While unified communications (UC) services are creating
a host of new revenue opportunities for next-generation
service providers, the challenge for many has been
generating the end-user demand that is required for them
to drive significant revenue streams and increase
profitability through UC offerings. In order to succeed,
service providers must break out of the traditional
service provider attitude of "if we build it, they will
come" and learn how to market, package, sell, and
support their UC service offerings.
INDUSTRY IN TRANSITION
The telecommunications industry is going through a
tremendous transition including rapid changes in
technology, more sophisticated and demanding users, and
competitive threats. Rapid evolutions in the Internet
and wireless technologies are creating new alternatives
for person-to-person communications and information
access/delivery. As a result, service providers must
reevaluate the way that they do business and respond to
the changes by providing differentiated services that
meet the constantly changing requirements of customers,
which are evolving rapidly as the demands of work,
family, and community create competing spheres of
influence. In addition, the challenging economy is
quickly consolidating the number of competitors vying
for consumer and business telecommunications dollars.
Those that remain will be fierce competitors who need
flexible and cost-efficient services platforms that
reduce acquisition and support costs while providing a
base for building a strong and lasting bridge to their
target customers for delivery of high-value, profitable
services.
UNIFIED COMMUNICATIONS DEFINED
Unified communications (UC) is the convergence of
traditional voice telephony communications and e-mail
applications. Although it originally started out within
the legacy enterprise e-mail and voice mail environments
as "unified messaging," UC has quickly become the focal
point for all public Internet-based multimedia and
cross-media communications. The UC market consists of
platforms, services, and user communication devices that
allow the different modes of communications (i.e.,
wireline and wireless voice calls, e-mail, voice mail,
fax, and Instant Messaging) to interoperate seamlessly
from the user�s perspective, sharing resources (e.g.,
a common, multimedia message mailbox, directory
services, and user interfaces). All the market
projections suggest that "unified communications" will
eventually be real big. Why? Because they are talking
about things that are already big becoming even bigger,
i.e., telephone communications, increasing Internet
e-mail traffic, and wireless communications. Because of
the ease of interoperability of all modes of
communications, the whole will actually become larger
than the sum of its parts.
DRIVING THE MARKET
The Internet and wireless communications technologies
are pushing traditional telephone and paging services
towards a converged world of cross-media messaging, on
multi-modal wired and wireless devices. This is not only
true for real-time person-to-person communications, but
is also applicable for all forms of voice and data
transfer such as personalized information delivery from
enterprise and Web-based applications.
What is driving the market towards UC? The key
drivers of UC services are the commoditization of
wireless services and multimedia telephones, along with
Internet telephony or VoIP. Service providers have long
known that subscribers want "one-stop" service, and UC
is no exception. Next-generation communications
providers will offer highly personalized communication
services, local and long distance, as well as
cross-media messaging and cross-modal communications.
Users, especially consumers, will not be satisfied with
separate point solutions, but will want comprehensive
service options that they can use selectively when they
need them. Users will pay for features that save them
time or allow them to do things they normally couldn�t
do any other way. Service providers, on the other hand,
have learned that "free" services are rarely a good
business model for profitability and long-term
viability.
CROSSING THE CHASM
The telecommunications market is still in transition,
suspended over the chasm that separates the early
adopters from the large-scale adopters of UC services.
The technology and standards necessary for widespread
adoption of UC services are evolving quickly, and in
many cases are still in final stages of development. The
migration from legacy point solutions for voice, e-mail,
and fax messaging to a consolidated IP-based
communications platform takes time and money; and the
market is still learning how to successfully promote and
exploit the benefits of "always on" access to people and
information. But, even though everything is not
completely finished, it is important for service
providers to fully understand the steps they can take
now to help cross the chasm. These include:
- Gain a full understanding of what technology is
available now and where the technology is going in
the near future.
- Deploy an appropriate architecture for UC services
that enables the service providers to deliver true
UC services in a cost effective, scalable
environment that can accommodate rapid changes in
market segments, user demands, and advances in best
of breed technologies.
- Learn and execute the fundamentals of market
research, customer segmentation, packaging, pricing,
targeted marketing, aggressive sales/channel
strategies, and customer support.
PAINTING THE TARGET
To succeed in the highly competitive battle for customer
"ownership," service providers need to gain access to
partners who understand and have existing relationships
with targeted market segments. If they choose to
fundamentally "change their stripes," service providers
themselves need to take on the characteristics of highly
skilled marketing companies that know how to develop
targeted product offerings. Targeted offerings help
service providers reduce customer acquisition costs,
develop brand recognition and loyalty, increase market
penetration beyond the anemic ten percent for point
solutions, and substantially reduce customer churn.
Service providers can use UC service offerings to
take on the characteristics of great consumer and
business brands. This can only be achieved by "painting
the target," that is, putting a face on both the
customer as well as the market segment. There are many
large market segments that can be effectively targeted
for UC services. The following two examples illustrate
the approach.
Telematics
This is the label that is given to information and
communication services available in a vehicle. It has
been well confirmed by various market studies that
mobile users are the most likely candidates to benefit
from the features of UM/UC. JP Morgan found that over 45
percent of U.S. mobile calls originate from the car with
over 50 percent of U.S. wireless minutes consumed while
driving.
In addition to basic safety and security features,
telematics includes wireless communications and UC
services including messaging, calling services,
entertainment, access to navigation services, and
information access and delivery. Voice activation and
delivery through text-to-speech and speech recognition
technologies will also be key since a number of states
have already moved to require hands- and eyes-free
access to the limited services that exist today.
Telematics services provide a needed entry point for
service providers to brand and deliver valuable wireless
UC services in volume. In addition, new/leased and
rented vehicles provide a constantly new pool of tens of
millions of potential telematics users.
Realtors
Realtors in the U.S. number in excess of 750,000 and
they spend over $600M in wireless services each year.
Realtors are a part of a vertical market that has
particular needs for wireless communications and UC
services, including "find me, connect me" services to
insure real-time contact with clients, cross-media
message delivery and forwarding, call answering and call
return, and the ability to exchange signed documents
immediately.
From the perspective of information delivery,
realtors may want to be selectively notified of new
listings that come on the market, as well as changes in
the interest rates. All of these needs can be combined
into a set of features that a service provider can price
to meet both the functionality and the usage needs of
this market segment
TARGET THE WHOLE, BUT SELL TO ONE
Although service providers should target UC service
offerings to different market segments and individual
user profiles, it is still critical to sell UC services
on an individual basis. Unlike traditional telephone
services that are location-restricted, the combination
of wireless access and UC options means that every
individual user within an enterprise, a community, or a
residence is a prospective subscriber for their own
service package.
Much like personalized Web portals have become
ubiquitous, UC users want to determine their own
communications needs and preferences and have the
freedom to pick, choose, add, or remove a service
offering as their communication requirements change.
Individual family members, who share a common residence
phone number, want to choose their own personalized
services that are tied to their personal wireless
numbers. Realtors and/or brokers, executives, managers,
and individual corporate contributors want to be able to
personalize and customize their services within a
defined menu of service options.
The increased range of service options that UC offers
to subscribers also lends itself to incremental revenue
opportunities by service upselling on an individual user
basis within different market segments. This approach
enables a minimum starter set of familiar functions and
features to be offered at an attractive price, followed
by trial upgrades to introduce the user to new
capabilities that they are not familiar with.
SERVICE PROFITABILITY
UC services can generate revenue for service providers
based either on functionality, increased usage time, or
both. The fact that there are more new communication
management functions, in addition to actual
communications (messaging, calling services, etc.),
means that service usage time will be much higher. For
this reason, it is critical that any cost-generating
activities be fully controllable by whoever is
responsible for paying the service charges. Detailed
usage reporting is not only necessary, but is also an
optional service for subscribers who have to bill their
time and expenses to other parties (e.g., consultants,
lawyers, accountants, etc).
SUMMARY
If done right, UC can provide next-generation service
providers with an efficient way to drive revenue
streams, increase profitability, and increase customer
satisfaction. Being successful is more than deploying a
service. Service providers must actively deploy, market,
and sell UC products and services that are open,
flexible, and scalable to support the multimedia and
cross-media communications that users and enterprises
demand.
Dick Hyatt is director of marketing, Internet
Communications Software Group, at Cisco
Systems Inc. Cisco Systems provides network
solutions for every market from service providers to
consumers.
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