UC with a chance of cloud: the emergence of cloud-based unified communications

Traditionally, a unified communications (UC) implementation has involved either taking on the configuration and management of fairly complex servers or cobbling together a collection of often consumer-grade services, but the shift towards hosted and cloud systems means that enterprise-grade services are, or soon will be, available to even the smallest businesses.

Audrey William, ICT Research Director at analyst firm Frost & Sullivan, says the hosted/cloud UC (or UCaaS - UC as a service) market is still at the early stages of growth, but the concept provides several key advantages. These include: flexibility, including support for telecommuters and mobile staff; ease of management, the provider takes care of the technical issues and provides customers with a simple interface for adds, moves and changes; scalability, users can be added or moved as required; and portability, if a company moves its office, it simply continues using the service from the new location. Consequently, she predicts a move away from on-premises systems.

But she draws a distinction between the real-time and non-real-time aspects of UC. Since voice and video are more demanding, she says some organisations like to keep that part of the system on-premises, even if they use a cloud or hosted services provider for the rest. William expects this hybrid model to remain commonplace, at least in the short to medium term. Around 50% of respondents to a recent local Frost & Sullivan survey said they were using no hosted UC components at all, and only a small percentage said they were using hosted telephony systems.

“The market will eventually mature,” she said, but for now “some customers don’t feel like taking the risk.” Frost & Sullivan’s prediction is that UCaaS will become the preferred model by 2015, and William expects to see a lot of hybrid and UCaaS trials in the next one to two years.

“Enterprise mobility will be a big driver,” said William. In addition to the tendency for employees to stay out of the office, whether that is so they can work at home or on clients’ premises, the growing use of mobile devices means the ability to use UC applications, via a browser, is a very powerful concept.

And SMEs are “definitely going to find this model very attractive” especially in the five to 10 employee range as the pay-per-use pricing of cloud systems allows usage to scale up and down with employee numbers and avoids the need for capital expenditure.

William says all the leading UC vendors in Australia - such as Cisco, Siemens, Avaya and NEC - offer hosted or cloud UC systems. So do the carriers: “They control the network and they have the scale,” she said, and they will offer cloud and hybrid UC services to SMEs right through to enterprise customers.

Large organisations need to be especially careful when choosing a supplier, she suggests, as there will be a wide range of UCaaS providers. Potential customers should check providers’ backgrounds thoroughly, especially with regard to their track records for service management and reliability. Resilience and fast disaster recovery are important, especially for real-time services.

Beyond cost savings

A recent Frost & Sullivan report (‘Enterprise Communications Research: 2011’) noted that “Businesses are realising that UC not only offers cost savings but also a competitive advantage through better knowledge sharing among employees and advanced communication tools.”

While some customers have had valid concerns about hosted communications services (notably around security and control), the growing complexity of converged communications and IT solutions is contributing to renewed interest in hosted and cloud services. In addition to lower and more predictable costs and improved agility, UCaaS is coming to be seen as a way of enhancing business continuity and resilience.

Gartner’s position is that we’re at least five years away from a single enterprise UC client (the firm prefers to talk about unified communications and collaboration - UCC - but our working definition includes aspects of collaboration, so we’ll stick to UC for consistency), and most businesses will be using at least three UC clients, eg for telephony, email and messaging and social networking.

The firm concluded that “The broad adoption of comprehensive UC suites, such as Microsoft Lync, IBM Lotus Sametime and Cisco UC 8.x, and their improving maturity into UCaaS, such as Microsoft Office 365 or Cisco Hosted Collaboration Service with dominant telecommunications service providers, reflects the expectation that UCC and related solutions will increasingly be delivered via the cloud.”

Gartner predicts UCaaS will become mainstream in the next two to five years and deliver high business benefits. The firm notes that vendors fall into two categories: email-centric (eg, Google and Microsoft) and voice-centric (typically telcos such as Telstra or specialist providers running systems such as Cisco’s Hosted Collaboration Solution). It also expects many major systems integrators to enter the UCaaS market during 2012, but warns that UCaaS functionality is 12 to 18 months behind on-premises equivalents and that some vendors’ offerings do not really deserve the ‘unified’ label.

Local options

For many organisations, voice is the heart of UC. And when you think of voice, you think of phone companies, and then typically of Telstra. Telstra’s IP Telephony (TIPT) service is “growing exceptionally well,” according to John Fasso, General Manager of UC marketing. TIPT use is doubling annually, he says, with thousands of handsets being installed each month. The Broadcom-based system includes video calling and video conferencing facilities and Telstra plans to launch these aspects for medium sized businesses in the coming months.

TIPT can provide small businesses (as few as two seats) with enterprise-style functionality such as click-to-call, remote office and simultaneous ring on multiple handsets including Next G mobiles. According to Fasso, Australian SMEs currently show little interest in other UC facilities such as presence and text messaging, although Telstra is working with Microsoft in this area. A 2011 survey conducted for Telstra found that just over half of Australian small businesses have a moderate to high interest in ICT, so that leaves some 350,000 with little or no interest.

Given that 65% of small businesses have at least one member of staff spending the majority of their time away from the office, there is clearly an opportunity to use UC to help overcome this separation. But the biggest barrier to technology adoption is seen to be the upfront cost, which is where UCaaS comes in.

Another example is iiNet’s Business Voice, a hosted voice service that provides features including advanced call routing (such as selective forwarding), music on hold, voicemail to email and conferencing, at prices starting from $39.95 per seat per month, including a handset, line rental and local and national calls. The service is hosted on iiNet’s own servers. One downside is that you can’t scale down without incurring penalty charges, but they appear to be related to the cost of the supplied handset.

“The beauty of a hosted solution means every dollar that’s spent on your phone system goes towards business productivity,” says Greg Bader, head of iiNet Business. “There’s no initial cost for buying the hardware and no added costs for upgrades.”

Back in 2009, Avaya adopted a new UC architecture called Aura that accommodates a combination of in-house and cloud or hosted services - the hybrid model. APAC Technical Director Muneyb Minhazuddin explained that running everything in-house can be expensive, and this arrangement allows organisations with an existing investment in infrastructure to switch on selected new services for particular groups of users without having to buy more hardware or software.

While greenfields customers tend to look to the cloud from the outset, “what we’ve seen is a gradual migration” from on-premises to cloud or hosted systems as new functions are implemented in the cloud or through hosting services and on-premises equipment is phased out, Minhazuddin explains.

A growing organisation with an existing 100-user PABX may need to accommodate another 100 users at the same location or elsewhere. Those new users can be served from the cloud, with full interoperability with the legacy PABX. “It’s not a rip and replace [upgrade],” he says.

While Avaya provides cloud services in some parts of the world, in Australia they are generally delivered through the company’s partners. “Partners are enterprise-grade systems integrators as well as some service providers [ie, telcos],” Minhazuddin says, emphasising that it is a true cloud offering with rapid self-service provisioning and the option of per user, per month pricing.

Dedicated hosting is another option for situations where that is more appropriate than cloud. Avaya offers “a fully flexible model” from completely on-premises through a blend of on-premises, hosted and cloud, to pure cloud. While government agencies may be especially concerned about keeping their systems isolated from other customers, midrange organisations are more interested in the economic benefits of UCaaS, says Minhazuddin.

Pure UCaaS customers tend to be at the smaller end of town and are attracted by the ‘no capex, pay by the month’ model, while larger enterprises are accommodated by service providers that can take on the management of their existing hardware and offer additional services. “Uptake is at all levels.”

Avaya’s offerings cover a wide spectrum of customer sizes, ranging from a single user to 250,000 users in 250 locations around the world. “We’ve got hundreds of millions of lines worldwide,” he said.

According to Minhazuddin, Avaya’s UC products use true multichannel sessions, so users can, for example, jump from instant messaging to voice, or voice to video as required. “Nobody else can do that, because they’re not doing the architectural change,” he claims.

Colin Thomas, IT Manager at Teachers Credit Union, says his organisation installed an on-premises implementation of Interactive Intelligence’s UC system around three years ago, but if he was making the decision today he would give serious consideration to the otherwise similar cloud or hosted system that is now offered.

“The time is ripe for that kind of product,” and hosted UC is “absolutely perfect” for greenfields situations in some industries, he said. “You have to look very seriously at all options,” even though cloud isn’t the panacea some business leaders think it is, suggests Thomas.

Marcus Moufarrige, Chief Information Officer at virtual office provider Servcorp, says his company offers a cloud UC system to its clients. Based on Cisco hardware, the system was developed entirely in house.

Clients can self-provision the service within five minutes, he says. With 130 centres in 22 countries, Servcorp can provide phone numbers in each city that can be answered by a receptionist in the local language or English, or routed to the client’s softphone or home, office or mobile number, or any other number, as required.

The system includes such features as voice to email and fax to email, but not (at this stage) presence or instant messaging. There has been a “fantastic response” to the system from clients, Moufarrige said, and the feedback “has been really phenomenal.”

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