Alcatel-Lucent Enterprise expands its cloud vision

Brian Riggs, Principal Analyst, Enterprise

Through 2013 Alcatel-Lucent Enterprise (ALU-E) will roll out a set of solutions on which its partners can offer a range of hosted unified communications (UC) services. The company’s strategy is different to those of its competitors in that it will deliver separate solutions for enterprises and SMBs, as well as a set of application services.

These will be offered to operators, and also sold to value-added resellers and distributors that want to compete not only against telcos’ managed services but hosted services as well.

ALU-E’s hosted UC platform for enterprise-grade services became available earlier this year, with a handful of partners offering services based on it. The SMB platform and application service are in a less mature state; both are still in development, and no service provider partners are associated with them as yet. ALU-E is in a similar position to Avaya, which is also in the midst of introducing platforms on which its partners can offer hosted UC services.

The company must prove that there is a demand for hosted UC services based on its technology, that major telcos are prepared to invest in the infrastructure needed to bring these services to market, and – uniquely to ALU-E – that businesses want to buy video and conferencing services via the app store that it is proposing.

From UC as a service to “YouTube for the enterprise” as a service

ALU-E’s hosted UC platforms are OpenTouch Enterprise Cloud and OpenTouch Office Cloud. Both are closely related to the premise-based communications solutions that the company sells to large enterprises and SMBs respectively.

The former is a version of the OpenTouch Suite for Mid-sized and Large Enterprises, ALU-E’s next-generation UC software that brings together call control, conferencing, instant messaging and presence, desktop videoconferencing, and other features. The company has modified the software so that telcos and other partners can deploy it on virtual machines in data centers, offering dedicated instances of it to businesses with no more than 3,000 end users (to be increased to 5,000 later this year).

These scalability limitations could prove a hindrance if partners plan to target large enterprises with their hosted UC services. However, OpenTouch Enterprise Cloud, which has been available since January 2013, is being adopted by a number of ALU-E partners that are presumably targeting moderately sized enterprises.

In addition, operators can deploy OpenTouch Enterprise Cloud as a software overlay, providing UC and multimedia communications functionality to on-premise PBX systems. This is a clear differentiator for the ALU-E solution and, if positioned effectively, for its partners as well.

OpenTouch Office Cloud, unlike its enterprise cousin, is not a software-only solution leveraging virtualization. Rather, it is based on ALU-E’s OmniPCX Office appliance, which service providers can deploy in a single rack sharing a common backplane and management platform. This will let them provide communications as a service to SMBs with 200 or fewer end users when the solution becomes available in mid-2013. Providers will begin service trials later in the year.

ALU-E’s third hosted UC offering is a horse of a different colour. Unlike the previous two solutions, OpenTouch Personal Cloud will be a service rather than a solution, a set of applications rather than a full-featured UC offering.

The first two apps will be OpenTouch Conferencing, a service based on ALU-E technology but developed by a partner (LoopUp), and OpenTouch Video Store, a video creation, storage, and sharing service based on technology from Bell Labs. These, as well as other applications such as Dropbox-like file storage and mobile device management, will be resold by ALU-E channel partners when OpenTouch Personal Cloud launches in late 2013.

OpenTouch Personal Cloud is an example of some very creative thinking on the part of ALU-E and, if successful, could differentiate the company in the business communications market. Other so-called “YouTube for the enterprise” solutions are available from various vendors, but Video Store’s as-a-service delivery model could lower the price of such solutions and drive their adoption down-market.

The first Personal Cloud applications are not entirely unique. LoopUp sells its conferencing service separate from Personal Cloud, and ALU-E currently sells Video Store as a service. But making them Personal Cloud apps has the potential of making them available to ALU-E resellers (Video Store is currently sold direct), and broadening their target market (Video Store is currently sold to enterprises, whereas smaller businesses will gain access to it via Personal Cloud).

Resellers and value-added distributors as telco competitors

ALU-E’s various hosted UC platforms and services represent both an opportunity and a threat to operators. As an opportunity, operators will be able to build hosted UC services based on the Enterprise and Office iterations of the OpenTouch Cloud platforms, and they will be able to resell one or more of the Personal Cloud apps. ALU-E says that more than 15 of its partners, 10 of which are telcos, are in various stages of investigating or deploying services based on the enterprise platform.

As operators weigh their options for hosted UC technology vendors, ALU-E’s enterprise division is certainly worth consideration. The company is particularly sensitive to the fact that telcos are very cautious about making large investments in building out their hosted UC, and has developed a risk-sharing model that includes flexible licensing and that reduces the price of service deployment.

At the same time, ALU-E is arming its channel partners with the weapons they need to offer hosted UC services that will directly compete with those offered by operators. Icon Technology, a US-based value-added distributor, is among the first three companies to build a hosted UC service based on OpenTouch Enterprise Cloud.

Icon has made this available to its 232 authorized dealers; it expects its first paying customers in May 2013, and plans to expand into hosted contact center services when ALU-E adds hosted customer support capabilities to Enterprise Cloud later this year. Switch Communications, a managed data services provider in the UK, and UXC, an ITC consultancy in Australia, are also offering Enterprise Cloud-based services; ALU-E expects Office Cloud-based services to be offered by channel partners rather than operators.

This could, in time, change the competitive landscape, pitting resellers against operators in the market for hosted UC services. However, this is only a possibility, because resellers and value-added distributors have yet to prove their ability to succeed as providers of hosted communications services.

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