The cloud has captured the imagination of businesses big and small. Organizations are venturing into cloud services in record numbers, and many more are making careful considerations before they leap. And now, add unified communications (UC) to the long list of applications and services that are moving into the cloud and can be delivered as a hosted service.

ShoreTel has announced a definitive agreement to acquire M5 Networks, a pioneer of hosted unified communications. Like ShoreTel, M5 prides itself on delivering easy-to-use hosted phone system and unified communication services and has a passionate focus on the customer. Once the acquisition is complete, our combined customers can choose the best model for their business – either on-premise or in the cloud.

Today, more than 95 percent of UC is delivered on-premise, according to Gartner. However, the market research firm predicts that by 2016, 50 percent of organizations will source their UC on a utility subscription model.

Why Choose Hosted UC

Hosted UC is a good fit for many organizations, especially for small and midsize businesses or companies that are geographically distributed. The benefits of hosted UC include:

  • Shift to opex from capex. Organizations can shift their IT investments from a capital expense to an operational expense. Many educational institutions, healthcare organizations, government agencies and other organizations can cover their communications costs through federal government subsidies, such as E-Rate. These organizations find the opex model of a hosted UC system particularly appealing.
  • Rapid startup. With a cloud-based UC system, installation is handled by the provider. The customer doesn’t need to buy and install UC systems, software, and storage.
  • Reduced IT administrative overhead. With UC provided as a service, customers can focus their resources on the core competency of their business—and not on running their phone systems. This allows them to free up people and capital for innovation and serving customers.
  • Predictable monthly costs. Hosted UC is typically priced per user per month, and organizations can plan accordingly. Plus, hosted UC scales to meet the organization’s changing needs, whether a booming business drives hiring, or the company needs to downsize. There are no surprise purchases of more servers, software, and storage to meet the demand – or equipment sitting idle.
  • Consolidated telecom billing. Cloud-based UC can help you bring order to telecom vendor management. Instead of having different providers—and different bills—for local phone service, long distance service, Internet services, and others, many cloud providers package multiple communications services into a single bill.
  • Reduced risk of technology obsolescence. Using a hosted UC service allows organizations to mitigate the risk of technology change. The rate of technology change is increasing, which means systems are becoming outdated faster than ever before. With a hosted UC system, organizations don’t need to manage the technology transitions.

Why Choose On-Premise UC

The majority of companies today use enterprise-owned phone systems, and while hosted UC is growing rapidly, on-premise deployment of UC won’t fade away any time soon. The benefits of on-premises UC include:

  • Control and familiarity. Most major corporations have a long history of buying and managing their own phone systems. They want the control, and they have an existing infrastructure and a well-trained staff.
  • Preference for capex. Many organizations prefer to make capital investments for IT infrastructure, and depreciate it over time.
  • Business continuity or regulatory requirements. All businesses depend on the flow of incoming calls to make sales and service customers, and if a natural disaster or other unforeseen disruption strikes, losing those incoming calls may be painful, but not catastrophic. But many healthcare providers and government agencies prefer on-premises UC so they can ensure communications within their organization even if a disaster strikes. Similarly, many financial institutions prefer to maintain UC systems in-house because they are under stringent requirements to protect sensitive information.
  • Greater customization. Communication-enabled business processes can help organizations optimize workflow. Integrating UC processes into the workflow can greatly increase efficiencies, but it often requires custom integration between an insurance application or a retail application, for example, and a UC system. And that typically means the enterprise needs to use the advanced features and integration points in a UC system.
  • Fixed upgrade schedule. With an on-premise solution, the customer has complete control over where and when software upgrades take place. As communications are more tightly integrated into applications, major changes in the UC platform may have an impact on business processes or require that employees be retrained.

On-premise or in the cloud both offer key advantages; companies can choose the deployment model that best fits their business needs.

Digital transformation has become a top initiative for business and IT leaders. In today’s business world, sustainable market leadership is no longer based solely on which company has the best products or even the best people. Instead, organizations that are agile and can quickly adapt to rapidly evolving market trends will become market leaders.

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