It’s easy to see why service providers might balk at the idea of migrating to a cloud network.
After all, plenty of blood, sweat, and tears probably went into their last migration and building an infrastructure that is still functional and doing a solid job for their customers.
But, not moving to the cloud now is risky for service providers, according to Senior Director of Customer Enablement, Elizabeth Jaeger from Alianza.
Lurking beneath the surface is a host of hidden costs many providers do not associate with the price of implementing and maintaining a legacy network. And these costs will often dwarf those associated with cloud migration.
“Operating or building your own network is like an iceberg in that there are a significant number of hidden costs beneath the surface,” Jaeger said.
“The most obvious, visible costs — like vendor hardware maintenance, session border controllers, and other voice network expenses like caller name ID, signaling system No. 7, and local number portability — are only the tip of the iceberg.”
Alianza claims that just 30 percent of legacy network cost is visible to service providers. The remaining 70 percent is a plethora of other expenditures that are often not baked into the total price; areas such as sales and marketing support, unplanned disruption, hardware replacements, maintenance, and E911 infrastructure.
When all of these costs are considered, dragging out the life of a legacy network typically overtakes the cost of migrating.
“You might think that a network transformation will be too complex or capital-intensive,” Jaeger said.
“In reality, delaying the transition from a legacy switch system to a cloud communications platform could be costing your business more than you know.”
CAPEX and OPEX
Alianza splits the cost of legacy networks into two categories: capital expenditure (CAPEX) and operational expenditure (OPEX). Both of these areas can silently add to the hidden costs of a legacy infrastructure throughout its life.
From a CAPEX perspective, the replacement of legacy hardware can really hurt service providers. There is a temptation to continue paying for replacement parts to keep a network running, but this cost also needs to be added to what providers consider the total cost of their infrastructure. Hardware will only fail more frequently as it ages, and, as parts reach end-of-life, buying replacements will become more complex and costly.
“Service providers can kick the can down the road by replacing hardware with hardware, but they will face the same challenges and capital expenditure for replacement in another five to seven years,” Jaeger said.
“In addition, taking into consideration time and value for money — a dollar today being worth more than a dollar tomorrow — service providers can avoid large CAPEX expenditures by moving to the cloud.
“Doing so, they can invest capital in more strategic projects, like growing their broadband network, rather than an aging switch infrastructure.”
From an OPEX perspective, the most significant hidden cost centers on employees. Legacy networks have been built and maintained by skilled personnel, but as these networks age, so do the workers. Staying on legacy infrastructure will inevitably mean either paying these staff members more money to keep them on or training new staff in a technology that will eventually become obsolete and won’t further their careers. Both options will add further to the cost of this network.
Ultimately, Jaeger says, the cost of moving to the cloud will end up being substantially lower than the cost of propping up legacy technology for another decade. Moving to a cloud network such as Alianza’s takes responsibility for deployment and maintenance away from service providers, shedding some of the most costly elements associated with legacy networks.
“Making the move to a cloud-based voice solution isn’t really a matter of if but when,” she said.
“So why waste more of your time and resources maintaining a legacy voice system when you could be allocating more of your budget to moving your organization forward?”
