Table of Contents
Businesses increasingly deploy hosted Internet protocol (IP) telephony and unified communications and collaboration (UCC) services in order to gain flexibility, reduce costs and risks associated with communications investments, and more effectively support remote branch office and mobile workers. Underserved small businesses can more easily gain access to advanced functionality and a large pool of technology expertise in spite of budget and information technologies (IT) staff constraints. Large, distributed organizations can leverage hosted communications services to consolidate their infrastructure and thus reduce costs, more effectively manage vendor relationships, offer a consistent feature set across the organization as well as deliver communications capabilities to various locations based on specific user needs rather than underlying technology. Businesses, especially those favoring operating expense (OPEX)-based technology investments such as education and government organizations, can replace large upfront capital outlays with predictable monthly charges.
Businesses considering hosted communications must first assess their existing communications infrastructure and IT staff skill sets, review business objectives, and develop a comprehensive and sustainable communications infrastructure evolution roadmap. Based on the findings of this initial assessment, businesses must conduct a thorough due diligence investigation of available hosted communications solutions and providers.
Most businesses are likely to begin the process with a feature/functionality and cost comparison of multiple solutions (including premises-based alternatives if the decision to move to hosted communications is not yet final). Furthermore, ease of use for both end users and IT administrators can ensure more efficient solution deployment and management and broader end-user adoption of new tools and capabilities. Deployment options (private lines versus public broadband) can determine the quality and reliability of the service as well as service level agreements (SLAs) offered by the provider. Businesses must also obtain information about the data center design, solutions architecture, and other factors that determine the reliability and security of the hosted service. Total cost of ownership (TCO) analyses can help compare the short- and long-term value of communications services and solutions. Finally, in-depth insight into the prospective service providers’ financial performance, track record, vision and technology roadmap, partnerships, customer service, and technical support should factor heavily in the final decision.
This article provides a guide to a structured and sustainable deployment of hosted IP telephony and UCC services. It can help businesses maximize their return on communications investments and leverage technology for a competitive advantage.
Businesses increasingly leverage communications and information technologies (IT) to improve business agility and more effectively meet shifting market and workforce requirements. Over the years, communications and IT budgets have grown considerably as businesses seek to enable higher employee productivity and superior customer service. However, economic uncertainty and accelerated technology development are compelling businesses to apply a more cautious approach to communications and IT investments. More specifically, customers are looking for flexible deployment models that reduce risk and upfront costs while providing faster access to advanced functionality. As a result, cloud architectures and “as-a-service” business models—software-as-a-service (SaaS), communications-as-a-service (CaaS), etc.—are gaining significant appeal among business customers.
Over the past decade, hosted IP telephony and cloud UCC services have matured and are offering a compelling value proposition to businesses of various sizes and vertical industries. This study discusses the benefits of outsourcing communications from a trusted service provider partner; identifies the best fit in terms of matching organizational composition, existing communications infrastructure, and end-user needs; and proposes a methodology for assessing hosted IP telephony and UCC solutions and providers.
The Hosted Communications Value Proposition
Factors Driving Hosted Communications Adoption
Hosted IP telephony and UCC services adoption is growing at a steady pace with the installed user base expanding at about Xto Xpercent year-over-year. Customers have gained considerable awareness of the benefits of IP telephony and cloud business models and are actively exploring hosted IP communications as a viable alternative to existing premises-based implementations, typically based on legacy technologies.
Multiple factors are driving demand for hosted communications, including: macro-economic conditions, shifting user demographics, organizational dynamics, and technology evolution.
Frequent economic downturns have limited access to lines of credit and other external funding for many businesses, especially small ones, and have encouraged demand for flexible solutions that allow fast and cost-effective capacity adjustments. Fiscal uncertainty, coupled with rapid technology evolution and accelerated technology refresh cycles, have also increased the risks associated with technology investments. As a result of these trends many businesses are looking to avoid locking into risky CAPEX investments in premises-based solutions. Instead, they are switching to hosted communications for the benefit of predictable monthly charges, which can be adjusted based on actual usage and changing capacity requirements.
Furthermore, the complexity of enterprise communications infrastructure has increased dramatically. Businesses use a plethora of communications tools including: telephony; e-mail; voice and unified messaging; presence, instant messaging and chat; audio, web, and video conferencing; content and file sharing; mobility; and more. IT staff is increasingly overwhelmed with both the workload and challenges of deploying, managing, and maintaining a continually expanding set of IP-based communications tools. Finding skilled IT staff and ensuring that in-house personnel has the necessary expertise to cope with evolving technology requirements represents a growing challenge and cost burden for most organizations. Outsourced solutions provide access to a larger pool of technology expertise and enable businesses to reduce the costs associated with hiring, training, and retraining skilled IT staff.
Maturing voice over IP (VoIP) and cloud technologies are also fostering improved customer confidence in hosted IP telephony and UCC services. Over the past decade, technology developers and service providers have greatly enhanced the quality and reliability of real-time communications delivered over IP networks. Improved quality of service (QoS) management, advanced security tools, and greater availability of high-bandwidth access networks represent some of the technology factors driving the adoption of hosted IP communications services.
Favorable market conditions will drive a gradual, but steady shift to hosted communications over the next decade. In some world regions, such as North America, over X percent of business telephony users are likely to migrate to hosted IP telephony and UCC services by 2023.
Counterpoint I: Hosted IP telephony and cloud UCC services require a move to converged, IP-based networks which pose specific challenges related to bandwidth utilization and management, real-time applications (such as voice and video) prioritization and quality of service (QoS) management, IT/telecom department re-organization, and IT staff skill set and job role adjustments. Businesses with considerable investments in legacy infrastructure, including analog and time-division multiplexing (TDM) endpoints, and/or major security and regulatory constraints must proceed with greater caution and even consider keeping the voice and data networks completely separate.
Counterpoint II: With the adoption of hosted IP telephony and cloud UCC services businesses relinquish a considerable degree of control over their communications capabilities to a third party. This process requires a major culture shift and a significant investment in change management. Businesses embarking on this journey must have a long-term plan for both technology and organizational (structural and cultural) evolution.
The Best Fit
Hosted IP telephony and UCC services can provide significant benefits to businesses of any size and any vertical industry. However, there are certain business scenarios where hosted communications can provide greater value.
Small Businesses and Small Sites: For small businesses or small sites within large organizations (e.g. bank branches, retail franchises) with less than Xusers, hosted solutions can provide a greater return on investment than premises-based alternatives. Limited budgets, lack of locally deployed IT staff, and small capacity requirements make the cost of premises-based solutions and related ongoing maintenance prohibitive for such organizations. Through hosted solutions they can economically gain access to advanced functionality and a broad pool of technology expertise that can create a competitive edge for the business.
Distributed “Virtual” Organizations: Distributed organizations with several or many remote and mobile workers can use hosted communications for their remote sites/users or gradually migrate their entire communications infrastructure to the cloud. Through the latter approach, they can eliminate the cost and hassle associated with deploying, maintaining, and upgrading disparate, multi-vendor solutions and managing multiple vendor relationships. Furthermore, a hosted or cloud service infrastructure enables such organizations to more effectively support and deliver capabilities to each user based on actual needs rather than underlying technology.
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