Who Wants UC as a Service?

While the case for hosted services as a money-saving measure has been widely made by now, the prospect of delivering unified communications, as a managed service still hasn’t achieved mass appeal.

The technology is there, according to Atlanta-based hosted UC provider Cypress Communications, but the industry as a whole still has some distance to cover in helping potential users understand the offering.

“Hosted VoIP is a SIP phone and you’re done,” said Frank Grillo, executive vice president of marketing and customer care at Cypress. Hosted UC by comparison is “really deep stuff. We’re talking about software on the desktop, LAN management, defining which applications users need. This is very specialized stuff.”

The company manages desktop communications for more than 60,000 business personnel nationwide. It claims about 5,500 customers. Cypress presently is making a narrow vertical play with its specialized offerings, aiming specifically at the professional services sector, including the legal and financial industries.

“They are the folks that get the most value out of a rich UC experience,” Grillo said. “An attorney at a big law firm lives on the phone. When they meet with a client on the phone, that is a significant money-making moment. Things like video file sharing and Web collaboration, these all add value to that call and make them more efficient.”

The company has made inroads with that pitch, landing several of the top 40 U.S. law firms including Pillsbury Winthrop Shaw Pitman and King & Spalding.

As a network operator, Cypress brings none of its own technology to the table. It relies on Nortel carrier platforms, Nortel AS5200 switches, and the Nortel Communication Server 2000 (CS 2000) superclass softswitch.

On the user end, Cypress supplies every element of the network including phones, LAN switches and routers, “everything it takes to make this work, all the software and hardware you need,” Grillo said. He compares this to other vendors’ scenarios, in which the vendor may offer service in the cloud, leaving equipment and local management of the LAN in the hands of the customer. He said the full-service approach helps Cypress keep tighter control over the quality of its offerings.

“To do [hosted UC] with the maximum quality of service, this is the right way, otherwise you have too many middle men between that phone call, that user and the ultimate delivery of that phone call,” he said.

It takes a bigger capital investment for the company to supply all elements within the network, but there’s a long-term payback in terms of operational efficiency. “It’s much easier for us to manage it once we deploy it, because nobody else is in the middle,” Grillo said.

Cypress is riding a wave, Grillo said, as UC technologies have come together in the past 18 to 24 months. Driving that wave is the presence of Microsoft OCS in the marketplace. “The fact that they are making it mainstream and integrating it into their desktop experience is making the user community much more aware of it,” he said. “Microsoft is really helping to drive the user demand for this stuff.”

Even with that growing demand, Cypress still finds a couple common objections or concerns arising when it comes to introducing hosted UC as a hosted solution.

The most common protest still is the one Grillo refers to as “emotional.” Many of the people who have owned processes surrounding UC in the past still can’t get used to the idea of outsourcing. In a lot of ways, this is the toughest part of the sell. “When it is that level of emotional decision-making, it can be hard to get around,” he said.

Easier to tackle is the financial objection, which often is based upon a misconception as to the nature of the offering. “If you don’t understand all of the expenses that go with standing up, managing, and supporting the UC environment, then you will not underestimate the total cost of ownership and you won’t be doing a true comparison with the hosted model,” he said. In these cases, a little education goes a long way.

Looking ahead, Grillo said the coming 12 months could prove a turning point for the hosted UC community.

“It’s not a breakout moment yet, but more and more enterprises are considering the model, and that’s the precursor to a true breakout,” he said. “We’re not there yet, but it is very close to being de rigueur to at least consider a hosted model.”

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