I have been following Siemens and their unified communications strategy even before we called it UC. Their strategy has evolved but their direction has been surprisingly consistent. Siemens worked with Microsoft on solutions we now call UC. They were ahead of the market but it looks like they now have an opportunity to become a market leader in the UC space.
My colleagues have posted several blogs and articles on UCStrategies.com discussing Siemens Enterprise Communications (SEC) joint venture (JV) with The Gores Group (TGG).
- Marty Parker – “SEN has arguably the best software stack for UC solutions in the entire industry in their OpenScape Communications Suite.”
- Don Van Doren – “My suggestion is that Gores and SEN strive to become the systems integrator of choice for integrating voice communications into business processes.”
- Paul Stockford – “Siemens in unquestionably a power to be reckoned with in the emerging UC market, but they’re a non-entity in the well-established contact center market.”
- Michael Finneran – “In the near-term, mobility could be the joint venture’s ace-in-the-hole.”
- David Yedwab – “the US focus of The Gores Group and its contribution of Enterasys and SER Solutions to the JV is logically designed to have significant positive impact”
The JV will be well positioned from the start with $350M Euros for investment to shore up any product or distribution deficiencies and $500M Euros in working capital (and no debt) to cover any losses – which are unlikely with SEC’s recent cost cutting initiatives and TGG’s practice of turning acquired companies profitable within months of acquisition (JV in this case).
The challenge – will the new joint venture be able to take advantage of this opportunity. I have always felt – Siemens has a great UC story but nobody is buying it – why? I have already mentioned they were early to market and, they have a great marketing executive in Mark Straton – so why haven’t they been more successful? A simple explanation – Siemens is too large to easily evolve with the changing market and technology. The market is changing but Siemens corporate was not agile enough to change quickly to leverage the opportunity (you can read – challenges at Avaya and Alcatel Lucent into this).
To become a market leader they need to change the way enterprise customers look at communications. This is something we at UCStrategies.com are passionate about. We believe the vendors needs to support what they already know – the PBX is changing from the center of communications to a part of an enterprises communications solution. UC is communications integrated to optimize business processes and is not about buying a new PBX.
SEC appears to be the only vendor positioned for the changes UC brings. Most vendors have not been able to change their business model and still require the revenue and profits associated with sales of new IP-PBX’s. SEC is position to be successful by selling UC solutions – no matter whose PBX is part of the solution.
Too many enterprise customers are stuck in the same old model that is slowly killing past industry communications giants. The first thing they think about is replacing their current PBX with an IP PBX that will migrate to UC. They should be thinking – how can I communications enable a business process. If we need a new PBX great but that is not the core decisions process.
The SEC and the JV has an incredible opportunity. In not too many years we could look back and say Alec Gores was a genius. He leveraged an opportunity and his company became a market leader. Time will tell.