SEN’s Got A CMO?

By

Originally posted on NoJitter.com,  Jun 28, 2010
When you think of Siemens, what comes to mind? For most people, it isn’t unified communications. Siemens conjures images of Appliances, medical equipment, even power plants. The firm is a European diversified giant.What many don’t realize is that Siemens Enterprise Communications is a different company.

Siemens Enterprise Communications, frequently referred to as SEN, is making more noise at industry events including the past several VoiceCons (now Enterprise Connect). It has also made several major management changes; including a new CEO, Hamid Akhavan, and Chris Hummel as the new Chief Marketing Officer.

The German diversified powerhouse is known as Siemens AG. In its portfolio were several communications products and services. In 2006, Siemens AG and Nokia merged their equipment divisions, which primarily target carriers. The enterprise-focused communication division was spun-out in 2008. This new firm, Siemens Enterprise Communications, is a joint venture between Siemens AG and majority stakeholder The Gores Group (U.S).

The end result is Siemens Enterprise Communications, a new, young, US based, multi-billion dollar global unified communications player. CEO Hamid Akhavan (formerly with Deutsche Telecom), was named last December; and Chris Hummel was named as CMO last April. I had the opportunity to sit down with Chris and this is what I learned:

DM: You’ve had leadership roles at well known and respected companies such as SAP and Oracle–what attracted you to SEN?
CH: When I got the opportunity, I asked some of my colleagues ‘What do you know about this company?’. They all consistently came back with the same story; ‘Great technology’, ‘Diamond in the rough’, and ‘Not very well known in the market’. As a marketing professional it looked as though this was a situation where I could have an impact. I have been through a number of transformations, and SEN is entering a significant transformational period into a much more market driven organization with a stronger presence. I investigated to see if the company had the right mentality from the board down to the staff levels to determine if this transformation had a real shot at success; and it does.

DM: A company known for weak marketing is either a great opportunity or waste of time for a CMO; what makes you think you can be effective?
CH: The reasons we have not been successful are fixable. It isn’t turf battles or lack of recognition of what marketing does. After Hamid was named CEO, he quickly prioritized the need for a CMO to work with him on the strategy of our portfolio as well as with field issues, demand generation, pipe acceleration, and customer loyalty. It won’t be instant, but there are some low-hanging-fruit opportunities. Hamid brings a lot of credibility to the mission, he is an industry heavyweight with extensive technical, business, and operational experience he gained as the COO of Deutsche Telecom.

DM: What is SEN’s message?
CH: I will be frank, we have a lot of messages and each is optimized in their particular segment. We are trying to get a more consistent message nailed down. The history of the company comes from a carrier background, strong in reliability, innovation, and service. What we are trying to do on the product and offering side is to identify the core differentiators and the unique architectural elements that go across our voice, data, services, and new investment areas. We are taking a software approach to next generation technology shaped by open standards. We embed security into the core of our offerings. That is what we do and who we are. We are now in the process of packaging all that into revised core messaging.

DM: Historically, there has not been a global telecom leader. European companies were the leaders in Europe, N. American companies hold the top positions here, and Asian companies dominate Asia. If people assume Siemens is a European company, does that hurt SEN in N. America?
CH: It may, but we are a company in transition. The management team now includes many more Americans, the senior executive team remains international, but our global headquarters will likely be in the U.S. The CEO and myself will be in the U.S. We may or may not become the #1 player, but we do intend to be credible with significant share of the N. American market. What we really want is to be a global player. N. America is front and center in our marketing plan. The Siemens name probably doesn’t hurt us here, and in some verticals such as healthcare it probably helps. Siemens AG is/was largely associated with “hardware”. SEN is new company and we need to drive awareness around that. We will brand our new identity more closely with open standards and security.
DM: There are numerous studies that predict explosive growth in hosted and cloud telephony. How will this force Siemens Enterprise Communications to adapt its business model?
CH: With so many recent changes at Siemens, our level of ambition has gone through the roof. To be successful we have to look at disruptive approaches including cloud communications and on-demand services. We are already actively engaged in hosted voice services, managed services, and providing equipment to service providers. Today, we are the largest communications centric managed service provider with its own platform. We intend to pin our future on the disruptive aspects of the market, but exactly how is still in process.
DM: I understand you are offering your hosted services only though your direct sales force; do you intend to extend it to the channel?
CH: We are doing it through both–we have some channel partnerships in Europe and US. This is already becoming a sizable portion of our business. The danger of an indirect offering is it can become a commodity play. The way to add value is to integrate into business processes and offer a whole range of services. Our feeling now is we need to continue both sides, direct and channel, to get the feedback necessary to determine our strategy. We are testing different models and have not double-downed on one yet.
DM: 18 months ago, SEN demonstrated a “proof of concept” combining Amazon’s EC2 cloud and web store offering into a single on-demand UC solution. It got a lot attention, but seemed to disappear. What happened?
CH: I get that one a lot. It has not disappeared, the work continues and the development kit remains available. When I came on, we made the deliberate decision to slow down so we could get our ducks in a row. We are evaluating our portfolio and intend to communicate our revised priorities soon.
DM: Microsoft is getting a lot of attention, and their approach to UC is very different than SEN’s. Does that concern you?
CH: Microsoft is clearly gaining mind share, but it is debatable if they are gaining market share. I’ve seen it before when Microsoft threatens to disrupt markets, sometimes they have trouble getting it right. In this space, they have sent a lot of mixed messages. People are anticipating “14” to simplify UC. It is not that easy, and they have not shown a consistent commitment to this area; their participation in industry shows has come and gone. Microsoft is big enough that if they say they are going to do something, you have to look at it. But they are starting from a proprietary angle, positioning UC and voice as an extension to other things. I do partially agree with their strategy in that the more you can manage through your central IT organization and infrastructure the better. But there are indicators that the market wants an evolutionary approach to upgrades, integration, video, presence, etc. Buying behaviors have changed, and organizations don’t want mega-upheaval replacement projects, they want evolutionary steps with immediate returns.

DM: The dynamic nature of the industry is causing a lot of assumptions and once-clear lines need to be reevaluated. How is SEN organized, and how is it changing?
CH: We have three divisions internally; Voice and Applications, Data and Networking Infrastructure (including Enterasys), and Services. It is this aspect of the organization and industry that makes it exciting for me. For example, our hosted services is out of our Services division, but requires tight coordination with Voice and Applications. We are a sizable company, we have the scale and technology to benefit from these shifts in the industry. Our competitors are not just companies like Cisco and Avaya. SAP has a contact center, Oracle dabbles in UC with its Beehive solution, there is Google, Microsoft, and many of the biggest players on the planet are swirling around the space. The market leader in “enterprise communications” depends on which segment you are talking about. We believe our opportunity is to take a more assertive and professional approach to the market; to take ownership and leadership.

DM: Chris, thank you so much for your time today. Congratulations on your new position, and good luck.

CH: Thank you Dave.

Dave Michels