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What Is the Best Communications Solution
for My Business?
by Sandra Palumbo and Zeus Kerravala | July 2011
Picking the Right Communications Solution for Your Business Is Critical in This Fast-Paced World
Businesses large and small continue to evolve their communications infrastructure in an attempt to garner the greatest benefits from the latest
technologies. Today, the technology options available to businesses of all sizes are greater than ever before. Instead of just choosing between a
managed service and a traditional on-premises deployment of a communications solution, we now have cloud delivery as an option. The move to
communications and collaboration applications is not just thought of in terms of office worker use but mobile worker use as well. Security, reliability,
performance and flexibility are solution criteria that are now more important than ever before in a highly competitive, rapidly evolving world.
History shows that while many companies struggle with choosing the best communications solution for their business, other companies
enamored with the promise of the latest technologies move quickly to adopt them without considering how those new solutions fit into their
existing infrastructure and if they will truly benefit the business and its employees.
Enterprises are rapidly extending beyond their physical borders and to be successful, businesses must be able to communicate and collaborate
with their employees, partners and customers, no matter where they are located. Implementing technology solutions that are easy to adopt and
can scale to meet the needs of the business today and tomorrow is a real challenge for any IT department looking to stay competitive in today’s
marketplace (see Exhibit 1).
Exhibit 1: Communications Needs of Businesses Continue to Evolve
Source: Yankee Group, 2011
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Phone
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Web
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This custom publication has been sponsored by Comcast.
© Copyright 2011. Yankee Group Research, Inc. All rights reserved.
Phone
What Is the Best Communications Solution for My Business?
This report examines the evolution of communications services and
From an economic or cost standpoint, a managed/hosted service
their associated underlying technologies. Specifically, we analyze the
is typically less front-end loaded with capital expenditures for
architectural and feature evolution of managed/hosted telephony,
equipment. Instead, a monthly service fee is billed over the typical
VoIP, IP trunking and unified communications (UC). Additionally,
three-year course of a contract. A managed/hosted service also offers
we present key decision criteria for selecting the right IP telephony
savings in terms of time and productivity for IT staff, since most of
solution for a particular business.
the day-to-day management and maintenance work is handled by the
The Evolution of Managed and Hosted Telephony
service provider, meaning internal IT staff can focus on more strategic
IT priorities and projects. This lets businesses with small in-house IT
In today’s complicated technology world, the terms “managed
staffs do much more with the resources they have.
telephony” or “hosted telephony” can often refer to a variety of
Many businesses that turn to managed/hosted IP telephony services
solutions. Yankee Group defines VoIP/IP telephony as the use of
business-class voice and multimedia applications provided through
IP telephony systems, handsets and software. When the terms
“managed” or “hosted” are added to “VoIP,” “telephony” or “IP
PBX,” we are referring to businesses using a third-party service
provider to manage and maintain at least some aspect of the voice
service. Typically, this includes the monitoring and management of
any hardware and software required to make the voice solution
work. Managed solutions typically involve some on-premises
already have some history with outsourcing and view it as a strategic
business priority. With the emergence and adoption of cloud-based
services, companies that are newer to outsourced services may find
this the perfect time to consider a managed or hosted solution. As
more applications are pushed to the cloud, a managed service can
be a great first step and foundation for future communications and
collaboration application adoption that doesn’t require a lot of heavy
lifting from the internal IT staff every time something new is deployed.
equipment and hence remote management and monitoring, while
Yankee Group’s Anywhere Enterprise: 2010 US Unified
hosted services are typically more cloud-based or hosted at the
Communications (UC) FastView Survey proves that for enterprises,
service provider’s location.
speed and savings are the primary drivers for the move to managed
As enterprises come to terms with the business challenges that
prevent them from reaping the benefits of IP telephony and UC
solutions, it becomes time for these businesses to understand what
solutions exist for overcoming these challenges and leveraging
today’s IP networks. Because the underlying network is based
on IP, IP telephony solutions can be located anywhere within the
network reach, including the telecommunications provider’s cloud
or hosting/data center. This allows for the possibility of a business
offloading some of the day-to-day management and maintenance
work to a service provider. A managed or hosted model is typically
a most intriguing option for small and midsize enterprises because
and hosted IP telephony and UC solutions (see Exhibit 2 on the
next page). Enterprises are looking to save on IT maintenance,
integration between multiple providers and infrastructure costs.
These drivers tie nicely into the value proposition behind all
managed and cloud-based or hosted services. Businesses also can
benefit from the hosting/managed service provider’s road map for
the evolution of available services and applications. It often is easier
to undertake technology improvements and refreshes when using a
managed service because those arrangements can be worked into
the agreement upfront, without having to renegotiate or wait for a
contract period to end.
they don’t have the same staff expertise or balance sheet flexibility
as larger enterprises.
2
© Copyright 2011. Yankee Group Research, Inc. All rights reserved.
July 2011
Exhibit 2: Enterprise Drivers for Managed and Hosted UC
Source: Yankee Group’s Anywhere Enterprise: 2010 US Unified Communications (UC) FastView Survey
What are the most important reasons for moving to hosted or SaaS-based UC?
(n=418)
Reduced
IT maintenancetime
time
Reduced
IT maintenance
Lower infrastructure costs
Easier integration with other providers
Better/new features
Faster access to new features
Meets challenges of distributed employees
Allows for opex
Saas-based UC is part of a general cloud rollout
Lack of in-house skillset
0%
20%
40%
60%
80%
Ranked top 3
Ranked 4 and below
Concerns around a perceived lack of cost savings require some
upfront conversations between businesses and their potential
providers. Providers and businesses need to work together
to identify the best IP telephony solution for a given business,
whether it’s fully managed, a cloud-based hosted solution, a more
traditional on-premises deployment or a hybrid. Every business
will have different needs and goals, and service providers need
to partner with businesses in putting together the right solution.
Even when cost isn’t the concern but something such as reliability
or performance is, VoIP’s benefits are no different in a managed
arrangement as in a traditional one and need to be addressed as
part of the initial solution plan and architecture.
If cost savings are an overall driver, the business must work
with its provider to build a detailed cost assessment of VoIP and
UC solutions, bearing in mind the business’ current and future
communications environment. This ensures there will be no
surprises when the bill arrives each month. Managed/hosted
solutions can provide some savings over traditional deployments,
but savings aren’t guaranteed until the enterprise architecture
The Benefits of Consolidated Trunking
Despite its benefits, managed and hosted telephony solutions may
not be the answer for every business. For companies that choose
to keep the IP PBX on their own premises, an architectural change
that can have immediate cost savings is to move to consolidated IP
trunks. Typically, VoIP is deployed on a node-by-node basis, with
each location having its own call control and voice infrastructure.
This means each location has its own trunks for calls out to
the PSTN. In some cases, multiple trunks may be required for
redundancy purposes. This architecture can result in a very high
cost together with very low trunk utilization.
An alternative architecture choice is to centralize call control
either in a central data center or corporate headquarters and
then leverage the corporate WAN to distribute call control. This
provides companies with the ability to consolidate trunking services
to fewer locations. It also gives organizations the option of using
higher bandwidth trunks that can carry more calls, which translates
to fewer lines to terminate.
is really analyzed and evaluated. In a later section of this report
we provide some detailed guidance for areas of consideration in
selecting your service provider and solution.
© Copyright 2011. Yankee Group Research, Inc. All rights reserved.
3
What Is the Best Communications Solution for My Business?
By adopting an IP trunking architecture, businesses can capitalize on
the many core strengths of IP solutions, particularly when compared
to traditional PSTN voice solutions. In addition to consolidation,
these improvements and benefits include:
• Better network reliability than traditional PSTN
solutions. The idea that VoIP is any less reliable than traditional
• Optimized trunking to match a company’s calling patterns
• Accelerated deployment of current and future UC applications
through the simplification of network design
• Higher reliability and better disaster recovery capabilities than
traditional TDM-based systems
voice is one of the biggest myths holding back greater adoption.
VoIP is the direction every business is moving in and will eventually
IP is a resilient protocol and reliability can be built into the
adopt. The key for businesses today is to find the right solution and
design. For example, instead of having separate voice and
the right service provider partner to deliver that solution to their
data networks, a company could choose to deploy two data
business. And while the decision to move to VoIP may be an easy
networks that act as a backup for one another. This would cost
and straightforward one, choosing the best solution and solution
no more than the traditional model but could protect against any
provider can be a bit more complicated.
network outage. It would also provide better disaster recovery
capabilities than running separate networks.
• Lower intra-enterprise calling costs. All on-net calls (that
Finding the Right VoIP Solution
Businesses that do their homework in preparation for the adoption
is, calls within a corporation) are kept on the corporate data
of a VoIP solution will find the decision an easy one. These
network, meaning the cost of these calls can be eliminated
businesses will also discover that VoIP and UC will benefit their
altogether or at least greatly reduced, depending on architecture.
business in many more ways than just cost savings. They bring
Cost savings will vary by organization type. A large, distributed
tremendous productivity and collaboration improvements as well.
multinational company will save orders of magnitude more than a
IP trunking is the most cost-effective method of creating a scalable
large company located in a single building.
IP telephony and ultimately UC deployment, and it has benefits
• Faster deployment of UC applications. Particularly when a
centralized architecture is adopted, new UC applications can be
deployed in the central location and then distributed to all users
beyond those of PSTN trunking. The key to true success, however,
is finding the best service provider for your company. What are the
key considerations when making the decision?
over the company network. This can improve the time to market of
For every business and situation, the answer varies, but Exhibit
new applications by orders of magnitude compared with the node-
3 on the next page offers a guide to better understand the areas
by-node deployment of traditional communications applications.
for consideration and evaluation in selecting the right solution.
In these tough economic times, businesses are trying to improve
profitability and reduce costs, and they are forced to look for
ways to save when it comes to their communications expenses.
Additionally, companies with smaller IT organizations must look
for new, less staff-intensive ways of solving problems. The right IP
telephony solution helps companies achieve the following benefits:
We break the table up into two key components—voice and
data—because a VoIP solution requires that companies not only
have a handle on their voice costs but also their data costs, since
the move to VoIP is a move toward convergence. When evaluating
new solutions, companies must also understand their current
costs (recurring, capital and operating) and be able to compare
that to the expected new costs of the various solutions. With the
• Reduced overall communications costs
various telephony solutions, it isn’t easy to do an apples-to-apples
• More efficient use of network assets
investment and costs are with each solution to help make the best
comparison, but it is possible to know exactly what a company’s
decision for how each particular business likes to operate.
4
© Copyright 2011. Yankee Group Research, Inc. All rights reserved.
July 2011
Exhibit 3: A Guide to Gauging VoIP Costs
Source: Yankee Group, 2011
Components
Guidance
Your Monthly
Costs (Service
Provider)
Your Capital
Costs
Your Monthly
Costs
(Operating,
Maintenance)
Total 3-Year
Costs
Average Cost
Per User/Per
Seat
Number of Locations
DATA/INTERNET
VOICE
Number of Users/Seats
A. Current Telecom Costs
What are your true and total
telecom costs per month?
Exclude taxes and surcharges.
B. Cost of Simple (POTS)
Telephone Services
with Features
Typically $45 per month and
$40 per handset
C. Hosted PBX
Typically $20-$50 per seat
D. Trunk Service
Typically $500-$1,000
per month
Number of Locations
Number of Users
A. Current Data Costs
What are your true and total
telecom costs per month?
Exclude taxes and surcharges.
B. New Provider Costs
Typically $...
Except in some very specific cases, the cost of a solution is not
VoIP and IP trunking solutions are never going to be one size
the sole driving factor, especially when dealing with more complex
fits all. Businesses must find the solution that is right for their
solutions and services. Once a business has a handle on the costs
particular circumstances. Does the business prefer managed/
and infrastructure pieces of the decision as outlined in Exhibit 3, IT
hosted solutions to premises-based? What are the growth plans?
decision-makers must consider the qualities of the actual solution
How easy is it to add, remove or change services? What is the
provider. Features to consider include:
state of the current telephony solution? These are just some of
• The quality and coverage of the trunking service
the many questions businesses will need to consider, and finding a
service provider willing and able to have these discussions and offer
• The quality and coverage of the underlying network
business options and flexibility is always a great place to start.
• Experience in the market and availability of reference accounts
Working with the right service provider partner to deploy a VoIP
• Interoperability with the major UC vendors
• Deep expertise in trunking solutions and IP
communications solutions
• Commercial availability of IP telephony services
• Managed and professional services experience and offerings
© Copyright 2011. Yankee Group Research, Inc. All rights reserved.
architecture that leverages IP trunking not only has an impact
on costs, but also provides businesses with a road map to other
communications and collaboration solutions, such as those
found within the UC suite of applications. The right VoIP and UC
solution, coupled with the best partner for the business, can lead
to a path of change and growth beyond what many traditional
communications solutions can enable.
5
What Is the Best Communications Solution for My Business?
Understanding the Implementation of UC
Communications, collaboration and worker productivity are key
components to a business’ competitive advantage. Workers are being
challenged to reach more people in shorter periods of time with the
right information at hand. To meet these communications demands,
many companies are turning to UC, especially as a means to enhance
the functionality and use of their IP telephony infrastructure.
UC, in short, brings all a company’s communications and
collaborative tools together into one solution. It is the
convergence of voice, video, Web and desktop communications
built on an IP network and allowing businesses and employees to
overcome time, distance and media barriers. UC ultimately enables
employees to communicate with each other virtually anywhere,
any time and over any device. UC improves the manageability and
• Fixed-mobile convergence (FMC): FMC enables a worker
to seamlessly move calls between desktop and mobile phones for
voice call continuity. As the mobile workforce grows, the ability
to provide mobile integration becomes a key decision point for
organizations evaluating UC solutions.
• IP network: An IP network is required to deliver information
and communications to users. IP is the only protocol that is
scalable and simple enough to make the vision of UC a reality;
it will be the common network for the deployment of all
communications systems. Although IP is a dynamic, scalable
technology, it does require ongoing optimization. Management
of a network life cycle is critical now as more applications are
running on the network.
• Integrated multimedia conferencing: Conferencing
effectiveness of the ecosystem and makes the enterprise more
applications have existed for a number of years, but only recently
responsive and agile.
have they become integrated into UC. Yankee Group considers
UC consists of the following tools:
• IP telephony/VoIP: VoIP enables companies to use the
corporate data network for phone calls rather than having
a dedicated network just for telephone service. Historically,
VoIP was considered by many organizations as the foundation
of UC. However, during the past year, presence and desktop
the following services multimedia conferencing:
• Video conferencing: Long a nice-to-have, video is now one
of the main applications driving UC deployments. Quality and
ease of use have improved dramatically, allowing more users
to take advantage of video communications.
• Web conferencing: This form of conferencing has become
integration have been elevated to being critical to the success
popular within the last five years, due largely in part to ease
of UC.
of use and accessibility. Audio and Web conferencing are now
• Presence: The ability for users to understand one another’s
availability and willingness to communicate over a variety of devices
the most widely adopted forms of converged conferencing.
• Audio conferencing: The most mature form of
is critical in today’s quick-moving business environment. While
conferencing, audio conferencing through the use of bridge
instant messaging (IM) applications are common today, presence
lines is still the most widely adopted form of conferencing.
is also being used to understand a user’s status on phones,
However, as this space evolves, we will see audio become
wireless devices, video conferencing and other collaborative tools.
more integrated into other forms of conferencing systems
Additionally, presence can be extended to objects such as alarm
and UC solutions. Yankee Group has seen companies recoup
systems, medical devices and even documents.
their investment in UC in as little as six months by shedding
• Mobile client: Enterprise mobility is rapidly becoming a key
expensive bridge line services.
driver for UC. A mobile client mobilizes a UC platform and
Yankee Group believes a strong UC strategy begins with a solid
puts the desktop in the hands of mobile users, which make
foundation built on a well-planned VoIP environment and leveraging
up 40 percent of the work force. The holy grail of mobility is
the concept of presence. Exhibit 4 on the next page depicts the key
when a worker can seamlessly access UC applications anytime,
components of a full UC and collaboration solution.
on any device.
6
© Copyright 2011. Yankee Group Research, Inc. All rights reserved.
July 2011
Exhibit 4: Yankee Group’s UC Taxonomy Is Built on a
VoIP Foundation
Conclusions and Recommendations
Source: Yankee Group, 2011
Deploying VoIP and ultimately UC is a key component to
transforming into an Anywhere Enterprise®. The business benefits
Mobility
that can be achieved from the flexibility, scalability and functionality
of a full IP environment can take business and employee productivity
Unified Messaging
Video/Audio/Web Conferencing
Chat/Instant Messaging/Presence
to the next level of success. If deployed strategically, it can also help
companies redefine business processes around communications and
leapfrog their competition. However, any new technology deployment
needs to be a well-planned, strategic initiative with full buy-in at all
levels of the organization and the right service provider selection.
VoIP
Presence
Businesses must adopt VoIP and ultimately UC with a view to
where their business will be in the future—what technologies and
applications are on their road map. Taking into account business
expansion, the number of remote and mobile workers, business
UC is valuable on many levels. It is one of the few technologies that
plans around the customer experience and other possible initiatives
can fulfill on the promise of any IT project. Specifically, UC can:
all need to be factored into any IP telephony decision. Unlike other
• Lower TCO
technologies, the voice and communications solution chosen by a
business today will likely be one that is around for a while. With that
• Increase worker productivity
in mind, Yankee Group recommends:
• Create new efficient business processes
• Ensure full support from management executives to
• Improve customer satisfaction
run the show. The deployment of VoIP solutions, hosted
or on-premises, is not a one-time project. Long-term service
Over time, the focus of the value proposition has changed. A few
commitment and collaboration from the management team is
years ago, the primary driver for VoIP and UC revolved around
instrumental in achieving a seamless service migration without
cost savings alone. Though cost savings still remains a key part of
sacrificing the expected quality of service.
the UC decision, especially in tough economic conditions, the real
potential is as a foundation for fundamentally changing the business
and building long-term competitive advantage. Yankee Group
believes we are finally approaching the time when UC solutions will
be rapidly adopted by businesses of all sizes as collaboration and
communications is poised to take businesses to the next level.
• Choose a solution provider that has a robust IP network
as a foundation to the service. For a managed service to
provide the necessary levels of reliability and scalability, the data
infrastructure needs to be rock solid. An all-IP network will
provide high-quality services, newer services faster and a level of
reliability that is better than a service built off a hybrid of IP and
circuit switching.
© Copyright 2011. Yankee Group Research, Inc. All rights reserved.
7
What Is the Best Communications Solution for My Business?
• Assess your readiness. UC can be too complex to be deployed across the entire organization in one sweep, especially in larger
companies. Find a department or group of workers that would benefit most from UC. A younger group of workers or a highly mobile group
is ideal. This will help you establish a strategy for deployment and start a grassroots adoption campaign as UC is slowly rolled out to a wider
portion of the company.
• Evaluate service providers on decision criteria that are relevant to this era of communications. Too often, companies make
decisions based on vendor incumbency or simply choose the lowest cost provider. UC is ushering in a new era of communications and decisionmakers need to evaluate solution providers based on criteria that will enable this transformation. Specifically, organizations should look for the
following: Dedicated account managers and project managers to help with the transition, financial stability to ensure investments in UC will
continue, full 911 compliance, a one-stop shop for all a company’s communications needs and an aggressive road map of future UC services.
• Do your homework prior to any service-level agreement (SLA)/quality-of-service negotiation. Be ready to compare and
analyze SLAs among multiple service providers. Assess your major business-impacting breaches to determine optimal uptime and negotiate
business-driven SLAs. Be aware of contract lock-in by setting up baseline service requirements and expectations.
8
© Copyright 2011. Yankee Group Research, Inc. All rights reserved.
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Sandra Palumbo, Research Fellow
Sandra Palumbo, research fellow, reports into Yankee Group’s Research Council. Her research focuses on cloud
computing, enterprise mobility and service provider strategies, with particular emphasis on software as a service
(SaaS), mobile applications, Web portals, managed services, professional services and wholesale.
ad
He
© Copyright 2011. Yankee Group Research, Inc. Yankee Group published this content for the
sole use of Yankee Group subscribers. It may not be duplicated, reproduced or retransmitted
in whole or in part without the express permission of Yankee Group, One Liberty Square,
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constitute our judgment as of this date and are subject to change without notice.
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