Lync Finds Its Groove in 'Universal Communications' Era
Partners are seeing a massive upswing in business for the Microsoft software-based unified communications platform. Will upcoming enhancements keep the party going?
- By Scott Bekker
- April 14, 2014
Carol Spowart spent a moment at the recent Microsoft Lync Conference exchanging high fives with a peer on the show floor.
Spowart is the CEO of House of Lync, a Costa Mesa, Calif.-based professional services firm, which, as you might guess from the name, is 100 percent dedicated to Lync deployment projects. "I have a very friendly competitor out of Houston, and the president said, 'It's raining Lync.' I said, 'All you have to do is put out a bucket,'" Spowart recalls.
A major takeaway from the February conference in Las Vegas, from both Microsoft and the partners most involved in the Lync unified communications business, is that Lync is taking off as customers move from the voice pilot stage to the full implementation stage, and start taking advantage of the potential of a software-based approach to telephony.
"It was a long path up to this point," says Spowart. "In the first 12 to 18 months, it was explaining to people how to say Lync. It's not lynx; it's not a cat. This was in rooms full of Microsoft partners. There were some pilots, you had some brave CIOs and CEOs doing phased migrations."
Something changed at House of Lync in the September/October time frame. "The skies opened. And by November and December we were taking calls through the entire holiday season and it hasn't stopped," she says.
Matt McGillen, director of Microsoft infrastructure at Perficient Inc., an IT and management consulting company based in St. Louis, Mo., is seeing the same thing. "Demand has increased big time. It started in 2013, and it's ramped up in Q1 of 2014."
Giovanni Mezgec, general manager of product marketing for Lync and Skype, says Lync revenues passed into $1 billion-a-year territory in the fiscal year that ended in July 2013 and have kept on growing. "We've grown double digits every quarter for the last five or six quarters. In the last quarter, we've grown 29 percent year-over-year."
Mezgec, who served as emcee for the Microsoft Lync Conference this year and last year when the conference was about half the size and held in San Diego, says the tone has changed since last time. "Then it was, 'Hey, we're piloting. We're interested. We've got 1,000 people on Lync.' Now, it's all about massive scale or intention to reach massive scale. Really it's about user stories, the fact that people work [not just] in their offices anymore. Communication tools are really important for them."
Credit part of that momentum to Microsoft's institutional expertise at spinning its strength in the server OS market into ancillary enterprise infrastructure businesses. Microsoft has followed the playbook in the past to make billion-dollar businesses out of Exchange Server, SQL Server and SharePoint. The company knows how to push consistently at the flywheel until an enterprise server product becomes a massive revenue source.
Phil Sharp, the lead Lync architect at Project Leadership Associates, the Chicago-based business technology solution provider, attributes the recent success of Lync to the confluence of several other factors, as well.
"A lot of our customers have aging PBXes, and now seems to be the time that our customers are looking to replace those," Sharp says.
Customers seem to have gotten past any concerns about the latest Lync release. "The first six months or so that Lync 2013 was released, there was maybe a little bit of hesitation. Now, Microsoft has done a great job of marketing the product and familiarizing customers with these much larger deployments that show how Lync can perform," says Sharp, who has participated in Lync voice implementations reaching from as few as 100 to as many as 38,000 seats.
Improvements in the 2013 version of Lync also contributed. One essential feature was the ability for Lync to serve as the core PBX to route calls to other, legacy PBXes in branch offices. "You can deploy Lync in the primary site and still have some PBXes in disparate sites," he explains.
Conferencing improvements in Lync 2013 are also a factor. "The ability to see multiple attendees' videos has been a pretty big driver," Sharp says.
McGillen says customer enthusiasm for voice is the biggest driver of the increased business Perficient is seeing. "Part of the reason for our service number doubling from 2012 to 2013 is that people are taking voice seriously. I would say every one of our Lync on-premises deals involves voice in some way," he says.
Microsoft used the Lync Conference to make some announcements about its plans to keep the momentum going.
During his kickoff keynote, Gurdeep Singh Pall, Microsoft corporate vice president for Lync and Skype Engineering, tried to rebrand the industry from "unified communications" to "universal communications" and to set a bold user-number prediction.
"The era of universal communications is here to stay. That's what the next decade is going to be about. It's going to change your and my life. In fact, 1 billion people in this decade will use Microsoft universal communications," said Pall, who recently returned to Lync from other parts of Microsoft's business.
Shorter term, Pall's co-presenter Derek Burney, Microsoft corporate vice president for Strategic Relations and Solutions, demonstrated four technologies that Microsoft will deliver this year.
One is support for Android tablets. Microsoft has been fairly aggressive with other platforms, including several new releases in the last year of the Lync Mobile app for iPhone, iPad and Android-based phones. Now software supporting Android-based tablets is scheduled to be available on Google Play by the end of June.
Microsoft also demonstrated the long-promised Skype-Lync video integration, expanding the business platform's capabilities for B2C communication, as well as client and partner communication. Burney also showed new videoconferencing interoperability between Lync and the Cisco Systems Tandberg videoconferencing equipment. He also demonstrated browser extensibility with voice, video and other content.
Pall said other features Microsoft will deliver soon for Lync include the ability to make and receive public switched telephone network (PSTN) calls from Lync Online and support for larger meetings of thousands of users on Lync Online.
Among those announcements, several partners were especially enthusiastic about the browser functionality.
While it didn't rise to the level of specific announcements, Tong also notes software-defined networking (SDN) as a theme at the show. "It was notable that there was a lot of emphasis around it," Tong says. "The direction that it's taking is a very positive one."
Due to Lync's software focus, SDN is a natural fit. Around as a concept since about 2008, SDN at a high level divides networking into two "planes" -- a control plane and a data-routing plane -- and allows network behavior to be controlled more easily by software rather than by coding spread throughout the seven layers of the networking stack.
Tong says scenarios where Lync and SDN can be used together include having Lync "tell" the network what it's planning to do, such as setting up a massive audio conference, and having the network report back telemetry about whether it's achievable, or providing telemetry on improving the experience.
"If you think about a world where the application may be running into a situation where the experience might not be so good, the infrastructure can tell me, 'I tried, but it's not working well.' It could degrade gracefully, tell the user about it and try another path," he explains.
Another theme that stood out for some partners was the number of customers at the conference this year, and how their real-world implementation stories dominated the show. "This time around it wasn't a lot of feature, 'gee-whiz' announcements. It was a lot of customers saying, 'We did this, we saved a ton of money, we have happy users and you guys can do it, too,'" says Perficient's McGillen.
Taking Lync to the Next Level
In addition to new features announced in February, partners see several ways to accelerate the growth of Lync -- both in additional actions Microsoft can take and in steps for the ecosystem as a whole.
One big obstacle is the lack of any capacity for voice enablement in Lync Online, which is part of the Office 365 suite. Microsoft and a communications partner had an aborted offering for calling from Lync Online a few years ago. Microsoft has now promised PSTN calls through Lync Online at this and the previous Lync Conference. Partners say they understand the issue is complicated, but they're eager for Microsoft to get on with it.
"Right now, the biggie is the question about voice in the cloud. A lot of our customers want Lync in the cloud, but they want to integrate it with their PBX on-premises," says McGillen. Acknowledging the announcement, Sharp says, "They didn't really talk about the details too much, which I was a little disappointed in." Tong, who attended a breakout session on Office 365, got a little more timing detail about Lync Online integration with the PSTN. "They're going to make it available in the [United States and United Kingdom] sometime late in 2014 or early 2015."
An obstacle in the ecosystem is a lack of qualified personnel to implement Lync solutions, which require a unique combination of traditional telephony skills, Microsoft server infrastructure expertise and application development skills. Says Tong, "It's probably more of a comment about the growth that we're seeing."
Microsoft's Mezgec says new partners are coming aboard every day. "I believe that the number now is 1,400 partners. The interesting thing to me is that the flow hasn't stopped. In the [last] two years, about 600 partners joined the competency of Communication and Lync. That really meant that every business day there was a new partner in the world who made the commitment, and in the last 12 months that trend has basically continued on," he says.
Given the complexity of the solutions and the novelty of the skill set required, the influx of partners and overeager customers has led to the related problem of poor implementations, which can undermine confidence in Lync as a voice product.
McGillen notes that Microsoft has made installation of Lync so simple that customers often go too far in enabling features without understanding the underlying network requirements for quality of service. "It's a big problem when somebody tries to install Lync on their own," he says. "It's easy enough to click next, next, next and install it, and the [call] button shows up. That's when we get called in a lot. The voice quality is crummy. It was easy to install, but that doesn't mean that everything is magic."
Partners who don't have the competence to implement Lync can cause similar situations. "We clean them up all the time," House of Lync's Spowart says of poorly implemented Lync solutions.
On the technical side, Sharp is looking to Microsoft to make the management tools more full-featured.
Avanade's Tong believes the Lync market would benefit from some structure. "The diversity of the ecosystem is fantastic, but we're at the level of maturity where it's incumbent on the market to supply in the way that customers can buy and onboard," he says, citing a need for reference designs, good documentation and vetted scenarios. "Partners will get there and Microsoft can support it."
Removing any of those obstacles should accelerate the market. For now, Spowart says, there's plenty of work to do: "The product works. The ecosystem is there and ready to go. They've invested their lifeblood, their life savings and other things. It's just time to make it happen."