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Microsoft pushes enterprise telephony to the cloud

Microsoft wants to push Skype for Business to the cloud, but organizations that want to host enterprise telephony services need to talk to their partners.

As part of its recent rebranding of Lync to Skype for Business, Microsoft also announced plans to support enterprise...

telephony within its Office 365 service without the need for an on-premises enterprise server. So, what are the options for using the cloud with Skype for Business?

Microsoft's cloud strategy for Lync always presented a bit of a challenge for enterprise IT architects. Until now, Microsoft had a split offering: Lync Online as part of Office 365 for voice, video chat and Web conferencing, and Lync Server on-premises for enterprise telephony functions and PSTN access. That setup means companies leveraging Microsoft's popular Office 365 service for email, calendar, document sharing and Yammer social computing must still run an on-premises server if they wish to use Microsoft Lync as their enterprise phone system.

The situation gets murkier for those companies that aren't ready to commit all their telephony services to Lync. End users who aren't using Lync for IP telephony can continue to have their accounts serviced by Office 365 for instant messaging, Web conferencing and for voice or video chat, while those who are using Lync for telephony receive not only phone services, but also instant messaging, Web conferencing and voice/video chat from the on-premises server. This means a potential split in account provisioning with some users living off the local Lync server while others are attached to the cloud.

Enterprise customers who wish to avoid running any services entirely on-premises have turned to Microsoft partners like AT&T, British Telecom, HP, Orange Business Services, Verizon and others that deliver a combined Lync and Office 365 service as a complete unified hosted offering. This saves them the cost and complexity of running their own on-premises instance of Lync.

Enterprise telephony and PSTN access

If your organization chooses a pure cloud-based Microsoft Skype for Business deployment, pay careful attention to the company's efforts to shift the current on-premises telephony and PSTN access capabilities to the cloud.

In February 2013, Tony Bates, then president of Skype, proclaimed at the inaugural Lync conference that Microsoft would add PSTN access to Lync Online in 18 months. That deadline came and went, as did Bates, who left Microsoft in 2014.

Fast forward two years, and Lync Online -- now Skype for Business Online -- still lacks enterprise IP-PBX functionality and PSTN access. Microsoft leadership, at both this year's Enterprise Connect in March and more recently at the Microsoft Ignite conference in May, is once again committing to delivering such functionality to Skype for Business Online, this time in a staged, two-phase rollout.

Phase one of cloud telephony is the addition of "enterprise telephony" functionality to Skype for Business Online. This means that Skype for Business Online will be fully capable of providing IP-PBX features that are currently only available via a dedicated instance of Skype for Business Server -- either on-premises or privately hosted.

However, enterprise customers will still need to provide their own PSTN access and will likely need to deploy a session border controller from Microsoft partners like AudioCodes, Oracle or Sonus to trunk calls from Skype for Business Online back to their premises and out to the PSTN. This arrangement, for obvious reasons having to do with complexity and voice quality management, isn't likely to see widespread adoption, but it should make it easier for service providers to bundle managed PSTN connectivity with Office 365 and resell it as a fully hosted package. Microsoft plans to launch a technical preview of enterprise telephony in Skype for Business Online this summer with general availability to follow.

During the second phase of the rollout, Microsoft Skype for Business Online will provide PSTN access without the need for customers to have any on-premises PSTN connectivity. Microsoft has aligned itself with an array of global service providers that will provide PSTN access through their own connectivity into Microsoft Azure services. This service will be available in the U.S. in late 2015 with global availability to follow.

Assuming Microsoft finally delivers enterprise telephony and PSTN access, customers will then have a fully hosted option for all Skype for Business Online and Office 365 applications. But expect service provider partners to continue to bundle management, on-premises federation, security, compliance and cloud-to-cloud federation offerings around Office 365 to keep customers from going directly to Microsoft.

If your organization chooses a pure cloud-based Microsoft Skype for Business deployment, pay careful attention to the company's efforts to shift the current on-premises telephony and PSTN access capabilities to the cloud, keeping in mind that global offerings are likely a year or two away. In the meantime, work with your vendors to understand how they can help you realize your goal of hosting enterprise telephony capabilities even before Microsoft has a fully baked product of its own.

About the author:
Irwin Lazaris the vice president and service director at Nemertes Research, where he develops and manages research projects, develops cost models, conducts strategic seminars and advises clients. Irwin is responsible for benchmarking the adoption and use of emerging technologies in the enterprise in areas including VoIP, unified communications, video conferencing, social computing, collaboration and advanced network services.

Next Steps

How to successfully migrate from PSTN to VoIP

This was last published in June 2015

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