While enterprise customers are embracing cloud-based services that offer quick returns on low-risk deployments -- such as cloud storage for better data management and universal access to information -- many businesses have been leery of moving their critical telephony and unified communications infrastructure into the cloud.
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It's often cheaper over time for a customer to purchase communications on a month-to-month basis, and ramp services up and down as needed.
president, Cloud Communications Alliance
Unified Communications as a Service (UCaaS) providers must adjust their selling strategies to match their customers' basic business needs by finding ways to work with the infrastructure customers already have installed. Enterprises with premises-based UC systems are not going to swap them out overnight, said Ken Landoline, principal analyst of unified communications and contact center research for Washington, D.C.-based Current Analysis Inc.
"Providers need to focus on hybrid environments -- customers will probably be staying with equipment they already have and might be interested in some add-on features in the cloud or putting remote office locations in the cloud," he said.
Providers should be prepared for an uptick in hybrid sales as customers dabble with cloud-based UC features, without ripping out their legacy infrastructure, Landoline said.
"UCaaS providers shouldn't focus on selling the entire package," he said. "They shouldn't be disappointed with getting their foot in the door with a hybrid cloud offering. [Providers] should look for opportunities to sell pieces of their cloud, and even gradually move [the customer] fully into the cloud."
Cloud-based communications: UCaaS definition and pricing confusion
While the benefits of some cloud services are more readily apparent, customers need help from providers in determining if cloud-based communications will be appropriate for their business, according to the Cloud Communications Alliance (CCA), which recently released a paper detailing how UCaaS providers can more effectively sell cloud-based communications to enterprise customers.
Many providers get stuck on the renting vs. owning conversation with customers, which can be problematic for large enterprises that want to own infrastructure, said Joseph Marion, president of the CCA.
"The way [providers] should be overcoming that is by explaining the differences between capital versus operating expenses," Marion said. "It's often cheaper over time for a customer to purchase communications on a month-to-month basis, and ramp services up and down as needed," he said. While many customer business models have been fixed around capital expenditures for UCaaS, including hardware refreshes and new system purchases, cloud-based communications could appeal more to enterprises that don't have the budget for large expenditures.
The definition of cloud-based communications varies by customer, which makes it more difficult to sell these services, said Dean Parker, president and CEO for Callis Communications, a Mobile, Ala.-based CCA partner and UCaaS provider.
"All our customers look at UCaaS as something different," Parker said. "Some believe it's video, voice and various UC applications, while to some, it's just voice, or just instant messaging and presence."
UCaaS providers: Embrace the hybrid sale
Providers need to gear their offerings towards the services the customer is looking for -- such as a single application or solutions for smaller branch offices -- and leave out additional features that the business won't use.
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"Providers need to listen to the customer -- they will tell you exactly what their needs are," the CCA's Marion said.
Customers purchasing traditional business communications -- including telephony and UC tools -- from telecom sales teams have historically bought on-premises products, rather than a service. "Providers have to talk to their customers about how UCaaS pieces come together -- which is totally different than selling [customers] a box," Callis' Parker said.
Hardware-based solutions also guarantee some degree of persistence with a customer that a UCaaS vendor will never be able to use. A customer will be slow to rip out installed hardware, but he or she will not hesitate to switch service providers, Current Analysis' Landoline said. "Providers have to fight for business every month, and they need to be flexible or risk losing business," he said. As the customer's needs grow and change, so will their business with their provider.