UC Summit 2011: Mark Straton – Siemens Enterprise Communications
UCStrategies’ Dave Michels interviews Mark Straton of Siemens Enterprise Communications following his keynote presentation at UC Summit 2011, held March 27-30 in La Jolla, CA. Siemens is a Platinum sponsor of UC Summit 2011.
Transcript for UC Summit 2011 Podcast: Siemens Enterprise Communications
Dave Michels: This is Dave Michels and I am at the UC Summit in La Jolla, California, sitting down with Mark Straton, the Senior Vice President of Global Solutions Marketing at Siemens Enterprise Communications, who earlier did a keynote. So let me ask you, Mark, a couple questions about your keynote. You had discussed five megatrends that you see in the industry and starting off with “flexible deployment options meeting customer-specific needs” – how does that help Siemens?
Mark Straton: The five megatrends are all along the idea of what’s driving cloud communications in the industry. And so the first megatrend is what we call “flexible deployments.” So if I am a CIO or an enterprise or even a small business, a capital investment might be a good choice for me, but maybe I need a “pay as you go” investment; maybe I have multiple locations; maybe I have a large legacy estate and I want to have web collaboration or use a cloud solution for multiple locations. So flexible deployment is about giving people different choices in how they acquire communications technologies.
Dave Michels: The second megatrend you identified was, “seamless mobility is transforming how we connect socially and professionally.” And again, help me tie that into Siemens Enterprise Communications.
Mark Straton: Well mobile communications, if you look at the growth– I don’t know what the exact number is—but there is something like five times as many mobile users as fixed-line users in the world and smartphone broadband access will actually pass internet fixed-line. So if you are designing an enterprise communication system in today’s world and if you aren’t deeply integrated in the mobile experience, you are going to really miss the mark in terms of what a business needs to be successful.
Dave Michels: Does that mean that you are going to stop selling phones or wired phones or does that mean that you are just embracing mobile carriers?
Mark Straton: What it means is that we are going to integrate the smartphone, the tablet, into a common user experience, with a desk phone, so that you can have a seamless experience as you go from a smartphone to a desk phone.
Dave Michels: Speaking of those, the next megatrend you identified: consumer innovations are impacting the integrated user experience and general greater business productivity. How does Siemens benefit from the consumerization of IT?
Mark Straton: I don’t know that we benefit. I think that if you look at what has happened in the consumer world with mobility, social media, the interface on an iPhone and Android or iPad, where you have gesture-based user interfaces. Once you start to use those and you go back to the enterprise world, it’s very archaic and so the question is how do you take these innovations in the consumer world and bring them into the business world to make the technology easier to use. The other piece of it ties back to mobility. I want to have the same enterprise communications experience on my desk phone, my cell phone, my tablet, and my PC. So one example is, if I walk into the office on my cell phone, how can I move that call from my cell phone to my desk phone, with just swiping that call and that would be one example. So we’re really going to do a lot of activities in the area of having a common user experience and integrating the mobile experience into the business experience.
Dave Michels: The next megatrend, the fourth one you identified is – social collaboration is having a staggering effect. Can you elaborate on that?
Mark Straton: Basically when you just look at the volume of traffic and usage in social collaboration, it’s incredible. So Facebook traffic will – is about equal to Google traffic now and if you look at the amount of time users spend on Facebook relative to Google, it’s something like five/six – I am not sure of the exact number – more. So I think an example is that actually there is more traffic sent – messaging sent through social media than there is email. So the question is how you harness this in a work environment to take advantage of it, particularly as new people enter the workforce. The second thing is in the contact center. When you are working with your customers, you are going to have to work in the media that they work with and the majority of people now are working in social media. So you have to figure out a way to integrate that into your business.
Dave Michels: The fifth megatrend you identified was – reliability and security redefine support of cloud communications.
Mark Straton: There’s this idea that when you move to the cloud that it is less reliable and less secure. And so therefore, as you architect your solutions as we have, you have to think about that. But the irony is that for most businesses, a cloud-based solution is probably more secure and more reliable. Why? Because it’s run by professionals with a set of certifications that are required to be successful and market the product. In our case, the data centers, there are two in Europe and two in North America and ultimately in Latin America as well, and they are geographically separated and fully redundant. One network, one data center can fail from fire, bomb, whatever and it will continue to operate. Also out in the branch, we have a very low cost appliance that allows the branch offices to stay up in the event of a network or data center failure. In addition, the data is encrypted end-to-end across the network and it’s also high definition audio quality.
Dave Michels: I think it’s interesting that these five megatrends that you’ve identified are fairly generic sounding – reliability and security redefined to support cloud communications are not really Siemens perspective, but nonetheless I think about your recent product announcements – you have video collaboration with the iPhone now and is part of your collaborations sweep. You have a Twitter integration story, with a social – it sounds like these megatrends, which are generically industry-wide are very much a part of your product strategy, as well.
Mark Straton: What we try to do is we try to look at where our customers are going. Of course, we have a little bit more inside knowledge because of our technology expertise, and these are just what we see happening in the market and so we are trying to make sure that we are the leading vendor in providing these. We are also in a unique situation in that in the mid 2000s, we re-architected both our unified communications and our voice products from the ground up, so that they are completely software-based and open. So they really are able to take advantage of a lot of these trends, as well.
Dave Michels: Now, toward the end of your keynote, you had reviewed a number of success stories and customer implementations and customer testimonials – I couldn’t help but notice all of those were international or European-type of firms that were successfully implementing Siemens Enterprise Communications products. And so my question is, how is Siemens addressing the North American market and building up its traction in North America?
Mark Straton: We’re a world leader in voiceover IP and we are – depending on exactly on what day of the week, number three in total voiceover IP revenues, three or four in systems shipped, we do about 15% of our business or about three billion dollars – about 15% of that is done in North America. But we do a lot of business here. I chose to emphasize both an example of ourselves, using our own technology, and a couple of European ones, simply because I have really good – and one Latin American one – because I have really data. But we do a lot of business here. We have some marquee brands and there are some examples, the town of Enfield, Connecticut that has 9,000 users and integrated wire to wireless. Clark Atlanta University is an interesting environment, because we overlay their legacy Avaya which they use in their dorm rooms, but they are using the new software base for their contact center and their new locations. People Natural Gas, which is also an interesting case because they are very concerned about future growth, so the scalability of a private cloud solution and disaster recovery – so again, the geographically separated data centers.
Dave Michels: My last question for you then has to do with your own case study that you have discussed at Siemens Enterprise. You had put up some pretty impressive numbers. You had said that by switching to a – what I assume was a private cloud implementation–
Mark Straton: Right, private cloud.
Dave Michels: That you had replaced 132 PBX systems, 132 voicemail systems, presumably mostly Siemens by curiosity, but 12 contact centers, and you did all this with a 17-month pay back and a 140% ROI. These are – and then the last thing you stated was a 62% reduction in annual operating expenses. So…is this because you are Siemens and you didn’t have to pay for the software, or are these numbers that could be applicable to other companies or customers as well?
Mark Straton: No—these could be applicable to other customers. They have been born out in our examples with other customers. We hired a company called Mainstay Partners, which specializes in doing case studies, to come in and analyze our situation. They did that and they came up with the numbers. We will save about $30,000,000 after our capital investment over a five-year period. Our IT department has to buy it, just like anybody else acquires it and that’s what we used for this study. But what is really remarkable about it is that we have two data centers, one in Europe that handles Asia and Europe and another in North America, which handles North America and Latin America and they are fully redundant. And then that also gives us one virtual contact that operates all over the world.
Dave Michels: That’s a great story. Well, thank you very much Mark. I appreciate you coming out to the UC Summit.
Mark Straton: I have enjoyed it and thank you for the interview.