Panel Tells Why Most SMBs Still Not Using Cloud for Voice Services

According to William Haskins, Sr. Analyst and Partner, Unified Communications at Wainhouse Research, a recent panel of 300 U.S.-based IT decision makers (ITDMs) who support businesses from 20 to 500 employees revealed that more than half are still running telephony services in-house.  The primary reason for maintaining these systems in-house was concern over security.

Another notable finding uncovered by the panel is that virtually all ITDMs would use MPLS it it were a viable options.  This is not necessarily surprising, but worth keeping in mind as SD-WAN solutions (such as SimpleWan) continue evolving to provide both security and MPLS-like benefits at a fraction of the cost.

Other findings outlined by Haskins (the full post here) include:

1. Odds are, we’re not using the cloud yet – for telephony

What we found: over half of our survey respondents are still rolling their own, running telephony themselves, supporting users out of their own data centers (or closets, or garages, or basements). These findings are consistent across all respondents – from the very small business with 30 seats to the mid-sized gang with 500.

Why this is interesting: wait, whaaaat? I thought every small business was already in the cloud, certainly for voice services. We’ve been tracking the hosted voice market at a confident and consistent 25%+ growth rate year after year, and the IT teams we work with all seem to have at least some seats in the cloud.  Indeed, a third of all respondents note they have a hybrid voice deployment, pointing to ongoing migration. Still, 50%+ of businesses with telephony on-prem – especially in the small and medium side of the market – was higher than this analyst expected.

2. We’re getting what the cloud has always promised

What we found: we asked ITDMs who are currently using the cloud what benefits they are achieving. The top three responses = IT Productivity, Quality, and Faster Upgrades.

Why this is interesting: because this is what I’ve been talking about for the last 10 years!! It’s what the cloud is supposed to be delivering! Look – if the cloud is adding overhead to your IT team, you should likely be shopping for a new cloud provider, full stop. One of my favorite quotes in recent history came from a VP of IT who said “I want my team to excel at managing vendors – not applications.” The cloud had better free up your IT team from tactical day-to-day break / fix activities, allowing them to focus on strategic growth and transformation. As for quality and upgrades, these should also be considered ‘table stakes’ for a cloud service – if I can do it better / faster, why do I need a hosted solution? Thank you ITDMs for making us look like we’re paying attention!

3.…Except for one thing

What we found: the cloud’s not perfect, however. The biggest cloud gripe = we thought we’d save money – but we’re not!

Why this is interesting: oops! I thought this was going to be a key benefit.  I mean, I heard the provider has these magical “Eco Gnomes of Scale, right?” The reality: it is difficult-to-impossible to deliver a realistic cloud-based cost/benefit model that applies to every enterprise. This perspective is reinforced regularly during our cloud-provider briefings. From my chair, the biggest opportunities the cloud delivers were uncovered in finding Two above – expect increased productivity, quality, and more features. Combined, these can (and do) deliver material hard benefits that just don’t often make it into the typical CFO-approved business case – think company-wide productivity, increased employee engagement (and retention), happier customers, IT efficiencies, and increased EBITDA. Take advantage of these correctly, and you’ll come out on top. Compare your telecom invoices line by line, however, and you may be disappointed – likely because your cloud costs expose line items you may not associate directly with your telecom services (e.g. support, vendor management, power and equipment, etc.).

4. MPLS is damn sexy

What we found: almost all small to medium decision makers would use MPLS for their enterprise voice if they had it their way.

Why this is interesting: because a material percent of small to medium business’ hosted telephony is still reliant on the Public Internet. The PI debate wages on and on – a number of providers will tell you that the PI is all good now, that bandwidth is plentiful, and that voice applications now handle un-managed networks just fine. What I think: it’s mainly the PI-based service providers who believe this. And whether or not I believe MPLS is a better transport solution for corporate telephony services is absolutely irrelevant – it’s the ITDM who will be making a purchase decision and living with the results. Based on this survey, the vast majority associate quality, reliability, and security with a managed network.

5. So why are we still on prem?!?

What we found: the most popular cloud barrier (if barriers can be popular): security concerns.

Why this is interesting: current VoIP solutions promote application-layer security, pointing to Transport Layer Security (TLS), Secure Real-time Transport Protocol (SRTP), and a host of other acronyms that should help the ITDM sleep at night. However, these same ITDMs are well aware that the cyber-criminal wants more than just your real-time-voice packets.  Data is the new bacon: directory information, meeting content, and customer lists are all very tasty and potentially profitable targets. In reality, security needs to be a core competency of every hosted provider – you should expect they run a tighter (and more secure) ship than you can in this regard.  It’s their business!