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UCaaS on the Mind for AWS Watchers

We've heard speculation in recent days that Amazon, already providing behind-the-scenes cloud resources for some UC- and contact center-as-a-service providers, might be readying a move of its own into the communications space. Analyst and regular No Jitter contributor Dave Michels laid out a few good reasons why such may be the case in his recent TalkingPointz post, "Will Amazon Reinvent UCaaS?"

For example, Michels pointed to several acquisitions that strengthen Amazon, technology wise, for a move into communications -- particularly of the video collaboration sort. It gained a livestreaming service when it picked up Twitch, high-speed video encoding and transcoding software with the purchase of Elemental Technologies, and an early workstream messaging product complete with WebRTC-enabled video with its acquisition of Biba.

And, of course, competitiveness could play a role in Amazon's potential move into communications, too. "Top cloud competitors Microsoft and Google offer business communications services including video conferencing. Amazon has lagged in commercial communications services, but clearly has the know-how," Michels wrote, citing its three-year-old Mayday video customer service app as an example.

As of this writing, we've heard lots of interesting stuff coming out of the AWS re:Invent conference taking place this week in Las Vegas. And while some of the news is tangentially related to enterprise communications, none firmly positions the company as a UCaaS provider akin to a company like, say, an 8x8, Microsoft, RingCentral, or Vonage. Regardless, the idea that we might soon have Amazon knocking on the business communications door makes for some interesting thought.

William Blair equity research analyst Dmitry Netis delved into the question in a research note published today, reiterating the firm's belief (detailed in a March research note) that Amazon's emergence as a "wildcard disruptor" in the UCaaS space would be a "natural progression" for the company. As articulated in that earlier note, William Blair believed such a move "would have to happen through inorganic efforts (buying one of the pure-plays in the UCaaS space) or via partnership efforts (by outsourcing a best-of-breed, white-label VoIP engine from BroadSoft)," Netis wrote.

While Netis said he could see Amazon announce a video-enabled team collaboration service yet this week, "UCaaS is an entirely different story, but only a matter of time."

Telecom, so critical to the voice piece of UCaaS, is a big sticking point -- what with all that peering and trunking and regulatory mandates (including obtaining CLEC status from the FCC), etc. with which a provider must contend. At this point in time, Netis wrote, the question still remains as to what Amazon's go-to-market strategy would be for UCaaS. Amazon could sell UCaaS via a portal and inside sales team like 8x8 does, he speculated, or it could simply become a reseller for channel partners by enabling them with IaaS and PaaS. "Both cases would work, though the FCC regulation requirement could be likely avoided in the latter case or offloaded to another interconnect CLEC partner (Intelepeer comes to mind)," he concluded.

To date, UCaaS providers like RingCentral and 8x8 that have their own clouds for communications have had to defend themselves against providers, such as Interactive Intelligence, that have built their UCaaS offerings on top of AWS. And they've done that based on the infrastructure control story, in large part.

As RingCentral CEO Vlad Shmunis told me a month or so ago in a briefing, RingCentral feels it must control its infrastructure for mission-critical communication components such as dial tone and voice quality of service.

"As great as AWS is, we don't control its uptime... and we control ours," he said, noting that RingCentral has invested in at least double redundancy, and in many places, quadruple. "This is what allows us to run through a very rapid innovation cycle. We have six to eight major releases per year, and are able to do that without taking the system down. It's like refueling your plane in the air, and only in the air, forever."

Some time ago I also spoke with Mehdi Salour, SVP of global network and DevOps at 8x8, and he stressed the same sort of thinking. Using a public cloud might have some advantages, especially when looking to provision services in foreign countries in which a public cloud provider has data sovereignty, compliance, and other regulatory issues squared away, he said. However, "public cloud is not ready for all elements of communications types of services. ... The media handling, the signaling elements of VoIP or UC services still need to be at data centers under our control."

But Amazon's entry into UCaaS would change the competitive landscape rather dramatically -- if not for larger enterprises evaluating their options than at least for smaller businesses. Should Amazon decide, or perhaps when it does decide, to dive into UCaaS, the wake it creates will be substantial -- or, as Netis wrote, "nothing short of disruptive to existing market participants, particularly given Amazon's unstained execution track record."

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