CommBank ditches softphone strategy for smartphones


news The Commonwealth Bank of Australia has confirmed plans to substantially modify its high-profile softphone-based unified communications strategy recently implemented at its flagship Commonwealth Bank Place facility in Sydney, turning instead to a mass smartphone deployment as its replacement.

The bank’s unified communications strategy was unveiled in a Microsoft case study published in May 2011. The strategy saw the bank deploy the 2010 version of Microsoft’s Lync UC platform to some 32,000 staff across its operations, in one of the largest known rollouts of the UC software in Australia at the time. The idea was that staff, especially at the bank’s new high-tech Commonwealth Bank Place offices in Sydney’s Darling Harbour, would use a combination of desktop videoconferencing, IP telephony and unified communications features such as instant messaging to improve internal and customer communications; in a softphone-style headset rollout that would avoid the need for employees to pick up the traditional desk phone.

At the time, a senior executive with the bank said in the video that the bank’s Lync deployment saw the fastest take-up of any product it had ever deployed to staff. “What we found when it got it out there was that it spread like wildfire,” they said. “It was just intuitive and they picked it up. 60 percent of people were using it within 24 hours of that tool landing on their desktop. We put it across 32,000 people in a couple of weeks.”

However, Delimiter was told this week, last week the bank briefed senior staff on a decision to dump the hardware being used to power the softphones — Cisco and Plantronics branded gear — and shift to a mass smartphone deployment strategy at the bank, due to what was claimed to be flaky technology and increased costs. An unverified source claimed that mobile phones were to be issued to all staff at Commonwealth Bank Place who did not already have a BlackBerry handset or a permanent desk phone.

“As part of our continued planned set of experiments into productivity and bring your own device capabilities, the Commonwealth Bank has decided to use mobile phones as the preferred telephone solution for staff at Commonwealth Bank Place,” a spokesperson for CommBank said in a statement in response this afternoon. “Employees can continue to use Microsoft Lync for instant messaging.”

The spokesperson said the bank wouldn’t comment on negotiations with suppliers, but the same source said that two vendors were currently locked in a battle to land a contract to supply the smartphones.

Despite the fact that CommBank inked a $1 billion telecommunications services contract with Telstra in April 2009, the source said, Optus was currently the frontrunner in negotiations to supply the bank with smartphones, with the telco looking to supply close to 5,000 Nokia Lumia 800 handsets to the bank at no charge, should it secure the deal. Apple Australia is also allegedly having discussions with the bank, and is interested in providing a similar number of iPhone 4S handsets, at a similarly subsidised price.

Both Apple’s iOS and Microsoft’s Windows Phone 7 platform are likely to have their supporters within the bank, but for different reasons. Microsoft’s Windows Phone 7 platform has in the past been positioned as a consumer platform, but it appears to be falling back into business favour due to its integration with the rest of Microsoft’s office productivity suite, including Lync but also Microsoft Outlook and Office.

Last week it was revealed that the Australian division of tyre manufacturer Bridgestone has picked Nokia’s Windows Phone7-based Lumia 800 smartphone as its platform of choice for its corporate smartphone fleet, with the Finnish company beating rival offerings from the likes of Research in Motion, Apple and Google to the work. And Telstra is currently positioning HTC’s Titan 4G handset launched over the past week as a business smartphone.

However, CommBank also has an existing heavy Apple presence, particularly at Commonwealth Bank Place, where the bank has deployed thousands of Apple MacBooks to staff. Commonwealth Bank CIO Michael Harte has expressed strong praise for Apple’s user interface in the past, and a number of the bank’s executives are believed to already be using their own iPhoens and iPads within the bank’s infrastructure — including access to certain company datastores, such as email.

Commbank’s move to shift away from its smartphone strategy throws a significant wrench in the movement towards softphone use in Australia. The bank’s deployment — along with a similar rollout of Microsoft’s Lync software at Qantas subsidiary Jetstar — had been one of the most significant and high-profile known implementations of a hardware-less UC strategy in Australia. Given that the bank’s underlying network and desktop infrastructure at Commonwealth Bank Place is believed to be extremely modern, given the fact that the facility was only constructed over the past few years, the rollback onto smartphones will call into question whether softphone strategies are practical in large Australian organisations at all.

There are several very striking things going on here which I really think Australian chief information officers and IT managers considering their future internal communications strategies need to pay attention to.

Firstly, if the Commonwealth Bank of Australia, with its huge IT budget, forward-thinking CIO, educated white collar worker staff base and brand new facilities can’t make a softphone-based UC strategy work well in its operations, then it is questionable whether other Australian organisations can. Those phones on desks may not be going away for a while yet — if they are at all.

Secondly, the bank’s shift to a mass workplace smartphone strategy is also very significant. Australian organisations have been debating such strategies for years, but typically this debate has been focused around the idea that employees would be issued with dual-mode smartphones which would place internal calls over the internal Wi-Fi network and through the company’s IP telephony system, roaming onto traditional mobile phone cell networks when outside the office or when out of Wi-Fi range.

It doesn’t look like CommBank is doing this here, however — it looks to me as if the bank is going purely for a 3G smartphone strategy, with all calls placed over the terrestrial cell network — and data, presumably, generally being piped over its internal Wi-Fi network. This is why the bank is talking to Optus. It would be fascinating if CommBank did go down this route, because if it does, it will essentially be saying that many employees no longer need desk phones — they can get by with company issued smartphones instead, connected to 3G mobile phone networks and internal Wi-Fi for data. This would represent a new evolution in our understanding of how large organisations do internal communications.

Of course, I could be completely wrong and CommBank could be intending to still pipe much of its smartphone voice traffic over its internal Wi-Fi network. But my gut tells me this isn’t the case.

We also need to look at the actions of the suppliers here. If it is true that both Optus/Nokia and Apple are offering steep discounts for mass purchases of their smartphones by CommBank, this indicates that smartphones are indeed becoming commodity items in the enterprise, and that what really matters to these vendors is having bulk scale in the enterprise, on their platform — not the profits of the moment. This could indicate that other Australian organisations could similarly get great deals on this kind of mass internal smartphone rollout.

Lastly, there is the fact that both Research in Motion and the Android vendors (HTC, Samsung, LG, Sony and so on) have been left completely out of this equation. As I wrote last week when Bridgestone picked Nokia, it appears as if Android is making very little headway in the Australian enterprise, compared with the mammoth growth it is seeing in consumer-land. Conversely, Microsoft, which is having trouble pushing its Windows Phone 7 platform to consumers, is seeing early interest from large Australian organisations.

There certainly is a lot here to analyse and discuss. I will be fascinated to see the direction in which enterprise communications goes in Australia over the next several years. So much of the pie is suddenly up for grabs, in this highly dynamic market. I suspect that in a few years, the way Australian organisations provide communications services to their employees may be very different from the way much of the industry had been predicting. The future of the enterprise is looking highly consumerised — and less and less like UC vendors like Cisco, Avaya and Microsoft would like it to.


  1. Couple of typos in there – eg iPhoen.

    Fascinating that the entire rollout was canned due to (apparently) flaky headsets?

    Perhaps the Microsoft licensing caught up with them. They seem to be now just using the “free” IM and presence features now.

    • Also first sentence in the last paragraph before the opinion.
      “Commbank’s move to shift away from its smartphone strategy” I suspect you mean shift away from its softphone strategy.

  2. This doesn’t surprise me in the slightest.

    I have quite alot to do with the Opera House and their rollout of Cisco switches and WiFi routers was massive, for their size. Something like $3 Million dollars was spent, when their operating budget is less than $100 Million.

    Now they’re finding more and more, it’s the consumer devices being used to get the job done. iPods for theatre lighting, iPads for internal documents etc. Sure, these still have to have a backbone and that’s where the cisco’s work, but there’s alot of underlying server infrastructure they tacked on too that is now essentially superfluous because of the shifting trends.

    It’ll be VERY interesting to see what happens with business over the next few years and integration with BYOD’s.

  3. I’m not surprised Enterprises (especially paranoid banks) aren’t considering Android.
    The fact is if you ready any mobile threat reports (F-secure for example are quite prominent at the moment), malware for Android devices is increasing exponentially, whilst malware for other mobile OS are steady or even declining. [1]
    This is by no means a post about how bad Android is (I am considering the One XL from T at the moment to replace my iphone!), but the stats are pretty clear in regards to malware threats on Android at present.

    [1] –
    pp. 14

    • @Douglas – “malware for Android devices is increasing exponentially

      True only if you really stretch your definition of malware. This “malware” is something:

      – The user deliberately and knowingly chose to install, and

      – Was told what data it would have access to, and what facilities (like internet and location) it could use.

      – Is always told when it is active,

      – If the user doesn’t like it, they can uninstall it at the touch of a button.

      Oh if only PC malware was so benign. IMHO F-Secure is just stretching the definition of malware to drum up sales.

      One day the iOS or Android devs are going to really stuff it up, and leave a back door open so some drive by virus can get root. When that happens it will have complete access to the phone and all its data, the user won’t know the thing is present on their machine and even if they do figure it out there will be no way to get rid of it as formatting and reinstalling from media isn’t an option on most phones. And we won’t be able to use “malware” to describe it, as the word has been perverted to mean something essentially harmless.

      There are good reasons to choose iOS over Android for a corporately controlled device, but malware isn’t one of them.

  4. Douglas, that is true of Apps….but what if you locked down the phone to only install certified apps? :)

    Yes, in Apple’s ecosystem, Apple controls ALL the Apps, so it isn’t such a big deal.

    But plenty of companies have issued Android phones (including the DOD in the US) and locked the kernel and have their own Intranet app service, allowing them to only install secured apps they pick and check themselves.

    Yes, it’s not as elegant as Apple, but it is INFINITELY more configurable.

    And on the side note, I’ve pre-ordered my One XL. Hopeful it’ll get here next Monday! :)

  5. Windows XP on a Mac Air!! Why????. You can see how this went wrong. I suppose they will buy Windows Smartphones to fix this mess too.

  6. Poorly written article, not too factual. Oh well, can’t expect much from the media these days.

    • Thank you for your “inspired input”. Perhaps you could point me to where this is covered in mainstream media. And its’ rigorously factual nature?

      No, didn’t think so. This is a news AND opinion site. It is also quite small and I think the fact that Renai has gained this much information from one of the country’s largest banks is quite commendable.

      But thankyou for your “factual” critique.

  7. Kind of off-topic but I’m interested in the justification of this line “Conversely, Microsoft, which is having trouble pushing its Windows Phone 7 platform to consumers” ?

    Windows Phone is now outselling RIM in US, outselling RIM in France and has already taken at least 5% marketshare in most EU countries.

    That is not a product which is having trouble selling to consumers.

    • “Windows Phone is now outselling RIM in US”

      I’m sorry, but big fucking deal. RIM was never primarily a consumer phone manufacturer and only enjoyed a tiny portion of that market. Windows Phone 7 is getting slaughtered by iOS and Android and that is simply a fact. If you don’t like it … deal with it.

  8. To be fair GTRoberts, WinPhone has been around for…what, 2 years now? And they’ve managed to gain, according to the latest figures, about 2% of global market share. In that same length of time, Apple gained about 20% when they arrived with the iPhone and Android gained about the same.

    They may be excelling in some markets, but overall, they’ve yet to make a more than a superficial dent in the mobile market. The fact that they’re better than RIM……well, RIM are calling in the bankers, so…..what does that say? Not much.

  9. How are they going to do video on the desktop? Enabling video enables voice. Windows Phone share over the last 2 years was heavily impacted by the lack of decent handsets. It’s only with the Lumia 800 and 900 that finally there are devices of the quality of an iPhone. The Lumia 800 has been available here for a only a few months and the 900 has only just been announced. Let’s see what happens from here in. As Microsoft have proven time and again, they play a long game.

  10. Can someone please advise what the Cisco and Plantronics gear being used to run Microsoft Lync is?

  11. I think it is far too early to make a call when the world’s most successful OS company and (still) the world’s most successful handset manufacturer get together. Most analysts have WinMo exceeding iOS market share globally within 3 years. There is a good reason for that.

  12. how was/is lync being used ? was it the smartphone? is it native lync? is there any integration to pabx here? what software/harsware is being used to integrate to pabx? are there plugins here? if there is plugins on top of lync, can see why that would be a failure.

Comments are closed.