What is the future of the unified communications (UC) industry?
Quietly and despite earlier slow adoption, UC has become big business, with the IDC report EMEA Enterprise Communications Survey finding that 93 percent of businesses in Western Europe plan to invest in unified communications over the next 1 to 3 years, with 40 percent of businesses are already using the technology.
The biggest names in UC remain the traditional IT giants such as Microsoft and Cisco, although there remain smaller companies offering niche technologies.
The next big trend in the market might be expected to be consolidation, with companies within the space buying each other up.
This almost happened with two of the big providers in the industry earlier this year. Mitel announced in April that it would be acquiring Polycom for around $1.96 billion, before the deal fell through in July.
Alternatively, the acquisition could come from outside the industry: from traditional IT providers who wish to add UC to their capabilities.
Unify is one company that exemplifies the latter route. The company has annual revenue of €1.2 billion as of January 2016.
The French Atos completed the acquisition of Unify from Gores Group and Siemens in January 2016. It paid €366 million for the acquisition and acquired 100 percent of the company.
From 1 February 2016, the Services activity of Unify, worth around €400 million annual revenue) was integrated into Atos’s Managed Services line.
CEO Jon Pritchard says that Unify has spent a lot of time managing the integration and has now returned to business as usual.
Unify has remained a standalone business unit, as Pritchard says that Atos didn’t want to lose the value of the brand through a complete merger.
Pritchard was appointed CEO of Unify in February 2016 with overall responsibility for Unify’s strategy, business direction and global execution. He has worked in the IT industry for 25 years, having worked as Executive Vice President of Channels at Unify. Before Unify he worked at Comstor Worldwide and IngramMicro UK.
Pritchard’s work in developing Unify’s channel programme has led to the company now selling 50 percent of its products through channel.
The CEO says that he doesn’t expect much more consolidation within the industry.
“Consolidation within the industry will be difficult as there are not many players left,” he says.
Despite this, he suggests that the collapse of the Mitel-Polycom combination was a relief.
“We are more comfortable with Polycom not being in Mitel,” he says. “Mitel is a competitor, and for them to gain more leverage would be a concern.”
He notes that Unify itself sells Polycom products.
Mitel’s buy of Polycom fell through and was replaced with a buy-out by Siris Capital Group, with Polycom paying a termination fee to extricate itself from the Mitel buy.
It is the other kind of acquisition that Pritchard expects more of.
“We will definitely see outside parties coming in and taking position on companies,” Pritchard says.
He explains that IT companies have found it difficult to move over into the market, explaing that with large enterprises the deals are very complex.
“It is not just plugging in UC and there you go,” Pritchard says, explaining that integration to other systems such as active directory require specific expertise.
For the companies who do have UC, he says, it is a differentiator but also offers better margins.
“Atos already had a big share in markets it was in,” Pritchard says, explaining that UC was the “missing piece” which can now provide an additional vehicle for growth for the IT giant.
Atos will continue to invest in Unify’s core functions. Pritchard views the next big growth area for Unify’s business as vertical platforms, targeting specific industries such as financial trading or the contact centre.
While some IT providers already have strong UC offerings, Unify’s example shows that many others may be looking at the area in future.
