9847-64
October 2013
Microsoft Lync: Market Impact and Growth
Potential
Transformational Force or a Market Byproduct
MMarket Impact and GrowthPotential
2 9847-64
Microsoft Lync: Market Impact and Growth Potential
Contents
Introduction.............................................................................................................................................. 3
The Evolving Enterprise Communications Marketplace ................................................................... 4
The Lync Value Proposition .............................................................................................................. 7
Impact on Customers ..................................................................................................................... 11
Impact on Technology Partners ...................................................................................................... 11
Impact on Channel Partners ........................................................................................................... 12
Lync Traction and Market Shares ................................................................................................... 13
Lync-Skype Integration: Significance and Market Potential ........................................................... 16
Lync in the Cloud Communications Marketplace ........................................................................... 18
Lync v-Dedicated ..................................................................................................................... 19
Lync Server 2013 Multitenant Hosting Pack (LHP v2) ............................................................. 20
Lync Server .............................................................................................................................. 21
Office 365 and Lync Online ...................................................................................................... 21
Lync and Microsoft Impact on the Enterprise Telephony and UCC Competitive Landscape ........ 22
Competitor Response to Microsoft Lync ........................................................................................ 23
Conclusion............................................................................................................................................. 25
Legal Disclaimer .................................................................................................................................... 27
The Frost & Sullivan Story .................................................................................................................... 28
Authors
Robert Arnold,
Principal Analyst,
Unified Communications & Collaboration
Elka Popova,
Program Director,
Unified Communications & Collaboration
MMarket Impact and GrowthPotential
3 9847-64
Microsoft Lync: Market Impact and Growth Potential
Introduction � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �cations Server � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �
communications and collaboration (UCC) market have remained a persistent and lively topic of
discussion among all parties with a stake in the industry.
Primarily an enterprise presence and instant messaging engine which displaced Exchange Instant
Messaging, LCS was designed and positioned as complimentary and a value-add not only for other
Microsoft platforms, including Active Directory, SQL, Exchange and more, but also for third-party
communications platforms such as private branch exchanges (PBX) and conferencing platforms.
As Microsoft gained experience and expertise in the realm of real-time communications applications
development and integration, the Redmond-based company increased its appetite and set its sights on a
bigger slice of the communications market. Opportunities and greater control could be gained by relying
less on third-parties for core real-time voice and video elements Microsoft could develop these on its
own. � ! � � " � � # � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �folio over the past ten years.
Exhibit 1: $ % & ' ( ) * & + & , - * . / & 0 & , ) 1 0 2 3 3 4 & / ) , & ' * & 5 6 7 7 8 9 2013
Source: Frost & Sullivan
OC
S 2
007 R
2 la
un
ch
ed
LC
S 2
005 S
P1 la
un
ch
ed
OC
S
LC
S
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Skyp
e a
cq
uire
d
Yam
mer a
cq
uire
d
LC
S 2
003 la
un
ch
ed
OC
S 2
007 la
un
ch
ed
LC
S 2
005 la
un
ch
ed
Pla
ceW
are
acq
uire
d
Lyn
c2010 la
un
ch
ed
Lyn
c2013 la
un
ch
ed
Offic
e 3
65 la
un
ch
ed
Exch
an
ge U
M la
un
ch
ed
MMarket Impact and GrowthPotential
4 9847-64
Microsoft Lync: Market Impact and Growth Potential
It has not been a swift or elegant 10-� � � � : � � � � � � � � � � " � � � � � � � � � � � � � � � � � � � � � � � � � � � � �
today. The company has transitioned from LCS to Office Communications Server 2007 (OCS), and
eventually to Lync 2013. PlaceWare (later rebranded as LiveMeeting), Skype, and Yammer were also
acquired along the way. With each step Microsoft has added functionality and changed its game plan ultimately disrupting the nature of the overall UCC landscape for partners, competitors, and customers
alike. Due to its assets and influence in the IT software market as well as its track record the company is
poised to play a heavy hand in the evolution of enterprise communications for years to come. This article � � � � � ! � � � � � � � � � � � �present impact on the UCC market and will provide a perspective on its future
role in enterprise communications.
The Evolving Enterprise Communications Marketplace
Forward-thinking businesses acknowledge the value of UCC and have rolled out strategies and business
plans for the integration of existing tool sets with new investments in communications infrastructure and
services. The move to fully integrated real-time collaboration capabilities is an evolutionary path for
almost all customers. In Phase I, or the traditional phase, enterprises have separate voice, data, and
video networks; many companies are still in this phase today. With the growing build-out of
IP communications networks enterprises are now moving to Phase II, or converged communications. In
the next 5 to 10 years, we expect many organizations to move to Phase III, in which most
communications and collaboration applications will be integrated, or unified, with one another and with
critical business processes.
Exhibit 2 illustrates the phases of UCC market maturity and customer adoption.
Exhibit 2: Communications Technology has Evolved into Lower-cost, more Flexible, Software-centric Solutions
Source Frost & Sullivan
Traditional
Converged
Hardware
focus
IP
focus
Unified Communications
Siloed;Separate voice, video,
data networks
Modular; IP everywhere; Point applications;Distributed
communications
Unified< Integrated apps< Communications-enabled
business processes< Multimodal collaboration< Anywhere access
Software
focus