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A UC in the Cloud Update

Adoption of cloud-based UC applications isn't exactly new. In fact, one could argue that the two most widely used collaboration applications have always been cloud-based; WebEx and Skype. But for those using enterprise platforms for voice, video conferencing, messaging, and document sharing, it's only more recently that cloud-based alternatives have become a viable alternative to on-premises systems. So is it time for companies of any and all sizes to toss out their on-premises platforms and move to the cloud? The answer, as any good consultant will tell you, is "it depends."

Before we get too far into the discussion, it's worth taking a minute to discuss the various flavors of "cloud" UC. There are SaaS-type offerings from vendors like 8x8, Fonality, and dozens more, each requiring little more than a credit card to purchase, configure, and deploy. Then there are the provider-hosted/managed offerings built on platforms like Cisco's "Hosted Collaboration Solution (HCS)." These are custom-built, single-instance software images customized to a specific customer's needs, but sold largely the same way as SaaS; on a per-user / per-month basis.

Alternatively there are even approaches pioneered by Inter-Tel (acquired by Mitel) where the solution is on-premises, but billing is OpEx-based, just like a cloud/SaaS platform. To make matters even more confusing, some UCaaS solutions lack key UC features; Office365 for example, which doesn't provide telephony.

For small companies, the solutions are plentiful and integrated. Numerous vendors offer bundled solutions delivering voice, video, instant messaging, web conferencing, audio conferencing, and even contact center capabilities. For larger enterprises, with broad installed bases of various applications, many of which aren't fully depreciated or can't be moved to the cloud due to governance and regulatory concerns, creating a cloud strategy might mean picking specific cloud services for individual needs.

As an example, a company could leverage a cloud-based video interoperability provider like Acano, Blue Jeans Network, or Pexip to connect its on-premises video endpoints to each other and to business partners. Another might leverage Esna's suite of offerings to integrate its on-premise IPT platform with Office365 or Google Apps, while a third might use a federation-as-a-service provider like NextPlane to connect its IM platform to public and partner systems.

About 85% of companies currently use at least one cloud-based UC application, with web conferencing still dominating. But other UC apps are rapidly gaining adoption as well. Cloud IP telephony use is up to 13% in the Nemertes 2013-14 Enterprise Technology Benchmark, with another 27% evaluating or planning to deploy. Email/calendaring/instant messaging services from Google, IBM, and Microsoft enjoy widespread adoption, with 53% either using, evaluating, or planning to deploy by the end of 2014.

Nemertes finds three primary factors that impact cloud deployment decisions: Cost, integration, and risk.

While lots of IT buyers like the OpEx model of cloud, the reality is that cloud isn't always cheaper than on-prem, especially for larger companies. In a study I reviewed at Interop last month, we noted that while cloud IPT provided a lower 5-year TCO for a small company of 80 employees, cloud was actually more expensive over the same timeframe for another company of 5,000 end-points. In this example, the cost to procure and self-manage the solution was actually cheaper, though the upfront (first year) costs were almost $1 million more for the on-premises platform.

So the first step in evaluating if cloud is right for you is to conduct a TCO analysis and compare various options. Keep in mind that cost isn't the only buying criterion. We've talked to many IT leaders who have picked cloud over on-premise despite higher costs simply because they like the OpEx budget model, they can shift their IT resources into more strategic roles, they want rapid upgrade cycles that many cloud providers offer, and they want to be able to easily scale up and down as needed. Costs (and availability) will likely vary by operating region as well.

The second factor is integration. Understanding that cloud is generally not an all-or-nothing decision, the ability to integrate cloud solutions with on-premises platforms is a key buying criterion for those evaluating competing cloud solutions. Increasingly, it's not just cloud-to-on-prem that's important, but cloud-to-cloud (e.g. 8x8 and ShoreTel Sky's integration with Salesforce). Companies that are building a UC strategy want to maintain (or expand) application integration capabilities as they move to the cloud.

With respect to risk, we see two sides of the coin. Some argue that cloud is "less" risky because of the lower up-front investment, though moving between cloud providers can be disruptive, especially if one cloud provider suddenly closes up shop, as has happened in the past. For others, cloud represents increased risk due to potential data loss by the cloud provider, or snooping by government entities.

So ultimately, the decision as to what and when to move to the cloud depends on a variety of factors. The best approach to evaluating cloud is to weight these factors based on your own requirements, and use them to evaluate competing offerings. Look at the ever-growing variety and breadth of cloud solutions, and remember that even if cloud doesn't make sense today, it may in the future.

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