Dave Michels
Dave Michels is a Principal Analyst at TalkingPointz. His unique perspective on unified communications comes from a career involving telecommunications...
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Dave Michels | January 12, 2016 |


The Year the Cloud Premise Changed

The Year the Cloud Premise Changed Now that premises and cloud platforms have reached functional parity, providers need to think big on UCaaS strategies.

Now that premises and cloud platforms have reached functional parity, providers need to think big on UCaaS strategies.

Hosted VoIP has experienced steady growth since its emergence some 15 years ago. For most of this time, hosted VoIP offered the same value proposition as premises-based solutions with an outsourced and OpEx twist.

Gartner opens its 2015 Magic Quadrant report on unified communications as a service (UCaaS) by stating: "UCaaS supports the same functions as its premises-based UC counterpart. Only the delivery model is altered." While the functions are similar the approach isn't, and that became clearer in 2015.

We often cite scalability as an enterprise organization benefit of UCaaS, but it is critical for the providers as well. Many of the first-generation services were architected for thousands of users. In 2015, it became clear that success requires efficient and reliable service and support for millions of endpoints. In the UCaaS Magic Quadrant, Gartner reported on 20 of an estimated 250 total providers worldwide, yet only (and barely) deemed three as "Leaders."



Learn more about cloud communications trends and technologies at Enterprise Connect 2016, March 7 to 10, in Orlando, Fla. View the Cloud Communications track sessions here.

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UCaaS providers need to think big. Even the tiniest gains in efficiencies or cost reductions have exponential ramifications. Every aspect of the service, from provisioning to system updates, has to be optimized for millions of users. Premises-based and single-tenant solutions simply weren't designed for this scale. In 2015 we saw some significant shifts in cloud strategies from Microsoft, Cisco, ShoreTel, NEC, and Interactive Intelligence.

When Microsoft decided to add UCaaS to its Office 365 portfolio, it didn't just implement Skype for Business in its data centers. Instead it has been recreating the service and moving to become a carrier itself. The transition takes time, so Microsoft enables customers to connect their premises-based or hosted solutions with its hosted service to create a full-featured virtual system.

Cisco is following a similar approach with its Spark application, which is expected to expand into a direct UCaaS offer with partner-provided carrier services. As the company builds these features, it will also support hybrid services (with hosted or premises-based implementations of its mature solutions).

Evidently the companies didn't feel their current solutions were architected for where UCaaS is heading -- and they weren't alone.

ShoreTel expanded from UC to UCaaS when it acquired M5 Networks back in 2012. Though the acquisition did bring some first-mover advantages, it also burdened the company with two separate and incompatible platforms. The company realized a totally new approach was necessary for its cloud-centric vision, and released ShoreTel Connect this past August as a new, common platform.

Channel and go-to-market maturity was also a common theme for UCaaS changes in 2015. Last fall NEC relaunched its UCaaS offer, now called Univerge Blue, with a revamped channel program. Cloud services have tested many of the traditional channel programs because the discovery and evaluation of cloud services tend to take place prior to channel interaction.

Interactive was also early to move its premises-based solution to an OpEx model, and realized a totally new, cloud-first approach was necessary. In 2015, Interactive launched its PureCloud portfolio, which leverages messaging, communications, and collaboration with a cloud-ready split architecture using Amazon Web Services cloud infrastructure for faster and cheaper global expansion.

UCaaS involves both the UC technology (which is maturing) and the service delivery (which is emerging). It is not enough to only focus on features. UCaaS providers must offer frequent upgrades without downtime, self-enforcing SLAs, and the highest levels of security and encryption. Customers expect visibility to real-time metrics, detail-rich self-provisioning portals, and competent, live customer support.

"Cloud-first" broadly conveys a higher priority toward cloud in development or consumption of services. From a provider point of view, cloud-first means a solution architected for large, scalable, multi-tenant cloud delivery.

The cloud is emerging as the preferred model for enterprise communications, and it appears it will be dominated by large, multi-tenant, carrier-grade, cloud-first solutions. More often than not it will require a new solution rather than an evolution of existing products.

Dave MIchels is a contributing editor and Analyst at TalkingPointz.

Hear more from Dave on UCaaS in our upcoming webinar on January 20 at 2 pm ET. He'll be joined by NEC's Jay Krauser and will explore 2016 cloud trends and UCaaS success stories. Register today and join us.

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