Gone are the days when senior executives and line-ofbusiness

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1 SPECIAL REPORT: Unified Communications and the Cloud UC and the Cloud: An Ideal Match Executive Summary Cloud computing has evolved into a strategic component of the IT landscape at businesses and public sector entities. In fact, a majority of companies are already using a cloud service or are planning to do so, according to a recent survey of 331 IT and business professionals in North America conducted by UBM Tech and commissioned by Mitel. Many organizations are also using unified communications (UC) to improve collaboration and productivity. A growing number of organizations are leveraging the combined advantages of cloud and UC, deploying UC capabilities such as presence, instant messaging, conferencing, collaboration and voice as cloud-based services. The expectations are clear: save money, increase flexibility, improve productivity, enable better customer service and achieve faster deployment. This report analyzes the research findings regarding the actual and potential benefits of the cloud, UC and cloudbased UC, as well as the possible challenges companies face in deploying these initiatives. Gone are the days when senior executives and line-ofbusiness leaders asked IT people what cloud computing is and what it could do for the company. The past few years have seen a dramatic increase in the adoption of cloud services, driven in part by the ubiquitous availability of high-capacity networks and widespread adoption of server and storage virtualization. Companies have implemented private, hybrid and public cloud-based offerings, including software as a service (SaaS), infrastructure as a service (IaaS) and platform as a service (PaaS). So well-entrenched has the cloud become that for many enterprises, cloud-based services are now a key part of the IT infrastructure and business operations. They are a way to efficiently acquire and use enterprise applications, platforms, computing capacity and other IT resources that would be far more costly if procured via traditional channels. Most (93%) of the 331 organizations surveyed in spring 2013 are using some type of cloud computing services or are planning to do so in the future. More than half of the organizations (5) Sponsored by

2 Figure 1: Does your organization currently use cloud computing services or does it plan to use cloud computing services within the next 12 months? Not using, nor plan to to, within1 to 2 years to within 6 to12 months to use cloud computing in under 6 months to, not sure when 5% 9% 13% 2% Don t know/not enough knowledge of cloud computing services 5 Yes, currently using Data: UBM Tech survey of 331 business technology professionals with a working knowledge of unified communications or cloud computing, May 2013 are already using the cloud, and 36 percent say they are planning a cloud services deployment. A mere 5 percent say they are not using the cloud and have no plans to deploy cloud services. (See Figure 1.) Three-quarters of the organizations surveyed have taken their first step into the cloud by building a private cloud or using hybrid cloud services, and 18 percent are using or planning to use public cloud services. While there s no shortage of applications available in the cloud today, most companies say they re using cloud for communication and collaboration. By far the most common are /messaging (cited by half the companies that are using the cloud) and Web conferencing (45%). Other apps companies are running in the cloud include customer relationship management (28%), customer support (25%) and project management (23%). Apps for supply chain management, voice, and enterprise resourcing planning all came in at 11 percent. The Benefits of Cloud Computing Many companies today are investing in a cloud strategy for better economies of scale and increased business agility. Indeed, the ability to scale up or down as business needs change, to provide continuity or to more rapidly take advantage of modern software apps is tempting to businesses trying to grow and innovate. So, it s not surprising that the key benefits organizations report from using the cloud include cost savings (cited by 59%), increased flexibility (5), increased scalability (48%), easier/faster deployments of applications and infrastructure (40%), improved business continuity/disaster recovery (34%) and improved reliability/ availability of solutions (28%). (See Figure 2, page 3.) Companies in a number of industries are reaping the benefits of the cloud. One such business, Sea Crest Home Health Services Inc., a Costa Mesa, Calif., healthcare provider, has been using cloud services in various ways for three years, says operations manager Kenneth Cowan. When Sea Crest expanded and moved into a new location, it implemented a hosted phone system. In September 2011, Sea Crest implemented a new home health agency software package that is hosted by the vendor and supports both office and point-of-care applications. The company has also been using a hosted fax system since 2010 to help it handle the 10,000 to 15,000 pages per month it receives from referring hospitals and doctors offices. Among the benefits Sea Crest has seen from using the cloud-based phone system is cost savings, which is attributable to faster deployment, easier maintenance and support when compared to traditional phone systems, Cowan says. Another benefit is increased flexibility. We are able to quickly and easily move devices as needed, without having Survey Methodology: In April and May 2013, UBM Tech conducted an online survey on behalf of Mitel exploring unified communications and the cloud. UBM Tech collected data from 331 business technology professionals with a working knowledge of unified communications (UC) and/or cloud computing. The majority of respondents (5) were from organizations that currently use cloud computing services, 43 percent reported they currently use UC solutions, and 10 percent have already moved UC/voice into the cloud. The majority of respondents were from large companies with 1,000 or more employees. The greatest possible margin of error for the total respondent base (N=331) is +/- 5 percentage points. UBM Tech was responsible for all programming and data analysis. These procedures were carried out in strict accordance with standard market research practices. 2

3 Figure 2: What benefits has your organization seen from using cloud computing services (other than UC) whether for unified communications or other applications? Cost savings Increased flexibility Increased scalability Easier/faster deployments of applications and infrastructure Improved business continuity/disaster recovery Improved reliability/availability of solutions Enhanced customer service Improved security 18% Increased ability to support mobile devices 18% 23% 28% Increased innovation and competitiveness 16% Note: Multiple responses allowed 34% 40% 48% 59% 5 Base: 301 respondents using or planning to use cloud computing Data: UBM Tech survey of 331 business technology professionals with a working knowledge of unified communications or cloud computing, May 2013 to do any reconfiguration, Cowan says. The system also is more scalable than the previous one, so Sea Crest is able to add users as needed. As demand grows, the service provider increases bandwidth accordingly. The company can also address its business continuity and disaster recovery needs via the cloud. During local power outages, the system [can] route calls to mobile [devices], keeping us going, Cowan says. The benefits of using the hosted software solution are similar. It s a much less expensive alternative than using an in-house solution. The company pays monthly fees, which are less than the yearly lock-in costs it had with the previous package. There is also increased flexibility and faster deployment. Another cloud user, YES Prep Public Schools in Houston, was one of the first organizations to host an application on Figure 3: Does your organization currently use unified communications solutions or does it plan to use UC within the next 12 months? to within 1 to 2 years to use UC in under 6 months to within 6 to12 months 6% 9% 13% Not using, nor do we plan to 5% 1 43% Yes, currently using to, but not sure when Don t know/not enough knowledge of UC Data: UBM Tech survey of 331 business technology professionals with a working knowledge of unified communications or cloud computing, May 2013 Microsoft s Windows Azure cloud platform in 2009, according to Troy Neal, director of IT. YES Prep, an open-enrollment public charter school system serving students grades six through 12 in Houston s most disadvantaged communities, uses the cloud to host its lottery application, which is used to track and select students for admittance. The immediate cost savings and the flexibility to add resources when needed are the two major benefits of using the cloud, Neal says. Moving forward, we will also use Azure s [IaaS] to move critical services from on-premises to the cloud, giving the company business continuity at a reduced cost, he says. Business continuity is especially important during the hurricane season. The Benefits of Unified Communications UC technology is dramatically changing the way employees stay in touch with each other and with customers and business partners. That s made it a key business tool even a foundation for business transformation for organizations that want to boost employee productivity, share knowledge and better serve customers. According to the UBM Tech/ Mitel survey, 43 percent of the organizations are currently using UC solutions, and an additional 35 percent are planning to implement UC some time in the future. (See Figure 3.) In addition to voice devices such as desk phones and mobile products, organizations are using a variety of communications methods. The most common are instant messaging, mentioned by 73 percent of respondents, and Web conferencing and collaboration (70%). Others include videoconferencing, unified messaging (the ability to access 3

4 Figure 4: What benefits has your organization seen from the use of UC? Cost savings Improved employee productivity Enhanced collaboration and communications Ability to offer staff flexible working options (e.g., working from home or other location or flexible hours) Improved customer service Ability to access critical applications from anywhere Creation of a more mobile workforce Reduced travel costs We have not seen any benefits yet Other 2% 13% 2 25% 24% Note: Multiple responses allowed 32% 31% Base: 255 respondents using unified communications 51% 50% 49% Data: UBM Tech survey of 331 business technology professionals with a working knowledge of unified communications or cloud computing, May 2013 voic via messages) and presence (the ability to see via a UC client when colleagues are available). The benefits companies are seeing from UC match up well with the business drivers. These include cost savings (51%); improved employee productivity (50%); enhanced collaboration and communications (49%); the ability to offer staff flexible working options, such as working from home and flexible hours (32%); and the ability to access critical applications from anywhere (2). (See Figure 4.) UC technology has made it easier for Sea Crest to support remote users and accommodate flexible work schedules. As a startup, we were most interested in [the] flexibility of the system, allowing us to easily route calls as we grew, Sea Crest s Cowan says. YES Prep decided to deploy UC after Hurricane Ike damaged three of its PBXs in Teachers use UC capabilities on a daily basis to enhance collaboration with Figure 5: Has your organization moved or would you consider moving unified communications/voice into the cloud? Don t know/not enough knowledge of UC or cloud computing 2 22% Not using, nor do we plan to Yes, already have moved UC into cloud to move UC into the cloud in under 6 months 10% 5% 8% 21% to within 6 to 12 months to within 1 to 2 years to, but not sure when Data: UBM Tech survey of 331 business technology professionals with a working knowledge of unified communications or cloud computing, May 2013 colleagues and administrators. Because the school system employs only one teacher for each subject at a campus, teachers frequently need to interact with colleagues at other schools to share information. Being able to interact quickly and easily with peers has saved teachers considerable time. UC has also helped YES Prep maintain a low ratio of administrators to students even as it expands, by allowing staff to be more efficient. For example, administrators can deliver messages to classrooms using the system rather than by hand. The Challenges Deploying and using UC can pose a number of challenges some financial and some cultural and addressing these effectively is key to gaining the most value from the technology. Among the biggest concerns are ensuring that the UC tools are being used to their full potential (cited by 42%) and getting end users on board with new ways of working (41%). Other challenges include the costs of the overall solution; the migration process and fitting UC in with legacy systems; and designing and planning the rollout for multiple sites and users. Sea Crest still does not use the full capabilities of the UC solution. The medical services industry is typically slow to adopt new technologies, and while we have been doing so since the beginning, [we] still find that old habits don t die easily, Cowan says. The best or worst example of this is not being able to send or receive secure to or from the hospitals and [physicians ] offices with patient orders. 4

5 UC in the Cloud: A Perfect Match? A number of business and technology analysts are talking about the transformative potential of combining communications solutions and cloud computing. Some call this the rise of the personal cloud and see it as a fundamental reshaping of traditional office environments. Today, only 10 percent of the organizations surveyed have moved their unified communications capabilities into the cloud, but that s likely to change in a big way in the coming year or two. Forty-one percent of the organizations say they are planning to move UC to the cloud in the future, and 20 percent report that they will make the move within two years. (See Figure 5, page 4.) As for UC deployment models that organizations are using or considering, nearly one-third are using on-premises equipment, and another 17 percent are using a mix of on-premises and cloud. Fewer are using private cloud/virtualization (19%), hybrid cloud (18%) or hosted/public cloud (8%). Of the organizations that are using UC in the cloud, the key benefits they are seeing or expect to see include cost savings, increased flexibility, easier and faster deployment of solutions, increased ability to support mobile devices with UC, increased scalability, and improved reliability and availability of solutions. Companies also report a number of benefits from running UC in the cloud compared with having an on-premises UC solution. These include cost savings (5), increased flexibility (49%), increased scalability (48%), easier/faster deployments of solutions (40%), improved business continuity (31%), improved reliability and availability of solutions (26%), increased ability to support mobile devices with UC (21%) and enhanced customer service (18%). (See Figure 6.) Sea Crest has benefited from lower total costs than if it were to bring each of the components in-house, Cowan says. Deployment was much faster, and feature enhancements are more easily implemented, he says. Another company, Pillar Hotels and Resorts, sees huge potential for UC in the cloud. Pillar has been using cloud solutions for processes such as human resources, capital/ purchasing management and Web filtering, says Justin Harville, vice president of IT technical services. Having experienced the benefits of the cloud, the company is considering a cloud-based UC offering. These [cloud-based] applications give a growth-stage company such as ours the flexibility to meet the needs of our constituents while minimizing costs and maximizing scalability, Harville says. We are afforded some measure of customization, but largely take applications as is. We sometimes have trade-offs in needing to adapt our processes Figure 6: What do you see as the benefits of UC in the cloud when compared with an on-premises solution? Cost savings Increased flexibility Increased scalability Easier/faster deployments of solutions Improved business continuity Improved reliability/availability of solutions Increased ability to support mobile devices with UC 21% Enhanced customer service More secure UC solutions 12% 18% 26% 31% 40% 49% 48% Base: 164 respondents who have moved UC into the cloud 5 Data: UBM Tech survey of 331 business technology professionals with a working knowledge of unified communications or cloud computing, May 2013 to those of cloud providers, but we make up for those challenges in the ease of deployment. To date Pillar has not implemented a full-blown UC system because the cost/benefit numbers have not been favorable for the company, Harville says. But cloud-based UC might enable the company to take full advantage of the technology. The true beauty of UC in hospitality is not the mobility aspects of the solution, but the fact that we can incorporate a low-cost, cloud-based solution, deploy in a very short time frame with minimal [capital expenditures] and forklift the antiquated PBX equipment that long ago ceased to have a value proposition for the hotel, he says. Among the potential benefits Harville says he sees with UC in the cloud are cost savings, increased flexibility, and easier and faster deployment of the solution. We can maximize our existing investment in on-site PBX equipment, saving further investment until all life has been exhausted from the existing system, then rapidly deploy a cost-effective cloud solution, he says. 5

6 Cloud offerings are increasingly appealing to the hotel industry. Leveraging any dedicated circuit at any of our properties allows us rapid deployment and the ability to reroute calls in the event of a disaster scenario, Harville says. Rapid deployments and turnkey support mean our general managers can focus on what they do best guest service. Survey respondents see UC in the cloud potentially resolving a number of business issues or problems. These include enabling companies to reduce capital expenses because they have less need for on-premises equipment; being faster and more responsive to the needs of the business; supporting the organization s evolutionary move to the cloud; and addressing IT skills and resource shortages. Rapid deployments and turnkey support mean our general managers can focus on what they do best guest service. Justin Harville, vice president of IT technical services, Pillar Hotels and Resorts Organizations surveyed that are not using UC in the cloud and have no plans to do so cited reasons that include having concerns about security, privacy or regulatory compliance; a need to retain direct control over voice/uc; and not being convinced about the real cost savings associated with cloud-based communications. This is in line with the general market perception that concerns about security and loss of control keep some companies from using the cloud. The Mobile Factor Several factors and trends under way in the business community could stimulate adoption of UC in the cloud. One is the growing use of mobile devices and applications in the work environment, whether purchased by organizations or by their employees. End users now have sophisticated communications tools readily available at their desktops or in the palms of their hands, which means they can easily collaborate with colleagues and across their supply chains, anytime and anywhere. The UBM Tech/Mitel survey shows just how prevalent mobile devices have become in the workplace. A significant number of organizations (88%) are allowing employees to use their own devices or are considering letting them use these devices for work. The most commonly used devices are smartphones (cited by 82%), followed by tablets (74%) and laptops (59%). Such devices are critical for regular road warriors and even the occasional remote worker. One quarter of the companies surveyed say at least 25 percent of their employees travel or work from a remote location nearly every day, and one third say at least 25 percent of their employees travel or work from a remote location about one or two days a week. Many of the organizations surveyed have remote locations or branch offices, not including home office workers. Nearly half of the enterprises (46%) have more than 10 remote locations or branch offices. About 75 percent of Sea Crest s staff are field clinicians, including nurses and physical therapists, who travel to treat patients in their homes. Deploying the various pieces of our total business process [including cloud-based UC] over the last three years has allowed us to better treat our patients through increased continuity of care and better communication between clinicians, physicians and the office, Cowan says. All of this yields better care, better measurable results and increased patient satisfaction. Of the pieces of UC in the cloud not currently being utilized, we anticipate slow adoption over the next couple of years, as the debate over national healthcare settles down, and the form it takes shakes out, Cowan says. As the hospitals take advantage of technology, so too will home health agencies [that] support their patients, with the common goals of healing and decreasing costs associated with hospital readmissions. Marriage of UC and the Cloud: Inevitable The findings of the UBM Tech and Mitel survey indicate that UC in the cloud is poised for growth. Adoption of both UC technology and cloud services continues to be on the upswing, and for many organizations it makes economic sense to move UC to a cloud environment. The move to the cloud has been under way for several years, and the survey data show just how widespread cloud usage has become in North America. It also indicates that many companies are opting for private and hybrid clouds as a solution for their IT infrastructure and applications needs. At the same time, UC has clearly become part of the corporate strategy at many organizations, as they seek ways to improve productivity and enhance collaboration and communications within and outside the enterprise. For a growing number of organizations, the marriage of the cloud and UC is only natural. And as companies rely increasingly on mobile devices and applications, and as more employees work from remote locations, cloud-based UC appears to be an ideal solution UBM LLC. All Rights Reserved. 6