UCaaS Costs: Your Choices Matter Most!

Unified communications as a service (UCaaS) continues to grow as a telephony and UC solution for organizations of all sizes, but UCaaS is far from completely replacing IP PBXs and on-premises unified communications systems.

Today, most planning for new or upgraded UC systems include UCaaS as an option. This may be driven by an overarching IT strategy to move to the cloud, the rampant claims of financial benefits by the UCaaS vendors, some cloud-based capabilities needed by some enterprise users, or simply by IP PBX vendors pulling back from on-premises solutions. Whatever the reason, most enterprise communications managers, architects, and planners are evaluating UCaaS options.

But this is a murky task, loaded with pitfalls. None of the UCaaS vendors offer a comprehensive analysis of the total costs of selecting, testing, installing, and operating a UCaaS service as a replacement or option to on-premises UC systems. In part, they can't do this, since most of the costs are outside their control; at the same time, the goal is to show the lowest cost possible.

At Enterprise Connect 2018, taking place March 12 to 15 at the Gaylord Palms in Orlando, Fla., I'll be presenting the session, "How Cost Factors Affect Your Cloud Migration." In this session, I'll review a model of the costs that will have the most impact on your analysis of UCaaS as an option to your current systems and to new on-premises UC system investments. If you attend this session, you'll also receive a link to a powerful, easy-to-use Excel model of the financial effects of the key decision factors on UCaaS costs.

The model and the session will illustrate that the most important factors are the choices that you, the enterprise communications/IT manager or architect, make when analyzing a UCaaS decision. Here are the most important factors:

  • Is there a compelling need to change your current PBX or IP PBX? If not, and if your current vendor continues to offer maintenance and upgrades for that system, then making a business case for moving to UCaaS on the basis of lowering your annual telecom budget is almost possible. If there's a compelling reason to replace or upgrade, then your next choices come into play.

  • Are you willing -- really willing, with management approval and support -- to change the size and shape of your current communications staff, including the help desk staffing? A careful analysis of your total enterprise communications budget will likely show that these staff costs are the largest single component of your annual budget. Are you willing to trust the UCaaS provider to do some of this work? How much of this work will the UCaaS provider agree to include in its pricing? What management and staff positions will you still need to manage a UCaaS service? In the end, this may even be good news, opening new career opportunities for the existing team. But, deciding if staff costs are part of the equation is important.
  • Can you shift your public switched telephone network (PSTN) services to the UCaaS vendor? In most cases, the UCaaS vendor can provide these services much more efficiently and economically than is possible with local on-premises trunks and carrier rates for toll and toll-free calling. In some cases, your organization may have long-term contracts with your existing carriers and won't be able to benefit from this UCaaS economy. Your choice to change, or not, is a major UCaaS planning factor.
  • What are the conversion costs for moving to UCaaS? This can be a big cost factor as well as a major enterprise IT question. You'll have to prove out new WAN topologies, assess UCaaS security, integrate UCaaS with your directories and identity management systems, provide for interoperation with your current PBX or IP PBX during the migration, and much more. This will require peak-load staffing and skills, with associated costs, and will take time. There'll also be costs to change existing equipment, replace telephone instruments, and train both staff and users.
  • What's the UCaaS provider willing to offer to make a compelling business case? This might be by offering discounts, amortizing some of the up-front costs as part of the monthly UCaaS charges, including some of the installation and training costs in its UCaaS pricing, or any number of other options. But, you should analyze this factor only after you have a solid understanding of the other factors of your plan, so you're negotiating price based on your total cost and your business case, not just on competitive price comparisons. The lowest price may be far from the best package.

By understanding these choices during your planning cycle, you can get a good grasp of whether a move to UCaaS is compelling today, or should be revisited at some point in the future. If the decision is to go forward, then you'll be able to get the management support you need and will be able to position your procurement process to negotiate the best responses from the UCaaS vendors. In the end, this is all about assuring your UC roadmap is smooth, beneficial to both staff and users, and financially rewarding.

My panelists and I will be discussing and quantifying all of these factors in the "How Cost Factors Affect Your Cloud Migration" session, taking place Tuesday, March 13, at 3:00 p.m. Hope to see you in Orlando!

Learn more about Cloud Communications at Enterprise Connect 2018, March 12 to 15, in Orlando, Fla. Register now using the code NOJITTER to save an additional $200 off the Early Bird Pricing or get a free Expo Plus pass.