Article

Hosted unified communications vs. in-house UC deployment

Katherine Trost, Analyst, Nemertes Research
IT architects increasingly view unified communications as a critical business tool to enable both improved internal productivity and richer customer interactions. This explains why interest in unified communications (UC) has increased substantially in the last couple of years. Included under the umbrella of UC are integration and presence sharing among applications such as IP telephony, audio, video, and Web conferencing and instant messaging. Organizations may also extend UC functionality such as presence and click-to-call to other office or productivity applications.

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That task of moving to UC can seem daunting even for the largest and most sophisticated IT staffs.
Katherine Trost
AnalystNemertes Research
The benefits of unified communications become apparent as we consider how the way in which we conduct business has evolved. Workers are increasingly distributed, conducting business from branch locations, home offices and partner sites, as well as from the road. These virtual workers rely on UC applications as a way to share information easily and to communicate and interact with co-workers, partners and clients.

That task of moving to UC can seem daunting even for the largest and most sophisticated IT staffs. Many struggle in trying to roll out and manage these services effectively. Their end users have high expectations of application performance, regardless of where they work, at what time of day, and from which device. Supporting their needs is difficult because applications often exist in isolation, deployed and managed separately.

To meet these challenges, IT practitioners are evaluating hosted unified communications deployment and management options as an alternative to in-house deployments.

Challenges of in-house unified communications apps
The in-house option requires significant IT resources to first integrate applications, which is a key challenge as IT teams try to figure out how to make existing and new applications work together. The teams must also monitor performance and buy tools to address configuration, application performance, asset and change management, and event correlation.

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Hosted unified communications options can save the enterprise money, but expect limited feature sets.
Companies that lack internal resources or simply don't want to manage internally may opt to deploy unified communications internally but to outsource the monitoring and management to a third party (typically a carrier, system integrator or reseller). The service providers either install remote-monitoring tools and manage each site from a central location, or they assign their staff members to work on the customer premises, or a combination of the two.

Hosted unified communications
The third option is to use a hosted UC solution. In the past, fully hosted offerings have seen much slower adoption rates than managed services. For example, only 6% of organizations are using hosted VoIP (with another 17% evaluating) compared with 46% using managed VoIP services. One exception, however, is hosted Web conferencing, deployed by 61% of organizations.

In a hosted scenario, hardware and applications software is physically located on the provider network/data center. The provider owns, monitors and manages the application and provides customers with access to management portals.

This gives businesses all the technical advantages of the unified communications services without the large capital investment. For most of these services, there is no equipment to purchase except, in some cases, phones for VoIP or cameras for video conferencing. Even then, some service providers lease all hardware. As with any service, the customer is under contract for a specified amount of time, which will vary between services and vendor.

Some key features of hosted unified communications include:

  • Low capital expenses and overhead. The provider owns and manages equipment in its facilities. The hosted service provider handles all management, monitoring and service problems remotely.
  • Hosted services enable an enterprise to take advantage of redundancy, backup and disaster recovery features that are costly to maintain on premise.
  • The service provider handles all system updates and enhancements.
  • Hosted/SaaS applications are developed to scale well, by design. They are globally accessible because they are Web based.

Numerous customers share a general- purpose infrastructure residing in the service provider's data centers, which often means a more limited feature set and little room for customization.
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Limits of hosted unified communications
There are a few drawbacks to hosted solutions. Numerous customers share a general- purpose infrastructure residing in the service provider's data centers, which often means a more limited feature set and little room for customization. Also, when new unified communications applications or enhancements come out, the carrier decides when to implement them, so customers are at their mercy. There are sometimes data-protection issues as well – some companies will not allow call data records to reside externally.

Also, until recently, most service providers did not focus on large, enterprise-hosted services (with the exception of some hosted-conferencing providers). Nemertes predicted that a shift was inevitable as large providers faced new competition in the smaller-business market from alternative service providers and large systems integrators/outsourcers. And recent announcements such as the partnership between British Telecom and Cisco to deliver hosted VoIP show that providers are indeed moving hosted UC offerings up market.

A variety of providers offer hosted UC applications today. These include carriers -- such as AT&T, BT, Covad, Cypress, Global Crossing, Masergy, Orange Business, PCCW and Verizon -- as well as pure-play providers, such as 8X8 (Packet8), Alteva and Intelliverse. Hosted conferencing and collaboration vendors include Cisco, Citrix, Microsoft, IBM and Google.

In addition, there are many providers, both global and regional, that host specific applications such as Microsoft Exchange or SharePoint, IBM Sametime or Notes and Google Apps.

Keep in mind that the main business driver to adopt any new technology right now is cost, and the fact is that for some unified communications hosted services, providers still don't have pricing to a level that makes sense for larger enterprises compared to in-house solutions. In contrast, SMBs (under 1,000 seats) can often achieve cost savings.

Organizations having trouble creating a compelling business case for on-premise UC deployment can utilize a hosted solution as they evaluate which UC components to deploy. When choosing a hosted UC provider, it's important to look beyond cost and consider breadth of services, geographical reach and the amount of support for customization and integration with on-premise solutions.


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