UC for Free

You have to wonder if Unified Communications is ever going to be a moneymaker. Before the economic crisis hit, the technology was a bit too immature, with too uncertain a value proposition even in flush times. Then when the money was gone, UC applications and interfaces mostly started to look like a luxury that enterprises weren't in a mood to splurge on.So several of the vendors have adopted the strategy of giving away UC apps, and this has turned out to be something of a success, after a fashion. As Allan Sulkin explains on No Jitter, Avaya shipped almost twice as many UC application licenses as telephony line stations in the most recent quarter. The reason? Most of these licenses were given away for free, bundled with the telephony system.

Free is generally considered to be an attractive price point for the customer, and Allan argues that giving away UC software may be an acceptable thing for the vendor as well, if it's the best way to make the telephony system sale. The opportunity cost to the vendor is high, because it's foregoing a potentially fat margin on the software sale; but at least this is better than giving away or drastically discounting hardware or other items with a higher cost of goods sold.

Or is it? One commenter to Allan's blog asks the critical questions: "Doesn't 'free' software devalue the very thing vendors have been trying to instill value in for the past decade as hardware became a commodity? Aren't the vendors teaching customers that licenses are of less value than the hardware that runs it?"

The answer would appear to be yes they are, and this commenter clearly disapproves of such an attitude, calling it "last-century thinking."

I'm not so sure I agree with that condemnation. There's hardware and then there's hardware. An Intel CPU is hardware. An IP phone is hardware. You've seen one, you've seen 'em all.

Is an iPhone hardware? What about a Palm Pre? If you choose the latter over the former because the latter can run multiple apps at a time-or you choose the former over the latter because it has a bigger array of cooler apps-the value doesn't reside in any single application. Nor does it reside in the hardware per se. It resides in the nexus of hardware and software, either the hardware's ability to run software in a particular way, or the quality of the software ecosystem that lives off the hardware platform.

In the world of enterprise communications, that nexus has to do not with pinpoint applications on cool devices; it has to do with delivering capabilities that offer business value and can be supported. Here's how another commenter on Allan's blog-an enterprise end user-put it:

Move the prices around and I am still looking at a 1 million dollar system for the Corporate Office. What I am after is the Best of the Best consultant/designers and partner installers for a system. Avaya at one point offered free installation in a bid and Cisco of course wants contract or VARs to do the work. My problem is both systems are perfect for 95% of our needs, but the difference between a sound business communications design and a 1 size fits all (or just add licenses) is the difference between operational efficiency that will have tremendous payback, and high support costs due largely to complicated integrations that nobody is left understanding once they are set up.

To me, that's the bottom line; Enterprise communications is always going to be a complex system--not a mere application or even a mere collection of applications. The vendor that puts together real-time performance with cost-effective applications and integrations with business apps, and ensures support for this complex environment-that's the vendor that will make the sale. Such a sale won't be cheap for a big enterprise, but in the end it'll pay off for both the vendor and the customer.Enterprise communications is always going to be a complex system--not a mere application or even a mere collection of applications.