Analysts say the market value of cloud-based Unified Communications-as-a-Service (UCaaS) solutions will more than double by the end of the decade. Organizations are adopting UCaaS to create a cohesive communication and collaboration strategy to support increasingly decentralized operations. A recent Metrigy survey finds that UCaaS solutions are currently in use at approximately 47 percent of businesses globally.
That’s not particularly surprising news. UCaaS is an attractive communications option that eliminates most upfront expenditures for on-premises hardware, facilitates the transition to a hybrid workforce, shifts the management burden to the cloud and is easy to use.
It’s not right for everyone, however. For many organizations, other UC deployment models offer important advantages over UCaaS, including greater control, flexibility and reliability.
Although UCaaS adoption is growing rapidly, on-premises remains the most common deployment model for UC. According to recent market analysis from the Eastern Management Group, 61 percent of organizations that purchased a new UC system in 2021 bought an on-premises solution. Even among small to midsized businesses (SMBs), on-prem sales were 25 percent higher than UCaaS sales for the year.
The perceived downside of on-premises deployment has always been the high upfront costs of buying servers, PBX systems, telephones and other hardware components. The UCaaS subscription model creates a lower barrier to entry. But over time an on-premises solution may actually be cheaper compared to the monthly fees for UCaaS. In addition, owning the UC infrastructure can offer certain cost benefits by enabling year-over-year asset depreciation against tax liabilities.
For most organizations going the on-prem route, the chief benefit is greater customization and more direct control. UCaaS solutions allow very little customization beyond the provider’s standard configurations. That’s by design — the whole point of moving to the cloud is to eliminate complexity with a streamlined, user-friendly platform. However, many organizations require more sophisticated capabilities. An on-prem solution opens up a lot of possibilities for integrating with business applications, contact center operations and even other communications platforms.
Companies in the technology, healthcare, pharmaceuticals, hospitality, manufacturing, retail and education sectors are among the biggest adopters of on-premises platforms. According to the Eastern Management Group study, the banking sector purchased on-premises solutions four times more often than UCaaS in 2021, schools did so three times more frequently and healthcare organizations twice as often.
Of course, the on-premises model isn’t ideal for every organization. The upfront costs and the technical proficiency necessary to manage and maintain it are deal-breakers for many organizations. However, some may still prefer to have more control than they can get with a UCaaS option. Two other options — hosted UC and hybrid UC — represent solid alternatives.
As in the UCaaS model, hosted UC providers own and maintain all the necessary hardware, freeing customers from the day-to-day support and maintenance burden. However, hosted UC customers retain control over administrative duties such as moves, adds and changes. In addition, customers get dedicated networking capacity and a customized software platform that can be integrated with on-premises applications. This is often the preferred model for large organizations that have administrative staff and their own phone hardware in place.
Hybrid UC involves a mixture of on-premises and cloud-based features. In this model, organizations own their communications infrastructure but use it to connect with a variety of cloud-sourced services and tools. For example, an organization might use an on-premises phone system at headquarters while deploying cloud-based solutions at remote offices. Meanwhile, another company might combine cloud telephony with traditional landline connections for redundancy and failover.
There’s a lot to like about UCaaS, but it may not be the best choice for your organization. If your organization is considering changes to your communications infrastructure, give us a call. We can walk you through the pros and cons of each UC deployment model and help you create a strategy for implementing the solution that best suits your business needs.