Tom Arbuthnot: Hi, and welcome back to the Teams Insider Podcast. Happy New Year. We've got a great one to kick off 2025. I talked to Irwin Lazar of Metrigy about what's going on in the space. We talk AI, we talk Teams phone and PSDN options, and we talk to return to the office as well. Great insights from Irwin. Many thanks for his time.

Appreciate it. And also many thanks to AVI SPL who are the sponsor of this podcast. Really appreciate their support. On with the show. Hi, everybody. Welcome back to the podcast. Really excited for this, uh, first podcast of 2025 and, uh, got a great guest to talk about, uh, what's going on in our space and maybe what we're going to look to in 2025.

Uh, I'm fortunate to have known Irwin for quite a while, uh, kind of run on the same circuit, done a few panels together. Uh, Irwin, if you could just introduce yourself and give us a little bit of background about what you do at Metrigy as well. 

Irwin Lazar: Yeah. Um, so hi, I'm Irwin Lazar, President and Principal Analyst, and thank you so much for having me on the podcast.

I've known you for a long time, respect the work that you do and try and attend. Pretty much anything that you do online because I know what a great resource you provide to the community. 

Tom Arbuthnot: Thank you. 

Irwin Lazar: So, uh, yeah, so thank you. Uh, so yeah, I lead our research coverage around unified communications and collaboration here at Metrigy.

Uh, we spend our time focusing on gathering data from the buyer side. So we go out through a number of studies throughout the year and try and understand what are companies doing with respect to different technologies? What, uh, what vendors are they choosing? What, what, uh, what experiences are they having with those vendors?

How are they measuring success? And we try and report on, you know, what are the characteristics of successful companies in terms of, you know, do they, do their investments in collaboration and customer engagement technology deliver measurable results? 

Tom Arbuthnot: And you've got a great perspective both on the kind of the vendor side and on the customer side as well.

So kind of looking back at 24 and into 25, what were some of the big themes for our space? 

Irwin Lazar: Other than AI? I would say, you know, there's 3 areas that we're watching. We just published our annual study back in November on the Unified Communications collaboration market. And really, the 3 core areas that we're looking at is hybrid work.

So how are companies. Bringing people back to the office. What's the strategy that they're using? How is workspace evolving both in desktops and meeting spaces? What, uh, devices are people putting into those and, and how do we expect that those strategies will change over the next year, as companies are kind of in that phase of figuring out what's the best approach for them right now?

The hype is around bringing people back to the office, but we find that a number of companies are finding, well, that may not be right for us, or we tried it and it didn't really work. So, I'd say that's the 1st area. The 2nd obviously is around generative AI as companies are moving beyond the hype and trying to get into the practical deployments and figuring out, you know, what can it do for me?

How do I measure the value of it? Saving time is great, but what does time save translate to? And then how do I deal with things like governance and security and user training, all of which are core characteristics of success. And I'd say, lastly, you know, it's near and dear to your heart would be Microsoft Teams.

You know, we see Teams gaining huge momentum around the meeting and messaging space, and now really starting Uh, come along as, as a voice partner and, and, and Unified Communication as a service cloud voice, uh, platform. So we're tracking how are companies using Teams? How are they connecting it to the PSTN?

What's the role of, of third party UCaaS providers? Uh, and then what it, what's happening on the mobility side around Teams Phone Mobile? Those have all been core areas of research for us over the last year. I think we'll continue to be going forward. 

Tom Arbuthnot: That's awesome. I feel like we could have an hour conversation on any, any one of those.

Um, uh, let's, 

Irwin Lazar: And we didn't even 

talk about 

contact centre in Teams, which, you know, certainly another big topic 

Tom Arbuthnot: yeah, 

that's huge, especially with Microsoft kind of coming up with cues on the kind of low end and then in with dynamics on the high end. It's really, that's really interesting. Okay, we've got four podcasts to do. Um, let's, let's, let's do the AI thing because, uh, 2024 was all about AI, 2025 it's going to continue to be a theme.

I'm interested in your perspective on that. Obviously Microsoft are fully on the AI train for every, every product, but also the other UCaaS vendors, um, you know, Cisco, Zoom in particular, um, having equivalent AI stories. I feel like our, the UC space is one of the first kind of time to value spaces, like meeting recaps, meeting summaries.

As far as I can tell from customers I've talked to and Microsoft, that's one of the strongest use cases and most well adopted use cases in, you know, kind of practical AI. 

Irwin Lazar: Yeah, so we ask participants what they're using AI for and what they want to use it for. And, you know, the top three were the first and foremost is just an improved search, you know, help me find information in my company.

And that may be information stored in meetings and emails and chat messages. It may be information stored in docs. Uh, it may be information stored in other business applications. So, you know, providing an AI bot or AI service that allows people to obtain information that's relevant to them, uh, and then act on it, I think is really the biggest area of need.

Um, beyond that, like you said, you know, things like, it's, it's crazy to think about, you know, how early we are in the AI journey, but. Things like meeting summaries and transcripts and capturing of action items have almost become table stakes, like everybody in the, in the, in the calling and meeting and now even in the contact center space, you know, it really has to have that, um, you know, just as a core level of functionality.

I think what's, you know, one of the big challenges that companies are facing now is that, especially in multi vendor environments, is that everything has an AI. So. Uh, you know, if I'm a full Microsoft Teams shop and I'm using Teams for messaging, calling meetings, uh, maybe dynamics for CRM, like you mentioned, using SharePoint and OneDrive and so on, it's relatively easy for me to use Copilot to query all of that information that's stored under the Teams umbrella, but there aren't a lot of companies that are fully you know, in the Microsoft domain, and even those that are may have someone else for CRM or someone else for ERP. And so they're also probably deploying something like an Open AI or an Anthropic Meta, et cetera, company wide AI platform, and they're trying to figure out. How do I share data across my different AI algorithm engines and make it so that employees don't have to hop around between different applications to, you know, get the kind of information that they need.

Tom Arbuthnot: Yeah, I think that's really interesting, that kind of hopping around thing, particularly with, um, you know, Microsoft decided to kind of charge with Copilot across the stack and quite a, quite a healthy number per user. And then, uh, I think, you know, Zoom are bundling it in. I'm not sure if, is it extra on, uh, WebEx or is it included?

I think the base is included, isn't it? 

Irwin Lazar: Yeah, Cisco's giving it away as well. Interesting to bring them up because one of the things that they announced in November at WebEx One was that ability to share data into Microsoft. So they understand, you know, hey, we're, you know, maybe we're capturing meeting transcripts, call transcripts and so on.

But we want to play nicely in the environment that our customers work in. 

Tom Arbuthnot: Yeah, I think that's a really good strategy from them to be like, look, we want to be part of that conversation and we can be your UCaaS platform and bring that data in. Because otherwise I do think there's a really compelling story.

And I've seen this with some customers who've gone on the Copilot journey, but were hardened Cisco customers on the UC side actually rethinking, well, if we're spending all this money on Copilot, we really want that. MTR, kind of transcription, people capture, you know, like all the whole piece in the Teams world, and it's kind of making them rethink their UC strategy a bit.

Irwin Lazar: Yeah, we, we asked participants in our research that were considered themselves to be best of breed shops. So maybe they have Cisco, Microsoft, Zoom, whoever, uh, whether or not AI was changing their buying plans, whether, whether or not they were gonna consolidate onto a single collaboration vendor as a, as a means of, of ensuring that all of their data is easily accessible and roughly about a quarter were, uh, roughly about another 40% were thinking about it.

Uh, you know, mm-hmm . We're sort of in that evaluation phase. It's pretty substantial movement. Um, I think that's, you know, definitely an area of, of market dynamic. Uh, and again, I think the other one. You know, is where do the larger AI models play? Um, you know, I moderated a session at Enterprise Connect last year.

with a large, uh, global insurance company. And, you know, we asked them about Copilot. They were a Microsoft shop for the most part, and they were not going with Copilot. They were going with OpenAI and that was their, you know, their enterprise AI engine. And they were trying to figure out how do I get all my data from Microsoft into that?

So I think, you know, if I'm going to look at one area that should develop this year, it should be more, uh, opportunities for, you know, Information sharing commensurate with security, governance, privacy, compliance, all the, the data protection issues that come into play, but I expect you'll see much more of a push for open ecosystem for that reason that, you know, no vendor can own it all and they have to be able to play nicely with each other.

Tom Arbuthnot: Yeah, I feel like that's an area that's interesting. I'm surprised the EU Competition Commission haven't got on top of it of like the, like, make sure the data is Microsoft has such a massive advantage with holding the email and the files and SharePoint and in a lot of cases the phone in the meeting. So making sure third party ecosystems can get to that data if the customers want them to get that data. 

Irwin Lazar: Yeah. The, the whole impact of EU's push to set, you know, force Microsoft to unbundle Teams from the rest of the 365 office, uh, license is, is having some impact as well. You know, one of the areas we saw, again, kind of outside of ai, but just general strategy is about a, a 24% of of the Microsoft customers we talked to were at least going to do due diligence on other providers.

Uh, once their licenses were up for renewal. That doesn't mean they're. Gonna abandon Microsoft. That's a pretty expensive proposition if you're, if you're heavily embedded, but at least, you know, kick the tires on Slack or, or Google or whatever, and come back to your Microsoft sales rep with, you know, I could save some money, can you, you know, what can you do to keep me happy?

So I think it'll, it'll create some pricing pressure on, on Microsoft. 

Tom Arbuthnot: It is interesting because Microsoft have now broken out Teams for all the enterprise customers globally, so you have to consider Teams and add on, then you've got premium as well. If you want all the current bells and whistles, if you're E5, you've got phone included, but otherwise you're adding on phone and then you've got Copilot.

On top to get the full experience. So, and, uh, I think we were talking offline as well. We had the recent announcement of Teams phone standard going up by a couple of dollars, 20 percent on the skew. So, uh, you know, as is Microsoft that decently complicated licensing stack and kind of options there, um, which I think is, Very different to what we see with some of the other providers.

Irwin Lazar: Yeah, it's certainly the way that other providers are trying to attack Microsoft, Zoom probably most notably, you know, with adding additional functionality like email, calendar, documents, task management, and so on, and then trying to, you know, use that cost argument to say that, yes, when you think about, The cost of an E3 license and a Teams phone add on and maybe a premium license for those people who need it, plus Copilot, you know, versus having a license that may bundle a lot of that, you know, they could potentially make that argument.

It's still difficult just because you think of everything else in that Microsoft 365 suite, whether it's device management, you know, much more robust document creation tools, file management and so on that, you know, competitors really lack. But, uh, they're trying, uh, you know, and I think. The door's a little ajar right now.

Tom Arbuthnot: I think in the mid, the SMB mid market is really interesting. Like I feel like enterprise, there's so much M365 does and that, that, that need for the single compliance story is really strong. Even if it costs more, we, we understand where the data is. We've signed it off, but SMB mid market, a little bit more agile, a little bit more price sensitive.

That feels like a real competitive, Playground at the moment. And then you've got kind of the eight bytes and the rings as well in that space. What's your what's your view there? 

Irwin Lazar: Yeah, I think there that is. I agree with you. I think that's an area where maybe companies don't need the full suite. You know, they're probably not buying an E5 license.

They don't maybe not need some of the advanced security and other features that that E5 brings to the table. Um, I think where most of, you know, with the exception of Zoom, most of the providers have said, you know what, we're going to play in our niche and try and figure out how we go side by side with Microsoft rather than replace them.

So, you know, Cisco really focusing on voice and meetings and endpoints hardware, uh, you know, companies like 8x8, Vonage, uh, GoTo. Uh, RingCentral is, uh, as, as examples, really focusing on the contact center side and having a, an integration story. We found about a quarter of those that are Teams shops, meaning they're using Teams at least for meetings and messaging, are typically going to a third party UCaaS provider for the PSTN piece.

So they're taking advantage of the ability to integrate a dialer in or use, uh, uh, direct routing connectivity or Operator Connect in 8x8s, uh, example. Uh, so that they, they, they don't have all their eggs in the Microsoft basket. And the, the two drivers for that are one that there's that fear that if there's a Teams outage, I lose everything.

So at least if I have someone else as my phone provider, I can continue to survive. Uh, and the contact center, you know, Microsoft does have, uh, you mentioned it earlier, the, the Dynamics, uh, Digital Contact Center, but it's not really a full blown, certainly not for a small business. Uh, an appropriate solution.

So, 

Tom Arbuthnot: no, it's very, very much aiming at the very high end and you still need a partner to put it all together. Like, it's getting simpler, but it's definitely not a click and buy, seat count type model that would be good for, you know, your typical medium contact center. 

Irwin Lazar: Definitely, yeah, and that's where you see that opportunity for those providers.

Audio Codes is another one that's really pushed the contact center story as well in the last year. 

Tom Arbuthnot: Yeah, there's a lot. There's a lot coming in our space in 25 around like what Microsoft are doing with ACS for dynamics and how some of the ecosystem contact center vendors can take advantage of that.

Like, you know, Audio Codes being a good example there. So really, I feel like we're going to have to fit in a whole pod on contact center because there's a lot I want to ask there. Keep keeping it on phone. I'm really interested in that comment around people using the other UCaaS's. So, um, like, you know, 20 million plus Teams phone seats now.

So you've got direct routing. You've got Operator Connect. Now, I think it's 103 operators up to an Operator Connect. Teams Phone Mobile, you mentioned, and, and, Some of the UCaaS providers offering direct routing and plugins. What are you seeing of the mix of those approaches for customers? 

Irwin Lazar: Yeah, um, mostly on the small business side, you see direct routing and a third party UCaaS, especially if they already have, you know, a third party UCaaS provider.

Um, and the mid to large size, you still see predominantly direct routing. We found it was less than 10 percent of the participants in our last study that were using Teams phone were going with Operator Connect. So still a fairly small deployment, you know, although, as you mentioned, the number of providers continues to grow.

Um, we see that larger companies still prefer direct routing because it's easier for them to manage multiple carrier relationships. They want to hold control of their phone numbers. They want to be able to integrate. Other platforms, usually Contact Center, into their calling plans. Um, where smaller companies, you know, the calling plan makes a ton of sense.

It's just an easy way to ramp up and get rolled out. 

Tom Arbuthnot: Yeah, I think the same thing with direct routing, particularly if you think about finance or legal, where they've already got people who manage SBCs and they like that level of control and level of, you know, like they're integrating with other systems.

Maybe it's dealing with war turrets, that kind of thing. At that point, they're like, Another SIP trunk makes sense to us. Um, I'm seeing some, some enterprises starting to turn on that now where they're like, we've already committed to the cloud where we'd rather not manage the SBCs, but it'll be interesting to see how that plays out at the enterprise level.

Irwin Lazar: Yeah, we definitely see SBC shifting into the cloud and becoming, you know, a part of a cloud. Direct Routing Service. Companies like Sippio and NuWave and others, you know, that offer that today. Um, and I agree with you. I think that's really the future. And then there's also the building of additional feature functionality in whether it's analytics, whether it's chatbots, whether it's emergency call routing services, we're seeing carriers, you know, really trying to differentiate themselves by what else they can bring into that direct routing connection versus just providing dial tone.

Tom Arbuthnot: Yeah, I mean, they really have to because it's so competitive on that minutes and then the customers are, I'm definitely seeing customers kind of right size and be aware of what they need in terms of capacity now. So, being able to bring something else to the table to add value and make some margin is definitely a big thing in the telco space.

Irwin Lazar: Yeah, it was SMS, but now with Microsoft recently announcing they're bringing SMS to calling plan that, you know, takes away a big reason or a big competitive push that the other carriers have been delivering. 

Tom Arbuthnot: Yeah. 

Yeah, yeah, this is, this is the way, isn't it? Slowly things get integrated. What about Teams Phone Mobile?

I feel like in 24, that wasn't as big a story as I honestly expected it to be. It was a bit underwhelming from the carriers that had it from what I saw. 

Irwin Lazar: Yeah, you know, we saw about 40 percent of companies that said that. They were, they were deploying it in some fashion, generally very small. Um, you know, the, the use case that came out as a predominant one was essentially supplementing a traditional soft phone slash desktop phone environment with giving somebody a more native mobile experience so that they don't have to, you know, even if you give them the Teams phone mobile app, they were probably using their native dialer to make calls.

Um, the field work, the field worker use case was another one that we saw was really driving interest in Teams Phone, well, Teams Phone Mobile. But I think, you know, we're still early days, um, companies I've talked to have run into concerns over the, over the management of those devices. Most companies are still not provisioning company owned devices that are employee owned and so you're 

Tom Arbuthnot: Yeah, 

it's a little bit different in Europe.

Like mostly here, companies issue devices because they're worried about. Every combination of data and control on that device. So they've tried the kind of, you know, the, the, the, the apps that trying to kind of create a, um, like a special data area for email or something as I'm equivalent of that and just said, actually, it's easier to own the device and then we can remote kill it.

We can do whatever we want with it. But it seems to be a bit different in the US. 

Irwin Lazar: Yeah, definitely here in the US. It's much more stipend and, you know, no company control of those devices. 

Tom Arbuthnot: Yeah. And, uh, again, it's, yeah, I think it's gonna be a really interesting year this year for TPM because you've got AT&T coming into the space and they are not going to charge extra on their business plans for it, which is quite a marked difference from what everybody's been doing now where I've seen anywhere between four and eight bucks a user for the privilege of, of having TPM.

Um, which obviously from a CFO point of view is tough. If you can get direct routing for two or three, why would you spend five more to have. Less, less numbers if you like. 

Irwin Lazar: Yeah. I mean, I think it makes sense if you can get the cost down. It certainly makes sense because that's what users tend to gravitate to.

Um, and I think, like you said, yeah, as the service providers deliver more variety and support for dual SIM, you know, one of the concerns we've heard from the early adopters is that is a Teams phone and Teams phone only, but I know dual SIM support is coming, so you can use it as a personal device. One of the biggest issues we're seeing here in the US is that, If you pick up that phone and dial emergency services nine one one here in the US I think it's 1 1 2 in the uk. That call is taken off of Teams and handled by the, the, the, uh, the mobile carrier, which means in a us, in US, you're no longer, uh, able to comply with, uh, what we have in the US called Carrie's law and Ray Baum's Act.

Govern how 911 calls are supposed to be handled, but they only apply to the enterprise phone system, so it hasn't been tested yet. I'm sure it's going to. 

Tom Arbuthnot: Yeah, 

that's interesting. Who defines if that's still the end? I mean, it's an enterprise issued phone number and it ties into Teams, so you can definitely make the case.

It is the enterprise phone system, but also cellular has its own location tracking, right? So. 

Irwin Lazar: And so I think it's going to be a good, unfortunately, it'll be a scenario where lawyers will probably have to figure out once there is an incident, which so far, fortunately, there hasn't been as far as I know.

Tom Arbuthnot: Yeah, yeah, that's really interesting. It'll be interesting in the UK where I am because we've got two carriers coming into play this year. So we started off with BT and we'll have VMO2 and Voda coming in. So we'll be the first market, I think, with three providers. I know that Canada just got two with Bell, US will have two this year.

Um, so, I'm hoping that will create some, some competition and some interest because I feel like, again, hopping back to SMB mid market, I feel like a lot of those customers are probably mobile first. Actually, it's, it's that they're, that they're, they're having a soft phone is an upside on their already mobile rather than they're not a Teams customer mobile enabling Teams.

It's the opposite direction. 

Irwin Lazar: It makes sense. And if you can give those customers Who are, like you said, already mobile first, that integration into Teams, so they can track call logs, they can, they can, um, capture things like call summaries and recordings, you know, that's a real big value add, uh, versus having a separate mobile phone and, and Teams as, as, you know, again, a completely separate island, especially when we think about, you know, AI having access to data.

Tom Arbuthnot: Yeah, yeah, again, that's interesting. Like, like, uh, I'm, I'm selfishly killing for like all my mobile calls to be transcribed the way my Teams calls are because I quite often take calls on the run on cellular and I, I'm actually pretty addicted now to having that transcript and recap. Like, it's just something I expect.

Irwin Lazar: Yeah. And again, you could see the value once you've used it a few times. 

Tom Arbuthnot: Yeah. Yeah. You get quite, quite hooked on it. Suddenly it's like, Oh wait, I can't reference back to what I've always said on this call. Awesome. 

Irwin Lazar: Well, but you know, definitely there's value there. It's one of the things that we see with AI is, you know, we don't really understand how it impacts the ability of or the willingness of people to be frank in meetings and conversations if they know that everything's being recorded, everything's being transcribed.

Tom Arbuthnot: Yeah, it's an interesting challenge. Actually, we just had Microsoft put some policies in place to block the kind of third party bots that join as guests and auto transcribe meetings. And it is getting to the point where you kind of have to assume anything online is in some shape or form on the record these days.

Irwin Lazar: Yeah, 

Tom Arbuthnot: awesome. So we've, we've, we've done AI. We've done kind of some Teams phone. I'd love to hear about your, your research on the workplace, kind of back to work stuff. I mean, that, that's really, that's been a hot topic here as well as in, you know, and we've seen some very big U. S. companies doing the let's force everybody back to the office. Oh, no, maybe not. 

Irwin Lazar: Yeah, it's definitely an area of discussion. I think people have some very strong opinions on both sides of the data. I've see tends to support remote work as being more effective. We certainly haven't found any correlation with successful companies and those that are forcing people back to the office.

Our data set found a little over half of companies. That are bringing people back at least part time. So about a third that were full time back in the office. The rest that were around 3 days a week. But I think one of the interesting points that we found was that those plans are in a state of flux. We found roughly 30 percent of companies who said that will allow more remote work next year because you know what we found bringing people back isn't, isn't good for anyone.

And then others who, who are still thinking about moving to more of an in the workplace, uh, attendance policy going forward, usually if it, the dichotomy or the disconnect is between whether or not you're viewing the workplace location through the eyes of what's best for the company or what's best for the individual.

So we asked participants, if you're bringing people in the office, why? And it was, well, we think better collaboration, you know, better informal engagement. And if you let people work remote and choose whether or not they want to come in, it was more, well, we think it's better for employees. They can set their work hours as works best for them.

They're not being in cars or on trains, losing hours a day. They can work around childcare issues and so on. So, it's that big disconnect of the needs of the many versus the needs of the few. Not understanding that the needs of the employees may translate into benefit for the company. You know, so I think that's where I'm a little biased.

I've been working from home now for 20 years. 

Tom Arbuthnot: Yeah, I feel like I feel like people in our space have been advocating for it and now it's come round in full force. But I mean, one of the areas where I've seen really valid pushback is people that are either new into organizations or grads new into the industry.

Like, I feel like a big part of my career grew up on, you know, Being in early, being late, talking to people that you wouldn't get to talk to otherwise. And I feel, I feel really sad for people coming into a new industry or a new company, not having that kind of networking opportunity. 

Irwin Lazar: Yeah, I completely agree.

You know, we had somebody join us out of college a couple of years ago, and it was a really hard environment for him. You know, you try and mentor him as much as you can, but yeah, not, not having that ability to, to, to see people, to build social relationships, to go out. You know, for a beer after work or something like that is, is, is difficult to replicate in a, in a virtual environment.

So, um, but again, I think there's no, like I said, I don't think there's a right single answer, you know, and maybe even within a company for some groups, some teams, they need more in person. You know, we're a virtual company, we get together at least twice a year, if not more often for planning and engagement.

And we need that. You know, I don't think we would be as effective if we were 100 percent virtual. 

Tom Arbuthnot: Yeah. Yeah. There's definitely, there's a pretty unargued backside to getting together ever so often be that as, as, as little as once or twice a year in these big, highly remote companies or more often. Um, interesting for us, we're only very small, we're up to kind of eight people now, and we've got, you know, people, people that are three or four hours away.

So actually it's, it's, it's the same thing. It's like once or twice a month in person and the rest is hybrid and works really well for us. 

Irwin Lazar: Yeah. Excellent. 

Tom Arbuthnot: Awesome. Well, Irwin, thank you so much. Really appreciate your insights and I'd love to kind of highlight your podcast, which is particularly something I listen to and really enjoy.

Anything else you want to let people know or how people can get hold of you or kind of find out more? 

Irwin Lazar: Yeah, connect with me on LinkedIn. I'm also active on BlueSky now. Uh, love to connect with folks there. I'll be at Enterprise Connect in March. Hopefully see you there and hopefully see you at UCX. 

Tom Arbuthnot: Yep, I'll be there.

Yeah. 

Irwin Lazar: Yeah. UCX in London again in the fall and, um, look forward to meeting people at both of those events. 

Tom Arbuthnot: Awesome. Thanks so much.