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 | December 03, 2015 |


Skype for Business in the Cloud: A Survival Guide

Skype for Business in the Cloud: A Survival Guide Microsoft has finally delivered on its cloud IP telephony promise, but for now the primary impact is on those using Office 365 with Skype for Business on premises.

Microsoft has finally delivered on its cloud IP telephony promise, but for now the primary impact is on those using Office 365 with Skype for Business on premises.

With Microsoft finally making good on the cloud IP telephony plans it announced nearly three years at its inaugural Lync conference in 2013, those enterprises that are using Lync/Skype for Business, or considering its use for telephony, must understand what the company is and isn't delivering at this point.

First, here's a quick recap on Monday's news, as announced in an Office 365 blog and discussed in this No Jitter post. As part of its new E5 Office 365 license, Microsoft is offering two options for those wishing to combine Skype for Business's IP telephony capabilities with the Office 365 UC-as-a-service offering.

The first, Cloud PBX, enables companies to shift their current on-premises instances of Skype for Business into the cloud. In the prior operating model, those wishing to use Skype for Business telephony with Office 365 essentially had two separate systems: the on-premises server for real-time applications (voice, video, instant messaging, Web conferencing) and Office 365 for email, calendar, and file sharing. With Cloud PBX, enterprise customers can save money and reduce complexity by shifting everything over to Microsoft's cloud -- though they still need an on-premises gateway for PSTN connectivity.

The second option, PSTN Calling, eliminates the need for the on-premises gateway altogether. This essentially enables Office 365 to deliver fully hosted IP telephony features without requiring on-premises hardware (other than phones and remote survivable PSTN gateways). PSTN Calling is initially only available in the U. S., but Microsoft plans to add support for more countries in 2016 and beyond.

While these two options comprise the bulk of the new Office 365 capabilities, Microsoft also announced two meeting services: PSTN Conferencing, which enables Office 365 to support click-to-dial or traditional PSTN-dialed audio conferences; and Skype Meeting Broadcast, which enables streaming of video meetings to thousands of endpoints. So what is and isn't Microsoft delivering?

What it is delivering: For Skype for Business telephony customers, no longer needing to run a local Skype for Business instance will have the biggest impact, as it will greatly simplify the Microsoft architecture for IP telephony. This new capability won't mean much to those getting Skype for Business as a hosted service from one of the many Microsoft partners, but it will mean a great deal to those running Skype for Business instances on premises while also using Office 365. With PSTN Calling, Microsoft's enterprise customers can eliminate many of their on-premises infrastructure and telephony access contracts (including for SIP trunks), though the current limitations on global availability likely mean that the sweet spot for PSTN Calling is domestic, midsize organizations.

What it isn't delivering: Microsoft isn't yet delivering a fully featured SaaS-based IP telephony platform that competes with the likes of 8x8, RingCentral, ShoreTel, and the many products from service providers like AT&T, Comcast Business, and Verizon. Microsoft will still rely on partners for integration, endpoint devices, and management.

It is focusing this offer on the 250+ seat organization, not on the small and medium-sized business (SMB). It does not yet offer unlimited minute plans. And it lacks a contact center component. So those vendors that target the SMB space with fully featured hosted IP telephony/contact center offerings have some breathing room.

However, it does stand to reason that Microsoft will head downmarket at some point given the widespread adoption of Office 365 among SMBs. Also likely is that Microsoft will either bundle its own contact center offering into Office 365 or partner with another SaaS provider.

So what's an IP telephony buyer to do?

Quite simply, if you are already using Office 365 or planning to use it for email/calendar/IM/file sharing and its many other collaboration features, and you are planning to use or are using Skype for Business for IP telephony, moving your on-premises instance of Skype for Business to Cloud PBX within Office 365 makes a great deal of sense. It will reduce your complexity and management costs. Before you make the move, though, you'll want to make sure that you address WAN connectivity to the Office 365 cloud via either software-defined WAN or Microsoft Expressway to guarantee voice and video performance.

If you are buying a fully hosted Skype for Business solution from a Microsoft partner, or using Office 365 Dedicated, you'll see little to no change. Talk with your partners to see what, if any, impact the new Office 365 capabilities may have on your architecture going forward, but don't expect any significant changes for the time being.

If you are an SMB using Office 365, Cloud PBX may be an option -- but note its limitations. Since it currently lacks features readily available from many competitors -- contact center, bundled phones, unlimited minutes, and so on -- you many want to stick with one of the stand-alone IP telephony SaaS vendors or use hosted IP telephony services bundled with network connectivity from a service provider.

If you are using Office 365 but have no plans to adopt Microsoft Skype for Business for telephony, then it's business as usual -- though Skype Meeting Broadcast may still be of use for large town hall or distance-learning use cases.

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