Cloud-based telephony: Promises and Reality

In communications the Cloud is a fashionable buzzword with a vision that is sometimes not clearly understood. However information and telecommunications “as a service” can provide important and real benefits for businesses. For simplicity we can nonetheless retain the term ‘Cloud’.

All technologies now exist in Cloud versions including telephone systems, which have just undergone an IP revolution and a transfer from General Services to IS departments, and once again find themselves in this new revolution that will perhaps see telephone services passed from IS to Financial Teams. This is especially the case if it is simply a matter of managing a service contract rather than technology.

Leaving aside the classic debate of pros, cons, opportunities and threats, one real challenge that we see in our role as consultants is the fact that the concrete reality of Cloud-based solutions is catching up with the marketing story and the benefits that have long been understood.

We have been organising requests for tenders for Cloud-based telephony systems for several years now and we have been working with large companies and major business accounts to identify suitable Cloud-based providers. While SMEs can be satisfied with a telephone exchange with basic functions, these larger corporations expect features and functions that are at least identical to an in-house solution and very often are looking for opportunities to expand the operational scope to include mobile services or unified communications.

The market is split between operators who must upgrade their competence on the ‘user’ side of telecoms, and integrators who, conversely, are business telecoms experts and must obtain licenses as operators from the telephone communications authority in France, ARCEP (Autorité de régulation des communications électroniques et des postes). Both are facing the same problem: hosting and the associated service center.

Some players are obliged to set up their offer with subcontractors and sometimes a cascade of subcontractors, to connect the different elements of Cloud telephony. In these cases hiding behind a monthly fee that a customer pays you may find ad hoc rental charges for both equipment and licenses. We advise that you look closely at possible price variations (both upwards and downwards) and the period of commitment. These offers are often far from ‘on-demand’ services and are in fact much more rigid and inflexible. In terms of service, while a supplier may be able to roll various subcontractors into one package, there are nonetheless risks such as a loss of information and time as well swapping between different hotlines and service centers along the chain. It’s natural that partnerships come and go in business but can you have your say if your chosen supplier changes host or operator?

Other players in the market present the face of a single entity but subcontract work in-company, between business units or subsidiaries resulting in sometimes highly complex packages for the customer. This can be seen in the contract itself which may require the client to sign several separate contracts for each component of the offer for example telecoms, data links or VoIP services. Ultimately, the real problem is the absence of a single service level agreement (SLA) from one end to the other, offering telecoms “as a service.”

In addition to these differences in the architecture of the associated commercial offers. We see a limited field of suppliers with at best two reliable companies per manufacturer technology.

In short, the technology is maturing and partners and integrators in the market have a great opportunity to grow. The market needs suppliers with one foot in the world of integration and the other in the operators’ sphere, suppliers whose heads are not in the clouds, but in services!

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