Over the past couple of years, the telecommunications industry has been rife with pitches on the virtues of “cloud” and “collaboration!” Analysts and manufacturers alike continue to predict that the cloud, as a technology, will transform the information and communication technology (ICT) industry within the next few years. While this may evoke a sense of déjà vu to some from the client/server and Centrex days, the opportunity to evaluate and evolve organizations’ existing telecommunications environment to the collaboration as a service (CaaS) model is clear and present!
Cloud-based services have been around for a while, especially in the IT industry. Many of us subscribe to it without thinking about it. Gmail, Skype, Picasa, and iCloud are excellent examples of consumer adoption of cloud service. Microsoft Office 365 and Google Docs are changing how users access and use desktop applications from the cloud. Collaboration, on the other hand, is a relatively new, catch-all term for an application that takes audio, video and web conferencing to another level by incorporating presence, application-sharing, and mobile features, in a device-independent fashion.
As voice and data networks converge within organizations, premise-based deployments continue to prevail. Telecom administrators and IT managers find comfort, and a sense of control in the blinking lights and buzzing servers located within their own premises. However, CTOs and CIOs are exploring options to reduce cost and improve productivity. Rolling out voice and video, as components of a larger collaboration application, suddenly starts to make sense. A collaboration service from a reliable provider, made available as a utility model, merits serious consideration by companies contemplating refresh of their current systems.
If CaaS is the way of the future, who has a realistic shot at succeeding offering such a service? Three potential contenders are telecom service providers, system integrators, and equipment manufacturers. Let us analyse this further to gauge the level of appetite that each of these players has to launch CaaS, and the prerequisites they need to succeed with such a service.
Equipment manufacturers: Many of the manufacturers in the industry have deep pockets and are extremely anxious to see CaaS services succeed. Potential for serious new revenue streams is vast. However, manufacturers have been moving away from direct-to-customer models to channel-centric models whereby they leverage partners’ sales and operations teams to drive reach and revenue. Manufacturers’ systems typically do not provide service provider products and functionality. They do not own the underlying networks required to transport such services to and from the customer locations. I see manufacturers more as enablers of CaaS than actual providers of such a service.
Systems integrators (SIs): The key strength that the larger SIs bring to the table is their knowledge of back-end systems and virtualization technologies that are integral to CaaS offerings. They often have relationships with the larger customers in the enterprise and public sector markets. However, SIs have traditionally depended on carriers for voice networks and data transport, which they often relegated as “commoditized pipes.” Commodity or not, when it comes to cloud-based services, it is all about the quality and the dependability of the network. Reliance on a third party for network services is a significant dependency and exposure. In my view, SIs are unlikely candidates to offer full-fledged, cloud-based collaboration services. I see them actively pursuing one-off tactical deals by partnering with service providers, to set up private cloud environments for their strategic customers.
Service providers (SPs): SPs have the inherent advantage of owning voice and data networks that form the backbone of any cloud offering for collaboration services. They often are also in the business of providing collaboration services in the customers’ premises. Moving such a deployment from the customer’s location to a data centre and transporting voice and data to call-control servers hosted there, is not a stretch by any means. The question is: do they have the appetite? Most of the SPs have large revenue streams from services such as Centrex. Rolling out a hosted collaboration service that cannibalizes their high-margin revenue streams may not be top of mind for them. The slower than anticipated growth of SIP Trunking services which replaces digital services such as ISDN PRIs is evidence of this.
In summary, cloud-based collaboration services help organizations take advantage of new and advanced technologies, with minimum risk and minimal capital outlay. As telecom and IT budgets shrink, the impetus to do more with less is real. Service providers who are nimble and not bogged down by legacy services and technologies have the best chance to be succeed in the market.
After all, a first-mover advantage, combined with a disruptive technology, ought to count for something!
Next step: Explore what you can do by downloading our free white paper, Best Practices for Deploying Unified Communications with SIP Trunking.