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GENBAND Must Clear Hurdles to Succeed In Enterprise UC Market

GENBAND‘s recent foray into the enterprise unified communications (UC) market, through resellers, was an unexpected move from a company that spent its first 13 years targeting service providers. The change in business model, driven by the need for new revenue, seemed smart, albeit late; UC has dominated enterprise technology trends for the past several years but GENBAND only joined the fray this year. For its part, the company bills itself as “thoughtful,” wanting to take its time choosing whether to pursue an almost saturated enterprise UC sector. Going up against Avaya, Cisco, Siemens Enterprise and others likely will not prove easy right now, those rivals boast more distributors and VARs, and better name recognition among end users. But GENBAND says it has a plan and, to be sure, it has signed a major partner in Black Box Network Services. The question is, will GENBAND’s strengths outweigh the weaknesses and give the company an edge among enterprise UC users?

Analysis: GENBAND’s Enterprise Strengths, Weaknesses

GENBAND does appear to have plenty of strengths to help it attack the enterprise market. First, it owns an armory of Nortel assets, from its purchase of the Carrier VoIP and Applications Solutions (CVAS) unit. Those products, combined with GENBAND’s gear, have created a “full-featured and well-tested” platform for enterprises, wrote Kent Landoline, principal analyst for Current Analysis, in a recent client memo.

In addition, GENBAND’s service provider heritage serves it well; that background means GENBAND can deploy highly reliable technology for large enterprises, just as it has done for carriers. GENBAND is targeting the 1,000-user market. Finally, there’s also the ability to use GENBAND’s enterprise UC either in the cloud or on-premise. The underlying infrastructure is the same in both, which lets GENBAND maintain control of systems and upgrades, Landoline said.

There are drawbacks. For example, GENBAND wants to distribute through channel partners but that vision remains a work in progress, Landoline said, adding that GENBAND’s channel issues probably will not be settled until later this year in the United States, and not until next year in Europe. On top of that, GENBAND is a “virtual unknown” among enterprises, Landoline said.

Landoline also noted that GENBAND’s enterprise UC will not be available in a software-only version, which means virtualization in customer data centers will be delayed, putting the company at a competitive disadvantage. Plus, that platform doesn’t have “a sophisticated, home-grown contact center application,” Landoline said. There’s a third-party piece from T-Metrics, but that’s not a brand relied upon by most large enterprises, he said. A last hurdle GENBAND must jump is overcoming its legacy model. Other service provider infrastructure companies, such as BroadSoft, have tried to target enterprises, and not done well.

“It remains unclear if GENBAND has formulated a strategy that will succeed where others have generally failed,” said Landoline.

GENBAND may have a good start, if analyst Jon Arnold of J Arnold & Associates is right. He said the company’s new tack positions it “well enough to be in the game.” That’s partly because GENBAND is selling not just UC, but also SBCs, mobility and SIP trunking to enterprises, although without the clout of more channel-centric and well-known companies.

“They just don’t own the customer the way Cisco and Avaya do,” Arnold said.

That could change as GENBAND gets a grip on the enterprise market through its UC platform. And, really, UC is only a start for GENBAND.

“They’re betting even more on mobility and mobile apps,” Arnold said. That’s a solid, although late, tactic, he said, but GENBAND knows where the market is headed and is “fully aware of the need to build out beyond TDM-IP network transformation.”

GENBAND’s View

GENBAND remains upbeat about its new enterprise strategy and particularly is keen on selling through the channel.

Kurt Krueger, regional vice president of Americas channel marketing for GENBAND, said the company decided to add enterprise as a new revenue stream as it has watched its service-provider customers deal with the challenges of switching from TDM to IP.

“We thought we can really add value to the enterprise customer,” given GENBAND’s background in VoIP, hosted services and mobility, Krueger said.

Still, the company took its time solidifying the formula knowing how few players dominate the enterprise UC space. That’s part of the reason why GENBAND opted to sell enterprise UC only through channel partners.

“The channel is the path to market,” Kurt Krueger, regional vice president of Americas channel marketing for GENBAND, told Channel Partners. The Black Box announcement, for instance, is “a big feather in our cap,” he said. That’s the only big partner signed so far, however; GENBAND says to expect more.

“You will probably see us do a couple large national, multinational partners like Black Box … but also in specific geographies and niches,” said Krueger. Ideal verticals include government, medical, education and finance.

As such, GENBAND is “focusing on quality channels. We’re not trying to blanket the market by recruiting 50-100 different VAR partners.”

Support for partners includes a marketing assistance program, training, portals and more. Integrators such as Black Box tend to have their own first-tier customer support, so GENBAND is providing tier 2 and 3 support. Black Box types also prefer to handle their own professional services, including provisioning, and network design and management; nonetheless, GENBAND has a services organization of its own to step in as needed.

“We’re trying to make ourselves an easy company to do business with,” Krueger said.


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