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Enterprise Connect 2016: Special conference coverage

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Enterprise UC managers rein in the cloud craze

Debunking the cloud craze, a panel of IT architects at Enterprise Connect said many of their UC applications are still on premises, or at least hosted in a hybrid structure.

When Airbnb Inc. launched eight years ago, the company placed many of its operations in the cloud. Now, the online...

lodging service, based in San Francisco, is moving to a hybrid structure by shifting more of its operations to on-premises systems, according to Jason Galanter, Airbnb's unified communications architect.

For Airbnb, the cloud lacks the quick scalability and customization options necessary to fit its specific needs. As a small startup, the cloud made sense. But, as Airbnb has grown, a hybrid approach became necessary.

"It's become very clear to us that hybrid is the reality," Galanter said, "and there's not a one or the other solution that works."

Airbnb is not alone. Other UC users are eyeing a hybrid strategy, debunking a cloud craze that has had some enterprises throwing all their UC applications into the cloud.

Cloud outlooks among vendors and users don't mesh

Galanter was on an Enterprise Connect panel of UC architects last week that largely doused the cloud craze that has engulfed much of the UC industry. The user panel contrasted vendor panels at the conference that mostly touted the benefits of cloud services and how their customers are the ones driving this cloud craze.

Big UC vendors have a clear incentive to move their customers to the cloud -- it makes them money and investors demand these new revenue streams.

Microsoft's latest earnings report was buoyed by commercial cloud revenue, even as its archrival, Cisco, accelerates its cloud marketing. ShoreTel's last earnings report showed a 20% jump in cloud revenues year over year. RingCentral, a cloud business communications provider, recently saw its revenue surge 35% year over year. Interactive Intelligence, another cloud services provider, saw its cloud revenue soar 62% last year over 2014.

UC managers realize the benefits of the cloud, but they also acknowledge the shortcomings. Galanter said one of the restrictions of the cloud is "it's tailored to the many, and not the specific needs of our organization." For Airbnb, hosting everything in the cloud would not work, he said, just like moving all operations on premises would not make sense, since that, too, does not scale as needed.

Additionally, Galanter said cloud providers often don't move fast enough to fulfill Airbnb's needs and lack technical transparency. A provider, he said, could lose its key architect and the customer would never know. 

Users are the 'foremost authority' -- the vendor is not

Bloomberg LP, the New York-based financial media company, is completely on premises, but examining a hybrid approach, according to Jeffrey Fairbanks, Bloomberg's global head of AV and media technology. Like Airbnb, cloud scalability and customization are top priorities for Bloomberg, as it evaluates its cloud options.

Fairbanks acknowledged the importance of cloud within the enterprise, but said he believes the hybrid method is where the world is headed.

To take the stance of cloud only or on-prem only would be narrowing your focus. We're the foremost authority on what we need; the vendor is not.
Jeffrey Fairbanksglobal head of AV and media technology, Bloomberg LP

"To take the stance of cloud only or on-prem only would be narrowing your focus," he said. "We're the foremost authority on what we need; the vendor is not." 

Fairbanks added that the cloud craze gets so pervasive that senior executives at companies believe moving everything to the cloud is the right choice. However, companies that take that step risk losing both institutional and domain knowledge, he said.

Mergers among cloud providers could be another booby trap, Fairbanks noted, especially if the acquiring company has a roadmap that differs from the enterprise's goals.

Healthcare and defense companies emphasize security

NewYork-Presbyterian Hospital has a multivendor UC strategy and is almost 100% on premises, said Franklin Castro, the hospital's UC director. The hospital, with nearly 40,000 employees and six campuses, is mulling where it can consolidate services over the next year.

In the healthcare field, "obviously, security is first and foremost," Castro said.

Echoing the security sentiment, Beth Hilbing, global collaboration services senior director at Northrop Grumman Corp., said the defense company is treading carefully amid the cloud craze. Northrop Grumman, an aerospace and government provider based in Falls Church, Va., relies primarily on on-premises systems, but is considering some cloud services.

"We've been embarking down a path for the last five to seven years on burning out our aged infrastructure," Hilbing said, adding that the company is looking to consolidate and simplify its collaboration, data, video and voice tools.

But, she warned, cloud providers still have a long way to go. Cloud services, particularly voice, are not mature enough yet. Hilbing said she finds some providers flexible and responsive, because if they're not, then they'll lose revenue, as Northrup would move services in-house. The best option is to work closely with cloud providers, so they can develop and customize services that suit your company's requirements, she said.

Enterprises looking to order off the menu

Hyatt Hotels has a fairly mature hybrid cloud model, said Jim Mitilier, Hyatt's assistant director of contact center IT.

A couple years ago, Hyatt put out a request for proposals to replace its legacy TDM PBX system. The company found the cloud did not provide the required flexibility or feature functionality, so the telephony system stayed on premises.

And yet, Hyatt has used a public cloud for its Interactive Voice Response system that interfaces with the company's on-premises private cloud, which, in turn, interfaces with an on-prem reservation system.

Mitilier said the responsiveness and speed of cloud providers "is definitely an issue." And Hyatt realizes it won't get exactly what it wants, especially if vendors have a set, static menu of services.

Mitilier added that users need to manage their relationships with cloud providers and make sure priorities on both sides align. Additionally, he said, enterprises need providers with an extensive knowledge of both the business and technical processes.

"You're looking for that one person who knows everything," he said, "and it's a struggle."

Next Steps

How to build a custom cloud without customization expenses

Customers say hybrid cloud benefits outweigh integration challenges

Chief customer officers find a place among cloud vendors

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Conference Coverage

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