Move to Cloud UCC for Agility, Not Cost Savings

Move to Cloud UCC for Agility, Not Cost Savings

If you’re considering a move to Unified Communications as a Service (UCaaS) or hosted UC, the chance that you’ll realize cost savings is low, particularly in the first year but in subsequent years, as well. The key driver for cloud UC is agility–beating “perceived cost savings” for the first time in this year’s research.

For several years, Nemertes has held firm that most companies will not see costs savings with a move to the cloud. Our research has backed that premise for the past five years. I have debated with (a declining number of) doubters during that time, particularly when speaking at conferences on the topic. After all, people understandably thought they would move internal management functions to the cloud, resulting in layoffs. They also thought they would save money by reducing equipment maintenance.

In reality, we rarely see companies reducing their employee counts. Instead, they use the headcount (whether the same people or different ones) for new functions. Those include integration with enterprise and other cloud apps, management of the cloud provider relationship, internal change management and training, and enabling digital transformation by working more directly with the business units.

The figure below shows results from one set of questions relating to the move to cloud. In the first year, only 17.9% of companies saw a decrease in their operational costs (including staffing, managed services, equipment maintenance, subscriptions, and training). After year 1, that figure increases to 27.9%. The highest percentage in either timeframe sees costs staying flat. The average increase is 15.1%; average decrease is 13.9%.

With the cost driver losing steam now that enough companies have seen first hand what happens, does that mean cloud UC is dead? Quite the contrary! Organizations are moving to hybrid deployments in larger numbers than ever. What’s driving them to the cloud? Agility. IT can respond more quickly to employee requirements, deliver more services, and be involved in more strategic business initiatives. More on that in my next blog.

For more information on our 2018 Unified Communications and Collaboration research, click here: https://nemertes.com/research/unified-communications-collaboration-2018-research-study/