Unified Communications as a Service

Unified Communications as a Service (UCaaS) is a category of “as a Service” or “Cloud” delivery mechanisms for Enterprise Communications. Similar to “Platform as a Service” (PaaS) (where data center capacity is made available to an enterprise on a consumption model from a service provider), with UCaaS, unified communications services can be made available from the cloud to enterprises. UCaaS is part of the global industry trend towards cloud services.

History

UCaaS first came to prominence 2014, on the heels of the cloud IT movement.

Traditionally, enterprises have acquired and deployed their own communications infrastructure. This was by far the most economical approach,^[1] as enterprises could deploy their own PBX switches and avoid the cost of individual phone lines for each employee. With the advent of IP and virtualization of the data center, the economics have shifted back^[2][3] in favour of a service provider model. The SP invests in a virtualized data centre, negating the need for the enterprise to do so, and offers a more flexible consumption model.^[4]

Prior to the Cloud, service providers offered IP Centrex and Hosted communications services. These were almost identical to the UCaaS capability, except for the fact that “virtualization” has meant that the economics of UCaaS is so much more compelling.^[5][6]

Rationale for UCaaS

The primary rationale for UCaaS is the fact that it allows a company to shift from a capital investment to an operating cost model.^[7][8][9] In addition, it provides companies with the ability to more rapidly increase their consumption (i.e. consume more licenses), or decrease their consumption, without the need for capital.^[10] With a traditional communications model, companies must acquire capacity ahead of demand and they rarely get it totally correct, which means over-capacity.

Secondly, the growing sophistication of enterprise unified communications has meant that companies must invest not only capital. They must invest more and more in their IT staff in order to be able to support this growing sophistication.^[11] Adding new features and upgrades are non-trivial and while communications are critical to the success of the business and productivity of its staff, the maintenance of the infrastructure requires a high level of expertise that continues to grow. Companies are able to off-load most of this complexity to service providers with a UCaaS model, as well as ensuring that they always have the very latest versions and features.^[12]

Historically, enterprise and government organizations needed to keep their carriage provider (i.e. access to the PSTN) in a highly competitive position. If they allowed the SP to lock them in with a Centrex solution, then they may not able to achieve the best carriage rates. Now, with carriage becoming a commodity and UC license becoming a premium, there is much less risk to moving to a SP UCaaS solution.^[13]

Cloud versus On-Premises

There is a significant level of internal competition within organizations as to whether they retain their existing enterprise communications platform, or move to a cloud-based UCaaS model. There are a number of arguments against moving to UCaaS. Security is one of the most common reasons given – companies are cautious about putting their data into the cloud.^[14][15] But any independent analysis will show that SPs are better placed to combat a security breach and are much more likely to have the discipline around redundancy of data.

Perhaps the most valid reason for concern is the level of customization that can be achieved.^[16] It is generally understood that with an on-premises communications platform, the IT staff can achieve much higher levels of customization for the enterprise. Of course this is totally dependent on the capabilities of the company’s IT staff. Without highly experienced staff, organizations can easily fall behind in the sophistication of their features and productivity of their communications tools.

The jury is still out on the Total Cost of Ownership (TCO) between on-premises and UCaaS. There have been many studies on this topic,^[17][18] but it is difficult to compare the two solutions, given that many enterprise companies rarely appreciate their true TCO for on-premises.^[19]

References