This article was originally published by Telecom Reseller.
Enterprises wanting to migrate their communications and contact centers to the cloud are more excited than ever, thanks to hybrid cloud approaches that put some functions in the cloud while others continue to operate on existing on-premises infrastructure. These SIP-trunking-powered solutions make it easier to justify investments in unified communications as a service technologies, but how should IT leaders evaluate the cost-benefit of hybrid cloud deployments? When you need to present tangible financial benefits to C-level executives for approval, consider these cost factors and tips to improve your return on investment (ROI).
Gartner defines “Unified communications as a service as supporting the same functions as its premises-based unified communications counterpart” as quoted in “Our Rundown of Gartner’s 2018 UCaaS Magic Quadrant.”
The unified communications (UC) industry and enterprises are moving to the cloud. While 50 percent of unified communications implementations in 2018 were premise-based, that is rapidly changing as many of these solutions will be phased out, replaced by cloud-delivered UCaaS and CCaaS. Gartner predicts that “by 2021, 90% of IT leaders will not purchase any new premises-based UC infrastructure.” Gartner also predicts that 90% of UC purchases in 2021 will be cloud-based UCaaS.”
SIP-based solutions are experiencing big upticks. The Eastern Management Group’s report, 2018-2024 SIP Global Market 7-Year Forecast and Analysis, states that SIP-based products and services are growing faster than IT spending in every world region. SIP trunking has gone beyond just PSTN connections. It is very popular for access to cloud-based communications services like UCaaS and CCaaS. Why? It is cheaper, more resilient, and flexible. (You buy only the sessions you need–unlike a T1 or PRI connection). Hybrid approaches offer the best of both worlds. You select what works on-premises and what works best in the UCaaS cloud. This is a balance of capabilities without a rip-and-replace scenario.
SIP trunking is also cost-effective. The blog “SIP Forecast Through 2024: Good News for Vendors, Customers” states “SIP trunking is widely available and far less expensive than the PSTN.” After a study, the article states that in some cases, the cost of PSTN can be as much as 2.6 times more expensive than SIP. The blog also mentioned that there are 33+ major competitive providers of SIP trunks.
Implementation complexities, as well as differences in features and services, can impact ROI. Not all SIP trunk services are the same. Do not just compare them on price. The features vary. It is also true that 4 out 5 SIP trunk implementations encounter one or more problems. (Learn more about common SIP trunking pitfalls and resolutions in this white paper.) Implementation problems reduce the ROI and increase the Total Cost of Ownership (TCO).
A cloud communications approach does not have to be an all-or-nothing implementation. Hybrid cloud solutions offer the advantage of the already owned on-premises infrastructure married with cloud services. A hybrid approach allows gradual, phased-in cloud migration that helps maximize investments in existing on-premises infrastructure. The blog “Cloud vs. Hybrid: What’s Best for Your UC?” has a good review of this question.
Ripping and replacing existing communications technology is not the best strategy for unified communications because of both cost and risk.
The key benefit is a phased approach–as on-premises systems are retired, the UC functions can be moved to the cloud in an orderly fashion. Other benefits include:
Not every organization will adopt UCaaS. Some have significant investments in legacy technology that has not yet reached end-of-life. Until the financial write off, executives cannot justify the complete migration to the cloud. Some enterprises are concerned about security and privacy issues, while others require custom capabilities that cloud services may not yet offer.
As time progresses and technologies mature, cloud services will become more in line with these enterprise requirements. The economics of the cloud are too attractive to ignore forever. Many pundits predict that cloud services will eventually dominate and trigger a retirement of on-premises systems. Consider that in January 2019, Gartner announced its retirement of the Magic Quadrant for premises-based unified communications and on-prem contact center infrastructure.
Read the second blog in this series, “UCaaS + SIP Trunking for Positive ROI Part 2: A Cost Analysis of Hybrid Cloud Deployments.”