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[August 31, 2004]



Convergence in Enterprise Collaboration




As organizations grow in size and become more geographically dispersed, corporations find themselves on a search for business communication solutions that boost employee productivity and effectiveness, and show a substantial return on investment.  


Lately, there has been steady movement for organizations of all sizes to leverage the Internet for all types of communications: written, spoken and visual. As a result, 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 IP (VoIP) (define - news - alert - tutorial), 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. 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.  


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 created a wide range of collaborative apps�such as desktop data conferencing, Instant Messaging and chat, point-to-point IP video conferencing and multi-player gaming. 


To truly benefit from this 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 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.  

According to research, 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. Now the 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

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 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 � 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 acquisition of InterCall.

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 (small business sector and large enterprise/government) will be critical in driving vendor growth and for the market to reach its full potential.


Although the Web conferencing 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.



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.


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 are exorbitant and limit the use of collaboration in any size organization. Additionally, these customers have no awareness of real-time usage and costs. Current pricing of ASP-only vendors is $40-200 monthly 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 has inherent challenges scaling to support the distributed Enterprise. These services enable Web meetings on a peer-to-peer basis.


  • Channel Conflict: ASP vendors� 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.


While hosted solutions are 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. 



Current Client/Server LAN collaboration software vendors have attempted to acquire market share by retrofitting and adding collaborative functionality into their existing software offerings. They 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. A good example of enterprise communication and collaboration convergence is provided by WiredRed Software. 


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 offers 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 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 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.  


WiredRed was founded in 1998 and headquartered in San Diego, California. WiredRed's e/pop software targets IT staff that seeks secure instant messaging, company-wide alert messaging and face Web conferencing challenges. The company licenses its software to corporate and government IT organizations.


Charles Orlando has served as both in-house and external marketing consultant for number of consumer and technology companies in high technology; and also as director of marketing for WebEx Communications and Pixion, Inc.

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