Is Hosted UC the Right Choice?

Aug. 12, 2010 (Vol. 31, No. 15)

Does your enterprise have a limited budget – and communications expertise – to operate your own systems? Maybe you should consider hosted unified communications (UC).

These days, UC can include voice communications, unified messaging, instant messaging, chat, presence, mobile access and hoteling, and even interaction with data applications. It can improve productivity, allowing your enterprise to increase profits and reduce costs, according to a range of vendors.

Your enterprise has three choices when pursuing UC:
• Do it yourself.
• Do it yourself, but let a third party manage the operation.
• Subscribe to a hosted service.

With hosted UC, the hardware and applications software is physically located on the provider’s network, and the provider owns and manages the applications. Customers gain access through portals that provide the UC services, most likely through Internet connections. Most hosted UC will likely be through a cloud-based service.
Consider CIVCO Medical Solutions in Kalona, Iowa. The company, which manufactures and supplies medical devices and accessories, has about 300 employees. With two main sites and a few remote locations worldwide, CIVCO handled its communications functions internally.

But IT manager Steve Miller said the cost of operating overhead was getting too expensive, so he began migrating to hosted services in 2008. And even as the company grew through acquisition to its current size, he notes that the hosted approach was “highly scalable and allows network expansion without any significant capital investment by CIVCO.”

First, Miller outsourced CIVCO’s WAN services to LightEdge Solutions, (http://www.lightedge.com), a provider of business voice, networking, IT and consulting services throughout the Midwest. LightEdge’s hosted UC suite is called LightEdge Connected Office.
 
Then, Miller subscribed to hosted e-mail, again through a LightEdge service. Now the company uses a LightEdge hosted UC service that also includes high definition (HD) quality voice calls, voice mail, remote fax and mobile office support and presence information.
 
The service also allows Miller to track mobile employee call support and route the customer calls to a main site when the mobile employee is not available. “This will provide a better customer experience,” Miller says. The customer will have someone answering the call, not voice mail.

CIVCO has been using the HD voice for two years, interconnecting its two main corporate sites. The only capital expense was the purchase of HD IP phones, supplied by Polycom IP SIP-based phones.

Miller says he chose those phones because they were standards-based, allowing him to move to another hosted service other than LightEdge, if he wanted. “The HD call quality is excellent,” he says.

LightEdge may also allow the company to have a formal call center, which it doesn’t have at the moment. “This may change in the future,” Miller notes. “With LightEdge, the function exists so CIVCO can quickly add this capability.”

There several business values for the hosted approach:
• There is little capital expense; only the phones have to be purchased.
• The subscriber has little overhead expenses (OPEX). The benefit is a consistent predictable controlled cost to the enterprise.
• The provider owns and manages the systems on their site, eliminating the enteprise’s real estate and electrical power costs.
• The provider deals with management, monitoring and service problems from their remote location, so the enterprise does not need staff for these functions.
• The enterprise depends on the provider for redundancy, backup and disaster recovery.
• The hardware and software updates are the responsibility of the provider.
• Hosted service providers expect to support many enterprises simultaneously, so the hosted design scales well and is globally accessible through the Internet.

But how much UC should an enterprise buy? There many providers that offer some or all UC features and functions.

CENTREX has been a traditional way of outsourcing voice communications and features. But other providers offer their alternative called Hosted PBX. And some carriers now offer IP CENTREX, the newest version. Both services offer a range of capabilities, from basic to highly sophisticated features. They include presence, find-me-follow-me and multiple levels of management controls.

Yet only about 6% of enterprises nationwide subscribe to hosted VoIP, according to a June 7, 2010 Network World blog posting, “Does Hosted UC Make Sense?”

Hosted e-mail service is more common. Some providers offer Unified Messaging that includes voice mail, e-mail and fax mail as a single service.

There are many independent voice conferencing services. Some voice conferencing capabilities are free to use. For instance, see http://freeconferencecallhd.com/. Video conferencing is usually offered separately and can be implemented by the enterprise over the Internet. And 61% of enterprises already use free hosted web conferencing, according to Network World

So, part or all of the UC functions can be supported separately without going to a hosted UC service. A hosted service, however, makes the management of many of these functions easier to accomplish.

Like CIVCO, most hosted UC customers have less than 1,000 employees to cover. But CIVCO is part of Roper Industries, a $1.9 billion company. So it was able to piggyback on some of its parent company’s tools, including voice conferencing.

Miller will receive training for the IT staff from LightEdge in all the hosted features. The IT staff will then provide the training in-house for their users. The LightEdge service also includes business continuity, backup and recovery, reducing CIVCO’s IT and communications complexity.

But hosted UC is not for everyone. Enterprises that subscribe to hosted services have to consider that:
• Your enterprise is no longer in direct control of the features, functions and systems.
• When a call traverses the Internet, call quality may decrease because there is insufficient bandwidth available.
• Call availability depends on the reliability of the Internet, which can be problematic.
• Your provider may have a limited offering, so true customization and service tailoring will probably not be available.
• Integration with the enterprise’s IT applications may not be possible.(

Gary Audin has more than 40 years of computer and communications experience. He has planned, designed, specified, implemented and operated data, LAN and telephone networks. These have included local area, national and international networks as well as VoIP and IP converged networks in the U.S., Canada, Europe, Caribbean, Australia and Asia. He has advised domestic and international venture capital and investment bankers in communications, VoIP, and microprocessor technologies. Audin began his career in the USAF as a decorated R&D officer in military intelligence and data communications. He has worked the last 30 years as an independent communications and security consultant. Contact Gary at Delphi-inc@att.net.