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UC buyers should look for SaaS-based UC offerings in 2009

Unified communications (UC) -- despite the hype -- hasn't quite taken off in terms of adoption across the enterprise. In this tip, Zeus Kerravala discusses why that is and how Software as a Service (SaaS)-based UC offerings will address those concerns.


Despite the hype, deployments of unified communications (UC) have been sluggish to say the least, in part because of the cost and complexity of deployments. Having this market transition to the Software as a Service (SaaS) delivery model can help accelerate deployments by allowing companies to experiment with UC without having to incur heavy costs up front.

Unified communications has been a market in the making for several years, but adoption of it has been slow. Most of the companies I speak with seem to get the value proposition and admit that creating a more collaborative work environment is a key corporative initiative. So we've got fairly mature product and customer demand, so that must mean a robust, growing market, right? Well, that's not the case. So why has adoption been slow? In a survey we ran last year at Yankee Group, the top two barriers to adoption of UC were "uncertainty in price/cost advantage" and "high cost to upgrade voice infrastructure." This means that companies don't want to pay a bunch of money up front for something without being sure when or what the payback will be -- which makes perfect sense. So what other options are there for interested buyers?

Expect to see UC offered as a SaaS-based delivery model in 2009. To date, Cisco is the only vendor that's articulated a SaaS strategy, which was built on its acquisition of WebEx. So why do I think other vendors will follow? In almost every major software market, the SaaS-based offerings have been the fastest growing segment. At Yankee Group, we predict that by 2012 more software will be sold as SaaS than as traditional software. So, if UC is a software industry, then its migration to SaaS is inevitable.

In addition to Cisco, the most likely vendors to "go SaaS" are Microsoft, building on its Live Meeting Product; IBM, extending Lotus Live; and Avaya, leveraging its "On Demand" product.

SaaS-based UC will create greater scale in this industry in that it will allow many more companies, even small ones, to experiment with UC without having to make hefty, up-front hardware and software investments, which is today's deployment model. Organizations that choose to use a SaaS implementation can pay for UC in various ways -- monthly fee, usage-based or perhaps some combination of the two, creating payment flexibility to allow companies to be as aggressive or as conservative as they are comfortable being.

Initially, I expect the SaaS UC service providers to provide basic UC services such as conferencing services, unified messaging and presence applications; but, over time, I expect them to provide full UC functionality, including voice. In addition, if other vendors follow Cisco's WebEx Connect model, where the software APIs are available from the "cloud," the SaaS-based UC service can be used as a development platform to create UC-enabled applications as well. This trend follows the larger industry shift to "cloud computing," where we can expect to see more infrastructure pushed into the cloud to remove much of the deployment complexity that exists today.

In summary, UC is a software-driven market that will follow the same trends as the rest of the software industry and migrate to SaaS. If you're in the evaluation process right now, ask the vendor you're dealing with what its SaaS roadmap is. Many of them probably have beta programs you can trial to see whether it's a better option for you.

About the author
Zeus Kerravala manages Yankee Group's infrastructure research and consulting. His areas of expertise involve working with customers to solve their business problems through the deployment of infrastructure technology solutions, including switching, routing, network management, voice solutions and VPNs.

Before joining Yankee Group, Kerravala was a senior engineer and technical project manager for Greenwich Technology Partners, a leading network infrastructure and engineering consulting firm. Prior to that, he was a vice president of IT for Ferris, Baker Watts, a mid-Atlantic-based brokerage firm, acting as both a lead engineer and project manager deploying corporate-wide technical solutions to support the firm's business units. Kerravala's first task at FBW was to roll out a new frame relay infrastructure with connections to branch offices, service providers, vendors and the stock exchange. He was also an engineer and technical project manager for Alex. Brown & Sons, responsible for the technology related to the equity trading desks.

Kerravala obtained a B.S. degree in physics and mathematics from the University of Victoria (Canada). He is also certified by Citrix and NetScout.


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