How to choose an SMB Unified Communications as a Service (UCaaS) solution

The on-premise deployment of Unified Communications (UC) continues to be a source of considerable corporate angst especially for the Small to Medium Business (SMB) sector.

The only alternative is to treat UC as a ubiquitous utility deploying it as a service from Australia’s dominant telecommunications providers or major vendors.

First generation offerings are lacking in support but as major vendors expand their client/server UC into Cloud-delivered versions, Unified Communications as a Service (UCaaS) has become sufficiently attractive in price and performance.

IT research firm Gartner believes UCaaS will be adopted as an adjunct service by large enterprises and as a core service by SMBs before 2015.

To help SMBs choose the best offering and develop a suitable roadmap Computerworld has prepared this special feature profiling the major offerings in the Australian market.

The two most prominent offerings in Australia are the Telstra/Microsoft Office 365 service and the SingTel-Optus-AlphaWest solution which provides a Cisco hosted collaboration service as well as an OfficeApps Portfolio using Google.

What is shaping the UC market in Australia?

Gartner analyst, Geoff Johnson, said UCaaS is about to become a stimulus for overall UC market growth in Asia, especially as major trusted brand name vendors are deploying this service. Johnson said SMBs clearly prefer UCaaS to an on-premise solution because it is easy to use and source.

He said few enterprises have actually thought through a considered UC strategy, plan or road map, and are merely upgrading UC components such as messaging, conferencing or telephony on an ad-hoc basis or when consolidating/virtualising UC into a data centre.

“Sound practices such as proactively determining a standard operating environment (SOE) specification or road map for integrating any disparate communications investments as UC or UCaaS are typically absent,” Johnson said. Despite this poor state of planning the competitive dynamics for UCaaS in Asia is beginning to take shape.

Johnson said UCaaS adoption today is dominated by Microsoft and Cisco and their channel partners. He said IBM Sametime has modest traction as a UCC suite and can be hosted while LotusLive delivers a business, social networking, and collaboration Cloud.

UC infrastructure suppliers Cisco, Avaya, Alcatel-Lucent, NEC, and Siemens also have their own UCC suites, followed by Mitel, ShoreTel, Aspect, Interactive Intelligence, Aastra, and Digium.

How are the major offerings shaping up?

In Australia Telstra has an exclusive distribution arrangement for Microsoft Office 365 based on longstanding hosting operations. Buyers of Office 365 that have a Microsoft Enterprise Agreement (EA) can buy directly from the software giant.

However, the rest of the market is obliged to buy through Telstra’s T-Suite portal in bundles at prices at least 23 per cent higher.

“Telstra’s strategy for UCaaS is not as complete as SingTel’s strategy in Singapore, where it sells Google Apps as a Cloud service principally to SMBs,” Johnson said.

“Office 365 is offered by Microsoft from data centres in multiple locations around the world. At this stage, Office 365 delivery in Asia Pacific countries is only from its Singapore and Hong Kong data centres.

“Cisco’s Hosted Collaboration Service (HCS) from the Cloud is aligned with the SingTel subsidiary Optus in Australia via its system integration arm Alphawest.”

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Johnson said the delivery mechanism for these services does create issues for telecommunications providers. In Asia, Microsoft promotes its advantages in delivering from a single large data centre.

It partners with dominant telco’s and channel partners in each country of operation. It’s Singapore UCaaS capacity is dimensioned for a minimum 500,000 users.

“This obliges all but the largest telecommunications providers to avoid launching competitive products because of this effectively high barrier to entry,” Johnson said.

“Users that require certainty of data hosting within their geographic jurisdiction will have a major issue in evaluating Office 365 while it is hosted from Singapore. Government agencies in any country are unlikely to sanction the hosting of sensitive data, including email or messaging, offshore.”

What about the UCaaS value proposition?

Many enterprise users complain about the cost of UC licenses when they need to multiply the unit-licensed seat cost by a large number (typically more than 250 users).

While UCaaS services appear to be significantly less expensive than internally provided UC, Johnson said that advantage can diminish significantly for full support packages.

Early adopters are favouring the use of a single-vendor solution rather than best of breed, he said.

Despite the Cloud nature of Office 365 users will pay different prices for it depending on where they are located. On Microsoft’s US web site a small business package is listed as $6 per user per month in Singapore, $7.90 in Australia and $7.20 in New Zealand.

“Exchange rates, customs duties and local taxes do not change this picture much. Network latency means most users will not want to operate their Asia Pacific UCaaS from US data centres,” Johnson said.

Hosted solution providers are operating with very low margins so pricing is competitive but users should evaluate whether they prefer operating expenditure (opex) rather than capital expenditure (capex) in their sourcing.

UCaaS Shopping Checklist

Gartner advises organisations to ensure pricing options and offshore hosting/privacy issues are adequately addressed for their business context.

Plus there is the usual raft of cloud Software as a Service (SaaS) delivery issues which apply to UCaaS. They include security, reliability, latency, performance, support, and consistency across geographies.

If adopting a Microsoft UCaaS Gartner advises doing it progressively starting with IM, email, voice, video or Web conferencing and finally, telephony. However, for vendor UC solutions begin with telephony.

Finally, the role for UCaaS as a hybrid on-premises/cloud solution or directly from public or private clouds should be considered for each communication component (mobile, fixed voice, messaging and conferencing) as well as popular UCC suites.