UCaaS vs. on-premise UC debate comes down to TCO


From Fierce Enterprise Communications

An on-premise unified communications versus a cloud-based unified-communications-as-a-service offering. It may be an easy choice for some, but according to Todd Hagstrom, senior director of product management at Bandwidth, the entire decision really rests in the hands of total cost ownership.

For years, choices were mostly different flavors and brands of on-prem solutions, but with the proliferation of UCaaS offerings from both big and small cloud providers, enterprises can offload some of their in-house UC technical projects to the cloud.

Hagstrom made the case for UCaaS, particularly in greenfield deployments. And he makes a good point. When enterprises are faced a bare minimum $30,000 PBX and the associated maintenance and staffing costs associated with it, a per-seat UCaaS subscription starts to look pretty good. The time to get up and running is significantly reduced over an on-premise solution. And many of today’s UCaaS offerings are also equipped with full 911 emergency calling service and a much more affordable cost.

“It allows them to gain some nice efficiencies,” Hagstrom told FierceEnterpriseCommunications.

For enterprises with their own unified communications solutions already deployed, though, the shift may be a more difficult sell. Rip-and-replace efforts have never been popular, so a UCaaS offering only seems to make any sense at the end of the solution’s lifecycle.

But more importantly than the cost, an on-premise UC solution offers a level of integration still not found in the cloud world, Hagstrom said. Particularly when it comes to delivering communications-enabled business processes (CEBP), UC vendors are simply providing more and better offerings, mostly because their products can easily be integrated through the use of APIs.

The down side, of course, is the additional capital and operational expenses. At the same time, though, those additional expenses enable greater control over a cloud-based UC offering.

But when considering whether it’s time to deploy a UCaaS solution, here’s something to keep in mind. Growth within the enterprise has been slow. Hagstrom indicated that the public sector, particularly government departments and education with “cloud first” policies, are adopting UCaaS more frequently than enterprises.

There’s one figure that really shows how slow the growth of UCaaS is. Some industry experts indicate only three percent of business communications are delivered by cloud services. That’s a rather small figure.

However, UCaaS is growing. Some research firms expect the UCaaS market alone to be valued at $8 billion by 2018. By comparison, PBX shipments are declining.