The uCaaS Cloud: It's Definitely Getting Cloudier

By Stephen Leaden
1 Jun 2014

Introduction

What a difference 18 months makes! Our firm has been involved with several clients either moving to the UC cloud, a.k.a. uCaaS, or have an interest considering uCaaS as an option. These are all private cloud opportunities with dedicated servers/cores for the client, not to be shared with any other customers. Client end points range from 3,000 end points to over 20,000 end points. We wrote each RFP for either a private cloud solution or a capital, premise based solution. All clients have been seeking a replacement to a TDM or VoIP Telephony environment to a fully integrated UC platform including all Telephony, Contact Center(s), and all Unified Communications components.

In the Last 18 Months...

In the last 18 months we (myself and my team) have seen significant changes in the responses from the channel partners and the manufacturers who are offering a uCaaS cloud solution. The table below shows the trends, in my team's experience with channel partners' responses to RFP components:

Description

18 Months Ago

Today

Managed, Cloud

Mostly Managed, Cloud Rare

Mostly Cloud

UC Integration

Some

All

Robust Contact Center

Managed

Managed and CaaS

SIP Trunking Included

Yes

Yes

Ability to offer WAN add-on

All

All

Ability to offer without WAN add-on

Some

All

Private (vs. public) Cloud offered

Some

All

Audio Conferencing

Some

All

Emergency Notification

Some

All

E911 Integration

Some

All

NOC Solution

Some

All

Within this short 18-month period, we have seen real progress in the maturity and completeness offered with a uCaaS cloud solution, as the above table shows. Channel partners are offering a LOT more than just basic Telephony as a possible replacement, including a full UC suite, integration to Microsoft Exchange, Google Apps, and more. E911 is now recognized as a critical part of a cloud delivery model. Vendors have begun to accept that en entire replacement of the WAN concurrent with a full UC replacement is an ideal opportunity but less than more, and therefore are now offering a cloud connected to a current WAN with QoS evenwith SLAs. Vendors have been able to provide cloud-based NOC services, and offer data-center centric cloud models in secure hardened data center rack spaces. In each RFP we have seen clearer answers provided by each vendor to cloud-based questions relative to delivery, financial structure, SLAs, maintenance, and more.

We have also seen acceptance of the cloud as an alternative solution to a traditional capital premise-based on the end-user side. All of our clients in the last 18 months have asked for a managed or cloud option in the RFP we prepared for them. What a difference only 18 months makes in the private cloud sector!

 

Industry Groups Can Make a Difference

We have also seen specific industries embrace the cloud with others resisting the cloud to date. Those industries embracing the cloud as an option have included municipalities, manufacturing, and publishing among others. We have also seen resistance to a private uCaaS solution in Healthcare, Financial Services, and some K-12/higher education. The big reasons, in my opinion, include:

  • Security - Healthcare and Financial Services are required to adhere to HIPAA rules and PCI compliancy respectively. These rules are here to protect patient and client confidentialities and records. All uCaaS cloud offers must adhere to the same confidentialities if cloud is to be "accepted" in these industry groups.

    I also highly encourage, in today's IP-centric environment, end-to-end encryption from the cores to the end points, in order to provide secure communications within the environment (private network) and over the "public Internet" as well.
  • Control - Healthcare providers deal with life critical issues as a core competency while financial services providers must deal with finance and critical uptime. Both groups must adhere to five 9s, even six 9s models for redundancy, resiliency, and Disaster Recovery/DR, and there are rare occurrences that this level of reliability and feature/functionality is available in an equivalent cloud solution. Cloud providers must show that their model meets or exceeds these SLAs.
  • Trust and Knowledge - related to control above, Real Time Communications is just that, real time, and the "jury is out" with these verticals that cloud providers can offer the same level of reliability and delivery they are accustomed to. Specific to Healthcare, a 24x7 environment is required, which requires an even higher level of trust. Cloud providers must show again that they can meet or exceed the high reliability these verticals expect because of the critical nature of communications, and they must prove that they can offer such both and short term with measureable metrics, show that they can provide the services these verticals expect for mission-critical communications.

uCaaS Cloud partner who have been smart about the cloud to date have:

  • Created specialized teams for cloud and managed solutions, even departments
  • Recognized the residual opportunity vs. up front profits from the sales of a capital based solution, taking a longer range revenue view of what the cloud can offer the partner as well as the end user
  • Sought to deliver on SBCs and associated SIP trunking
  • Engaged carrier partners to sell WAN and SIP trunking services as a part of their solution and organized mutual SLAs for QoS and delivery models
  • Received a "wake up" that, as one channel partner put it, "I saw the cloud coming, and the cloud was one area that kept me up at night," as the cloud solution was going to displace at least 40% of their staff
  • Expanded into data hardware sales, services, and specialization and certification
  • Expanded into NOC, emergency notification, and video conferencing services.

 

A Key Moment in Time

This is a key moment in time for the channel and end user alike for uCaaS. The channel must be prepared to offer comprehensive cloud solutions, while the end user has come to accept the cloud as an alternative to a traditional capital premise-based solution.

For the end user, the cloud opportunity may be an option to "explore" what a cloud solution can offer them, including advantages such as a short ramp-up timeline, ability to expand and contract based on the number of end points supported can increase or decrease without penalty, and managing internally a complex technology suite that they may not have the staff to support.

For the channel, if you have not begun to embrace the cloud as a solution, you are already behind. Without a cloud offering you will eventually lose to the growth market ignored and you could even eventually die by ignoring this industry trend.

Yes, this is an industry disruptor, just like VoIP was 8-10 years ago. Some of those who did not adapt to VoIP "died in battle." The cloud is the next wave and could have a similar effect, if ignored. For the channel partner, consider this as a key message to embrace the UC cloud, uCaaS, as a strategic discipline and practice.

Conclusion

For the end user, I recommend including a cloud option when going out for bid and include this option in your RFP. Some of the vendors may surprise you, and offer you options well worth your consideration.

And for the channel partner, the uCaaS cloud is here and should be a core part of every channel partner's go-to-market strategy. Your very existence short and long term may depend on it.