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Mobility and Video Drive UC&C in the Cloud

Executive Summary

- The UC&C in the cloud market in Latin America began around 2008 to 2009 with certain vendors developing private clouds for large enterprise customers.
- These deployments were on-premises (not hosted in a third-party data center), designed for enterprises with distributed offices (branches).
- The benefits included centralized management of business applications and cost savings pertinent to investing in 1 data center as opposed to rolling out many small data centers across multiple sites.
- As enterprises began familiarizing themselves with this model, vendors and service providers started forming alliances to best capture this market.
- Service providers invested in their data centers and started offering hosted Internet protocol (IP) telephony and later incorporated advanced UC&C applications—instant messaging, presence, and conferencing, among others.
- In parallel, vendors developed solutions specific to the needs of the rising small and medium business (SMB) segment as well as made their solutions compatible for virtualized environments.
- The first customers to adopt hosted UC&C were enterprises had already deployed private cloud architectures on-premises, giving rise to hybrid cloud models.
- These organizations had some applications (mission critical) running on a private cloud and others (not mission critical) hosted in a third-party data center.
- In 2013, the most common architecture was a hybrid cloud, a condition that will not change rapidly, as there are still corporate-culture inhibitors and technological limitations impeding the rise of pure hosting.
- Moving forward, it is unclear if pure hosted is the direction the market is taking, as enterprises in some verticals (e.g., financial institutions and government) are legally bound to keep certain data on-premises.
- Most vendors interviewed in this market insight affirmed that mid-2012 and 2013 was when hosted UC&C started gaining traction in Latin America.
- Some vendors are more advanced then others in their commercial offering, working with multiple service providers and partners in several countries, while others have a significantly smaller footprint.
- The actual installed base for hosted UC&C is still a fraction of the on-premises UC&C market, with some participants ranging from a few thousand to a couple hundred thousand active licenses.
- Not all vendors have a consistent hosted UC&C offering globally, as Latin America is usually a year or two behind what happens in North America and Europe.
- In the case of one prominent UC&C vendor that works with a leading service provider in several countries in Latin America, the functionalities offered for hosted UC&C vary among countries.
- This is not a technology-related issue, but rather concerns the business model that the service provider has chosen per country. However, market participants are still defining their strategies.
- Within the countries where vendors sell their solutions, they usually work with 1 or 2 service providers/partners to offer hosted UC&C because the market is nascent.
- All vendors interviewed stated that they are talking with other service providers and partners to expand their reseller community in the region.
- In terms of licensing, the 2 models that vendors offer are pay-as-you grow (actual licenses sold) or pre-pay (the reseller purchases a bundle of licenses in advance, even if they are not sold).
- In the case of the former, vendors lease the license, while in the 2nd scenario, the service provider/partner acquires the license and can resell it as many times as it wants.
- Currently, service providers/partners are required to purchase the solution from the vendor. However, some vendors are considering absorbing that cost to attract more resellers.
- Frost & Sullivan end-user survey conducted in 2012 in Brazil and Mexico revealed thatxx% and xx% of enterprises were either implementing or had already implemented cloud solutions, respectively.
- Furthermore, of those companies in Brazil that claimed to have a cloud budget in 2012, half expected a 10% or greater increase in their budgets dedicated to cloud computing solutions in 2013.
- In Mexico, this figure was even higher, with xx% of the companies expecting to increase their budget dedicated to cloud computing solutions by more than xx% in 2013.
- Though the survey covered all cloud solutions, not only UC&C, the data highlight that the market is embracing this model, and there is a large growth opportunity for vendors.
- The Cloud UC&C market in Latin America is in its nascent stage, and there is still important work to be done by vendors and the reseller community to raise awareness and understanding around this topic.
- It is particularity important that during this nascent stage, vendors and service providers position their brand within a enterprise segment that is still forming their opinions around cloud (solutions and vendors).

Market Scope

- Geography: Latin America
- Types of companies interviewed:
oTechnology vendors
oCarrier service providers
oSystem integrators
- Interviewees:
oExecutives with direct responsibility of Unified Communications and Collaboration as a Service (UCaaS) strategy.

- UC&C is an integrated set of voice, data, and video communications applications, which leverage PC- and telephony-based presence information and simplify communications with ubiquitous and seamless access to various tools. The benefits of UC include flexibility to access communications and collaboration capabilities anywhere, anytime, on any device, and on any network. A hosted UC solution involves the delivery of pre-integrated network-based applications.

- Cloud computing is a flexible and scalable, shared and/or private environment in which third-party suppliers or in-house architectures use virtualization technologies to create and distribute computing resources to customers on an as-needed basis via the Internet. The cloud computing model can have the following structures:
Private Cloud
A “private cloud” is a cloud computing-based model under a private scheme in which only 1 organization has access to all resources. A private cloud should be able to incorporate policies and infrastructure capabilities that are executed or used by the organization exclusively. It can be run with the company’s own resources or through a dedicated hosting model.
Public Cloud
A “public cloud" implements cloud computing for multiple organizations through a single set of resources. The basic model for a “public cloud” is similar to that of a public utility—a 3rd party manages the infrastructure to provide computing resources to customers who pay per use. Public clouds, for scalability reasons, tend to offer lower prices when compared to private cloud structures.
Hybrid Cloud
This is a mix of public and private clouds through which the organization can monitor certain sensitive activities in-house or through dedicated hosting infrastructures while conducting other activities in a shared environment.

Market Definitions

Virtualization is the development of a virtual version of infrastructure or part of the infrastructure. As a result, multiple running execution environments can be run in a single resource from the infrastructure.
Cloud computing and virtualization are thus 2 different concepts. Both cloud and virtualization deliver a more efficient usage of computing resources, but they are fundamentally different.
Cloud computing can be enhanced through virtualization, but cloud computing can be achieved without virtualization.
Software as a service (SaaS) provides enterprises access to specific software over the network. Applications and their related data are delivered as a service.
Unified communications and collaboration as a service (UCaaS) are UC solutions delivered via a cloud deployment model. UCaaS is a subset of SaaS.
Hosted refers to the outsourcing of infrastructure, platforms, or software to a 3rd party that owns said resources and that, in turn, manage and deliver services to the end user via cloud deployments.
Cloud deployments are said to be hosted when the client does not own the resource, regardless of if they have some administrative control via a Web portal.

Table Of Contents

Unified Communications and Collaboration (UCandC) in the Cloud in Latin America
Executive Summary
Market Scope
Market Introduction and Definitions
Market Trends and Analysis
Drivers and Restraints
Demand Analysis
Value Chain
UCandC Solution Vendors Profiles
UCandC Solution Service Providers Profiles
The Frost and Sullivan Story

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