, improved customer service, increased employee productivity and more.

Enterprise communication is rapidly evolving and larger companies are taking a much more critical approach when researching and selecting communication solutions and vendors. These forward-thinking enterprises recognize that security, performance, ease of use, integration and measurable increases in revenue are needs that cannot be sacrificed. Today’s approaches to enterprise communication have attacked these challenges in a “piece-meal”, one-off fashion and, as a result, have failed to meet these critical requirements.

In this white paper, we will explore past, current and future Internet-based enterprise communications and how these critical functions have passed the embryonic phase and are staged for the next level of function: integrated and converged real-time enterprise communication.


Market Background and History

In 1995, a communication standard known as T.120 was created and ratified by two organizations: FutureLabs (now known as WebEx Communications) and DataBeam (acquired by Lotus and then by IBM). T.120 was created to enable network-independent teleconferencing and video conferencing, which was viewed as an important building block of Internet-based conferencing. This enabled the creation of a wide range of collaborative applications—such as desktop data conferencing, Instant Messaging and chat, point-to-point IP video conferencing and multi-player gaming.

To truly recognize the benefits of this newfound point-to-point standard, large amounts of bandwidth (in addition to expensive hardware and software) were necessary to maximize communications and maintain data integrity. In response to the costs involved, corporations retreated as customization, implementation and securing dedicated bandwidth from each “data point” were expensive and arduous processes. Communications providers found it difficult to scale with the growing needs of customers and the proliferation of the Internet. Moreover, point-to-point communications solutions failed between these private end-points.

In 1998, the market began to change direction. Many data, voice and video communication providers altered their business models to subscription-based hosted services—now known as Application Service Providers (ASPs). These “Web-enabled” solutions overshadowed the presumed antiquated client/server solutions with promises of speeding implementation and enabling companies to maximize their Web communications with little or no capital expenditures. In this user-focused model, security and on-going costs were afterthoughts and features were king.

Recent research has proved, however, that as usage of these ASP solutions spread throughout an organization—and its partners, suppliers and vendors—and despite the promises of the ASPs themselves, costs actually increase. This requires the enterprise to pay highly variable and often unpredictable recurring monthly fees for the privilege of using these services. This brings us to the present day, where old is new again, as large organizations search for scalable architecture, long-term ROI and cost control and internal administration.


Current State of the Market

In this cross-functional, enterprise and global partnering environment, companies are increasingly looking for ways to leverage the Internet for communicating on a global scale. Pressure to reduce travel costs while maintaining real-time communications with customers, employees and partners, has resulted in virtually all Fortune 1000 companies using some form of Web conferencing, IM, and/or video conferencing solution—although most often on a hosted (read: ASP) basis.

More widespread, global collaboration implies a need for more efficient communication between corporations and their customers, partners, distributors, manufacturers and designers. Technology industry analysts have discovered that through better collaborative tools and techniques, industry-leaders are also reducing their development time significantly—sometimes by 50 percent.

Application Service Providers (ASPs) have enabled small workgroups to cost-effectively communicate regardless of time zone or logistics constraints, but as usage of these solutions spread across an enterprise and beyond, costs dramatically increase and the scalability and performance of these archaic ASP-only services suffers.

Additionally, overage fees—much like today’s cellular phone charges—are standard and hold back mainstream acceptance of Web-centric collaboration. Also, multiple vendors are being utilized by large organizations, and thus the end result is higher costs.

In consideration of Microsoft’s acquisition of PlaceWare in 2003, thus announcing their market entry, other collaboration vendors are scrambling to build and/or acquire key functionality to stay competitive. Also, with Microsoft’s renewed focus on the Microsoft Real-Time Collaboration project and its inclusion in the next Windows® operating system (codename: Longhorn), analysts are in agreement that major changes are in store for the collaboration category in the next 24-36 months. Some of the speculation centers on the following issues:

  • Virtual dismissal of the T.120 standard – Analysts across the board are rethinking their opinions on T.120 for the enterprise and have begun to deepen their understanding of why a larger organization needs more than just a point-to-point communications solution for the LAN. Additionally, T.120/point-to-point solutions fail to function securely and consistently between routers, NATs and firewalls.


  • Market Consolidation and Convergence – Over the last 18 months the number of collaboration vendors has increased; but there has also been a number of mergers and acquisitions. Large corporations such as Microsoft, Documentum and Polycom have recently acquired technology players in the industry. In addition, there have also been mergers and acquisitions that have occurred from large audio conferencing service providers, such as Teleservice’s $400 million acquisition of InterCall. This is a trend that is expected to gain momentum over the next two years.

    Currently, there are a number of collaboration vendors that offer a single solution (read: IM or conferencing or telephony, etc.). For the next two years, industry analyst Frost & Sullivan expects that many of these organizations will be able to build reasonable revenue and client bases by merely offering single collaboration applications and services. However, for the long run, the outlook for these vendors is very bleak (see sidebar).

  • Usage Entrenchment – While awareness of collaboration continues to permeate businesses of all levels and sizes—and major vendors such as AOL, WebEx and Yahoo! continue their attempts at garnering end-users—the majority of growth continues in the corporate environment. Similar to what has taken place in the audio conferencing market, the majority of businesses have yet to realize the benefits of instituting collaboration into their communication practices. As the market grows toward saturation, the extremes of the market (read: small business sector and large enterprise/government) will be critical in driving vendor growth and for the market to reach its full potential.

    The collaboration functions of web conferencing are driving a measurable surge in usage. Although the newest users typically feel more comfortable with the presentation features, experienced users are finding the collaboration piece to be the most beneficial. Data/desktop sharing and document collaboration functions of web conferencing enable users to efficiently work in a virtual team environment whether they are a few cubicles apart or thousands of miles away. Document sharing, application sharing, group web browsing, desktop sharing and whiteboarding represent the features and functions most frequently utilized by the enterprise.

The Two-Horse Race: On-Premises vs. ASP

Enterprises have garnered experience with business communication solutions and recognize that selection of the right vendor is paramount to short-term implementation, performance and long-term success. C-level executives across a wide range of horizontal markets and vertical segments are tasking IT to research, investigate and recommend solutions to enable global Web-centric collaboration. These efforts yield two distinct choices: subscribe to a hosted service; or, bring collaboration behind the corporate firewall.


Hosted/ASP

Turnkey subscription-based solutions are inherently cost-intensive over long-term use and T.120-based peer-to-peer technology prohibits a secure and scalable, cross-platform solution. These global leaders are shifting to implement viable, server-centric solutions that enable both secure, scalable Web communications and cost-effective ownership and integration.
These services-centric companies have hit the market strongly and captured early market share. However, most of these collaborative solutions are based on technology/functionality that can only be acquired as subscription services (ASPs) and provide significant barriers to enterprise-wide acceptance:

  • Cost: Costs beyond the customer’s license agreement—overage fees—are exorbitant and limit the use of collaboration in any size organization. Additionally, these customers have no awareness of real-time usage and costs; therefore overage fees are a surprise at the end of the month. Current pricing of ASP-only vendors is currently between $40-$200 per month per user. This monthly recurring cost, combined with overage fees, does not provide for cost-effective usage of ASP-only Web conferencing solutions.

  • Security: As ASP-only Web conferencing services are offered on a subscription-basis and hosted outside the corporate firewall, security is often limited to Secure Socket Layer (SSL) encryption. ASP-only services do not allow migration to a behind-the-firewall solution and, therefore, cannot enable ironclad security for the distributed Enterprise.

  • Scalability: Web-centric data communication services based on older, unreliable standards have inherent challenges scaling to support the distributed Enterprise. These services enable Web meetings on a peer-to-peer basis.

  • Channel Conflict: Today’s ASP vendors have created their own channel sales problems by changing their business/sales models and enabling customers to buy Web conferencing at any level and/or cost. The dominant source of Channel Conflict is the Pay-Per-Use (PPU) model, where customers pay a small recurring monthly access fee and are charged only for they time they use. While it sounds beneficial, larger corporations are beginning to experience the exact opposite and should turn to a more cost-effective solution in the near future.

    Conclusion: While hosted solutions are extremely advantageous for workgroups and smaller organizations, larger corporations need a standards-based solution with enhanced security and administrative control that enables bandwidth-independent collaboration and incorporated IM, video, data and voice.


On-Premises

Current Client/Server LAN collaboration software vendors have attempted to acquire market share by retrofitting and adding collaborative functionality into their existing software offerings. These software vendors have inherent architectural problems reaching out beyond the corporate LAN to securely include external conference participants. Some vendors have attempted to re-tool their product offerings in an effort to augment their solutions and support the globally distributed enterprise. Aside from unreliable functionality and insurmountable firewall challenges, these solutions usually require major expenditures and significant implementation time.
However, a select number of vendors have emerged with significant vision, talent, capital, and relationships that enable enterprises of all sizes to integrate and implement all aspects of real-time and on-demand collaboration behind the firewall in days—not weeks or months—without significant investment, administration, training or management. Leading the charge for enterprise communication and collaboration convergence is industry leader WiredRed Software.


Benefits of Converged Collaboration with WiredRed

As previously stated, Web-centric collaboration includes various forms of communication and has many applications. Since its inception, collaboration found a strong niche in a number of business critical applications such as outbound sales and marketing efforts, customer support, corporate presentations and internal communications. Thousands of organizations have maximized the efficiencies of their workforces by utilizing all forms of collaboration: instant messaging, web conferencing, multi-point video conferencing, and telecommunications.

Internally, the ability to link globally distributed workgroups and project team members—including vendors, contractors and partners—results in higher efficiencies, reduced communication costs and faster time-to-market. The result is a streamlined modus operandi for business communication that is more efficient than email threads, faxes, overnight couriers, and one-off teleconferences and lengthy face-to-face meetings. Externally, collaboration can significantly shorten traditional sales cycles and seamlessly integrates into sales, marketing, training and technical support efforts.

WiredRed’s e/pop product line has the ability to answer the call of the distributed enterprise and has eliminated common barriers to entry for any size organization—from the smallest business to the largest distributed enterprise.


Converged Enterprise Collaboration

Collaboration encompasses many functions of communications, and thus has many vendors offering specialized solutions. While this model is beneficial to smaller organizations requiring limited and/or single-function usage, these “communication silos” offer little to satisfy a globally distributed enterprise.

To date, only a small number of vendors have gone the path of offering a complete solution enabling the best in collaboration — secure IM, company/system-wide alerts, data conferencing, multi-point video, multi-point VoIP and more. This short list of vendors includes the likes of Microsoft and IBM/Lotus. Both require standardization on their respective platforms, large capital expenditures and significant time implementing and deploying their solutions. Significant time and cost for training (for users and administrators) is also required.

WiredRed’s e/pop enables converged business communication in ways never before possible. Whether the need is simple (starting a secure IM chat and moving to a Web conferencing session with a mouse-click) or complex (gathering a global team to respond to a time-constrained RFP). WiredRed is driving collaboration convergence.


Cost of Implementation

The cost involved with deploying Internet-based communication solutions has been a key factor for organizations looking to select and adopt a vendor. When compared to the costs of travel (and associated travel expenses), the cost benefits and return on investment becomes clear. However, when larger organizations take into account the recurring cost model offered by today’s ASPs, it becomes clear that this rapid ROI is only short-term.

WiredRed’s e/pop product line has made it easy for companies of all sizes to recognize instant deployment-based cost savings while considering and enabling long-term benefits of security, administration, integration, cost control and enterprise-wide standardization. By allowing all flavors of e/pop (data conferencing, secure IM/presence, alerts) to be installed in a matter of minutes—not days, weeks or months—and by leveraging existing infrastructure, e/pop has radically shortened the enterprise software installation and management paradigm.


Security

When considering communications of any kind—instant messages, documents, presentations, tele/video conferences, etc.—confidentiality is critical to the success of any organization. Most real-time collaboration vendors offer their solutions as a service, residing outside the corporate firewall with simple password-based security to protect content. If additional security is needed (i.e. VPN), bandwidth becomes an issue in the effort to keep latency at bay.

As an on-premises solution, and with security placed top-of-mind, WiredRed’s e/pop software is installed and managed behind the corporate firewall. This enables complete and total confidentiality of any and all data/content: IM chat, real-time data conferencing content and/or company-wide alerts.


Enterprise-Grade Architecture

WiredRed’s Real-Time Routing Architecture™ powers all e/pop products. This patented technology design enables an enterprise-class multi-server presence management engine, multi-server intelligent routing, high-speed virtual channels (synchronous), groups, security and directory integration.

WiredRed’s Real-Time Routing Architecture supports a wide variety of highly scalable applications across their entire product line including: secure IM, alert messaging (company-wide pop-up alerts), scalable text conferencing, web conferencing, multi-point audio/video conferencing, and proxy-friendly remote control.


Conclusion

As part of this analysis on Internet-based enterprise communication, Engravado Consulting has conducted an in-depth review of WiredRed’s e/pop product line and has determined the following:

  • WiredRed is on the leading edge in the convergence of collaboration and communication. There is significant opportunity for WiredRed as well as their customers based on the integrated offerings in the e/pop product line. As e/pop is deployed and managed behind the firewall, WiredRed is able to meet and exceed the short-term and long-term business collaboration needs of the enterprise.

  • The ability to “start simple” with the like of an alert or chat session and then escalate the encounter to a fully interactive conference—with multi-point and bandwidth-friendly data, voice and video conferencing—is of significant benefit to the end user and the organization as a whole. Aesthetically, users and administrators will find the UI extremely intuitive. Whether you are starting a conference or installing the server itself, WiredRed has put significant time and energy in maximizing and simplifying the experience.

  • WiredRed’s flexible and scalable Real-Time Routing Architecture is a tremendous benefit to organizations looking to truly utilize the Internet for their communication needs. By acting as a “smart agent” and enabling e/pop modules to “talk” to one another, WiredRed is positioning itself to compete in the realm of enterprise software infrastructure.

  • End-users and administrators alike will find WiredRed’s e/pop products extremely feature-rich, offering the best in Internet-based data, voice and video conferencing functionality.


About WiredRed

Founded in 1998 and headquartered in San Diego, California, privately held WiredRed Software is a technology leader in enterprise real-time communications. WiredRed's e/pop software appeals to busy, security conscious IT staff that seeks a superior solution to secure instant messaging, company-wide alert messaging and web conferencing challenges. The company licenses its software to corporate and government IT organizations and a growing network of business partners. WiredRed currently has thousands of organizations using e/pop for their business communication and collaboration needs.

 

Engravado Consulting specializes in bringing high technology solutions and services to market. For more information, please contact us at info@engravado.com or visit us on the web at http://www.engravado.com.

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