Will Cloud UC Breathe New Life Into Unified Communications?

Unified communications (UC) didn't really take off the way everyone figured it would. Will cloud UC succeed where its predecessors failed?

August 7, 2012

10 Min Read
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When unified communications (UC) was first bandied about by vendors and service providers, the pitch was that enterprises would flock to it en masse, wooed by the promise of seamless integration of voice, video and data across platforms and devices.

But that isn't exactly what happened--UC didn't live up to the promise, failing to integrate and interconnect on many levels. A bad economy sucked the bravado from traditional first-to-market IT mavericks, who instead retreated to the shadows of their legacy-based PBX systems rather than risk any bottom-line scrutiny that might reveal fiscal irresponsibility.

Meanwhile, vendors and service providers failed to prove a hard case for ROI, instead holding fast to isolated case studies that illustrated improved communications and collaboration without answering the much-needed question: How much will UC save in telecommunications and technology costs if I implement it?

Not surprisingly, enterprise IT responded in underwhelming fashion, and UC has limped along, a communications and collaboration strategy that sounded good in principle but simply didn't justify the cost, time and faith in its required rip-and-replace strategy.

Enter the cloud.

Although few UC vendors or service providers are willing to admit it, the cloud has delivered exactly what UC has been lacking since it first hit the market: cost savings, largely in the form of capex savings. That's especially important for larger enterprises, says Jim Burton, CEO of consulting firm CT Link.

"A good example of this was Interactive Intelligence, which came up with a cloud UC offering that it thought would be a good offering for small-business customers," he says. "It actually was the big customers that gravitated to it early because they saw the cost benefit of having someone host UC, manage it for them and not have to worry about regular updates. It's ended up being such a big thing that this year, more than 40% of Interactive Intelligence's revenue will be based on the cloud for big business."

The value of cloud UC products has not gone unnoticed by other service providers and vendors, as illustrated in the merger and partnership activity that's taken place during the past few months (see Figure 1). But for enterprise IT, the question remains: Is there value in UC--regardless of whether it's in the cloud or on-premise?

Figure 1


Related M&A Activity



April 2012: Agreement with Level 3 Communications and Internet2.April 2012: Acquired Comdasys AG.

Provides managed voice services to college campuses throughout the country.Provides fixed mobile convergence product that enable smartphones to become full-featured PBX extensions with UC capabilities.


Jan. 2012: Added UC services built at least partially on the Cisco Hosted Collaboration Solution.

AT&T launched UC Central, a downloadable app that creates a dashboard to manage all communication tools, and UC Voice, to provide IP telephony.


June 2012: Acquired Radvision for $230 million.March 2012: Partnered with Level 3 Communications.

Radvision provides products for unified visual communications over IP and 3G networks.Strategic relationship in support of AvayaLive Connect.


June 2012: Released Cisco UC Release 9.0 on the Cisco Unified Communications platform.

Added support for third-party endpoints, fixed mobile convergence; and improved video quality, security and usability; and enhanced customer collaboration.


June 2012: Released the A2 Intelligent Messaging Manager.December 2009: Acquired Nortel's Carrier VoIP and Application Solutions Business, including the A2, for $400 million.

The A2 originally was designed for SP networks. Genband added Web-based portals, cloud messaging and terminal interoperability to enable self-administration by customer administrators and end users.


July 2012: Acquired Broadcore Communications.

Broadcore, which provides cloud UC services, will continue to operate as a fully owned subsidiary.


RingCentral's service began as a cloud-based UC offering upon its founding in 2003.

Cloud-enabled services are available in RingCentral Fax, RingCentral Mobile and RingCentral Office.


February 2012: Acquired M5 Networks for $146 million.

The acquisition gives ShoreTel a cloud offering, in addition to its premise-based UC product.


July 2012: Partnered with CSC for an Infrastructure as a Service (IaaS) offering.March 2012: Partnered with Cisco to create Sprint Complete Collaboration.

Email, managed hosting and colocation services will be hosted by CSC and accessed via Sprint's communications backbone. The hosted, fully managed UC bundle enables IT departments to deploy a communications platform across an all-IP network.


August 2011: Acquired CloudSwitch.April 2011: Acquired Terremark for $1.4 billion.

Makes software that enables companies to move workloads and apps between cloud and on-premise infrastructures.Terremark is now a wholly owned subsidiary of Verizon, providing IT infrastructure services that include managed hosting, data storage and cloud computing.

Next: Searching for the Silver Lining in Cloud UCThe answer, it would seem, depends on what enterprise IT hopes to gain from UC. Unlike traditional UC--which was centered on a site served by local equipment, with an occasional remote user included--cloud UC can enable a user to implement bits and pieces of a solution into certain segments of the enterprise.

For instance, if the sales division of an enterprise needs find-me/follow-me and contact center functionality, enterprise IT can utilize some cloud UC offerings to provide those services to only the sales department (see Figure 2). If such functionality is proven valuable, it can be extended to other departments, and other functions and apps can be added or detracted as needed.

So in this way, cloud UC offers IT a solution that doesn't require a full-blown deployment for testing, nor does it require the full up-front capex costs that were required with traditional UC rollouts.

In many cases, that will be enough to move IT decision makers from "considering" UC to "deploying" UC. Determining ROI with a traditional UC system is tricky because there are many hidden costs, including capex, opex, maintenance, upgrades and the time IT spends administering and supporting the system--all of which are difficult to quantify.

Cloud UC reduces the up-front capital investment required and provides enterprise IT with other cost benefits that make it attractive, says Blair Pleasant, president and principal analyst of consulting firm COMMfusion LLC.

"Cloud UC doesn't really provide IT with any additional benefits or capabilities that traditional UC didn't," she says. "What it does is make it easier and faster to deploy and stay up to date with the system."

Specifically, enterprise IT should consider the following as possible benefits to a cloud UC offering:

• Little to no capital expenditures, as opposed to traditional UC offerings.
• Automatic upgrades via the cloud.
• Automatic new releases via the cloud.
• Flexibility when adding or deleting users.
• Simplicity of deploying a service across multiple users or locations.
• Ability to partially deploy only specific UC services as needed or wanted.
• Cost typically based on a set monthly fee that's based on the number of users.
• Maintenance, support and upgrade costs typically are included.

Cloud UC Isn't for Everyone

So what about those early implementers of premise-based UC, or IT organizations that still don't quite believe in throwing everything communications related into the cloud?

Most cloud UC offerings are proffered in one of several versions--on-premise, cloud-based or a hybrid combination of the two--for just that reason. For the most part, traditional UC systems make sense for only enterprise organizations that have large numbers of employees working in one or two main locations, and whose communications needs are unlikely to change for the foreseeable future.

Additionally, cloud UC makes more sense for certain business verticals, including government, higher education, financial services, healthcare and retail because these markets have geographic diversity and a diverse user community.

"It's still very early in terms of adoption," says Burton. "But cloud or some hybrid variation of it will likely be the roadmap for the future of UC in the enterprise."

Figure 2

Companyand Product

How Cloud UC Product Is Implemented

Mobile Integration?

Aastra Clearspan

Overlaid to the existing infrastructure, in which SIP trunks are put in place between Clearspan and the existing PBX.

Yes, with FMC

AT&T Unified Communications Service

Allows the use of an existing PBX and/or telephony service. For example, a customer can keep the PSTN connection at the local site but redirect it back to the cloud. Customers can move part of their population at their own pace to the UC Voice cloud service, while the rest stays on the legacy PBX. Using a coordinated dial plan between local PBX(es) and the UC Voice service, users can continue to utilize abbreviated dialing to make calls. Customers also can route unanswered calls to the existing voicemail/unified messaging system.

iPhone, iPad, Android, BlackBerry, Netbook

Avaya Unified Communications as a Service

Hosted and delivered by cloud service providers, enabling customers to migrate certain user groups as some of their infrastructure reaches end of life, while retaining use of on-premise equipment for other groups.

Supports devices running iOS (including iPhones and iPads) and Android.

CiscoUC Release 9.0

Customers choose based on an on-premise, cloud or hybrid consumption model. Applications and services can be deployed based on business drivers and resources to specific teams of people and individuals, rather than by site or location.

iPad, iPhone, Android, BlackBerry, Nokia

Genband A2 Communications Application Server

UC is added as needed, ranging from TDM overlay to hybrid, to complete replacement.

iPhone, iPad, Android-based smartphones and tablets

Masergy Broadcore

Integrate with best-of-breed technology partners and enhance the UC stack with services supported over more devices with consistent user experience.

Device and platform agnostic.

RingCentral Office

No incorporation with existing legacy TDM-based PBXs. Service allows for turn up and provisioning of preconfigured SIP phones with no additional equipment.

Apps available for Android, iOS and BlackBerry

ShoreTelM5 Unified Communications Suite

The UC offering requires the use of the company's hosted phone system or Cisco handsets, which are supported.


Sprint Complete Collaboration

Rip and replace is not necessary. IT can enable new functionality immediately and run in a parallel, hybrid environment.

Sprint Mobile Integration enables integration of Sprint mobile phones with UC, extending PBX features and desktop phone capabilities to Sprint mobile phones.

Verizon UCCaaS

Enables hybrid architectures that incorporate legacy equipment or customer proprietary applications with components from the cloud. For example, customers can utilize an existing IP-PBX platform on=premise and purchase voice messaging and/or IM and presence features from the cloud. Or a customer could use UCCaaS cloud-based call control to replace a legacy TDM-PBX but continue to use a unified messaging platform on premise.

Uses Cisco Jabber client to support enterprise communication and collaboration features on smartphones and tablets. The client runs on Android and Apple OS.

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