Analysts expect rapid growth of subscription-based unified communications.
Unified communications (UC) once was viewed as a way to reduce costs and simplify administration by bringing together communications tools for telephony, email, text, instant messaging, videoconferencing and presence into a single platform. However, UC quickly evolved into a valuable, strategic resource, capable of boosting productivity and innovation by enhancing the quality of collaboration and improving access to data and services.
Today, the technology is evolving once again with the migration of UC applications and services to the cloud, allowing organizations to take advantage of a Unified Communications-as-a-Service (UCaaS) delivery model. The ability to deliver a set of business communications services through a highly scalable IP communications infrastructure makes UCaaS an increasingly attractive alternative to on-premises communication platforms.
“There’s a growing preference for cloud-based services, particularly in mid-to-large enterprises, and UCaaS is riding that demand,” said Bill Haskins, Senior Analyst & Partner for Massachusetts-based Wainhouse Research. “Putting unified communications in the cloud makes great economic sense: the infrastructure is there, the support mechanisms are in the place, the training program is ready. Plus, fewer IT and purchasing resources are required to manage it.”
Cost Savings and More
In a recent report on the global UCaaS market, Wainhouse Research noted that all signs point to rapid growth in the industry as both telephony and non-telephony service providers compete for market share. While there are hundreds of providers currently in the market, analysts expect a great deal of consolidation over the next few years. Key players now include Cisco, Avaya, Alcatel-Lucent, Microsoft, IBM, HP, CSC, Voss, Verizon Communication and Polycom. Wainhouse Research predicts the market will be worth approximately $5.3 billion by 2018, with a five-year compound annual growth rate of 24 percent.
Not surprisingly, the cost factor makes UCaaS attractive to many organizations. Instead of purchasing, configuring, deploying and managing an on-premises solution, those costs and responsibilities are assumed by the service provider. For a monthly fee, users can simply access enterprise-class UC technology and applications on any Internet-connected device. Users enjoy a consistent UC experience anytime, anywhere, which allows for greater business agility and productivity.
UCaaS provides the flexibility to quickly scale services up or down according to business needs, creating operational efficiency by enabling organizations to pay only for what they need. Service provider data centers typically have more resiliency and redundancy than customer environments, making it possible to maintain high levels of performance and minimize the risk of downtime and data loss. Similarly, UC support is handled by the service provider’s team of IT specialists, which often improves the speed and quality of support.
It’s important to recognize that UCaaS is one approach to UC, and organizations need to determine if cloud-based UC is the right fit. Many IT managers are leery of moving mission-critical applications to the cloud, especially when dealing with increasingly complex regulatory compliance requirements. Organizations need to make sure the service provider understands and is capable of maintaining compliance.
In addition to regulatory compliance, existing technology investments must be considered. UCaaS makes the most sense in new facilities that have no communications service, or when a total overhaul is needed. Otherwise, organizations should make sure their UCaaS strategy is compatible with existing applications and user equipment. Employees should also be ready to embrace a new communications system, which should be trialed and tested before making a final decision.
Still, there is a widespread perception among telecommunication experts and industry analysts that UCaaS will inevitably overtake on-premises solutions as the platform of choice for organizations of all sizes.
“As the use of mobile devices within organizations grows, employees need the ability to collaborate from any device and from any connected location,” said Audrey William, Frost & Sullivan’s head of research for information and communications technologies. “Many organizations are reluctant to continue investing in on-premises solutions, which often have multi-year contract agreements. There is a significant shift toward third-party hosted and managed models, and service providers are playing an important role in the overall UC market.”