businessinfomag.uk
magazine
36
Hosted telephony
Are SMEs taking
to the cloud?
More and more, businesses are opting
for hosted telephony – having their
telephone system based in the cloud
rather than on premise.
The European hosted IP telephony
and UCC services market earned
revenues of $3.32 billion in 2014 and
is estimated to reach $17.93 billion in
2021, according to Frost & Sullivan’s
Analysis of the
European Hosted IP
Telephony and UCC Services Market
.
Moreover, service providers and
industry leaders surveyed by BroadSoft
Inc said they expected the UCaaS/
Hosted PBX market penetration to
grow by a factor of almost 6 across the
enterprise, midmarket and the small
business segment.
UK telecoms providers have definitely
noticed a shift to the cloud. Steve
Haworth, CEO of TeleWare, estimates
that over 80% of new deployments in
the market are hosted or cloud. This is
also the experience of business telecoms
specialists Spitfire, which offers both on-
site systems and hosted solutions.
Spitfire Direct Sales Manager Dominic
Norton said: “Over the last 12 months,
the proportion is now significantly in
favour of cloud-based deployments, with
88% hosted versus 12% on premise.”
For unified communications vendor
Swyx, the lion’s share is still on-premise,
with cloud telephony sold on a pay-as-
you-go basis representing around 20%
of the company’s sales. Although Mark
Russell, Swyx’s Director of Operations
UK & Ireland, does make an important
distinction between delivery models.
“Our resellers are also offering hosted
unified communications to organisations,
on a capex model. This is accessed via
a private cloud, but the customer will
ultimately own the solution at the end of
the agreed term and the only additional
on-going costs will be for software
updates and support. At the moment,
the split between CPE (customer
premises equipment) and cloud-based
telephony is around 50/50,” he said.
Business boost
The shift to cloud-based telephony has
given a big boost to some suppliers.
Commsworld, Scotland’s largest
independent telecommunications and
digital services provider, has achieved
a record number of new telephone
connections for businesses and
organisations this year. By May, the
firm had already deployed circa 13,000
connections, more than six times as
many as at the same stage in previous
years. This is also the first time it has
exceeded 13,000 connections in a single
year in over 21 years of business.
Chief Executive Ricky Nichol
attributes the company’s recent success
to growth in sales of its Voice over
Internet Protocol (VoIP) services. “When
VoIP first appeared on the scene over a
decade ago it was certainly exciting, but
it struggled against the resilience, speed
and practicality of landline systems,” he
said. “Now, it suddenly makes a huge
amount of sense and it is especially
exciting that smaller Scottish firms can
now benefit. Thanks to the advancement
of networks and cloud services, they
no longer need rooms full of expensive
hardware.”
There are many reasons why SMEs
might want to make the switch to a
hosted solution, from lower short-term
costs, flexibility and scalability to always
using the most up-to-date version and
not having to worry about maintenance
and upgrades (see Norton’s assessment
of the pros and cons opposite).
However, it is true also that there will
still be businesses that prefer an on-site
solution.“Despite the rise in hosted
solutions, there remains demand for on-
premises communications from those
Hosted or on-premise or a mixture of the two?
Tayla Ansell looks at trends in business communications
SMEs that wish to retain total control
over their systems and administer
upgrades themselves as and when they
choose,” said JohnWhitty, CEO of Solar
Comms.
Swyx’s Mark Russell says that security
and control are also factors. “An on-
premise solution is likely to be favoured
by organisations that are concerned
about security, location of their data or
have sufficient IT resource in-house to
manage a solution themselves. Banks,
for instance, will want to protect their
data so will shy away from a public cloud
solution in favour on-site or hosted
within their own data centre based in the
UK. There are also arguments that if you
have other on-premise technology then
it may be easier to get different systems
to talk to each other and undertake
higher levels of customisation,” he said.
Best of both worlds
Another option, says Whitty, is to adopt
a hybrid approach that lets you switch
between solutions depending on your
circumstances. “For Solar, offering choice
is critical, enabling our customers to
select the deployment model that is
right for them, but always allowing the
flexibility to easily migrate to hybrid or
pure cloud solutions when the time is
considered correct,” he said.
Whitty adds that growth in unified
communications is also having an
influence on people’s choices.“Employees
are becoming increasingly accustomed
to using applications like live chat, web
conferencing (both voice and video)
and social collaboration alongside more
established communications channels,
so organisations can no longer consider
telephony in isolation.”
With a range of options to choose
from and the ability to make a case both
for hosted and on premise solutions,
businesses should look carefully at their
specific requirements before making a
choice.
Mark Russell,
Director of
Operations UK &
Ireland, Swyx
Ricky Nichol,
Chief Executive,
Commsworld
JohnWhitty, CEO,
Solar Comms
Steve Haworth,
CEO, Teleware
