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Mobile Unified Communications: an Unfulfilled Market


by Russell Bennett, UC Insights

November, 2010

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Last month I wrote a paper defining Unified Communications (UC) in which I deferred on the notion of requiring the integration of the mobile phone ‘silo’ into a unified communications system.  I did this for several reasons:

  1. The challenges of integrating UC into the mobile device are too great for this to be easily achievable.

  2. No such offers exist today, despite this being an extremely compelling scenario.

  3. The ‘mobile UC issue’ is a complex subject that deserves a paper in its own right.

To point 3 – this is that paper.   I am going to attempt to:

  • Define mobile UC in terms of a compelling and achievable user experience;

  • Address the main challenges to the fulfillment of the mobile UC user experience;

  • Attempt to suggest ways to address the challenges in order to be able to enroll the ‘roaming device’ into the UC ecosystem.

A Definition of Mobile UC

According to my definition of UC, a mobile device would be a part of:

A complex of apparatus providing a system for multi-modal communications, operating as a logically integrated whole.

Specifically, it would:

  • Be built on a platform that provides centralized:

    • Authentication

    • Administration

    • Compliance

    • Failover

    • Presence

    • Routing

    • Storage

  • Have its routing and session initiation based on presence;

  • Be capable of modality switching and integration without impacting the user experience.

Herein lies the problem: as will be discussed later, the mobile device is an endpoint of a specific network and network infrastructure which is (for now) entirely separate from the UC infrastructure: so therefore this definition is already breaking down.  However, to explore the deeper issues, it would be useful first to define the ‘UC features’ that actually make sense to a mobile user.

A useful mobile user experience

The main features of a reasonably modern mobile phone include:

  • Place/receive voice calls;

  • SMS/MMS;

  • Personal Directory;

  • Calling history;

  • Digital (still) camera.

Many of the most up-to-date mobile devices also offer:

  • Email and calendar functions;

  • Access the internet;

  • A rendition of media files (music & video);

  • An implementation of 3rd party applications;

  • The ability to capture short video clips.

Therefore, mainstream UC features that make sense on a standard mobile device include:

  • Have calls routed to/from the corporate network; i.e. traditional Fixed Mobile Convergence (FMC);

  • Present access to a personal and corporate directory stored in the corporate network;

  • Provide ‘one-click’ access to conference calls (perhaps from an SMS message or calendar function).

Functions that could be or are already supported on a smartphone device include:

  • Access to corporate email;

  • Presence indications for contacts and update presence of the user within the corporate presence engine;

  • Access to corporate instant messaging.

Additional functions that could be supported on the latest smartphone devices include:

  • Data collaboration sessions (e.g. slides or application sharing);

  • Video conferencing.

Having defined what is potentially useful – we will now examine why this compelling value proposition remains unfulfilled.  First, I will state an assumption on the identity of the UC customer.

The ‘Customer’ for UC Mobile Devices

A key assumption of this paper is that the mobile device in question is a mass-market device that is being employed for personal as well as professional use.  With this assumption, the customer and the user are usually one and the same.  This assumption is supported by market data showing a trend away from employer-provided mobile devices and moving towards a personally-funded device that is used in a dual-role for personal and professional purposes.  This trend is not only driven by the emergence of devices that perform this dual-role very well (e.g. the Apple iPhone); it is also being driven by some economic and financial dynamics:

  1. The current US tax code, supported by upcoming changes (HR 4994) makes it administratively onerous for employers to provide cell phones to employees, i.e. they must:

    1. Separate personal use from business use and provide substantiating documentation;

    2. Add the value of personal usage to employee’s end of year tax statement (W2) as a taxable benefit.

  2. In a difficult financial climate, employers have found that they can make savings on cellular service by allowing employees to use their personal mobile device for work.  This means that:

    1. The employer can avoid making capital expenditure on mobile phones which depreciate rapidly;

    2. Employers need support only a proportion of the cost and employees welcome the employer’s subsidy of their personal device.

Therefore, outside of certain market sectors where the benefits of mobile phones significantly outweigh the costs (e.g. Wall Street), the prevalent sales channel is via the consumer who is personally liable for the monthly bill and gains partial reimbursement for the proportion of professional usage via business expenses.  There is a small but growing segment of devices that are workplace specific (i.e. ‘tablets’) but I will address these separately in this paper.

The Main Pillars of the Mobile Business

The mobile communications business rests on a ‘three-legged stool’:

  • The requirements of the Customer and/or the User;

  • The physical Device, including:

    • Hardware;

    • Operating System;

    • Software functions and applications that run on the device.

  • The Network and the Network Operator.

The notion here is that each of these 3 variables is critical to the current working model.  This model has evolved in a highly competitive environment where consumer choice has been the determining factor.

Human Impediments

A significant impediment to mobile UC is that mobile devices are overwhelmingly end-user funded dual role devices: and this trend has been forecasted to continue by many analysts.  The criteria for the purchase decision are determined by the personal user; albeit that professional needs are often a factor.  Referring back to the ‘three-legged stool’ model, we see a significant range of options across the 3 dimensions of:

  • Aesthetics, usage and user experience preferences;

  • Device specifications, capabilities, OS platform and form factor;

  • Network capabilities; regional coverage; network operator features and payment plans.

Personal priorities affecting choice of device

The degree of personal choice being exercised in the market means that neither the employer nor the UC vendor has any control over the specification and capabilities of the device that an employee will have available in a UC mobility scenario.  Therefore, in order to offer a consistent UC user experience UC vendors would have to instantiate their UC user experience across a range of devices.  Even having made that considerable commitment of R&D and Business Development resources, the user experience on each device would be limited by the capabilities of that device.  The outcome would be a sub-optimal user experience on the least capable devices, or a ‘lowest common denominator’ experience on all devices.

The only way to address this issue would be for employers to reverse the trend towards the ‘personally liable’ ownership model and to implement an ‘employer-liable’ cell phone program in order to be able to define a standard phone.  Ignoring the financial/taxation argument made above, from the human perspective, this would require users to carry two devices: one for personal use and one for professional use.  There are obvious reasons for why that would not be viewed favorably:

  • Inconvenience/clutter;

  • Loss of subsidy – the onus of payment for the personal device would now rest entirely with the user.

The limitations of UC while roaming

Unified Communications, by definition, makes use of multiple modalities – some of which are simple and require only transient attention from the user (e.g. short text messages such as SMS, tersely worded email and/or voicemail) while others command our entire attention (e.g. a data collaboration).  It is usually not possible (and often illegal) to participate in attention-consuming interactions while physically on the move (e.g. while driving/walking/flying).  For temporarily static situations away from the office (e.g. the hotel room/coffee shop/airport), the wide availability of WiFi and 4G networks make the laptop a better choice for attention-consuming interactions.  While it is convenient (although not always socially acceptable) to ‘multi-task’ on a cell phone while doing other things – the situation usually prevents a complete distraction of attention onto a more involved interaction.  Therefore I contend that using most UC modalities on a mobile phone is impractical in many situations for either social or safety/legal reasons.

Business/Strategic Impediments

Another key impediment to the realization of the mobile UC user experience is that UC is not a feature set that is currently sold by the network operators.  Instead, UC has evolved as a new business for enterprise technology companies (e.g. Cisco and Microsoft) or a repositioning of existing businesses for enterprise communications companies (e.g. Avaya and Siemens).  As discussed above, the customers of UC (i.e. enterprises) and the customers of mobile communications (i.e. individual consumers) are different.  Furthermore, the specific user experience that is integral to UC represents a challenge to the branding and differentiation strategies of mobile operators.

From a financial perspective, the integration of enterprise UC with mobile telephony is not a source of incremental revenue for mobile network operators insofar as a UC generated call would only replace a call that would otherwise take place on the mobile device.  While email and other UC modalities provide data network revenue, this is usually capped by unlimited usage plans; and the underlying assumptions of those plans are completely invalidated by bandwidth intensive UC applications.  To the extent that UC systems actually reduce mobile usage by diverting voice traffic onto corporate networks and into other modalities, UC could be viewed, at best, as financially disadvantageous and at worst as competitive for mobile operators.

Enterprise UC, as a revenue generating service, is a compelling scenario for mobile operators.  But while mobile network operators would like to offer UC operated from their networks, they are impeded by:

  1. The fragmentation of mobile customer base across the employee population and the lack of UC standards that would allow interoperation of UC across several mobile networks;

  2. The difficulty of integrating a cloud-based UC user experience with mission-critical (often multi-vendor) applications within the enterprise network, e.g.:

    1. Directory services;

    2. Audio and video conferencing;

    3. Email and IM;

    4. Collaboration platforms.

In fact, the mobile network operators (and the infrastructure vendors that serve them) have been trying to deploy Internet Protocol-based infrastructures upon which a UC user experience could be based.  This infrastructure, known generically as the IP Multimedia Subsystem (or IMS), was created within the standards bodies (primarily 3GPP and 3GPP2) based on the Session Initiation Protocol over the last ten years. The challenges to this infrastructure being the basis of a UC offer within the short to medium term are outside the scope of this paper (but is covered here); suffice to say that these offers do not exist today, and therefore need not be considered further within this paper.

Although UC is currently out of the reach of small and some medium sized businesses, the major vendors are moving rapidly to close this gap by making their branded offers available from ‘the cloud’ to enable SMEs to gain access to UC features.  The momentum behind the cloud business model and consequent control being imposed by the major UC vendors on cloud-based UC means that the UC market share among SMEs will not be captured by the mobile operators.  Instead, the major UC vendors (e.g. Cisco and Microsoft) will dominate this segment within the next 3 years.  I am not discounting the possibility that traditional network operators would be able to offer cloud-based UC as a service under license from the major UC vendors.  However once that happens, the issue of whose branding is being used then reopens the question of who ‘owns’ the customer.

Based on the arguments above, I contend that UC features and integration with enterprise UC is not priority for mobile network operators and could even be regarded as competitive.

Technical Impediments

We have already discussed in this paper the user experience that ‘makes sense’ on a mobile device.  This is dictated by:

  • The physical dimensions/form factor of the device;

  • The limits of the capabilities of a mobile device as defined by the laws of physics.

The physical limitations of the mobile device

Clearly, the size and portability requirements of the mobile device present functional limitations: what is usable on a desktop or laptop computer becomes less usable on a device that is often carried in one’s pocket.  While some interesting innovations have expanded these limitations (e.g. the touch screen ‘gesture’ interface), there remain absolute limits imposed by screen size and resolution on whether, for example, a data collaboration session or a multi-party video conference would ever be useful on a mobile device.

To circumvent the limitations of a pocket-portable device, some vendors (including UC vendors) have recently broken the traditional mobile device size envelope with the introduction of tablet devices such as the Apple iPad.  These devices and the opportunities for them to enroll the roaming user into the UC experience will be covered later in this paper.

The limitations of the ‘physics layer’

Many will be familiar with the OSI 7 layer model that has the application layer (layer 7) at the top and the physical layer (layer 1) at the bottom.  I have often been surprised that this model didn’t have a ‘layer 0’ or ‘the physics layer’ since it is the fundamental laws of physics that dictate everything above ‘layer 0’.  This is never more true than with wireless devices because they:

  • Use radio as the network;

  • Have to be portable;

  • Run on a battery (most of the time).

Therefore, the wireless device engineer often runs up against immutable laws when trying to implement the vision of a product manager.  This is to say that:

  • The current understanding of science places limits on:

    • The ability of the battery to store and hold a charge

    • The speed and capacity of the CPU and memory;

    • The ability of a given radio frequency to carry information (i.e. bandwidth).

  • The CPU and memory are also limited by the battery;

  • The range of the device is limited by the battery and by the radio spectrum;

  • The bandwidth of the communication network is also limited by the available CPU cycles (i.e. in compressing/decompressing data and the ability to use redundant data to overcome packet loss).

While it is possible to offer bandwidth intensive features (e.g. presence/location transmission, video conferencing, wideband audio calls, etc.) on mobile devices, the use of these functions will always be impacted by the availability of bandwidth, increased CPU consumption and the resulting battery consumption.  The newer smartphone/application platform devices make it possible for vendors to offer applications with UC features, whether approved by the mobile network operators and device manufacturers or not.  However, unless there is a commensurate increase in available bandwidth, what seems usable in a demonstration scenario (e.g. TV advertisement/tradeshow keynote) in an ‘early-adopter’ market phase will rapidly become unusable when these features are being used in mass deployment.

A Way Forward

As previously stated, UC presents an excellent opportunity for Mobile Network Operators to drive new revenue in markets that may be approaching saturation.  Furthermore, various new forms of internet communications are taking over from more traditional ‘voice call’; therefore the creation of a new compelling value proposition should be a high priority for mobile operators.  Indeed, the current trend of the use of social networking for business objectives strongly suggests that businesses and their customers are trying very hard to better communicate with each other, albeit indirectly.  This represents a significant opportunity for mobile operators.

The impediments to mobile UC discussed above are resolvable via:

  • New classes of mobile devices;

  • UC clients running on smartphones that route all traffic (including voice) over the data network;

  • The creation of multi-media capable networks and services;

  • A change in the mobile operators’ business model.

UC Specific Mobile Devices

As discussed above, the limitations of the form factor of the mobile device as well as considerations such as battery storage, CPU cycles, etc. often requires mobile workers to employ UC scenarios on a laptop computer.  However, many vendors (e.g. Apple, Cisco, Avaya, etc.) have recently seen an opportunity to offer a ‘tablet’ device that overcomes the limitations of the mobile phone while combining the opportunistic attributes of those devices with the capabilities of a laptop.  Targeted at those for whom a smartphone is insufficient but a laptop is overkill, tablets offer an excellent compromise as a mobile UC device.  The first of these devices, the Apple iPad, is not a UC specific device and Apple is not a mainstream enterprise UC vendor; the other devices have yet to hit the market. Although I remain optimistic about the impact of these devices on the mobile UC scenario, some of the impediments discussed above remain unaddressed, specifically:

  • Market fragmentation;

  • Social/scenario limitations;

  • The inconvenience of carrying a non-pocket portable device (along with a personal device);

  • Operator strategic challenges (non-ownership of the user experience).

The UC specific tablets (e.g. Cisco, Avaya, etc.) seem to be oriented more towards ‘inside the building’ roaming rather than wide area roaming.   For them to be compelling for the user and the mobile network operator alike, they should also be integrated with the mobile voice networks (currently GSM/CDMA).  To obviate the need to carry 2 devices, some accommodation must be made for personal usage: perhaps by allowing the tablets to become dual-mode devices by accommodating the personal SIM card while the user is at work.

Multi-media mobile networks and services

As discussed above, one of the keys to mobile UC is ubiquitous mobile IP connectivity and virtually unlimited bandwidth.  The latest smartphone platforms (e.g. iPhone, Android, etc.) already enable UC vendors to deploy UC clients as separate and distinct communications experiences.  If video calling can be delivered on the data network, then UC voice sessions will also bypass the GSM/CDMA networks.

Although massive capital expenditure is required to make this a mass market reality across all networks, the investments are being made by the mobile operators who are seeing the opportunities in mobile TV and other bandwidth intensive applications.  In my view, this will result in the decline of traditional mobile voice (and SMS) routing; the mobile operators will ultimately become providers of radio IP networks.  Landline network operators are already facing the demise of traditional telephony and are becoming IP network operators: so it seems inevitable that the same will happen in mobile networks: this will require a change of business model and pricing structures.  However, this will also open a path to the realization of UC integration of mobile devices.

Summary

Despite it being a compelling scenario, the integration of the mobile device as a first class citizen in the UC network has lagged the integration of other modalities into the UC experience.  This can be explained historically by a combination of the following factors:

  1. Market dynamics moving the onus of purchase and payment of the mobile device to the end-user and away from the enterprise (albeit that the latest devices are quite good platforms for UC as well as personal use);

  2. The consequent fragmentation of the enterprise mobile telephony market;

  3. The strategic issues preventing UC from being a mobile network feature and thereby becoming a competing communications medium;

  4. The technical limitations of small portable devices and the science/engineering challenges that are encountered.

However, there is a high degree of latent demand for mobile UC and there are opportunities for that demand to be fulfilled by:

  1. The creation of UC clients for the latest smart phone platforms;

  2. The creation of new classes of devices (e.g. tablets);

  3. The continued investment in ubiquitous, high-bandwidth networks;

  4. A change in operators’ business models to incorporate the data network becoming the mainstream mobile communications medium.

The evolutions of the mobile industry described above are more than merely hypothetical.  Who would have guessed 20 years ago that one day:

  • Some people would rarely use their mobile phone for voice conversations?

  • Reading and sending email when away from the desk would become a multi-billion dollar application?

  • Customers would be so enamored with a mobile phone made by a “computer manufacturer” that they would switch carriers to get one?

Not me….


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