Siemens Enterprise Communications - Still Moving ForwardSiemens Enterprise Communications - Still Moving Forward

While thousands of people were in Vienna last week for the Euro 2008 games (soccer, football, whatever you call it), some of us were there for Siemens Enterprise Communications' Global Analyst Conference. The location was amazing, the pastries to die for, and I now have a new appreciation of Austrian wine. But the focus of the trip was to hear Siemens Enterprise Communications (SEN) discuss its progress to date, how it's moving forward, and how it will succeed. And despite the many (too many) questions about the company's future vis a vis a merger and/or acquisition plans, there is no new news to report - as Brian Riggs reported, all SEN would say is that they are "In advanced stages of talks with potential partners" (emphasizing the plural "partners").

While thousands of people were in Vienna last week for the Euro 2008 games (soccer, football, whatever you call it), some of us were there for Siemens Enterprise Communications' Global Analyst Conference. The location was amazing, the pastries to die for, and I now have a new appreciation of Austrian wine. But the focus of the trip was to hear Siemens Enterprise Communications (SEN) discuss its progress to date, how it's moving forward, and how it will succeed. And despite the many (too many) questions about the company's future vis a vis a merger and/or acquisition plans, there is no new news to report - as Brian Riggs reported, all SEN would say is that they are "In advanced stages of talks with potential partners" (emphasizing the plural "partners").In terms of results, Thomas Zimmermann, COO, and Gerhard Otterbach, CMO, noted that the results to date include high productivity primarily through cost reduction, as well as greatly reduced headcount, in part due to outsourcing of several functions. To manage the business, Zimmermann and Otterbach mentioned that the company is growing several innovation areas, including OpenScape UC Suite, HiPath OpenOffice, OpenScale Managed and System Integration Services.

I was glad to hear the company state that it has a clear roadmap on how to accelerate, including establishing new growth areas, shifting more to indirect sales, and investing in skills transformation for direct and indirect sales However, this may all be moot depending on who acquires the company. SEN is investing 27% of product revenues in R&D, and also spending money on reskilling and recruiting IT and sales experts, ramping up indirect channels and partnerships, and investing in marketing, sales and communications. These are critical areas that have challenged Siemens for years, and it appears that they are being more aggressive in solving these challenges. In addition, the company is growing in managed and professional services.

Siemens made several points that I agree with--it's important for the company to speed up its transition to a software and services business, especially as the UC environment changes the role of traditional telephony vendors. Rather than fighting Microsoft and the movement to software-based voice that it advocates, Siemens is embracing this change. In addition to aggressively transforming its voice and telephony products to software-based solutions, Siemens has also been positioning itself as a services company.

To this end, Siemens' OpenScale Service is a global services offering used to design, implement and support open, multi-vendor UC solutions. The key is that OpenScale works with competitors' environments, not just Siemens', which is important as Siemens transitions to a software and services business. Siemens acknowledges that it has to speed up this transition, and is working on building up its expertise in this area.

SEN feels it has a one year lead in terms of product offerings compared with competitors, noting that the company has products that are available and shipping now.

Siemens has been a leader in UC in terms of product offering for years, but hasn't quite gotten the marketing and positioning in place to help support its products. While many people expected to see the company sit back and not do any innovation while waiting for its white knight to show up and acquire or invest in the company, that hasn't happened - Siemens has continued to be an active player in moving the UC industry forward. Now let's see if their new partner/owner/investor will let the company keep going forward.