BT has a strong presence in the SMB market and has just expanded its portfolio with a new unified communications (UC) service aimed at these customers. It hopes to utilize its “Communications Complete” solution to build long-term partnerships. BT has chosen to work with Cisco and is using its UC500 platform for this new service. The UC500 system offers functionality for up to 50 users, so is an ideal platform for BT to use to target SMBs. BT is already a technology partner and reseller for Cisco and it is set to further leverage Cisco’s strength in UC by this move.

The wisdom of this move is demonstrated by the fact that deployments are already in the pipeline less than a month after the solution was launched. BT appears to have a significant value-add here with its broadband and telephony background coupled with Cisco’s routing and networking capabilities. This is also a good move for Cisco in gaining traction in the SMB space. Cisco has already shown interest in this market by acquiring WebEx in 2007.

On first glance BT’s “Communications Complete” solution seems to be yet another solution in an already overcrowded UC market. Most vendors have been targeting large enterprises where UC is more attractive to companies and more lucrative for vendors. Packaged UC solutions specifically for SMBs have only recently become available because the market is still relatively immature.

However the competition in this space is increasing: Nortel, Mitel and Siemens are all targeting the SMB market with new solutions. Nortel’s BCM50 platform, Siemens’s HiPath Open Office ME as well as Mitel’s newly acquired InterTel 3000 are all a threat to BT’s proposition with Cisco.

Like the rest of the communications industry, BT is positioning itself as a services vendor. The success of this approach should be accelerated by the current credit crunch and economic slowdown. Businesses are more likely to reduce costs and shift spending from a CapEx to an OPEX model, choosing to run their software solutions as a managed service. SMBs are key contenders for such a solution because they generally have less IT resources available to implement and run new technology solutions.

BT has addressed SMBs’ concerns about the cost of using a managed service by offering a competitive pricing scheme. It is working with Cisco to offer a package with 0% interest financing for up to three years for “Communications Complete”. There is however, a financial risk for BT in using this approach as the return will not be immediate and SMBs may go out of business. Conditions have been specified in the pricing plan to minimize exposure in this regard.

In order for BT to capitalize on its investment in “Communications Complete”, it will need to provide a clear message to its target audience about UC and the simplicity of deploying this service. Its choice to partner with Cisco is wise although it could become an issue if SMBs take interest in choosing their back-end platform or want to upgrade to IP telephony at a later stage.

Although there is fierce competition, Datamonitor believes that BT will succeed with this solution because it has such a strong large SMB customer base. Its relationships with these customers mean it has a good understanding of its target audience’s needs. The financial deal BT is offering is also well thought out: it addresses both the current financial crisis as well as SMB’s concerns over cost when using a managed service.

Further Reading: 2008 Trends to Watch: Unified Communications