5 Scalability and Cost Benefits of Cloud Communications

5 Scalability and Cost Benefits of Cloud Communications

One key benefit of Cloud Communications is the capability to rapidly scale up or down based on an organization’s need for capacity and capabilities.

Cloud Communications services are offered on a “pay as you use” basis so organizations avoid having to pay for capacity and features they may need only during peak periods. For example, a retailer that needs extra capacity during the few months of the Christmas shopping season no longer needs to pay for that extra capacity during the rest of the year.

Also consider high-growth companies that are aggressively acquiring new companies and opening branch offices around the globe. Such firms need to quickly spin up voice, video and collaboration capabilities to support their business imperatives and enable worker productivity in short order.

One of the biggest cost factors associated with traditional, premise-based communications is the cost of in-house expertise needed to deploy and maintain solutions. Cloud Communications greatly simplifies this by automating some maintenance tasks and handling other issues as part of the service delivery.

Here are the primary cost drivers in the adoption of Cloud Communications:

  • Ability to scale in response to business conditions
  • Shift from a CAPEX to an OPEX model
  • Reduction of equipment costs
  • Simplified cost tracking
  • Risk mitigation

This cost flexibility definitely needs to be factored into any total cost of ownership (TCO) analysis that an organization may undertake when deciding to upgrade its communications system. Ideally, the TCO calculation will be done with a “what if” analysis to reveal the true cost impact of adopting a Cloud Communications solution.

For example, if growth is anticipated at 50 percent over the life of the platform, then per-user costs should be calculated based on that volume. With a cloud-based solution, the organization can pay for this extra capacity if and when it’s truly needed. By contrast, an on-premises solution may not scale that flexibly, and a 50 percent increase could result in dramatically higher costs.

Needs Analysis

One major challenge for TCO analysis is defining the organization’s actual requirements, both at initial install as well as in the future. If an organization anticipates growth, then the system must be capable of scaling up to accommodate that growth.

But what if the anticipated growth does not occur? With an on-premises solution, the organization will continue to pay for the capacity, even though it goes unused. With a cloud-based solution, by contrast, the organization can continue to pay only for the capacity it actually needs.

Similarly, if needs change and the volume of requirements are reduced, the core costs and ongoing amortization of the assets continue, regardless of use. This often includes the cost of unused or underutilized hardware and software resources in support and maintenance charges as well.

Yet another area is the level of services each user is to receive. While increasing the level of services for some users will often result in added capital costs, reducing the service level rarely results in savings.

Learn how Masergy’s Cloud Communications solutions enable organizations to transition to a modern communication environment with a rich set of collaboration features.

About Dean Manzoori

VP, Cloud Communications, Masergy
Dean Manzoori is Vice President of Product Management for UCaaS at Masergy Communications. He brings over 25 years of IT experience in a variety of roles including operational management, strategic planning and business development. Dean holds a BSEE from California State University, Long Beach with Great Distinction and an MBA from Pepperdine University.