Businesses 'should already be on their journey to UCaaS'

With the unified communications market on the rise, experts urge companies to shift towards an 'as-a-service' approach

The unified communication and collaboration (UCC) market is seeing a dramatic shift towards cloud-based solutions, with unified communications as a service (UCaaS) leading the way.

The global user base of cloud UCaaS has now surpassed 43 million, with new users estimated to grow at a compound annual growth rate (CAGR) of 23% from 2016 to 2023, according to analyst firm Frost & Sullivan.

This move is due in part to growing confidence in cloud solutions and a better understanding of the benefits it can offer, but also down to many customer premises equipment (CPE) assets nearing end of life.

Art Schoeller, vice president, principal analyst at Forrester Research states that more than one out of three IT professionals considering UCC will deploy it as a subscription service in their next upgrade cycle.

However, as communication systems have historically had long lifecycles of 10 years or more, with a heavy emphasis on 'investment protection', he notes that "this might mean that some [of our respondents] might not move to UCaaS for another five years or so".

In the meantime, many existing CPE assets are being integrated with cloud during their sunset years, while digital transformation initiatives are also pushing IT departments to look more closely at moving to UCaaS.

All change

Elka Popova, digital transformation vice president at Frost & Sullivan believes that customer confidence in UCaaS is also growing thanks to a recent swathe of mergers, acquisition and restructuring projects by IP telephony and UCC providers.

"In 2016 and 2017 the industry was marked by significant merger and acquisition (M&A) and restructuring activity affecting key providers. Their repositioning and strategy realignment is likely to determine the industry's evolution and growth trajectory over the next few years.

"M&As, bankruptcy protection, internal reorganisation, international expansion and solution repackaging will aim to improve industry health and boost customer confidence in service and company long-term viability."

The benefits of UCaaS

A key reason why companies are turning to UCaaS is the fact it offers a wide variety of communications technology and collaboration applications and services.

"Organisations are turning to UCaaS to reduce operational costs, expand into new markets or regions, boost creativity and innovation and also improve sales and marketing effectiveness," points out Rob Arnold, Frost & Sullivan's connected work industry principal.

Businesses are also looking for something that's 'on-demand', offering greater flexibility over the services they may have been used to in the past.

"Customers like the flexibility of a cloud service, in most cases with little or no upfront cost or hardware investment - depending on the service," says Cathy Gerosa, head of regulatory affairs at the Federation of Communication Services (FCS).

"The other major benefit for business is the flexibility it gives with today's workforce, enabling greater collaboration between both internal team members and external parties, regardless of where they're located."

Developing a transition plan - things to consider

But as the market shifts towards this subscription service, vendors must support organisations by developing a transition plan that protects their existing investments and offers minimal disruption to the business.

Benefits such as predictable billing, outsourced ownership and the move from CAPEX to OPEX are clear, but understandably, businesses still have concerns - particularly around security, visibility and a potential lack of control.

For many companies, the first step is often a hybrid implementation that spans on-premise and cloud.

"Some organisations still feel that they need to control their own communications, especially from a security and risk perspective," notes Forrester's Schoeller.

Plus, there are cons to balance the pros. New endpoint devices may be needed, even if the old system still works well, leading to not only extra spending but changes to the way staff work and how they interact with others.

"People used to maintaining older phone systems have to really shift their mindset, skill set and approach to the job. Plus, the move to UCaaS is very disruptive to the historical distribution channel for communications systems," Schoeller adds.

The key lies in selecting the right provider and developing a strong partnership in which you can have faith that the technology and implementation is what you need.

"The UCaaS market is relatively new so businesses do need to understand who they are taking their services from," advises Gerosa. "For example, are they financially stable but at the same time nimble in how services are delivered and developed?"

Vertical is the new black

UCaaS adoption looks set to grow at a steady pace, but analysts believe on-premise solutions will continue to play a role for at least the next decade.

While hybrid may be the first step many organisations take, providers look set to push forward with new technologies, capabilities and offerings, even if change is perhaps slow on the side of customers.

"The next phase in the industry's evolution will be marked by the emergence of 'productivity UC' 'IoT UC' and 'vertical UC' - vertical is the 'new black'," says Popova.

"Tailored services bundles, industry certifications, integration with vertical-specific apps and partnerships with vertical experts will deliver superior value in targeted industries."

Gerosa believes we'll soon see an even wider selection of services being offered by providers, with greater emphasis being placed on platform-agnostic applications.

"How businesses consume these services will be interesting with some of the dominant players like Microsoft with their 365 suite developing further," says Gerosa.

"As we see today with mobile phone apps, the potential in cloud just keeps growing so the ability to integrate these applications regardless of which supplier they are taken from will become more of a requirement."

"If businesses have not already started the journey down the UCaaS world we would certainly recommend they start now," she adds.

Image: Shutterstock

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