The Communications Tipping Point is here…

Are you ready?

Siemens Enterprise Communications, Inc.

2011

Siemens Enterprise Communicationswww.siemens-enterprise.com

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There’s a paradigm shift coming. And it’s going to have a huge impact on your business communications. It will challenge longstanding conventions of total cost of ownership, of deployment models and of just how, where and when we engage with colleagues, customers and stakeholders.

It’s going to significantly alter the communications status quo. And failure to respond will put your competitive advantage at risk.

It’s the collision of five megatrends that will forever change our working practices, our relationships

with communication devices, and our ability to work productively, efficiently, and creatively.

It’s as significant as the advent of the internet, and it’s going to usher in a new era of cloud communications.

And it’s happening right now.

Is your business prepared for the Communications Tipping Point?

1. Executive summary Are you ready?

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In December 2010, McKinsey Global Institute released a report on the adoption and impact of Web 2.0 technologies on today’s organizations – the culmination of four years study on the subject. The Rise of the Networked Enterprise: Web 2.0 Finds its Payday1 report found that enterprises that had enthusiastically embraced web services, peer-to-peer networking and online social networks – those which intensively use collaborative technologies to connect employees, stakeholders and customers – were more likely to lead their markets and enjoy higher margins.

It’s an important study if for no other reason than the fact it highlights the increasingly powerful influence external social and technological trends can have on the bottom line. In the case of McKinsey’s paper, Web 2.0 and the social networking revolution proved to be the catalysts for change... and more catalysts are coming.

Less than a year after the survey, a raft of powerful new influencing factors are beginning to take hold. Global IT and communications megatrends include the increasing consumerization of IT and advances in both cloud technologies and deployment models. These trends are set to have a tremendous impact on the enterprise; not simply on how we communicate, but where, when and on what kind of devices. And while these trends offer significant opportunity, there are challenges too.

So what are these trends?

Seamless Mobility

Undoubtedly one of the most significant movements of the late 20th century that’s continuing apace today, is the move towards ubiquitous mobility. With mobile handset penetration in developed countries approaching 100 per cent, and developing economies not far behind, the mobile phone has easily eclipsed its fixed-line forebear as the medium of choice (see Chart 1).2

But as significant as this movement has been, it is the move to seamless mobility where the enterprise impact will be felt.

The rocketing acceptance of the tablet as a business device (more than 7.5 million already connected to corporate networks)3; the unstoppable rise of the smartphone (300 million sold in 2010)4 with dual-core processing power to rival two year old laptops; and the growth of the virtualized desktop giving access to our cloud-hosted corporate apps have redefined the concept of enterprise mobility. But this brave new mobile world, for all its business benefits, requires support, security and control considerations, while app store-like access models demand investment into development and deployment strategies.

2. The Pressure’s Building

1: Source: Jacques Bughin and Michael Chui: McKinsey & Company. December 2010. 2: Source: ITU. 3: Source: Current Analysis, May 2011. 4: Source: Canalys, January 2011.

2000

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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Mobile

Internet

Fixed line

Mobile Broadband

Chart 1: Global ICT developments, 2000-2010*

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Next Generation User Experience Closely connected is the trend towards the next generation user experience. Firmly rooted in the consumer world, today’s generation of connected devices feature incredibly natural interfaces, where touch screens and swipe controls abound. If you’re an Android® user your smartphone and tablet experience is identical. While Apple®, and more recently Microsoft® with Windows 8®, are set to extend that consistency across their entire portfolios. The potential business benefits (70 percent of CIOs believe it will make employees more productive)4 make this trend a major enterprise issue, but development of in-house user-centric interfaces, applications and access methods (through app-stores) demands investment and planning from IT departments.

Social Collaboration

The subject of the McKinsey study remains a hugely significant trend. But while two billion5 daily video views on YouTube6, three billion monthly pictures uploads on Facebook, and 25 billion7 annual tweets are impressive statistics, there’s more to social collaboration than this. Such is its power that social collaboration can build brand or destroy corporate reputations in an instant.

So for the enterprise, social collaboration has the potential to usher in a new era of customer responsiveness, proactive engagement and loyalty through social media contact center integration. Collaboration, innovation and productivity can rocket by connecting colleagues (via video, IM and more) across the world. It’s now even possible to access and manage IT networks through Twitter. But there are challenges. Only 30 percent of organizations believe they are currently able to support social collaboration8, while research from IDC9 has found that IT underestimates social media use within their own businesses by 40 percent; employees may be using their favoured social media channels to get their jobs done. Of course, whether they are doing so securely or appropriately is up for debate.

Trending Toward the Cloud

So while the forces of IT consumerization run rampant through the enterprise, two IT centric trends have emerged to provide the enabling factors in this communications revolution. At their heart is the inexorable move toward cloud based services and applications — or in this case, cloud-based communications. With 78 percent of CIOs investing in the cloud in the next 12 months10, the cloud‘s importance as a catalyst to forever change deployment and consumption models is unquestionable.

4. 1 DC, 2011. 5. Source: Facebook, 2011. 6. Source: Google, 2011. 7. Twitter, 2011. 8. Yankee Group, 2011. 9. IDC iView. 2011 Consumerization of IT Study : Closing the “ Consumerization Gap ” July 2011 By Frank Gens, Danielle Levitas, and Rebecca Sega. 10. Loudhouse Research, September, 2011.

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Flexible Deployment

Whether it’s an audio and web conferencing service for a small business or a major customer contact center for a larger enterprise, deployment choice is now key. Five years ago, with cloud in its infancy, you could deploy onsite or not at all. Now, with cloud the norm in many scenarios, enterprises can chose the model most appropriate to their technology strategies, business objectives, scale and budgets. And as chart 211 shows, enterprises will continue to exercise their options, and move from a premise-based IT world to a predominantly cloud and hybrid environment. But in managing this seismic megatrend, architectural planning, migration and legacy support strategies must be given due consideration.

Security and Reliability Redefined

With the widely anticipated growth in use of cloud services, conventional fortress-style security policies are no longer sufficient. As a result of this trend security and reliability are being redefined. Redundancy (through geographically separate data centers), remote office survivability, multi-tier access management and end-to-end encryption are just some of the issues being addressed. In solving these challenges, enterprises will enjoy a secure and reliable environment where they can confidently move into the cloud.

57%

Premises -based

system

Private cloud Public Cloud

Hybrid

51% 27%27%

Public Cloud

17%

Premises-based

18%

PrivateCloud34%

Hybrid31%

Today premises-based models dominate11

In two years cloud and hybrid models will dominate11

11. Loudhouse Research, CIO Action Survey, Sept 2011

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While each of the megatrends has significant individual impact, the collision of all five at one time is having a profound impact on users, and by definition the organizations they work for. And it’s happening today.

As we have seen, the forces of IT consumerization are driving user and customer demand for new levels of social connectivity and collaboration. There is also demand for a new breed of enterprise-ready devices and applications where ease of use and natural interfaces are front and center, and for new, more flexible, mobile working practices.

Employees are legitimately asking why they can’t bring their smartphones and tablets to work (84 percent already are), and connect to the corporate network. They question why their corporate applications aren’t as user friendly as the ones they are downloading every day from apps stores. And they wonder why they are unable to download corporate applications onto their devices as and when they are needed. In short, users are relying on their own devices and downloaded apps to increase the productivity of their enterprises.

Meanwhile, further up the corporate ladder, the demand for greater customer satisfaction, competitive advantage and, increasing shareholder value reign supreme. CIOs are being tasked with delivering organizational transformation programs, to support and enable business growth, and to help the business respond to the social and economic changes pervading their organizations.

In turn, CIOs are asking some difficult questions of their own IT departments; questions ranging from security and business continuity, through futureproofing networks and applications to how IT can help deliver on the demands of their internal users, executives, customers and partners.

IT directors, subject to pressure from above, below and outside the enterprise, has a set of similarly challenging questions. Do they replace their site-bound PBX with another site bound piece of IP hardware? Do they bolt on separate solutions for mobility, or contact center? Do they continue to build on the complexity of yesterday?

The Challenges of Legacy Systems

Responding to the demands discussed above is a challenging task, made more challenging still by an often complex, disparate and proprietary nature of legacy communications. Quite simply, the hardware based telephony systems most organizations have grown up with are now incapable of supporting the kinds of demands now placed upon them.

If the enterprise communications network is more than seven years old the chances are it’s fully depreciated, is likely to be quite reliable and is perhaps doing a reasonable job of supporting your workforce with basic voice and voice mail.

But the problem is that in today‘s world the enterprise communications network can’t offer the levels of mobility and flexibility that its users and customers expects. It’s unlikely to be able to deliver increased productivity through enhanced collaboration, eliminate communications-lags through presence technologies or communication enabled business processes, or indeed address the issues of high-cost audio and web conferencing delivered by service providers. And with customer responsiveness key to business success, it is likely to be failing here too.

3. From Megatrend to Tipping Point

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Doing nothing is not an option. The reality is that legacy networks are costing enterprises money every day; in maintenance and upgrade costs, in unnecessary call charges, in below-industry standard levels of collaboration and communication, and significantly, in the increased risk of productivity robbing system failure. Ultimately standing still costs competitive advantage as rival firms, recognizing the significance of the megatrends, adopt new tools in response; from productivity-increasing unified communications and cost-saving SIP Trunking through to customer service-enhancing, social media aware, multi-channel contact centers.

And be under no illusion that this is happening today. In a recent global CIO survey by Loudhouse Research12, the collision of these five trends is directly influencing the technology investment strategies of 76 percent of IT decision makers in the next twelve months.

These organizations have been pushed to act; by their employees, executives, customers and now their competition. They have reached the Communications Tipping Point where doing nothing will set their businesses firmly behind the competitive curve, while taking action will do just the opposite.

0%

Now

Q. When will the megatrends impact our communications investment planning?

Next 6 months Next 12 months

20%

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100%

In the next 12 months 76% of CIOs will invest in communications change projects as a direct result of the megatrends

12. Loudhouse Research, CIO Action Survey, Sept 2011

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Realizing the benefits of today’s Communications Tipping Point begins and ends with an open communications environment; one that offers the flexibility, scalability and interoperability to deliver advanced communications today, while future-proofing investments for tomorrow’s innovations.

Open Communications Architecture

Siemens Enterprise Communications’ Open Communications Architecture delivers on this promise, offering customers a truly open environment, capable

of integrating our award winning, software-based suite of Unified Communications and Collaboration (UCC) applications with cloud services and corporate applications. The Open Communications Architecture further decouples both the applications and end user from the physical premise, enabling a compelling and seamlessly mobile experience across the campus, or across town. Deployed as a simple overlay solution, the Open Communications Architecture is easily able to support existing multi-vendor environments without ripping and replacing existing communications infrastructure.

4. Realizing the Tipping Point Advantage

OpenScape Cloud Solutions OpenScape UC Server

OpenScape UC Server

Premise Deployment

Hybrid Deployment

Cloud Deployment

Device and O/S agnostic consistent user experience

Applications Integration

Cloud Services

Enterasys integrated wired & wireless network

Open SOA

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Beyond the PBX

In delivering an architecture able to take customers beyond the PBX, we break down the barriers to next generation voice and communications; eliminating proprietary technologies, the need for dedicated hardware and support at every remote site, as well as the limited cloud deployment options, low grade survivability and lack of flexibility inherent in these legacy stacks.

Indeed, while the move to fully open, software-based communications architectures is gathering pace, (with Intellicom13 predicting more than three quarters of enterprises will have made the switch in the next five years), Siemens Enterprise Communications can accelerate your move. And in doing so offers the opportunity to realize the immediate total cost of ownership (TCO) benefits of a centrally deployed, SIP based software communications solution.

The Cloud and More

Critically, this architectural move opens up opportunities to move seamlessly into both the public and private cloud, delivering new levels of application accessibility, scalability and more flexible pay-as-you go utility pricing models.

But while we are committed to delivering cloud, we understand the need to support increasingly diverse distribution and consumption requirements.

Siemens Enterprise Communication is the only vendor to provide the complete range of Voice, UCC and Contact Center solutions across premise, private cloud, hybrid and public cloud services. This enables us to make a truly objective recommendation on what’s right for your business.

Our unique long-standing experience in business communications and standardized offerings means we ensure every solution is easy to acquire and use. So any customer, no matter their size, can benefit from ‘big business’ features.

What’s more, the flexibility of our portfolio means you can make these decisions by location or by application, enabling you to optimize your costs and benefit from only the functionality you need, when you need it.

13. IntelliCom Market Dashboard Programs Update, Feb 2011

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In delivering a truly open architecture and award winning suite of advanced Unified Communications and Collaboration solutions, Siemens Enterprise Communications is delivering the tools to maximize the return and minimize the risk of today’s Communications Tipping Point.

We are the only vendor to provide the complete range of Voice, UCC and Contact Center solutions and services across premise and private, hybrid and public cloud based on an open, proven software-based architecture.

This allows us complete objectivity and unparalleled breadth to offer what is best in delivering value for customers and channel partners, from small to medium business.

Here are ten reasons why you should turn to Siemens Enterprise Communications. For more details, ask about our Siemens Enterprise Communications Top Ten overview.

1. Global scaleOperating in 90+ countries; if you‘re there, we‘re there

2. Continuous innovationA history of innovation and a record of industry firsts

3. Business insightDeep sector experience, proven best practices

4. Open approachUnique Open Communications Architecture

5. Technology leaderCritically acclaimed and recognized technology leader

6. Flexible deploymentCutting edge options from premise to cloud

7. An open path forwardTransforming communications at your pace and budget

8. Secure and reliableEnd-to-end, built-in and automated

9. Service excellenceComprehensive, multi-vendor, and global

10. Demonstrable ROIProductivity gains and real-world TCO reduction

5. Moving forward with Siemens Enterprise Communications

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Ultimately, you can make cloud, seamless mobility, next generation user experience and social collaboration work for your business – securely and reliably, increasing your competitive advantage and reducing your costs.

According to Loudhouse Research14, major communications technology change will become inevitable for almost 8 out of 10 organizations sometime within the next 12 months.

The question is do you wait for your competitors or do you take the lead?

Find out when the Communications Tipping Point will impact your business at www.siemens-enterprise.com/us/tippingpoint

14. IntelliCom Market Dashboard Programs Update, Feb 2011

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Siemens Enterprise Communications, Inc. is a premier provider of end-to-end enterprise communications solutions that use open, standards-based architectures to unify communications and business applications for a seamless collaboration experience. This award-winning “Open Communications” approach enables organizations to improve productivity and reduce costs through easy-to-deploy solutions that work within existing IT environments, delivering operational efficiencies. It is the foundation for the company’s OpenPath commitment that enables customers to mitigate risk and cost-effectively adopt unified communications.

This promise is underwritten through our OpenScale service portfolio, which includes international, managed and outsource capability. Siemens Enterprise Communications, Inc. is owned by a joint venture of The Gores Group and Siemens AG. The joint venture also encompasses Enterasys Networks, which provides network infrastructure and security systems, delivering a perfect basis for joint communications solutions.

© 2011 Siemens Enterprise Communications GmbH & Co. KG.

Siemens Enterprise Communications GmbH & Co. KG is a Trademark Licensee of Siemens AG.

Hofmannstr. 51, D-80200 Munich, 08/2011

The information provided in this brochure contains merely general descriptions or characteristics of performance which in case of actual use do not always apply as described or which may change as a result of further development of the products. An obligation to provide the respective characteristics shall only exist if expressly agreed in the terms of contract. Availability and technical specifications are subject to change without notice. OpenScape, OpenStage and HiPath are registered trademarks of Siemens Enterprise Communications GmbH & Co. KG. All other company, brand, product and service names are trademarks or registered trademarks of their respective holders.

Siemens Enterprise Communicationswww.siemens-enterprise.com