®
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White Paper
How to Choose Between
VoIP and Unified
Communications
Contents
Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Five Needs Based Considerations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Consideration #1 - what is driving the need in your business?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Consideration #2 - what is driving the need for IT and your network?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Consideration #3 - what are the needs of your employees?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Consideration #4 - what are the needs of management? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Consideration #5 - what are the needs of the vendors?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
About Ziff Davis B2B
Ziff Davis B2B is a leading provider of research to technology buyers and high-quality
leads to IT vendors. As part of the Ziff Davis family, Ziff Davis B2B has access to over
50 million in-market technology buyers every month and supports the company’s core
mission of enabling technology buyers to make more informed business decisions.
Copyright © 2013 Ziff Davis B2B. All rights reserved.
Contact Ziff Davis B2B
100 California Street, Suite 650
San Francisco, CA 94111
Tel: 415.318.7200 | Fax: 415.318.7219
Email: [email protected]
www.ziffdavis.com
Ziff Davis | White Paper | How to Choose Between VoIP and Unified Communications
Introduction
Both VoIP and Unified Communications represent large leaps forward from legacy telephony,
which you have likely been using for years if not decades. The quality and reliability of TDM
service remains the gold standard in business communications, so these decisions should not
be made lightly. This is especially important if you are considering a move while your legacy
phone system is still in good working order.
Adopting new technology always involves some degree of risk and uncertainty, and this guide
has been prepared to address these issues. Any business can make a strong case to deploy
either VoIP or UC, as the associated technologies are quite flexible. However, there is an
appreciable difference between a serviceable decision and an informed decision, and the latter
will most always yield better results.
To drive that informed decision, our view is that you must consider five sets of needs that
cover the full gamut of stakeholders involved. Not only are these needs distinct, but as the
forthcoming analysis indicates, they are highly inter-related, and taken together we think you
will make the right choice when considering VoIP and UC for the business.
Five Needs-Based Considerations
In time, all businesses will have VoIP and most will have some form of UC, but SMBs are
still largely legacy-based. As such there are still fundamental business decisions to be made
about how to invest in communications technologies. This section examines five needs-based
considerations that will help you decide whether the time now is right for VoIP or UC.
Consideration #1 - what is driving the need in your business?
Decisions about either must start with a need, and both have a ripple effect of implications
from there. First and foremost, VoIP and UC are services, and they will be used by everyone
in your organization. This is very different from buying network hardware that only IT will ever
see or care about. IT may have needs and drivers for VoIP and UC, but they must play in the
broader context of what’s best for the business.
Let’s look first at VoIP. Despite being in the market almost 20 years, VoIP’s penetration for
business is relatively small. If there was a true need, every business would have moved
on from legacy service by now. This is especially true considering how quickly other new
technologies have been adopted, such as smartphones or Web platforms like Skype. In most
cases, the existing phone service and/or phone system works fine, but there are overriding
pressures to reduce cost, and that typically becomes the core driver for VoIP.
There will, of course, also be situations where a change is actually needed. Your service
provider may be exiting the legacy telephony business, in which case you must switch to VoIP
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or find another legacy provider. More likely, your phone system will reach end-of-life or simply
be overmatched to meet your current needs and is now creating problems that are hurting the
business.
Whether the driver is cost reduction or fixing a real problem, VoIP is a very practical solution,
especially if you’re just thinking about the status quo. In other words, keeping telephony the way
you’ve always had it, and maybe with a few extra features at a lower cost. For many businesses
that’s reason enough to adopt VoIP. The good news is that VoIP can be deployed fairly quickly and
easily. In most cases, a minimal capital outlay is required, and the bottom line benefits will accrue
right away, so it won’t take a year to convince management you’ve made the right decision.
As the Millennial generation takes holds among IT decision makers as well as the broader labor
pool, the above-mentioned status quo will seem like a step backward compared to how the role
of voice has evolved in the world of IP communications. When all communications modes can ride
over the same data network and broadband connection, VoIP becomes part of something bigger
as opposed to the self-contained world that housed legacy telephony for so long.
This is where the overall need shifts from cost saving to serving the broader needs of employees
and making them more productive. You don’t have to look very long or far to see how we
communicate differently and use different tools than when legacy telephony was dominant.
Now the issue becomes one of providing the tools your employees need and the capabilities to
communicate the way your customers now expect.
In this scenario, cost no longer becomes the issue, and the Unified Communications conversation
starts to make more sense. VoIP still has value but is really just a step along the way to UC and
leveraging the power of broadband and IP communications. However, unlike VoIP, where the need
can be measured by cost savings, the benefits of UC are harder to quantify, making the decision
more strategic than tactical.
Consideration #2 - what is driving the need for IT and your network?
Needs can be defined on many levels, and when determining whether to deploy VoIP or UC, the
state of your network is a critical factor. SMBs in particular are challenged by a tight economy,
and most are hard-pressed to keep up with the pace of change in communications. Services keep
getting cheaper, expectations continue to rise, complexity is growing and new solutions proliferate
from both familiar and unlikely sources.
Implications for VoIP
Whatever the extent of your IT and network resources, there is a wide variety of VoIP
offerings to choose from, making this a fairly minor concern. The main issue with VoIP is
convergence – shifting voice traffic off a dedicated telephony network and over to your
data network. Since VoIP consumes very little bandwidth, your existing data network
should be sufficient.
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Ziff Davis | White Paper | How to Choose Between VoIP and Unified Communications
The bigger change revolves around the migration from TDM to IP. If you feel totally
ready for VoIP, a wholesale cutover is feasible, but this does require advance planning,
including a network assessment for IP-readiness. Most businesses, however, prefer
a gradual shift so they can build up confidence in VoIP. This is more costly since you
will need to support voice on both networks for a period of time, and there are many
reasons why this could be the right approach.
Aside from converging voice and data on to a common network, you must also update
the phone system. Here as well, you can choose to make a full changeover from legacy
to an IP-based phone system – and if so, the network must be able to support it. This
depends largely on the state of your phone system, and if still in good shape, the
alternative is to IP-enable the legacy phones with adapters until they reach end-of-life.
This minimizes the upfront cost to deploy VoIP and keeps the network impact at a
manageable level.
If management is trying to keep IT as lean as possible, there are alternatives to
premise-based VoIP. Even though VoIP can be easily managed in-house by SMBs,
there is no shortage of hosted or managed services on the market. In broader terms,
these are cloud-based VoIP offerings that place nominal demands on IT. This is the
pay-as-you-go model which is especially attractive to small businesses that have little
or no IT expertise but want to take advantage of what VoIP has to offer.
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Implications for UC
Since VoIP is a subset of UC, the network considerations are more challenging.
Supporting multimodal, real-time communications requires far more than new IP
phones and some minor network tweaks, especially if you’re thinking large. Whereas
VoIP reduces costs and simplifies your network, UC can be transformational for the
business and will likely call for network upgrades.
In this regard, your IT needs will be driven by the vision you can sell to management.
Taking on a full-scale UC platform will likely require a capitalized investment in the
network, but along with that comes a richer role for IT and great expectations for
productivity gains from management. The underlying technology for UC is fairly
manageable, and the real challenge will be your ability to provide proper network
support and engage employees to get full measure from the applications. If you can
deliver, IT’s role in the business becomes enhanced, and if that’s on your agenda,
making the right plans for your network will be critical.
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If it’s clear that this support will not be coming for IT, you can still drive an ambitious
UC vision by opting for a cloud-based solution. Even more than with VoIP, the cloud
is well suited for UC, especially given the complexity around full-featured platforms.
So long as you are comfortable ceding network control, cloud economics for UC are
compelling, and SMBs in particular can get a major communications upgrade that’s
well beyond what their current network infrastructure could support.
Consideration #3 - what are the needs of your employees?
Looking outward beyond your network, the communication needs of employees will tell you
which path to take, but this may be harder to do than expected. VoIP is similar to legacy
telephony in the sense that the core product is complete and not likely to change much down
the line. Most businesses will still be using desk phones five years from now, and if you expect
landline telephony will remain the hub of everyday communications, VoIP is clearly the best
choice.
This is a pretty easy decision when their needs remain static, but even that can be misleading.
Desk phones may be universal, but their usage is declining in favor of other modes. Some of
this is easy to monitor, such as the proliferation of mobile devices or the rising use of chat or
messaging. More difficult to gauge is how desk phones are being used, and for that, network
usage trends will tell some of the story, such as the duration of calls.
Other factors are harder to ascertain, such as the percentage of call attempts that are
unsuccessful with no message being left. In short, given the wide range of options available to
communicate now, landline telephony can be quite inefficient, creating a drag on productivity.
Communications patterns are changing in lockstep with the technologies, and the deeper you
dig into what employees are doing, the easier it will be to determine if VoIP will suffice. No
matter what their current needs are, choosing VoIP has little downside. In time, everyone will
need more than VoIP, and eventually UC will be mainstream among SMBs. However, VoIP is
still a big step forward from legacy, and initially that will be well received by employees.
As they gain familiarity with VoIP, you can start planning ahead for UC since most providers
can offer both. While it’s possible to go straight to UC from legacy, most SMBs will start with
VoIP first. Furthermore, UC solutions themselves are modular, so unlike VoIP, you can start
basic and add pieces over time as needs dictate.
Another consideration is the basic fact that employees do not really understand the UC
concept, and nor do they really know what their communications needs will be in the future.
This is where you need to be somewhat proactive when choosing VoIP or UC. Once you have
determined that desk phones are not serving your business the way they once did, the move
to UC will be easier to justify. UC provides a rich palette that goes well beyond telephony, and
if employees are ready for this, they will adopt it quickly and easily. Conversely, you’ll be waiting
a long time if you deploy VoIP and hold back on UC until employees “ask” for it.
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Ziff Davis | White Paper | How to Choose Between VoIP and Unified Communications
Consideration #4 - what are the needs of management?
Regardless of IT’s needs or employee needs, management will ultimately decide whether
your next move is VoIP or UC. In some cases, IT will be on the same page with their wishes,
and these will be the smoothest deployment scenarios. Others, however, may clash, in which
case IT will need to step up and perhaps defend a position that does not align with what
management envisions. Each will be considered below for both VoIP and UC scenarios.
Why management would want VoIP
The business case for VoIP is usually pretty simple, and if management is preoccupied
with cost-cutting, this is an easy decision. They may simply mandate that IT makes the
move and leave it to you to sort out the details in terms of the network implications and
whether to stay on-premise or move to a hosted provider.
In cases where the phone system is aging, this brings up broader issues that need to
be considered. While VoIP service will generate savings right away, there might be a
need to invest in IP telephony, so the decision becomes more complicated. Businesses
are not replacing legacy systems with updated legacy, so this move will come at some
point. As such, the initial savings may not be much, but once the IP telephony costs
have been absorbed, the ongoing cost of VoIP service will be attractive.
If the overall priority is to cut costs as much and as quickly as possible, that will likely
steer you into the cloud, where can basically lease the whole package. Instead of laying
out capital for an IP PBX or IP phone system for a conventional on-premise solution, a
hosted service can factor the hardware cost into the overall monthly payment. Not only
does this free up cash flow, but it gets things in place quickly, and both of these will
please management in this scenario.
Why management would want UC
This situation arises when management gets beyond looking at telephony as a
cost-driven commodity. Your options open up considerably here, and this also affords
IT more leverage in driving strategic decisions at a business level. If management isn’t
thinking this way, you really should try to getting them to see it, as the overall benefits
stand to be much greater.
Generally, management pushes for UC when they feel the need to drive employee
productivity, as well as understanding the role communications technology can play
here. In this capacity, they are no longer thinking about VoIP as a standalone service.
Rather, they now see the power of an integrated communications platform to enable
collaboration as well as support an increasingly fragmented and decentralized work
environment.
Being a strategic decision, cost reduction becomes secondary to productivity gains,
but as noted earlier this also places the onus on IT to find ways of delivering those
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gains. Since productivity is much harder to quantify than VoIP cost savings, this will
likely create some new challenges. You should factor this into the overall plan, as it may
require new skills or resources, but if you can establish success with UC, IT’s role will
no doubt be elevated in management’s eyes, and presumably that’s a good thing.
Consideration #5 - what are the needs of the vendors?
This will be more difficult for IT to read than the other considerations, but should go a long way
to determining which path to take. Most vendors and service providers are moving towards
some form of UC since the revenue opportunities are better than VoIP. However, UC adoption
has been slower than anticipated, and with so much legacy telephony still in use, VoIP has a
lot of upside ahead.
There certainly is a strata of the market where VoIP is the core offering, and there many
players vying for your business. Ideally they want that initial transition from TDM, since this
is where the economics are the most attractive. This is a once-in-a-lifetime opportunity to
displace the incumbent telecom vendor and become the partner of choice for the latest
technology. Once that relationship becomes established, the vendor is in a great position to
deepen their role and become the standard upon which new technologies will be adopted.
Another layer down the value chain would be the other VoIP providers trying to displace the
VoIP provider you just put in place. In some ways this is an easier switch since you’re dealing
with like services. Now the providers are competing mainly on price and maybe with some
feature differentiation. If all you need is VoIP, there will always be someone selling it a bit
cheaper.
Since the business will be relying on VoIP for everyday telephony, you should be very cautious
making decisions on this basis. You often get what you pay for with VoIP, and lower cost
providers will invariably compromise in areas such as voice quality, service reliability or security.
Also, unlike legacy telephony, VoIP is a month-to-month service without long term contracts.
As such, the switching costs are low, so the temptation will always be there to consider
cheaper providers.
Going the other way – up the value chain – you will encounter VoIP providers that also provide
some flavor of UC, as well as vendors that only offer UC, but includes VoIP. This is the domain
of all Tier 1 telecom vendors and most of the Tier 2 players. Unlike pure play VoIP providers
that have no installed customer base of their own, UC vendors are primarily motivated to
protect their customer base, which initially was built on a legacy phone system.
As such, when your legacy telecom vendor offers a migration path to UC, their need is
self-preservation. If the business relationship has been good over the years, this will be their
opportunity to lose. The telecom marketplace is currently in deep flux, and some vendors
are doing a great job here, but others are squandering decades-long goodwill and losing
customers to competitors with more aggressive tactics and/or a better solution. The UC
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vendor space will remain highly fragmented for some time, and to make good choices here,
you have to be comfortable with their long-term viability and be sure that their product
roadmap aligns with how your needs are expected to evolve.
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