Introduction

One of the biggest trends in IT is the migration from organisations owning and operating their own hardware and infrastructure to consuming on demand services. Whilst this has been happening for many years in some areas of IT, telephony has been somewhat slow to the party.

However, with the technology developing quickly, the question we are going to investigate in this white paper is whether now is the right time for you to buy hosted telephony?

To address this question, we will be leveraging our unique, independent insight into the market, as well as assessing the buying behaviours of some of the UK’s largest and most demanding organisations to help you evaluate your options.

What are the main types
types of telephony?

TNC’s research identifies four main types of telephony solution:

  • Traditional telephony – ISDN & PBX – old technology, solid engineering, typically privately owned, and it works consistently well. However, it’s legacy technology and lacks flexibility
  • IP telephony – Voice over IP technology – has also been around for years and is generally deployed as privately owned services, often on-premise
  • Service provider hosted telephony – typically multi-tenant deployments in a telecoms service provider’s data centre
  • Hosted Unified Comms (UCaaS) – cloud based, usually a multi-tenant deployment, unlike service provider hosted telephony, UCaaS is often delivered by a software provider rather than a telco

Market trend: moving from owned hardware to
hosted services

Whilst there may be four main types of telephony, these are not equally adopted, nor do they represent a logical journey e.g. organisations don’t start with traditional telephony, progress through IP telephony, service provider hosted telephony and ultimately reach Hosted UCaaS.

It is important to also note that many organisations have more than one voice solution deployed. Therefore, for the purposes of this white paper, we are focusing on the main solution deployed by organisations e.g. the solution most widely used in the organisation, ignoring pockets of other usage types that almost certainly occur.

With these principles in mind, TNC’s research shows the most common journey taken by most organisations so far is from traditional telephony to IP telephony, and there they have remained. There certainly has been some take up of service provider hosted telephony, but this is a relatively niche pursuit. Even more niche is Hosted UCaaS.

The next logical question therefore is why is this the state of the market?

TNC’s research in this area is very clear:

  • Organisations move from traditional telephony for very many reasons – to reduce costs, to gain flexiblity, to deploy new functionality
  • Organisations have historically found IP telephony attractive – replacing ISDN with SIP typically generates cost savings, and the solutions are generally as reliable as traditional telephony
  • By contrast, organisations have not found service provider hosted telephony particularly attractive. The feedback TNC receives is that organisations find it expensive, lacking in flexibility (typically it is sold on long-term contracts with considerable “lock-in”), and TNC has also received a lot of feedback about the pain of migration and performance challenges in-life

So far, so clear – there are sensible reasons why most organisations have started a journey from traditional telephony, and why most of these organisations have alighted on IP telephony.

However, the question we want to answer in this white paper is whether organisations are now going to set sail on a journey to hosted UCaaS.

The good news is that TNC’s research on this question is also clear.

From a conceptual perspective, hosted UCaaS is extremely attractive. It aligns with the wider trends in IT of moving away from owning and operating infrastructure to consuming services on-demand, and it often involves service provider partners who may be part of the wider cloud strategy, such as Microsoft and Google.

However, TNC has identified a number of challenges which is putting many organisations off hosted UCaaS at the present time.

Challenges of
Hosted Unified Comms (UCaaS)

  1. Lack of Reliability: Put simply, UCaaS is not currently as reliable as traditional telephony or IP telephony. At its heart, telephony is about delivering dial tone and users have a 100% expectation that they will get dial tone every time they pick up their handset. There is also an expectation that telephony is simple and everyone knows how to use it. However, almost everyone who has had experience using UCaaS type services (even if just Skype), will be familiar with issues around call quality, technical issues with hardware etc. This is particularly challenging for those organisations with critical voice requirements, including contact centres
  2. Not feature rich: UCaaS tends to lack the more advanced call handling functionality that many organisations require. In other words, UCaaS tends to offer quite simple and basic functionality e.g. dial tone and voicemail
  3. Price: Unfortunately, TNC’s research shows that building a business case for UCaaS is extremely challenging. The main reason for this is that, once an organisation has already invested in PBXs and phone handsets (in most cases some time ago) the on-going cost of traditional telephony is very low – really just hardware maintenance and call costs. By contrast, most UCaaS solutions bring monthly costs per user as well as call costs, the result often being significantly more expensive

TNC’s research shows that most companies have a strategic intent to deploy hosted unified comms in some shape or form. However, at this stage not many companies are rushing to it for the reasons set out above – the business case often doesn’t stack up; the solution may not work consistently well; and it may not provide increased functionality.

What is the solution for
telephony in business?

Very often organisations only make the wholesale move to hosted voice when there is a catalyst e.g. an office move, which will precipitate the need to reconsider the voice.

Without that trigger event, most organisations are finding that a hybrid voice solution works best to meet their individual company requirements. This often means retaining some traditional telephony and/or IP telephony for internal/external communications, and mixing in hosted UC for particular user types, or for internal communications.

Conclusion

So, the big question – Is now the right time to buy hosted telephony? The answer is not a simple yes or no as there are pros and cons associated with all four types of telephony. However, there remain a number of barriers to doing so meaning most organisations are currently concluding that a wholesale migration isn’t optimum.

To be clear, that doesn’t mean that UCaaS doesn’t have a future. TNC’s research shows that it is the solution many organisations desire when it is feasible to deploy, so it is likely that the question of migration is “when not if”. In the meantime, hybrid solutions look to be the voice solution of choice. However, there remain a number of barriers to it depending on what’s happening and changing in your company over the next 12 months, what your specific requirements are and how well your current solution is working for you.

Would you like support with your telephony strategy? TNC’s experts have vast industry knowledge and years of experience working with companies just like yours to find the best solution to fit your needs, for the best possible price.

Disclaimer

Other than matters relating to The Network Collective, this research is based on current public information that we consider reliable. Opinions expressed may change without notice and may differ from views set out in other documents created by The Network Collective. The above information is provided for informational purposes only and without any obligation, whether contractual or otherwise. No warranty or representation is made as to the correctness, completeness and accuracy of the information given or the assessments made.

This research does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, if appropriate, seek professional advice.

No part of this material may be (i) copied, photocopied or duplicated in any form by any means or (ii) redistributed without the prior written consent of The Network Collective Limited © 2018

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