Collaboration Solutions: On-Premises or in the Cloud?

Posted 2011-04-28

Collaboration Solutions: On-Premises or in the Cloud?

By: Roberto De La Mora, Eric Schoch

Henry Ford once said, "Any customer can have a car painted any colour he wants so long as it is black." Most unified communications (UC) vendors today are applying the same line of thinking that Henry Ford did back in the early days of the Model T. Except now, in terms of delivering UC, these vendors are thinking: "It doesn't matter what consumption model makes the most sense for the customer, their choices are limited to how we are able to deliver it."

When looking at a customer's current and future needs, a one-size-fits-all approach just does not work. The question is, what consumption model makes the most sense for the customer based on the way they do business? Is it on-premises, hosted or perhaps even a combination? A vendor's focus is to deliver a high-quality user experience, maintaining the look, feel and functionality regardless of how companies decide to deploy and consume UC solutions and the associated technologies.

Customers are increasingly looking for flexibility in how they consume and deploy UC and collaboration solutions-including the option to utilize hosted and "as a service" models. The growth opportunity for these models is tremendous. According to a recent report, non-premises consumption models for UC and collaboration have growth rates that are 1.5 to 2 times that of traditional customer premise equipment. What this means is that, by 2013, up to 30 percent of UC revenue will come from hosted UC deployments.

Collaboration Solutions: On-Premises or in the Cloud?

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Hosted deployment model

With a hosted deployment model, it's possible to provide customers with a complete range of UC and collaboration solutions, just as they'd receive via a premises-based solution. From a provisioning perspective, the solutions service provider will have the ability to automate and simplify the activation of new enterprise customers, users and their phone services-providing real-time monitoring in place of more manual and often error-prone batch provisioning. Hosted UC and collaboration service providers also like this model because they benefit by being able to manage a large-scale, shared IP telephony platform as a single entity, simplifying integration and reducing operational complexity and costs.

Organizations gain the benefits of this network without having to own, manage or maintain a UC system. They will have all the advantages of an outsourced IP communications environment, along with access to all the regular business telephony features they need, with a wide variety of UC applications that create a full suite of business-class collaboration tools.

Designed specifically for hosted and large-scale environments, UC-hosted architecture is comprised of four integrated components:

1. Full range of UC and collaboration capabilities,

2. A management platform designed for efficiency and scalability,

3. A virtualized server environment, and

4. An aggregation and integration layer designed for service provider environments.

Virtualization, management automation and aggregation enable an architecture that makes it possible to deliver a hosted UC solution. As a result, services can be cloud-based, hosted at customers' premises or a combination of both. All services are enabled by the same applications and virtualized per customer by the service provider.

Regardless of the variability of service deployment, service providers get a shared infrastructure, both from a management perspective and with the end-to-end network. From an architecture perspective, hosted collaboration solutions (HCS) makes full use of a network infrastructure and a data center strategy to make linkages happen in the most efficient ways. It provides scalability and automation from order to activation for minimal operational costs and maximum efficiency.

Collaboration Solutions: On-Premises or in the Cloud?

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Choosing the right consumption model

There is no one single answer that would fit all environments and needs. The decision on the best model for you will depend on several factors. Whether you want basic IP telephony service, IP contact center or federated presence, users can now obtain the productivity benefits of these and other powerful communications and collaboration services, regardless of your current set of circumstances. With the wide range of deployment options available, you can opt to deploy pure models (for example, only cloud or only premises solutions) or you can choose blended models according to your unique business needs. For example, consider these four scenarios:

1. If your company views technology as a competitive differentiator 

The traditional Customer Premises Equipment (CPE) model is ideal if technology is a strategic part of your value proposition and you want to handle everything yourself. Your company purchases and integrates the tools, building the knowledge, skills and processes to manage your converged network and the new UC and collaboration solutions that run on it. The IT staff, in essence, becomes a service provider for your organization.

2. If your company wants to focus less on IT and more on core competencies 

Managed CPE is something to consider if you want to own the UC infrastructure and software but the IT staff is lacking the required expertise. A service provider with UC and collaboration expertise can help you transform your organization and lower your operating expense because the service provider manages the hardware and software. This arrangement eliminates on-premises management and maintenance costs such as full-time help desk and server support, freeing your IT staff to focus on other tasks.

3. If your company is constrained by capital expenditures and uncertain about the future 

Consider collaboration as a service (CAAS) if, like many companies today, you need to do more with less; if you have fewer people, less budget and less lead time. A software-based delivery model provides UC and collaboration services through private clouds. Cloud services deliver rapid time-to-value and are typically paid for as they are used (some service providers bill by the second), and you pay for only the required capacity and features. This utility-based pricing model eliminates the cost of directly buying, installing and maintaining the needed hardware and software.

4. If your company is seeking investment protection and flexibility 

A blended or hybrid model may be the best option if you have older PBX and IP equipment and want to introduce new UC and collaboration capabilities without introducing additional complexity to IT staff. With an open and interoperable platform, you can use cloud and premises benefits for particular components. Blended models also help ensure state-of-the-art capabilities because solution providers typically use the most current versions of software and hardware.

Collaboration Solutions: On-Premises or in the Cloud?

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How to make it all work 

Collaboration is equal parts process, culture and technology. The best technology in the world will only take your organization so far. To realize the full potential of these new tools, you need to accept that these tools will affect the way some business processes are conducted. You need to accept that these tools will change the way employees interact with each other, suppliers, partners and customers, and that these changes will lead to a change in the organization's culture.

Changing our process for working together, we can forgo the traditional command-and-control hierarchy, enabling us to do more and spend less time in both virtual and face-to-face meetings.

Organizations across the globe are finding increased benefits from collaboration tools when combined with adjustments in culture and associated processes. The integration of collaboration technologies represents the next step in the evolution toward more efficient and automated business processes, while delivering more space for personalization, customization and work flexibility.


Roberto De La Mora is responsible for IP communication solutions at Cisco Systems. Roberto holds an MBA from the Instituto Mexicano Aleman de Capacitacion Industrial y Comercial in Mexico City, Mexico. He can be reached at

Eric Schoch is Senior Director, Product Management at Cisco Systems. Eric holds an MBA from the University of Texas at Dallas. He can be reached at


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