Small and medium-sized businesses are interested in unified communications, but are buying only gear that will help them in the here and now. Most have put presence-based packages with longer ROI periods on the back burner. The two main obstacles are the poor economy and channel partners who also struggle to understand the broader UC picture.

UC and SMBs: Tough Times Until the Economy Clears

The bad economy, conceptual fuzziness and the difficulty of finding channel partners who are comfortable on both sides of the IT/telecommunications boundary are among the reasons that small and medium-sized businesses are slow in their adoption of unified communications.

That sluggishness doesn’t mean that no UC tools are being deployed, nor does it mean that SMBs are not intrigued by the emerging approach to their communications, experts say. It simply means that they are approaching it in a deliberate manner befitting the financial struggles many are experiencing. “SMBs are definitely interested,” says Henry Dewing, a principal analyst for Forrester Research. “They show a very similar interest level to enterprises. But their purchasing tends to lag.”
Analysts agree that there is some purchasing of specific tools. What isn’t happening in this environment is the adoption of UC on the conceptual level, in which the different tools are deeply interconnected. “If we are talking about UC per se, the sense I have in the market is that people are trying to figure out what to do with it, where to go and how to make it pay for itself,” says E. Brent Kelly, a senior analyst and partner at Wainhouse Research.

Of course, it is difficult to generalize across all SMBs. For one thing, these organizations span a tremendous range in terms of size. Likewise, their communications needs differ greatly. A regional medical establishment with several offices will vary dramatically from a retail firm with a substantial outside sales force, for instance. That said, vendors have to generalize to some extent in order to address the SMB market, and discussions with analysts suggest that the lull is fairly consistent across the sector.

The Economy, Again

The biggest single issue, not surprisingly, is the economy. Organizations are willing to spend money, but it is being done only if there is almost immediate payback. The focus on the here and now subtly changes the picture. Organizations are drawn to particular technologies that can help, but are not thinking of the gear’s longer-term value in a holistic UC web.

“Late 2008 and 2009 has been an interesting year because of the changing dynamics [due to the economy],” says Sanjeev Aggarwal, the founder and partner of The SMB Group and a partner at Hurwitz & Associates. “What SMBs are looking for are solutions that provide a lot more operational efficiencies and at the same time cost cutting and short-term ROI. UC is more a strategic tool than a short-term ROI-based, operationally-focused solution.”

UC historically exists in a dual world. On one level, it is the VoIP, video conferencing, IM and other hardware and software products and platforms that are necessary for people to communicate. The higher-level techniques are those that enable these products to act in unison. This level, so to speak, unifies the communication. The question is whether organizations buying equipment to perform the more basic level of communications have an eye toward the higher-level UC functions. At the enterprise level, there are people charged with thinking through these long-term strategic issues. That isn’t necessarily so among SMBs.

The definitional issue seems likely to remain for a while. Many observers differentiate isolated communications tools from UC by saying that the latter must feature

presence, which is the ability to report if other registered users are available and where they are. Some definitions say that true UC must also include the ability to efficiently escalate a session. For instance, a UC system will be able to seamlessly add video and data functions to a voice call at the moderator’s request.

To some extent, perhaps the pure definitions are not as important as they were in the past. Wainhouse’s Kelly says that he “was pretty dogmatic” during the past few years on what constitutes UC. “I am moving aware from that,” he says. “The world is a pretty big place, and if I say, ‘If it has no presence engine, it’s not UC,’ well, there are some pretty interesting things happening [without presence]. For instance, if you run a group video conference on the same dialing plan as the PBX, that is helpful to people and may be more ‘unified’ than if everything is separate.”

The common wisdom is that immediately useful UC tools, particularly those that lend themselves to fast ROI, are making progress, while the overall conceptual approach is taking a back seat as the economy struggles to right itself. “[Conceptual] UC is a longer-term sell, and it is not going to get a lot of play in this environment,” Aggarwal says.

Obstacles in the Channel

The other issue that is slowing SMB uptake of UC is the difficulty of navigating the channel. The channel – distributors, value-added resellers (VARs), independent software vendors (ISVs), system integrators and others are wrestling with the complexities of UC. This is an important group because it serves as the trusted advisors upon which SMBs rely.

“It is a very competitive area,” says Bern Gallagher, a vice president and distinguished analyst for Gartner. “I think you are going to see a number of different kinds of channels approach it differently.”

The mix of telecommunications and IT – two disparate disciplines that are getting thrown together due to the primacy of the Internet protocol – is creating as many challenges for channel partners as it is for communications departments. The problem is that most channel partners come to UC from either the telecommunications or IT side. Thus, they can have a vulnerability when asked to deal with both sides of the equation.

Can channel partners learn enough about how the other half lives – or, at least, how it communicates – in order to counsel SMBs on their UC purchases and deployments? Kelly says that the vendors have a significant stake in making this happen. For their part, channel partners can partner with each other to fill gaps or hire folks with the requisite skills. The bottom line is that there is money to be made in providing SMBs with advice on UC and the various technical platforms of which it is comprised.

Much of the confusion about unified communications comes down to fact that it simultaneously exists at the equipment level – VoIP, teleconferencing, Web conferencing and all the other modes of communications – and the level aimed at meshing it all together.

“The knitting together is going to happen over a long period of time,” says Gartner’s Gallagher. “The misconception is that UC is one thing, and you go and buy it. We are in the midst of a rapid evolution of communications. It is hard to see because we are in the middle of it.”