Siemens Enterprise Communications, which has been rebuilding itself in the U.S. for the past several years, will punctuate the idea that it deserves another look with the announcement Monday of Version 7.0 of its OpenScape UC suite that enables the VoIP platform to support up to 500,000 users.
Complementing that leap forward -- up from a maximum of 100,000 users in the previous version -- are a parcel of new unified communications capabilities, including federated UC support to extend presence, chat and other core functions to other domains, support for MacOS, and some slick call handoff capabilities between various types of devices and networks.
Strengthening the product portfolio was number two on the task list of company President Chris Hummel. Number two because the first order of business was to restructure the company for its new size after former parent company Siemens AG sold a 51 percent stake in Siemens Enterprise Communications three years ago to private equity company Gores Group.
"We were once a $6 billion company, but the business had been declining 10 percent annually for the last 10 years," Hummel says. "Now we're a $3 billion company. A lot had to change." Siemens Enterprise Communications only has 1.5 to 2 percent market share here today, and is 8th or 9th on the market share list, Hummel says. But it is a global company and tops the charts in Germany, Brazil and in Western Europe, and is second or third in market share on a worldwide basis. "We need to get bigger here," he says. "We won't be first, second or third, but we have to do better."
As the company fleshes out the product portfolio, Hummel says the plan is to:
- Aggressively pursue new business, instead of just service the installed base. At the end of fiscal 2011, which ended last September, orders were up 26 percent, about half of the business coming from legacy customers while the rest was net new.
- Go after bigger transactions. Typical deal sizes used to range from $100,000-$300,000, but the company has recently landed seven $1 million plus deals with new customers. "Gross margins are up too," Hummel says. "We're not buying business."
- Showcase the company's technology and services. Hummel says the company's managed service business is already a $1 billion line, "as big as most," giving the company a firm foundation for emerging cloud business. In fact, he says the company already has a million ports in private cloud environments.
- Build a bigger and richer ecosystem of partners. The company has deals with, among others, Black Box, which landed two of the seven $1m+ deals, and Verizon, which partners with Siemens Enterprise Communications on a worldwide basis, particularly on complex projects.
Hummel says the company hangs its hat on advanced technology, but has a compelling cost advantage as well. "In a $200,000 deal, there's isn't going to be much of a pricing difference between vendors," he says. "But at $5 million to $10 million, the cost separation really starts to show up."