QUESTION & ANSWER

VoIP, unified communications market trends: Q&A with Siemens CEO Eve Aretakis

By Kate Dostart, Associate Editor 03 May 2007 | SearchVoIP.com

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What are the major drivers for unified communications (UC) solutions?
Eve Aretakis: One of the major drivers of unified communications is its openness. As more enterprises look to integrate the features of UC into their daily business culture, vendors will need to be prepared to work with them to get the solution they want.

At Siemens, that's what we want to do -- focus on the open side of unified communications and develop products that work with

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all vendors in a non-proprietary environment. We know that most customers will transition into UC gracefully, so we need to be able to adapt. Some enterprises will want to keep parts of their legacy telephony systems for a while, so we make sure that every interface we develop can north- or southbound interface with a lot of the standards that are in the market today. Whether it is a desktop device, a phone, a downloadable desktop client or a wireless device, we have to be flexible in all devices we see. Part of this is seen especially in our OpenPath strategy to what we term "fixed mobile convenience."

What are the top three trends you see driving the enterprise VoIP marketplace?
Aretakis: Businesses looking at VoIP are looking for vendors who focus on being open, more flexible and who listen.

Customers are looking to see that Siemens is open -- both in terms of interoperability and in terms of listening to what they want. Customers want to be able to leverage their IT infrastructure when they come to Siemens for a solution. There's a lot of debate going on right now about the pros and cons of adding on or building on from various infrastructures -- IT routing network, the wireless network or the IP network -- which is best to build off of?

We've found that most customers are looking at their IT environment and wanting to commoditize that network. Siemens wants its customers to know that they can come to us and know that we will work with them so that our products will ride on their existing platform. It's more important to be open and to be able to ride on other platforms, whether it's IBM or Fujitsu-Siemens, so that enterprises can make that transition to VoIP and UC as gracefully as they want. Additionally, by integrating on the existing platform, the customer can maximize their lifecycle costing, sparing, as well as their knowledge base.

To that end, we've worked hard to ensure that we will fit into their existing infrastructure. We've integrated with SIP so that our products are interoperable with other vendors' products. As customers build out their strategies and IP switching, that's more of what we're going to see -- multi-vendor infrastructures. We see SIP as one of the most critical leveraging points in terms of enabling that interoperability.

In terms of a deployment plan, customers want to see more stealth-managed services, meaning they want to own their IT organization and they want their own applications, whether desktop apps, etc. But they want to outsource on a hosted basis some of their voice capabilities or video or other UC capabilities. Many customers come to us after they've already built up their IT organization, and they want to make the buy decision and manage their own IT network, but they want us to handle the voice or video side of the environment. Siemens has a product design that allows them to operate in whatever type of environment they prefer.

Because of this, there are times when Siemens is selling directly to the enterprise and other times when we sell to a customer through another company that's offering a set of bundled, hosted services. It's the hosted model you're going to see starting to take off for all kinds of communications offerings.

Are larger enterprises or SMBs going with hosted?
Aretakis: In Siemens' case, we find that both sizes of enterprises are looking at hosted services, in one form or another. Larger organizations with global networks look at hosted services as an overlay option or for mixed-mode possibilities. They have large sites that they want to service themselves, but for their smaller sales offices, they will look for a hosted option. And that's what is nice about using the open interface for UC -- we can actually blend with that mixed environment and optimize on it to the benefit of the enterprise.

What are your customers telling you they want from their communications systems?
Aretakis: One thing that customers want -- something they've learned from the legacy systems -- is an open system. They love the idea that we're providing them with next-gen products and services on an open platform. The advantage that they see is if they have an existing relationship with a service vendor, they can leverage that relationship with us. By combining that previous relationship and a new one with us, they are able to ride the curve of cost reduction in the server market.

Whereas when you get locked in on a proprietary basis, you're pretty much at the whim of that vendor's pricing strategy with a proprietary platform. The server market is a very competitive environment, so it gives the customer tremendous pull to pick and choose from the best of breed. And not only in terms of the cost -- customers continue to witness savings over time in terms of expertise, repair and return, and the whole lifecycle, giving [them] an even bigger bonus.

Another big advantage is that the customer is no longer confined to a set of desktop solutions that are proprietary, as they traditionally were. In the old days, you'd basically get a proprietary system with a proprietary desktop environment. Now they can leverage many different desktops and integrate that into one offering. Since we also play on the desktop, customers can come to us and, by working with us, they can come up with soft solutions or they find all they need is a single headset that connects to a laptop.

So whether they want a quick solution, a forklift or a slower solution -- we listen. Some customers have come to us and they're not ready to get away from the hard plastic of a telephone, while other customers look at a desktop client and see something more useful. I think that's the key thing customers are telling us -- listen and build what we need. They want a communications system that adapts to them and is consistent and secure.

Siemens is in a market space with many major vendors -- i.e., Aspect, Avaya, Cisco Systems, Nortel, etc. How are you meeting the challenge of differentiating yourselves from your competitors? What will be Siemens' focus and direction for the next 12 months?
Aretakis: There are a lot of vendors out there who are still looking at proprietary solutions -- obviously there are a lot of advantages to that type of solution for the vendor. But as a customer, you get locked into it, and the only way to diverge is essentially to perform a forklift. Our view is that in this area, especially with UC, open communications is the way to go. There are going to be many application developers that are going to build for the best-of-breed providers. So we see two things -- first, we want to stimulate that incremental value because we think ultimately it will bring more value to a Siemens buy decision if we can allow other vendors products in our solutions; and second, that the customer can do some of that integration themselves through open interfaces and open communications.

We think that this is important because if you look historically at the systems used and the buy decisions made, the most problematic have always been where things go so proprietary that the customer ends up in a scenario where they couldn't take advantage of the best and the brightest entering the marketplace.

Finally, one of our major focuses is going to be our OpenPath strategy. It is designed to show the customer how to get to an open environment and how to get there gracefully. OpenPath allows them to take the journey in steps, or they can be more aggressive and take a large leap. Depending on what part of the problem the customer wants to solve, we can develop an evolution path that is more tailored to them, without developing a customized product.

Eve C. Aretakis currently holds dual strategic roles for Siemens. The first is the CEO of Siemens Communications Inc., with responsibility for running all business operations of Siemens Enterprise Communications in the United States. She also holds the position of president of the Global Large IP Siemens Enterprise Communications. Aretakis has worldwide responsibility for the development, marketing and support of next-generation network products, including the HiPath 8000 softswitch, the HiPath family of enterprise gateway products, network management and solutions for the VoIP enterprise market.

Since July 2003, Aretakis has led the Siemens Network Convergence LLC organization as president and CEO, with responsibility for the development of the carrier suite of VoIP products, including the hiQ8000 softswitch, Media Gateway family of products, and network management and services used by global carrier and cable companies.

Aretakis was vice president and general manager of the Voice Switching Business Unit at Unisphere Networks from January 2001 until July 2002. From August 1998 to January 2001, she served as president of the Carrier Division of Siemens Carrier Networks, a telecommunications company providing voice and data products and services to carriers in North America. Prior to 1998, she held several jobs in development, strategy, product management and product support for companies such as Texas Instruments, Raytheon, and Databit (a Siemens acquisition).

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