Cost is the leading driver and inhibitor of cloud-based UC

While more enterprises are looking at cloud-based UC, cost seems to be what drives companies both to and from unified communications as a service.

IT leaders are heading for the clouds! According to the recently released Nemertes 2014-15 Enterprise Technology Benchmark, 63% percent of companies have at least one UC app in the cloud -- web conferencing being the most widely adopted cloud-based UC product.  Those moving to cloud-based email or calendar platforms rose from 20% in 2013 to 33% in 2014, with another 12% planning to migrate in 2015. IM adoption sits at 26%, up from 18%...

in 2013. IP telephony is also moving beyond the SMB, as now 18% of all companies use it, with another 6.4% planning migration in 2015.

What's driving cloud-based UC adoption?

What's driving this momentum? Those adopting UC as a Service (UCaaS) say that cost savings is their biggest driver. They simply find that it's cheaper to procure cloud-based services than research, build and administer them on the premises.  Secondary drivers include:

  • Cost is both the leading driver and the leading inhibitor to cloud UC adoption.
    easily scaling offices up or down;
  • quickly adopting new UC features;
  • improving business agility; and
  • off-loading commodity service administration from IT resources to free them up to work directly with lines of business, which can drive innovation, improve business processes and engage with customers.

What's keeping enterprises away from cloud-based UC? Despite this momentum, cloud UC services aren't yet right for everyone, or for all applications. Among those choosing not to move to the cloud, cost is the primary reason as well. It might seem odd that cost is both the leading driver and the leading inhibitor to cloud UC adoption, but for some companies, especially mid-to-large sized firms, cloud services are often more expensive than simply buying an application or server and running it in-house, especially if the organization already possesses the internal expertise to maintain the application, or if extensive customization would be expensive to migrate to the cloud. Another leading factor keeping some out of the cloud is security. In some cases, governance or regulatory requirements require data storage to be on-premises. One example frequently cited by research participants is the need to keep data in local countries, a capability that many cloud providers cannot support. Others cite concerns over data leaks and the need to maintain strict privacy controls as cloud obstacles.

Where UCaaS growth is stunted

One area where the cloud is not yet seeing widespread growth is in SaaS-based alternatives to Microsoft Office (for example, Google Docs). Just 19% of surveyed participants say they are using such products, though another 9% say they are planning to use cloud-based services for office applications (such as Office 365) by the end of 2014. However in most cases, Office as a Service (OaaS) is supplementing, not replacing Microsoft Office. The primary drivers for adoption include co-editing in real-time, sharing documents outside the organization and eliminating the need for local document storage.

What cloud-based UC apps make sense for you?

The bottom line is that cloud UC has arrived, but it may not make sense for every organization. Evaluate your tolerance for risk, your security and governance requirements and your need for customization. Most importantly, consider the costs of cloud services versus your on-premises platforms. Finally, understand that cloud UC isn't an all-or-nothing proposition. While cloud may not make sense for all your UC apps, it may make perfect sense for some -- especially those that you need to extend to those outside your firewall.

Next Steps

How to decide whether cloud-based UC makes sense for you

Which UC applications should be in the cloud?

A guide to understanding unified communications as a service

This was first published in July 2014

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