Is Hosted UC Really the Way to Go?
It’s time to get beyond the hype of cloud communications services and get under the covers on guarantees for delivery and performance.
Is the hosted UC cloud really the way to go? In a two-word answer, “It depends.”
I’m writing this post based on my personal experience with hosted UC solutions and presenting a slightly different perspective beyond the hype of the UC cloud. Personally, I think the cloud industry players are overselling the OpEx cloud model, as compared with the level of maturity expected in a premises-based model.
Key cloud characteristics include:
Faster deployment times
An organization’s intentional desire to move to an OpEx model
The need or desire to remove the telecom ”headache” from a management perspective
The continuing increase in complexity of newer technologies attached to UC, including workstream communications, the Internet of Things (IoT), blockchain, artificial intelligence (AI), communications platform as a service (CPaaS), biometrics, 5G, software-defined WAN (SD-WAN), and more
Some reduction of staff requirements is expected (but in my experience not as much as one would think)
Some technologies that we've been discussing forever are now going mainstream. These include video conferencing, omnichannel contact centers, mobility, UC APIs, and of course the UCaaS and CCaaS hosted solutions.
Hype Cycle Stage
From my perspective, we’re still in the hype cycle of the UC and contact center cloud. Yes, many applications, such as Salesforce and Microsoft 365, have already moved to the cloud successfully. These applications don’t require the real-time characteristics of UC and the contact center. Solid quality-of-service (QoS) -- meaning minimal jitter, delay/latency, and packet loss -- is a necessary requirement for a great UC and contact center experience. In addition, the traditional five nines (99.999%) uptime model (meaning five minutes of outage annually, or essentially always on) is also a requirement. Several CIOs that we work for have wanted to remove the telecom headache that plagues them, as UC technologies are the most sensitized to various network dips and possible network anomalies.
According to Zeus Kerravala, of ZK Research, UCaaS sales already are far greater than premises sales, but the on-premises installed base is so much larger than the cloud base. But Zeus said he expects the installed base to be more than 50% cloud seats vs. on-prem seats by 2023. Whether this shift will be driven by the hype of the last few years or a real need for enterprises to move to the cloud is a matter of debate.
Reliability and TCO
No matter how many applications move toward a cloud solution, call quality and uptime will always vary by provider.
To date in my experience with clients, cloud reliability isn’t quite on par with a premises-based model. In the world of digital telephony, enterprises historically took a five-nines reliability model for granted -- it was a communications rite of passage and requirement. VoIP then lowered that bar slightly to four nines, with the introduction of network dependencies and network redundancy required to get to that five-nines model. Over time, VoIP has moved to a five-nines model, and therefore the expectations for five nines continues.
I haven’t seen cloud telephony meet the reliability of a five-nines model or deliver on QoS consistent with a premises-based system. Case in point, downdetector.com, which tracks cloud uptimes, indicated that in first-quarter 2018 outages for a national UCaaS provider equated to more than 10 hours per year. That’s below three nines (99.9%) availability, the equivalent of a single circuit with no redundancy. In my experience, a three-nines model is the baseline for circuit delivery and not for real-time communications applications reliability.
Another case in point, our firm uses one of the national cloud providers, and in the last 12 months outages have exceeded 15 hours (99.8%) -- and the problems weren’t on our network. This again is well below three-nines availability -- far below the required reliability models enterprises are used to at five nines.
I’ve seen such poor performance lead to demotions or firings of those responsible for telecom and UC. At the very least, companies start to question their authority.
Some UCaaS providers now offer contract agreements that deliver on a five-nines model, as long as dual SD-WAN or MPLS connections go back to their data centers. These contractual penalties are just that, contractual, and don’t displace the design requirements for a five-nines model. While these providers are putting some skin in the game, generally speaking these penalties don’t have much teeth in them for non-performance.
Some UCaaS providers deliver on shared-resource platforms, others on virtual private platforms, and others still on a private-cloud hybrid approach, with redundancy within the data center only… geo-redundancy optional. With any cloud solution, our consulting practice recommends geo-redundancy; data centers should be separated by at least 500 to 1,000 miles.
And now the idea of customer experience, patient experience, and member experience is front and center; they’re the key buzz terms we're now socializing and hearing about from every organization with which we work. The need to get reliability and QoS comparable to that of a premises-based model is even more important than ever.
Yes, the UC cloud is here, but at what financial cost? Based on my work with clients, I’ve found that over seven years, the total cost of ownership for cloud compared to a new premises-based solution will be anywhere from 40% to 50% higher. And that variance can be as high as 100% in the case of upgrades and incentives offered by premises-based vendors.
Simplicity of the Cloud -- True?
And is the UCaaS cloud model really that much simpler when you look at all of the components required to deliver on a new UC implementation replacing legacy telephony infrastructure? Once deployed, the ongoing management of a UCaaS solution is less than that of a premises-based solution. For example:
Most UCaaS providers offer the full UC and contact center suite, something they were lacking just 24 months ago. Kudos to the UCaaS providers here.
For public cloud, the data center infrastructure is already built and therefore delivery and build time are improved.
For private cloud, the enterprise still needs to build out a geo-redundant virtual server environment.
For either the public or private model, providers offer the opportunity for change control windows without requiring any enterprise customer intervention. Most updates in this case are transparent to the customer without any change window for scheduled downtime. Some large updates or upgrades, depending on the vendor, do require downtime off-hours. In such cases, the provider will notify the customer of such an outage prior to the scheduled update/upgrade.
Let's take a look at specific variances between a hosted and a premises-based solution.
In the case of UCaaS, the provider is responsible for the following:
IP telephony, disaster recovery
UC, unified messaging (UM)
Remote workers
Mobility integration
Voice mail
Contact centers, contact center apps
Voice circuits, SIP trunking (some larger enterprises also deliver their own backups for PRIs and SIP in the event of a key site outage)
Network performance assessments (prior to go live) -- to ensure the network is ready for voice and video communications
Delivery of the endpoint only to the site, with no hands-on staff to implement and test, unless specifically requested
In the case of a premises system, the customer, vendor, or a combination of the two is responsible for the following:
IP telephony, disaster recovery
UC, UM
Remote workers
Mobility integration
Voice mail
Contact centers, contact center apps
Voice circuits, SIP trunking (some larger enterprises also deliver their own backups for PRIs and SIP in the event of a key site outage)
Network performance assessments (prior to go live) -- to ensure the network is ready for voice and video communications
Delivery and install of endpoints is the responsibility of the vendor, unless specified that the provider delivers on such
These lists are nearly identical, with the core applications and voice network delivery provided by the UCaaS provider in the hosted model. In either case, however, the customer is responsible for the following:
WAN, MPLS/SD-WAN
Dial plan
# change or keep
Closets
Interoperability between UCaaS and legacy PBX during migration to the new solution (especially larger enterprises)
Cabling
Switches, routers to support VoIP/UC/contact center
Network management tools, including QoS-based tools to measure call quality and mean opinion scores
Cloud Challenges for Larger Enterprises
Based on our experience, the areas that UCaaS vendors must address if they want to win over a larger enterprise include:
Trust, as IT is now giving up control to an outside provider, oftentimes with little to no history. UC providers deliver on an all-in-one, all-in solution. UCaaS vendors must show that they’re trusted partners, allowing customers to get under the covers and take a look at their networks, reliability, redundancy and even SLAs of their internal partners for SIP trunking, WAN, collaboration, contact center, and more
Higher costs -- as detailed above, the significant cost variance will give enterprise owners pause before migrating to a UCaaS solution
Five-nines reliability, through redundancy and QoS, guaranteed
Custom APIs -- some enterprises require customized reporting and integrations not found in cloud-based solutions (this is changing) and larger enterprises are seeking such
Complex IT environments, with integrations to third-party applications -- again, larger enterprises need flexibility to continue managing complex environments while migrating to a UCaaS solution
Security requirements -- with security breaches in the news causing some CEOs their livelihoods, security is a key requirement for larger enterprises, especially those that require PCI and HIPAA compliance. Note that many of the hosted providers now offer some level of PCI and HIPAA compliance; this needs to be addressed at deep levels with potential buyers that require such.
Summary and Conclusion
As you read this post, you may think that I’m anti-cloud, anti-UCaaS, anti-CCaaS. Far from it.
In my experience, a high-reliability QoS-based model is an absolute requirement for any enterprise organization delivering on real-time communications. Reliability simply cannot be compromised. I think most enterprise owners would agree. We currently use UCaaS in our own consulting practice for the flexibility and delivery; however, the reliability has been less than stellar, forcing us to use our mobile devices as the go-to tool for communications much of the time. I’m a fan of UCaaS and CCaaS, as long as the vendor commitments, reliability, delivery, and QoS are close to matching that of a premises-based system.
It’s time to get beyond the hype of UCaaS and CCaaS and get under the covers on guarantees for delivery and performance.
At Enterprise Connect, coming the week of March 18 to Orlando, Fla., I’ll be leading a session on Wednesday, March 20, at 4:00 to 4:45 p.m., titled, “Staying On-Prem: Maybe the Cloud’s Not Right for Me (Yet).” Come and learn about the requirements we’ve come to expect from a premises-based model, now required for UCaaS. I hope to see you then.
This article was originally published in No Jitter.
