Elka Popova's Blog

Is Cloud UCC Ready for Prime Time?

28 Mar 2013 | by Elka Popova
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It’s been a week since I came back from Enterprise Connect in Orlando and I finally found the time to sit down and share my thoughts on some of the key announcements made at the event. Better late than never, right?

I may be biased because of my personal interest in cloud/hosted communications, but it seemed that there was a lot of buzz around cloud (déjà vu?) at Enterprise Connect. More specifically, quite a few announcements focused on cloud unified communications and collaboration (UCC). I am using the term cloud UCC loosely to refer to a broad spectrum of new offerings including hosted IP PBX, contact center, video and more—some delivered as standalone applications, others as more comprehensive UCC suites. In addition to the Enterprise Connect announcements, there were some other cloud UCC launches earlier this year, which made me wonder if cloud UCC may finally be ripe for prime time.

Hosted voice and cloud UCC have been around for awhile. BroadSoft and Metaswitch platforms as well as home-grown (i.e., service provider-developed) solutions have powered cloud UCC services for over a decade. But what’s exciting today is the entry of PBX and carrier platform vendors into the cloud UCC space—either as the providers of multi-tenant/multi-instance platforms deployed by partners or as service providers themselves. 

I talked about this trend in a blog post last year. Here follows a brief account of some more recent developments.

At Enterprise Connect, Avaya announced cloud video, UCC, and contact center solutions designed for service provider partners. I discussed the Avaya cloud solutions quite extensively in a previous blog post. In short, Avaya's new Avaya Cloud Enablement for Unified Communications and Customer Experience Management is a multi-tenant service provider platform based on the Avaya Aura technology. A particularly interesting aspect of the new Avaya cloud UCC offering is the utility pricing for service providers—instead of purchasing perpetual licenses, partners pay only for the seats they actually deploy with end-user organizations.

Also at Enterprise Connect, Alcatel-Lucent announced a service provider version of its OpenTouch UC suite and featured its first cloud UCC partner (though long-time solution reseller)—ICON Voice Networks. Similar to Avaya, Alcatel-Lucent is offering its cloud UCC solution under a utility pricing model to its partners. The rich feature set of the OpenTouch suite enables ICON to deliver cloud voice, messaging, presence, conferencing, video, mobility, and contact center capabilities to its customers.

Again at Enterprise Connect, Mitel introduced Sprint as a new partner for its cloud UCC solutions. Mitel was one of the first UCC developers to deliver a variety of cloud solutions, hosted both by its own LEC NetSolutions and other partners. Sprint, which has already invested in other cloud UCC platforms, is going to be reselling Mitel’s cloud portfolio through a white-label arrangement. As a long-time Mitel partner and reseller of Mitel’s premises-based solutions Sprint is leveraging its Mitel technology expertise to address increasing customer demand to deploy Mitel’s UCC stack in the cloud.

Cisco did not make any major cloud announcements at the event, but held several “whisper sessions” with the analysts to discuss its cloud UCC roadmap. Since most details are under NDA, I can only say that Cisco remains committed to the cloud space. Cisco has publicly shared that it has signed up about 40 HCS service provider partners globally, 27 of which have commercially available cloud UCC offerings today. Cisco continues to enhance and aggressively promote both its partner-hosted HCS and its Cisco-hosted WebEx cloud offerings. Recent enhancements include HCS support for Cisco Customer Care and Cisco Telepresence, as well as enhanced mobility with native mobility features such as single-number reach and clientless, network-based fixed-mobile convergence (FMC) options.

I also managed to catch up with NEC, which announced a cloud UCC solution a couple of months ago. NEC is offering its complete UCC stack—telephony, messaging, presence, conferencing, mobility, and contact center through a cloud model. NEC is hosting the platforms in CenturyLink data centers and is reaching customers through its established dealer network. Similar to Toshiba (which announced its cloud offering last year) and some of Mitel's deployment options, but unlike Avaya and Cisco, NEC has chosen to maintain ownership and control of its platform and to leverage its large reseller channel to market and deploy the solution and manage customer relationships.

I also connected with GENBAND, which launched a series of cloud offerings a few weeks ago. It is offering service providers a choice to either deploy the cloud UCC platform on their network or to resell a cloud UCC service hosted by GENBAND. The GENBAND-hosted NUViA platform allows providers to quickly launch a cloud UCC service without the risk and cost of deploying and managing a carrier-grade UCC platform on their own network. At Enterprise Connect, GENBAND announced its first NUViA partner—Arrow S3—which will be offering HD voice, video, multimedia messaging, mobility, conferencing, web collaboration, desktop clients, and fixed mobile convergence as a service to small, medium, and large enterprise customers. Arrow S3 will market the GENBAND cloud service under the SynapS3 ucCLOUD brand. GENBAND has some early deployments under way with other partners as well.

The utility pricing model is an appealing alternative for service providers. BroadSoft has addressed this opportunity with its BroadCloud offering, which allows partners to deliver voice, video, messaging, and other services without the costly investment in service provider infrastructure. A couple of service providers are delivering hosted voice and UCC services today using BroadSoft's utility pricing model.

BroadSoft's newly launched UC-One IMS offering focuses on mobile operators. It leverages BroadSoft's UC-One platform to enable mobile carriers to deliver a comprehensive suite of UCC applications along with fixed-mobile convergence for 2G, 3G, and 4G mobile networks services to their business customers. This offering creates new revenue opportunities for mobile operators and enables businesses to consolidate their carrier relationships. Due to various regional market differences, this solution is likely to be more effective in Europe than in North America.

My conversations with service providers AT&T and Level 3 had a slightly different flavor. AT&T announced a SIP trunking offering for Office 365 with Lync online. With AT&T’s SIP trunking capability, which connects Lync Online with the PSTN, Lync Online can be used as a relatively complete UCC solution by a customer organization.

At present, Level 3 is offering hosted UCC services in Europe and Latin America, but is focusing on SIP trunking in North America.  Level 3 reported 100 percent growth rate in its SIP trunking service and intentions to launch a cloud UCC offering based on Lync.

Speaking of Lync, there seems to be a lot of interest among service providers to offer hosted services based on Lync. However, both Lync Online and the Hosters Pack lack many of the key features of Lync Enterprise. Furthermore, Lync Online does not provide PSTN connectivity. Some providers are using Lync vDedicated or re-engineered versions of Lync Enterprise to deliver cloud UCC services today. Future Lync versions are expected to provide a more compelling cloud UCC alternative and pose a bigger threat to existing market participants.

Sadly, Siemens Enterprise Communications does not have much to share in the cloud UCC area today in spite of being one of the early market entrants with its OpenScape Cloud solution a couple of years ago. Once Siemens revamps its cloud UCC offering (not so much the technology, but the business model), we will have a pretty full gamut of UCC developers delivering their own cloud platforms and/or services. For most of them, cloud UCC is currently a defense move. In a few years, that may be their only offense alternative.

The cloud UCC market will be very interesting to watch going forward. So far, it has grown steadily at about 30 to 40 percent annually, but there has been no major inflection point. Could these new platforms and delivery models spur more explosive growth? I guess we will find out …

I am in the process of wrapping up my North American hosted IP telephony and UC services market study. I will make some market growth projections and will also provide a deeper analysis of the emerging solutions and business models.