Azaleos, Working with Microsoft, Moves Into Unified Communications for Business

10/20/09Follow @gthuang

[Updated 12:25pm, 10/20/09. See correction below] Seattle-based Azaleos is announcing today it is releasing new software and services to help companies manage Microsoft Office Communications Server, which is a software platform for instant messaging, Internet telephony, and video conferencing over the Web. It’s a strong move for Azaleos that expands its product line beyond management services for e-mail and collaborative software, and into managing “unified communications”—all forms of company communication run by a single system.

Azaleos is best known for the services it provides to help companies manage their Microsoft Exchange e-mail servers and Microsoft SharePoint collaborative networks.

Last spring, Azaleos established itself in the realm of SharePoint server management. The company also merged with North Carolina-based M3 Technology Group, doubling its size and solidifying its position in e-mail and other communications management. Azaleos now has about 125 employees, and is backed by Ignition Partners, Frontier Capital, and Second Avenue Partners.

“Anybody who follows the IT industry sees the promise of the concept of unified communications, integrating real-time and non real-time,” says Scott Gode, vice president of product management and marketing for Azaleos. “It’s important for Azaleos to get in early.”

These days, companies typically implement instant messaging first, Gode says, and then follow up with conferencing and Internet telephony for their employees. [An earlier version of this article mixed up the order of these services. We regret the error---Eds.] Azaleos provides extensive consulting to help companies deal with the complexities of running and monitoring these features using Microsoft’s Office Communications Server. (Microsoft is a leader in the space, though it competes with Cisco and others.) Azaleos breaks even on its consulting service and looks to make its profits on the management service, Gode says. This is different from big companies like Accenture or IBM, which tend to make more on consulting fees.

So who’s the target customer for Azaleos? “The sweet spot in general for our business is a 500 to 5,000-seat company,” Gode says. “They’ll assume a little more risk [in moving from telephony to IP telephony].” He adds that companies typically can save 30 to 50 percent of the cost of running communication systems by using Azaleos.

Gode says the company has also been “pushing aggressively into Europe.” In late August, Azaleos opened a new office in London that employs five people. He says the company is now selling to more companies based in Europe, such as Mediq, a Dutch pharmaceutical firm.

Lastly, I asked Gode where Azaleos is in terms of its cash flow. From his response, it sounds like the company is still in a growth and expansion mode, rather than hunkering down and getting profitable. “We’re flirting with profitability, and I mean that in a good way,” he says. “Business is good.”

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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