Cisco Delivers UC to SMBs via Hybrid Cloud and Premise Packaging

14 Nov 2011

On November 2, Cisco announced Cisco® Business Edition 6000 and Cisco Business Edition 3000. Normally, I don't write about Small and Mid-sized Business (SMB) solutions, but this caught my attention for multiple reasons, since this announcement sends several very important messages to the market.

Hybrid Cloud UC: First, this move simplifies UC delivery to small businesses by "integrating" cloud-based UC functionality with an on-premise server supporting IP telephones with point-to-point video displays. Users of the on-premise server get their Presence and Instant Messaging (IM) not from a separate on-premise server but from the Cisco Jabber service in the cloud. Web conferencing for meetings with voice, video and desktop sharing come from the Cisco WebEx service. In parallel, SMB organizations can also use the recently announced cloud-based Cisco Telepresence® for small and medium-sized business. Cisco has already been proposing integration of WebEx services with Cisco Unified Communications Manager for larger enterprises, but this Cisco Business Edition move puts all of the UC functions in the cloud while leaving voice and video telephony on the premise where customers and resellers are used to seeing it installed.

Low Base System Price: Cisco seems to be offering a new, low entry price in the SMB marketplace. The press release says, "Pricing for the Cisco Business Edition 3000 starts at $100 for a 100-user system." While 100 users is a somewhat larger configuration than needed by most small businesses, the $100 per user will certainly get some attention. Yet, that seems to be just the attention-getter. The SMB will still need to buy an appropriate IP phone, whether an inexpensive single line option or more pricey Cisco Unified IP Phones 8941 and 8945 which include video cameras and displays for video calling between those device on the Business Edition system. In addition, SMBs will need the appropriate licenses for Jabber and WebEx. So, the Cisco Business Edition will get some attention, but may not change the industry average price per seat by much when finally installed.

New Name: This announcement is very interesting because neither "communications" nor "unified communications" are used in the name. The prior version was known as the Cisco Unified Communications Manager Business Edition. What does this mean? Could it be that Cisco believes their brand is so strong they don't even need to use the word communication? Is there a new verb out there, as in, "Hey, can you Cisco me tomorrow morning?" Probably not. While the reseller won't care, this may be a search engine challenge for some SMB buyers. But if this works for Cisco, it may signal an interesting shift in the business "communications" market.

In the end, the big deal here is the hybrid-cloud approach. Perhaps it makes sense that the advanced UC services will prosper in the cloud, so that SMB and large enterprises don't have to manage those elements and so that resellers don't have to get certified for every new service. An appliance on the customer premise is used to register and manage the SIP devices (desktop IP Phones) and other local functions such as fax machines, alarm systems, attendant consoles, or E-911 services, but all the communications to PCs, tablets, and mobile smart phones can come out of the cloud.

In addition, the cloud-based service can provide some of the natural inter-enterprise and social networking functions that SMBs as well as large enterprises want and need. For example, if the cloud service can "federate" with other businesses and with consumers either on that same cloud service or by linking to other clouds, the individual SMB will not have to manage that function. And, as cloud federation becomes increasingly popular, it will save the SMB or enterprise a lot of money in SIP trunks and long distance charges. Just look at the success of Skype to see how this might work.

If this hybrid UC model becomes the "sweet spot" in the industry, it could really tilt the UC and enterprise telephony playing field. Companies such as Cisco (WebEx, Jabber, and hosted Telepresence), Microsoft (Office 365, Lync Online, Microsoft Live and Skype), IBM (Lotus Live), and Google (Google Docs, Google +) are well positioned if the market shifts towards hybrid cloud configurations.

Other providers of communication solutions (aka IP PBXs) to both SMB and Enterprise segments may find they are in a big hurry to partner with established hosted UC providers. That will loop right back to the prior list. While there are many carriers/cloud providers hosting IP telephony based on Broadsoft or Cisco Hosted Unified Communications, few of the major players are providing cloud-based versions of UC functions separate from the IP PBX. Of those hosting unified communication suites, a significant number are hosting Microsoft Office Communications Server or Lync. Some providers, such as Esnatech, are integrating their premise systems with Google Apps.

Meanwhile, the pure-cloud options continue to mature. Many SMBs may find their operations can work well and without capital outlays by using existing and emerging pure-cloud options such as Fonality, CallTower, NextUC, 8x8, Office 365 (esp. when telephony connections are added next year), and many others.

Well, that's a lot to say based just on the announcement of Cisco Business Edition, but when a market leader such as Cisco moves toward the cloud in such a specific and significant way, it's worth attention.