Irwin Lazar
Irwin Lazar is the Vice President and Service Director at Nemertes Research, where he manages research operations, develops and manages...
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Irwin Lazar | October 26, 2012 |


Cisco and the Rise of the Hybrid Cloud

Cisco and the Rise of the Hybrid Cloud A growing number of companies are leveraging the cloud for part of their UC and collaboration applications, while keeping some functions on premise.

A growing number of companies are leveraging the cloud for part of their UC and collaboration applications, while keeping some functions on premise.

"Cloud" has stuck around as a hot IT buzz-word a bit longer then most. Just about every vendor and service provider manages to insert the word "Cloud" into every press release, and usually more then once. To the outside observer, it may seem as if it is only a matter of time before everything moves to the cloud. At last week's Cisco Collaboration Summit, for example, cloud was front and center as Cisco unveiled enhancements to its Hosted Collaboration Solution (HCS), including integration with service provider call signaling networks and broader support for video. In addition, Cisco announced that more than 30 partners were now delivering solutions based on HCS.

Yet despite all the hype around cloud, most enterprises still aren't fully embracing UC in the cloud. According to our recent benchmark of more than 200 end-user organizations, just 14% are implementing or planning to implement cloud-based IP telephony (we're using the term "cloud" to mean "fully hosted" phone systems, meaning the service provider owns all the infrastructure, versus private systems sitting in a co-location or managed data center facility). Of these 14%, more than half are SMBs (under 2500 employees). Among the large enterprise, few are deploying cloud-based telephony today.

So given all the hype, why is cloud adoption still relatively low compared to on-premise systems?

While 70% of those moving to the cloud say it saves them money, the equation changes as deployments scale. In our analysis of the total cost of ownership for cloud-based UC solutions, we find there's a cross-over point, typically around 2,500 seats, at which on-premise solutions become cheaper to deliver and support. Though more than 65% of enterprises are currently utilizing cloud-based Web conferencing services, with another 14% evaluating its use in 2012/2013, many of the companies that tell us they are adopting Microsoft Lync, for example, cite the ability to "turn off" the hosted web conferencing bill as justification for their purchase, as Lync provides them with on-premise web conferencing capabilities without usage-based pricing. Perhaps this is one reason why another announcement out of Cisco last week was the introduction of a WebEx on-premise web conferencing server providing an alternative to the WebEx cloud-based service.

Another factor limiting cloud adoption in the mid-to-large enterprise is the availability of global cloud-based UC services. In our recent consulting engagements we find that providers are only just now starting to deliver cloud-based UC offerings that span the globe, providing enterprises with a single point of contact, and ubiquitous application suite regardless of location.

We do find that attitudes toward cloud are changing, driven by not only the hype, but the real ability of cloud-based services to off-load operational tasks from IT (enabling a more strategic IT focus); the ability to transform capital costs into operational costs (reducing up-front investments and eliminating the need to go through a capital budget approval process); and the rapid improvement in cloud-based services. Fifty-seven percent of enterprises consider cloud roadmaps important in UC buying decisions; even those who aren't ready to move everything to the cloud today want to know that their provider can get them to the cloud in the future. IT buyers also want investment protection, a guarantee that whatever they buy today will enable them to move to the cloud at their own pace in the future.

Another key trend is the rise of the "hybrid" cloud. A growing number of companies are leveraging the cloud for part of their UC and collaboration applications, while keeping some functions on premise. As an example, consider a company that's adopted Microsoft Office 365 or Google Apps for instant messaging and e-mail, but still maintains an on-premise phone system and video conferencing platform. This scenario is more the norm than the exception as companies evaluate cloud-based services individually rather then adopting an "everything in the cloud" approach. In this scenario, IT architects are looking for ways to mate on-premise and cloud, enabling features such as click-to-call, presence awareness, and video integration between on-premise and cloud platforms.

The bottom line--cloud approaches vary from company to company. There's no one-size fits all model. And as companies increasingly move part, rather than all, of their UC applications into the cloud, integration becomes a key factor that will determine overall success.


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