The Economics of Cloud-Based Unified Communications

Here’s one for the bean counters: Are cloud-based unified communications (UC) solutions more cost-efficient than traditional on-premises systems?

As with most complex questions, the answer is, “It depends.” There are a number of factors that go into the analysis, many of which will be specific to a particular organization or implementation However, here are some general considerations.

Capital Expenses. One of the much-touted benefits of the cloud is that it allows you to minimize capital investments in on-premises infrastructure. A Unified-Communications-as-a-Service (UCaaS) solution may require some purchases of endpoint equipment, but most of the costs associated with the UC platform are encompassed in the monthly subscription. If you have an older on-premises system, or are struggling with a low-end phone service from a telco or ISP, UCaaS enables you to gain up-to-date communication and collaboration features without plunking down a ton of money.

Subscription Model. This is the flip side to the capital expense savings. The UC platform is never really paid for — the meter is running month after month. The solution will likely wind up costing more over the long haul than an on-premises system, especially if you add more users and features. That said, you won’t have a bunch of depreciating assets on the books, and you won’t be facing a forklift upgrade down the road.

IT Operational Costs. This may be more difficult to calculate but it’s an important part of the equation. UCaaS transfers much of the operational burden to the cloud provider, relieving in-house IT teams to focus on other tasks and initiatives. The savings here are most significant if your IT staff has limited knowledge of UC.

Rationalization of Existing Services. How much are you paying for communication and collaboration services? Odds are, more than you think. Many users will subscribe to cloud services with or without IT’s approval. A full-featured UCaaS platform allows you to eliminate that redundancy. It should also increase productivity since users have a more consistent solution that can be accessed throughout the organization.

End-User Adoption. What features and functionality do your end-users really need? It’s important to make that determination before you invest in a UCaaS solution. Otherwise you’ll be paying a monthly subscription for services that no one is using. You should also make sure that end-users recognize the value of the solution, and have adequate training in all relevant features.

Growth. If the UCaaS solution is successful, you should be prepared for some growing pains. For example, increased use of video conferencing could mean network upgrades and additional investments in video endpoints. Or, if users are accessing UC features through their mobile devices, you may need to beef up your Wi-Fi network and invest in a mobile device management solution. This can be difficult to predict but should be considered so there are no surprises.

This is hardly an exhaustive list, but it offers a starting point for analysis. IPC’s consultants can also help you weigh the pros and cons of a cloud versus onsite platform, and architect the right solution to meet your business needs and budget.