November 27, 2013

Barriers to UC Cloud Success, Part 1

According to the press and pundits, cloud and hosted Unified Communications and collaboration (UC) service is very attractive and gaining subscribers rapidly. Cloud UC has the benefits of bill consolidation, little or no capital expense, increased OPEX savings, and a single point of contact for one monthly fee. As with any IT/ communications implementation, there will be problems and issues that are not apparent to the enterprise. 

This is the first of two TechNotes dealing with non-technical issues when subscribing to UC cloud services. The first TechNote focuses on the business case for the UC cloud service and the terms of the cloud service agreement. The second TechNote focuses on protecting data, emergency services, and telecom regulations.

The Business Case, Unexpected Expenses

Developing a business case always has the potential that some expense will be overlooked or left out on purpose (to help justify the UC cloud decision). The migration to a UC cloud service can be a new experience for the IT staff. If the IT staff already has some other cloud services implemented, then there is less chance that there will surprise expenses. If however the use of cloud services is new to the IT staff, then a number of initial costs need to be calculated and included in the business case. 

Even before the decision to use UC cloud services, the enterprise has to perform a needs assessment, plus site surveys, and system design. Most UC cloud services support a limited number of IP phones. Does the enterprise have to procure new or upgraded endpoints (phones, PCs, headsets) to take advantage of the UC features? The endpoints will be connected over the enterprise LAN. Are there any upgrades costs associated with the UC endpoints that are required for LAN support? 

Most UC cloud services are sold through VARs. These VARs may have to perform some work to finish the UC cloud implementation. It is desirable that the enterprise be able to implement the UC cloud without support. Investigate several UC cloud services to determine if third party support with its associated cost needs to be included in the business case.

Assume that an existing PBX or service like CENTREX already exists at the enterprise. There will a period of time that the existing legacy environments need to be available during the implementation of the UC cloud service. It is too dangerous to shut down the legacy communications on the day the UC cloud service starts. There should be a phased in approach to the UC cloud service. The legacy environment should be available as a backup in anticipation that the UC service may not be completely successful. This will cause the enterprise to pay for the legacy environment for 30 to 60 days while cutting over the cloud service. This cost must be part of the business case.

Finally, there may be one-time costs for assigning IT staff to the UC cloud implementation. There will also be training costs, most likely train the trainer classes for the IT staff and for the help desk personnel. The enterprise may have purchase or publish their own documentation, either in paper or electronic form, for the ultimate end users. A legal counsel review of the cloud service agreement may be necessary to ensure that the enterprise receives a fair balanced service agreement.

The Business Case, Recurring Expenses

The business case has to also cover recurring costs like:
  • The cloud service itself which is based on the number of users and the services they consume
  • Management of the UC cloud service if it is performed by a third party and not by the IT staff
  • WAN  access upgrades for the connection(s) and the increased bandwidth that will be consumed
  • Probably SIP trunk services
  • Loss of discounts/ cost increases/ shortfall charges on existing communications arrangements that are modified or eliminated by the move to the UC cloud service
The cost of recurring expenses should be predictable and fixed for at least three years. If these costs cannot be predicted, then that weakens the business case because it is more likely these costs will increase rather than decrease in the future.

Cloud Service Agreement

Cloud service removes most of the CAPEX from the enterprise. The cloud service provider now incurs the CAPEX. Many enterprises are trying to become asset light. This leads the cloud service provider to push for longer contracts, 3 or more years for the provider to recoup their costs. The penalty for the enterprise may be that the service agreement has many inflexible terms included in the agreement. UC is made up of many features and functions. What if:
  • The selected features and functions selected by IT are not what end up being used? 
  • The selected feature and function mix changes, either increased or decreased?
  • The enterprise has a reduction in force, is acquired, or experiences a business downturn leading to fewer users and possibly the elimination of some features and functions? Will this affect discounts producing a higher per user cost for the service?
  • The technologies offered do not meet the enterprise needs as the enterprise matures in its use of UC?
These questions go to the heart of the contract terms and their flexibility. Inflexible agreements will not allow the enterprise to evolve in its use of UC as it responds to business pressures and market changes.

The enterprise is also looking for price predictability and stability. The service provider should offer a service catalog with clear pricing components. Some agreements appear to be written to cause the most confusion with the legal language too complex to fully appreciate the terms and conditions. Have the agreement reviewed by legal counsel. Remember, cloud providers write the agreements for their benefit, not yours. The enterprise should pre-negotiate the rates and their overall structure before embarking on the cloud service. 

1 Comment

Business communications are no longer just about person-to-person telephony, but include all forms of asynchronous messaging capabilities and notifications from automated business process applications (CEBP).

This shift from real-time person-to-person telephony connections will be especially practical for mobile users with smartphones and tablets, and will increasingly involve UC-enabled self-service online "mobile apps" that will be "cloud" based, and allow contextual, presence-based, "click-to-contact" options from within the applications (e.g.,WebRTC), rather than initiating a legacy PSTN phone call.

So, there will be more responsibilities for the cloud service providers to support those customized, UC-enabled mobile apps that may be developed and maintained by third-party expertise on an ongoing basis. Add that consideration to the challenge of moving UC to the "clouds."

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