Unify: Back from the Brink
With a revised commitment from its parent Atos, Unify should see accelerated growth.
Unify has gone through more transitions and transformations than any other UC company. In the past 10 years, it has had three changes in ownership, four changes in leadership, three different company names, one major launch, and significant changes in go-to-market approaches.
Ever since Atos acquired Unify in 2016, there's been lingering doubt about the company's future. But now it's full-speed ahead.
A Brief History
In 2008, Siemens AG spun out Siemens Enterprise Communications, a company jointly held by Siemens AG and The Gores Group venture firm. In 2013, it was this company that previewed Project Ansible as "a new way to work," sold its networking division (Enterasys) to Extreme Networks, and rebranded itself as Unify. Then, presumably with the intent to prepare for acquisition, Unify put new leadership in place at the end of the year.
In June 2014, it was this company that implemented the massive layoffs that had many people questioning if it could survive after reducing headcount by half. But work on Project Ansible continued, and in October the company released Circuit, renamed from the project phase.
In January 2016, Atos, a global solutions integrator (GSI), acquired Unify and named Jon Pritchard as CEO.
A Questionable Start
Atos was a surprise. The French company had not been well known in the U.S., but had been growing aggressively, both organically and via acquisition. It had likely found Unify's service business attractive. After the acquisition, Unify service revenues (including professional services, managed services, and consulting) transferred to Atos.
Atos's intentions were less clear regarding Unify's product business. Acquisitions usually result with overlaps and strategic incompatibilities that get resolved by attrition or sale. Atos's 2016 financial statements confirmed that portions of Unify had been for sale.
Atos has now determined to keep Unify, citing first-quarter 2017 results showing that it provides a key building block for the digital transformation of its customers. For Q1 2017, Atos reported: "The decision was made to integrate Unify Software & Platforms into Atos (Infrastructure & Data Management division). This entity generated revenue of € 677 million in 2016, while services revenue delivered by Atos to Unify Software & Platforms represented € 231 million in 2016."
The New Atos-Unify
The Atos-Unify partnership demonstrated synergies in 2016, and that was with a partial integration and a tepid commitment. The synergies coming from the combined company are likely greater than many expect. Unify is back from the brink, and here's why its rebound will continue.
- Solutions: The UC industry is no longer about ports or equipment; it's about integrating communications and collaboration into business processes. Customers can either select a single vendor that has integrated its components or integrate best-of-breed applications. This integration process, which involves analytics, evolving APIs, hybrid cloud architectures, contemporary digital platforms, and advanced collaboration technologies, is fueling growth for Atos and other GSIs. GSIs thrive in multi-vendor, complex environments, and companies such as Atos, Dimension Data, and Accenture are snapping up technology companies that facilitate integration and/or operations to create powerful turnkey solutions. For example, Atos strengthened its Public Safety Practice using Unify's software and turret endpoints to create a multi-vendor, packaged E911 solution for PSAPs.
- Vision: Unify has a strong track record for innovation. It was the first major UC vendor to launch a team chat service (Circuit). The company is also the first among UC vendors to offer IoT sensor-equipped endpoints, and it recently launched Circuit Meeting Room -- a WebRTC-based room video system. During the 2014-2015 period, the company lost momentum with its restructuring, but it is now back in high gear. Circuit had 26 update sprints in 2016. Unify also had seven major launches across its OpenScape portfolio, which is now Joint Interoperability Test Command (JITC) certified.
- Enterprise Focus: Products are not born enterprise-ready. It takes time to win enterprises, which want proven solutions. Larger accounts tend to reveal deficiencies, which then take time to address. For example, it took years for Microsoft to adopt Skype for Business for internal, enterprise-wide use, and for Cisco users outside of the Collaboration unit to embrace Spark. Atos itself is a large, global enterprise with roughly 100,000 employees in 72 countries. The company is on the forefront of digitization, cloud services, and cybersecurity. Atos serves many large enterprises, with its largest customer being Siemens AG. Atos, and many of its customers, have fueled Circuit's development priorities in 2016 in preparation for large enterprise rollouts. Unify currently reports having more than half a million paid users on Circuit, and says adoption is poised for rapid acceleration.
Unify is heading into a perfect storm. The mobile workforce, digital transformation, and cloud computing are driving businesses to improve communications (text, voice, video, and IoT) between people (including teams), devices, and applications.
Cisco and Microsoft are powerful competitors, but they are not going to win the entire market. Unify suddenly finds itself as a full member of a large, global company with a vastly improved ability to sell and service large enterprise accounts. It's also noteworthy that Atos-Unify is a European company, which none of its major competitors can claim.
Unify once again has the wherewithal to invest and expand its portfolio. The fastest growing segments in collaboration are team chat apps, communications, and APIs. Circuit is currently optimized when combined with OpenScape, the company's premises-based UC solution. It seems inevitable that Unify will combine Circuit with a hosted version of OpenScape in the future.
I expect significant developments out of Atos-Unify.
Dave Michels is a contributing editor and analyst at TalkingPointz.
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