Round Table: Only 15% of Unified Communications is in the Cloud, correct?
We asked a variety of experts for their statistics and opinions around cloud service uptake within Unified Communications
Proliferation of cloud services is on the rise but within Unified Communication the uptake seems slower. Recently published data indicates only 15% of Unified Communication platforms are based in the cloud currently. We spoke to a Vendor, service provider and an analyst to get their opinion on the current cloud map within UC and how this might develop over the next 12 months.
In today’s panel:
Khalid Khan – Director for Cloud & Midmarket Segment at Avaya
Khalid has been responsible for launching and developing Avaya‘s cloud strategy for over three years and has ensured new partnerships with over 100 new cloud partners and wholesalers. Previously marketing and Business Development Manager at 3Com, responsible for marketing programmes, events and promotions, Khalid has over 15 years communication industry experience.
Tim Gelardi – Senior Industry Analyst at MZA
Tim Gelardi has led MZA’s UC Applications analysis for the past four years having previously worked on a number of MZA research areas including communications platforms, devices and mobility solutions. Tim is responsible for formulating MZA’s forecasts for adoption of cloud UC solutions which involves him interacting with many of the leading solution providers and service providers across the globe. Tim continues to take an active role in MZA’s hosted/cloud telephony analysis service and its range of broader business communications research. Tim joined MZA 11 years ago having completed a BA hons degree in Business Economics and spending a short period in Italy teaching Italian business students.
Nick Seagrave – Chief Technology Officer at Modality Systems
Nick is Chief Technology Officer for Modality Systems, responsible for helping organisations translate and understand the potential value of communications & collaboration technology. With a wealth of experience in the IT industry, specifically focussing on enterprise communications, Nick is very aware of the need by businesses to realise the value of their technology investments.
With over 20 years’ experience, Nick is an industry-recognised expert, having worked at Modality Systems since its formation, Nick has played a pivotal role in working on some of Microsoft’s biggest projects and technology rollouts, including OCS, Skype for Business and more latterly Microsoft Teams.
Do you concur with the estimate of 15%?
Khalid Khan told us the figure is roughly in line with Avaya’s data.
“The 15% figure is consistent with adoption we have seen in the market to date – but that percentage is changing rapidly. Some market research agencies estimate the percentage of cloud-based UC solutions will be about 50% by 2020”
Tim Gelardi tells us that their research shows the uptake figure might be even lower than that.
“From our research findings I’d say that 15% is a little on the high side as a global average which is closer to 13% of the total installed base utilising cloud services. It varies a lot depending on the country and size segment that you’re looking at, but overall on-premise solutions still have a very strong position in some very large markets”
There are a number of potential reasons behind the limited uptake of cloud UC services and Nick Seagrave explained that UC deployment in the cloud is trailing behind uptake in other areas such as IT provision.
“We have seen a big uptake in cloud services across IT. Email is usually the first service to move. UC can be harder to move completely as a workload, but it certainly feels that the aspiration of most organisations is towards cloud services.”
To what degree did cloud shipments increase 2016 versus 2017?
With current level of UC services based in the cloud appearing to be relatively low you would expect more rapid growth in 2018. To try and anticipate what that growth might be that we asked by what degree the cloud market expanded from 2016 to 2017.
MZA’s Tim explains that more time is required to fully gather the data to enable accurate feedback.
“We’re still collating the data for 2017, but MZA’s expectation is an increase of just over 20% in terms of the installed base user volume when looking at all of the cloud technologies combined.”
As a current service provider on the front line Modality Systems have full visualisation of their own cloud sales.
“We have seen cloud deployments double year-on-year, and demand is continuing, particularly driven by cloud native services like Microsoft Teams. We are observing more customers accepting the cloud for their communications and collaboration requirements”
Avaya, after enduring a turbulent 2017, are recognising the shifting market and the greater demand for cloud communication services so have readjusted their focus. They have modified their proposals and solutions and are increasing focus on their partners to engage with cloud customers.
“The Avaya ecosystem has “changed gears” to be ready for cloud. In our fiscal 2017, we had a clear focus on onboarding channel partners across all regions, training our teams and equipping our partners with the right tools and methodologies to go out and sell in the new year. In the second half of 2017, we got a good number of partners fully enabled and ready to sell. It takes time to get the partners up to speed in terms of getting their back-end systems set up, their data centre strategy ready and many other things.”
“Now that we have partners ready, we are picking up speed rapidly. “
There are however some barriers to further cloud uptake, Nick Seagrave explains
“For those businesses who are governed by strict legal and regulatory legislation, call recording is an ever-present pre-requisite that is challenging for cloud services to fulfil. In these scenarios, there is still a need for some or all users to remain on-premises in these cases.”
Are you expecting another increase this year, if so by what extent?
It seems that cloud services are future within all aspects of technology but surprisingly growth might not be accelerated as much as expected as Tim Gelardi explained.
“Yes, we’re expecting the overall cloud user installed base to increase at a similar, if slightly lower, rate for 2018 as we see in 2017. The acceptance of cloud as a delivery model for unified communications continues to grow across the board, and there are a lot of large service providers starting to ramp up their offerings, but on the flip side the market is starting to mature in some markets, and there’s a lot of choice, concern about reliability, security and quality, and confusion for the end user who often decides to stick with what they have for the time being.”
Avaya are one of those large providers who are upping their effort within the cloud market. Khalid expands on their cloud strategy going forward.
“This year will see Avaya accelerate its cloud efforts – we have a newly formed cloud business unit and we have just announced that we have agreed to acquire Spoken Communications, a critical step in developing our cloud business. Every product we develop going forward will be developed for the cloud first”
Nick Seagrave from Modality tells us how important communication is within organisations and that critical function might be slowing uptake of fully cloud based systems.
“For most of our customers, and I believe this is true of the industry in general, conferencing remains the lifeblood for internal and external use. Many businesses nowadays have remote workforces and cross-geographical colleagues and customers.”
“With such importance placed on the overall user experience, some businesses are not yet prepared to go down a full cloud-based deployment of their UC needs.”
It seems strange that uptake of cloud services within Unified Communications seems to be behind other technology areas such as IT. However there appear to be a number of critical factors behind this. Communication platforms, both internal and external, are such a critical business function that it appears less businesses are inclined to take the risk and place them in the cloud. It seems most organisations still feel more secure with their critical business function being managed in-house.
It seems that as cloud services grow within other areas of technology a bigger proportion of organisation will want to explore the benefits of UC in the cloud, more transparent operating costs and greater flexibility in terms of service provision and size.
So although uptake of cloud services for Unified Communications appears to be low and whilst the growth also may be slower than expected it’s clear that cloud UC will play a crucial role for businesses in the future.