About five years ago, Dave Nuss -- longtime CIO at Cresa, a global commercial real estate firm based in Boston -- looked at the cloud and saw a competitive advantage. With a highly mobile workforce and clients spread across 776 cities worldwide, he wanted a unified communications platform that could keep workers connected to their customers, colleagues, applications and data from anywhere in the world. Unified communications delivered as a cloud-based service, aka UCaaS, fit the bill.
"There is really no point to going on-prem. Cloud has made everything a lot simpler and more streamlined," Nuss said. "It allows IT to become more strategic because that stable infrastructure is there 24 hours per day, seven days per week."
The CIO vetted several providers in the emerging UCaaS market and ultimately landed on RingCentral, saying the company addressed his requirements of application functionality, business continuity and user mobility. The organization now relies completely on the cloud for UC -- abiding by the mantra "cloud first, mobile first" -- and Nuss said it won't look back.
"It's become a noun, a verb and an action word for us," he added. "We're always referencing it -- 'Let's get on a RingCentral.' When you see something permeate the culture like that, you know it's had a positive impact."
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Cresa is in good -- and growing -- company. According to a recent Nemertes Research survey of more than 600 IT professionals, UCaaS adoption rates nearly doubled between 2018 and 2019, jumping from 11.9% to 19.1%. And of the 35.7% of respondents still using on-premises UC platforms, 43.2% said they plan to evaluate or adopt cloud-based technology by the end of 2021.
The hosted UC model, which offers a custom-built platform designed and is operated by a major carrier in its own cloud, also seems to be losing ground to the more commoditized approach of vendors such as RingCentral, Fuze, Vonage and 8x8. Of survey respondents currently subscribed to hosted UC -- 17.8% -- more than half said they are actively considering or planning a switch to straight UCaaS.
"There's no advantage to running your own system anymore," said Irwin Lazar, vice president and service director at Nemertes Research, adding that lower costs, greater flexibility and richer feature sets make cloud UC increasingly attractive to users. "For all intents and purposes, UCaaS has won."
Andrew Froehlich, president at analyst firm West Gate Networks, agreed that UCaaS adoption rates will continue to climb as the technology matures. He predicted, however, that very large organizations will take their time and wait for the release of more advanced, customizable features before ditching their on-premises systems.
"With on-premises UC, you can do literally anything -- configure it however you want, down to the most intricate detail," he said. "But with cloud services, you're far more constricted."
Expect to see cloud-based platforms that are on par with or better than on-premises alternatives within four to five years, Froehlich predicted, along with a corresponding spike in adoption among large enterprises. Analysts anticipate several key UCaaS trends -- from advanced business application and workflow integrations to the dawn of artificial intelligence -- will help drive that anticipated growth.
With the new UCaaS, users can have it all
For Cresa, where around 75% of employees regularly work on the road, the promise of UCaaS to enable efficient, professional communication beyond the office had major appeal. Nuss said brokers' smartphones now function like mobile workstations, giving them access to everything from direct extensions and fax lines to screen-sharing and web-conferencing capabilities.
"They look like they're calling and working from one of our offices," he said.
Jon Arnold, research analyst and principal at J Arnold & Associates, said UC mobility will continue to rank among top UCaaS trends in the months and years to come.
"Vendors want to engage people wherever and whenever they're working, and that's typically on the go," he said. "So, mobile applications will have to get easier to use and become more integral to the collaboration experience."
Untethering UC from narrowly defined geographic locations also results in better business continuity, according to Nuss. He said RingCentral's platform let Cresa stay open and online even while experiencing major storm-related network outages in Florida and Texas. "Our offices continued to function at 100% even though we had two buildings under water."
In other noteworthy UCaaS trends, Lazar highlighted the convergence of calling, video conferencing, team messaging, persistent workspace and contact center functionality within a single, integrated offering.
"Two years ago, you might just buy phone functionality," he said. "Now it's harder to justify licensing six different applications when you can get a single, lower cost license that gives you everything you need." In other words, an office juggling Slack for chat, Zoom for meetings and Vonage for telephony might eventually use just one platform to do the work of all three, and more.
Lazar said he also anticipates the line between UCaaS and communications platform as a service will become increasingly blurred as UC vendors integrate more CPaaS capabilities into their existing workflows. As an example, he points to Vonage's acquisition of Nexmo, which it has used to enable programmable phone numbers in its UCaaS platform.
"We're seeing a lot of use cases for consumable communications where I don't have to buy a separate platform and only pay for what I need," he added.
That might mean a medical practice's UCaaS system connects to its calendar management app and automatically sends appointment reminders to patients for a small, per-message fee, Lazar suggested.
Jon ArnoldPrincipal, J Arnold & Associates
Or in another example of UCaaS-meets-CPaaS functionality, a missed phone call to a programmable number could trigger an invitation to a follow-up meeting based on participants' real-time availability. Once confirmed, that appointment could auto-populate across users' calendars and in the organization's CRM system, which would then generate a ticket for internal tracking.
"UCaaS is a very fluid term," Arnold said. "Right now, it's about making it easier to communicate, but the technology will ultimately move past that to doing the actual work."
Carrier Enterprise LLC, a major distributor of HVAC equipment, based in Charlotte, N.C., initially came to UCaaS to cut costs because it was fed up with its expensive on-premises Cisco system.
"Aside from our annual subscription, we were looking at spending half a million dollars every three to five years on forklift upgrades," CIO David Bernardez said. "So, I thought, 'I don't want to deal with hardware anymore.'"
But Bernardez said they quickly discovered additional compelling use cases for cloud UC. The company now subscribes to Fuze for calling and contact center needs, and -- thanks to the vendor's integrations with Microsoft Office 365 and Salesforce -- Bernardez said the business benefits have exceeded Capex and Opex savings.
When Carrier Enterprise receives an incoming call, for example, Fuze automatically logs it in Salesforce and mines the application for customer information associated with that number. Employees now have valuable data at their fingertips before even answering the phone.
Bernardez added he hopes Fuze will eventually offer the ability to integrate with a wider variety of business applications, such as his company's ERP system. "The ability to do that with other vendors is really important to us," he said.
Lazar said he anticipates future UCaaS trends will include increasingly sophisticated application integrations that extend across organizations' digital ecosystems. "The real value will come from those APIs," he said.
Bernardez also pointed out that while the hefty Capex investments associated with on-premise systems all but guarantee short- to medium-term customer retention, vendors must continually woo UCaaS subscribers if they want to keep their business. That aspect of UCaaS benefits users.
"To remain relevant, Fuze is constantly making improvements and reaching out for customer input," he said. "That gives us the ability to see what the future looks like and say, 'OK, I want that feature in my environment.'"
Froehlich noted vendors often prefer the cloud-based model, too, as it typically means bigger profit margins. "If you can lock an organization into paying a monthly or annual rate, that's preferable to selling $200,000 worth of phone equipment once every 10 years."
As a result, many vendors have now stopped adding new features to their on-premises platforms, redirecting all their engineering resources toward UCaaS technology, he added.
AI could mean less talk, more action
Dawning UCaaS trends like artificial intelligence, big data analytics and machine learning could ultimately position cloud-based UC software to play a more active role in the enterprise collaboration process, with digital tools taking on additional -- and more difficult -- tasks over time.
Ahead of a scheduled meeting, for example, AI might search the internet and internal documents for relevant information about participants and agenda topics, gathering data in microseconds and presenting it to the end user in an optimized format.
"Cisco calls it cognitive collaboration," Arnold said. "[The technology] kind of makes you an instant expert, and it learns your preferences over time."
As AI gets smarter and data sets mature, he added, new use cases will emerge, and the role of UCaaS will evolve -- easing pain points most workers take for granted.
"The models we use now are still analog-based -- we write notes, work in spreadsheets, draft emails," Arnold said. "But you'll eventually be able to use more advanced tools to do a lot of that work for you."
He predicted virtual assistants will one day take over tedious manual tasks like scheduling meetings and booking conference spaces, for example. Rather than prompting a human user to reserve a room (communication), the software will complete that task itself (collaboration). It's a subtle distinction with potentially profound implications, with AI-driven UCaaS functioning more like a colleague and less like a legal pad.
According to Arnold, consumer AI already has the maturity necessary to add significant value to the business environment, with functions like voice command, transcription services and voice-to-text analytics offering obvious, immediate utility. He said he expects technology to trickle into the mainstream enterprise space within two to three years.
Some UCaaS platforms already offer data analytics capabilities to assess and optimize user behavior. At Carrier Enterprise, for example, Bernardez said the Fuze call center application automatically collects "very, very rich data" to help managers monitor customer experience and measure employee performance. With their previous on-premises system, they could have accessed similar information but would have had to pay a hefty premium.
Arnold predicted enterprises will eventually use highly granular, AI-driven metrics to track how well every worker collaborates, contributes and performs while interacting with UCaaS applications.
Although next-generation UCaaS trends like AI and machine learning are still in their infancy, research suggests the days of on-premises platforms are rapidly coming to an end, according to Lazar.
"If companies don't take advantage of UCaaS, they will place themselves at a competitive disadvantage," he said.