The virtual office takes off

Unified communications (UC) is charting the way for future corporate interaction as environmental, productivity and cost concerns top the enterprise agenda.

Dan Engel, regional sales manager at Polycom, says there have been significant changes in the UC market space in the past year, with increased consolidation between vendors. These include the Cisco-Tandberg acquisition, Logitech's purchase of LifeSize, and Radvision acquiring Aethra's video conferencing technology assets, among others.

This period of M&A activity comes at a time when businesses face a shaky financial landscape, and while the economic downturn has seen a radical repositioning of UC players, it has also proved a boon for the market, says Engel.

“2009 was an extremely negative year economically, and created greater awareness of the advantages of using video conferencing and collaboration tools.”

According to Engel, cutting travel expenses was a major motivator. “If you're the CFO of a company under extreme financial strain, one of the first things you'll look at is reducing expenses, and company travel is probably one of the biggest items on the balance sheet.”

However, adds Engel, because travel is an important part of doing business, one can't just cut it without providing an alternative solution. “Last year, we saw very clearly that the video conferencing industry suffered less of an impact than other businesses in the ICT space, which is a good indicator that more companies are adopting it.”

Dorota Oviedo, Frost & Sullivan industry analyst for UC and collaboration, notes that corporate travel is not only a drain on financial resources, but forms a substantial part of a company's greenhouse gas emissions. Frost & Sullivan reveals air travel is one of the fastest growing contributors to carbon emissions, accounting for 3.5% of carbon dioxide (CO2) emissions in 2009, and expected to reach 25% by 2030.

“Minimising this mode of transportation in particular is a way to attain a significant reduction in the level of environmental impact,” says the firm.

Given that employees need to travel to meet partners and customers, and for conferences and training, Oviedo says telepresence and UC tools offer virtual meeting alternatives that reduce the necessity of traditional face-to-face contact.

She adds that while the economic downturn has put on hold some initiatives, the enterprise world has increased its interest in telepresence and conferencing solutions. “The Web conferencing services market in Europe grew at a rate of 19.3% in 2009,” she points out.

As businesses look for cost efficiencies, and with energy costs on the rise, a reduction in power consumption has become a focal point in the enterprise agenda, Frost & Sullivan reported earlier this month.

Furthermore, the increased focus on green IT is expected to drive the adoption of unified communications and collaboration, and will become an increasingly significant factor in the marketing of these solutions, says Oviedo.

She adds that the political discussions and publicity surrounding businesses' carbon footprints has led to green IT emerging as a popular trend in recent years. “The growing importance of social responsibility and corporate governance policies is going to drive end-users as well as IT companies to have a stronger focus on adopting green technologies.

“The ICT sector accounts for approximately 2% to 3% of the worldwide energy consumption and related CO2 emissions, and ICT applications have a large potential to enhance performance across the economy and society as a whole,” she notes.

According to Oviedo, one of the most consistently important drivers for greener behaviour is legislation. She points out that a plethora of voluntary and mandatory agreements provide direction for sustainability efforts. Additionally, implementing green technologies can potentially lead to tax benefits for businesses.

Engel says emission-related tax breaks for companies could see a significant shift in business operations. “If the government provides tax relief for reducing carbon emissions, UC is one of the tools that could contribute to that. “Take a big banking institution, for example. If they can save just 1% of their yearly profits, compared to the investment needed to put in video conferencing technology, not to mention the other benefits it will bring, it makes business sense.”

Another element of unified communications, vividly demonstrated in the recent travel crisis following the eruption of the Eyjafjallaj"okull volcano, is its role in business continuity. Keith Matthews, BT's GM for sub-Saharan Africa, says the ash cloud struck at the heart of businesses' assumption that they can reach any corner of the world within a day.

“So, the most important change, going forward, must be to make sure that effective communication is still possible regardless of whether we can physically travel or not,” says Matthews.

“In this case, it wasn't a budget issue, but one of business continuity,” notes Engel. “People travelling suddenly couldn't move, but couldn't just stop doing business. They had to find any way possible to carry on.

“Unified communications allows people to continue working even in the face of elements outside their control, like volcanoes, H1N1, and SARS.”

Oviedo points out that UC applications enable people in stranded situations or remote sites to work with the same efficiency as they would in an office. “They allow staff to access data remotely, hold interactive meetings, make online sales presentations, deliver online training... or set up shared online workspaces to collaborate on documents.”

Another aspect of UC is that it allows a remote working employee to be contactable. “Presence-based technologies like unified communications become vital in providing clarity as to which experts are available to do their work, regardless of where they are,” says Matthews.

According to Oviedo, companies recognise the benefits of teleworking and increasingly offer their employees the option to work outside the office. This has several benefits, for the employee, business and environment.

“Businesses actively pursuing a green strategy understand that letting staff work from home, or nearby, not only contributes to lowering CO2 emissions, but also results in increased employee satisfaction,” she explains.

This decreases staff turnover and helps attracts highly qualified professionals who may not live in a reasonable daily commuting distance, Oviedo adds.

“Mobility has huge benefits,” says Engel. “It allows employees to work in a much calmer environment, with fewer disruptions and distractions.”

However, this also depends on the role of the employee, notes Engel, as those based at an R&D base, for example, will have to participate in teamwork and collaborative efforts on site. In other areas like sales, individuals can be dispersed and communicate via UC solutions as if they're in the same office, he explains.

“It's also a question of mentality, because if an employer allows staff to work from home there has to be an extremely strong trust relationship.”

Oviedo points out that home and remote working leads to reduced office space requirements, and fewer operating overheads. “Working areas can be reduced, thereby decreasing the costs of heating, powering and lighting, which is another positive contribution to a sustainable saving on resources.”

Engel says gains can be made even with small changes. “If you're running a large facility that's been going for several years, and you allow staff to work from home even for just one day a week, that can already bring lots of savings.”

Oviedo adds that as broadband Internet connections become more available, a greater number of workers will have enough bandwidth at home to use these tools, and link their home office to corporate ICT systems, including unified communications tools.

While bandwidth may remain a bug bear for local businesses, Engel says the situation is improving. “In SA, the lack of bandwidth and connectivity has been an issue, but it's becoming comparable to other areas, like here in Israel. It exists and is available, and as more bandwidth arrives, either the price will drop or you'll get more for what you pay.”

Going forward, Engel believes the greatest driver in the UC space will be productivity. ”At the end of the day, the benefit to the bottom line is the greatest advantage for a company.

“The more productive and financially stable a business can make itself, the better, which is why cost reductions and productivity will remains the biggest drivers in this market in the next few years.”