Verizon Business Sets the Table Stakes for UC with Pan-European Product Launch

| June 18, 2008 | Business Telecom Services - Europe | Competitive Intelligence Report

| Analyst: Dustin Kehoe

Current Perspective: Positive
Vendor Importance: Moderate
Market Impact: Low

Event Summary

June 18, 2008 – Verizon Business announces the extension of its Integrated Communications Package (ICP) to ten European countries where it has also increased its VOIP portfolio to provide full inbound and outbound calling. ICP provides a single interface where employees can access voice mail, control incoming and outgoing calls, manage their online presence, send text messages, and synchronize contacts and calendars. The company has also introduced the latest version of Microsoft Office Live Meeting platform for Verizon Net Conferencing, including a redesigned interface and support for live video.

Analytical Summary

• Current Perspective: Positive on Verizon Business for bringing its Integrated Communications Package (ICP) to ten European countries, because the company is one of the first in Europe to offer a consistent portfolio of unified communications (UC) solutions on an international basis. The introduction of ICP also coincides with improvements it has made to its IP Telephony portfolio and to its web conferencing services. Having launched ICP in the US last year, the company is now building out the pieces for pan-European UC product offering.

• Vendor Importance: Moderate to Verizon Business, because this gives the company an opportunity to highlight an international UC product whereas most of its key competitors, particularly European incumbents, are only offering UC products at the national level. Proving to be a work in progress, the first international release of ICP includes basic call management and presence services, and is only available for Verizon’s hosted IP Centrex customers.

• Market Impact: Low on the business services market, because this first release includes basic collaboration features such as instant messaging, softphone and call management that will not provide much in the way of long-term differentiation. Existing Verizon Hosted IP Centrex customers will be pleased at the availability of new features, but many businesses are not deploying IP Centrex and customers do not have to look far to find many alternatives, such as CPE-based solutions or software-based alternatives.

Recommended Competitor Actions

• Competitors (and especially incumbent operators) must begin to offer standard UC products on an international basis to support the needs of MNCs with cross-border requirements. By focusing extensively on the needs of national customers, carriers will fall behind in serving the high-end MNC segment.

• Carriers should also make sure they have the right partners to see that they can deliver a more flexible UC solution whether it is built as a CPE-based solution with a leading vendor, or deployed as a collaboration and messaging platform from a traditional software provider (e.g., IBM Lotus Sametime, Microsoft LCS/OCS). While MNCs are divided over deployments types, carriers must align with the right set of partners to provide a flexible solution based on customer approach for UC. In other words, their bases should be covered no matter how the market evolves.

• Operators should continue in their attempts to develop the business case for UC that customers understand. For example while video conferencing can reduce travel time and expenses, giving employees a single Unified Messaging consol can yield improvements in human response times and enable users to work more collaboratively. Voice integration, presence and IM could also lead to a reduction mobile, voicemail and e-mail traffic.

• Operators must also develop and launch SIP Trunking on an international basis. This is a key enabler to UC and supporting protocol-specific applications. Some providers, such as T-Systems, can offer the product on a national level, but now is the time to internationalize this product. In some cases, this will involve new investment in the network (e.g., Session Border Controllers) and educating customers what could be required in the LAN.

Recommended End User / Customer Actions

• Customers should consider some of the benefits of Hosted IP Centrex. This solution is ideal for customers that want many of the key features of a PBX system without the associated capital, lease, or maintenance costs. All functionality resides in the provider’s network. This is popular for customers moving to Greenfield location, or looking to replace an outdated PBX or TDM Centrex system. While IP Centrex is improving, IP PBX solutions should be deployed if the number of features has a high level of importance.

• Customers should be aware that while Verizon Business is one of the first to offer a standard UC product, competitors are not too far behind. Most top tier operators, for example, will launch Microsoft OCS (as a dedicated product) later this year and are also working with other partners such as Cisco and IBM to deliver a strong roadmap. However, customers should take notice that Verizon Business does have an offer for UC with IP Centrex and is ahead of most operators with its roll-out of SIP trunking.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

| Client access - Full report in Business Telecom Services - Europe | More information
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