Cloud is the new hosted in the adverse diverse universe

Irn-Bru cans
If there was always one, single, universal answer, we’d not have Pepsi, Coca-Cola and IRN-BRU; there would not be around 20 diverse, major religions or belief systems in the world; Android, iOS 4, Symbian OS and Windows Phone 7 would all be superseded by ‘Universal SmartPhone OS 2’, and we’d all dress the same – like the characters in Logan’s Run.

Thankfully, the world is full of heterogeneity and that applies also to the α-diversity in the communications marketplace. Unified communications (UC) does not mean uniform communications and there is a ‘business case for diversity’ beyond that which talks of the composition of the workforce. It’s called competition.

The hype regarding competition in today’s communications marketplace is all about the ‘cloud’ and if we are to believe that, businesses should be falling over themselves to implement UC or their contact centres or Web-telephony, in public or private cloud networks as if that was the solitary answer. The reality is somewhat different and enough to make any self-respecting evangelist utter a simple unitary philippic in exasperation. You can hear them say, “They just don’t get it, do they?”

Enterprises, particularly SME/SMBs, probably see the ‘cloud’ as suggested by these lines from the Pretenders’ song ‘Don’t get me wrong’:

“If I come and go like fashion, I might be great tomorrow, but hopeless yesterday’. On the other hand, ‘it might just be fantastic’. It is going to be fantastic, but if current trends in the UK telecommunications services industry are anything by which to go, it’s going to have to wait for tomorrow – which, never fear, will come.

In the UK, there doesn’t yet seem to have been a landslide in favour of hosted telephony or other applications, such as SaaS or cloud-based applications delivery. Back in 2006, a Dell’Oro Group forecast suggested the total PBX market would be US$7.1 billion annually by 2010. They were right, but recent financial meltdowns are reflected in a current forecast, which points to the global market exceeding US$6 billion in 2014. Its 2008 report looked forward to growth fuelled in large part on increased sales to SME/SMBs and from 2006, apart from ‘extenuating circumstances’, the year after year predictions were for a reasonably steady market. The question is, “Why, at a time when OPEX is favoured more than CAPEX, has there been no avalanche of hosted or cloud-based solutions enveloping the prime target; those very SME/SMBs?”

It’s an interesting question when you consider that other intelligence from ABI Research indicates that enterprises are ramping up their investments in VoIP technologies on both customer premise equipment (CPE) and hosted VoIP. It goes on to say that overall revenue growth is due to brisk competition between CPE vendors and hosted service providers, but it does add that hosted VoIP is a ‘safe investment’, precisely because it offers flexibility at this time of uncertain economic recovery. Its research suggests that hosted IP PBX services should exit 2010 with a 15.3 per cent increase in revenue to US$3.4 billion worldwide, which means that it does have traction. One third of the market is more than a tremor and it brings us closer to a shakedown.  

The market inertia is because of the spenders’ disinclination to change and for there to be more than a slim chance of a mudslide, the tipping point needs to be reached. ‘Cloud’ is the new hosted and if we talk of ‘true cloud’, in addition to simply ‘hosted’, and of solutions being ‘engineered for the cloud’, it will help folks over the edge. Numerically, SME/SMBs constitute the largest proportion of the diverse communications marketplace and, in theory, should benefit most from getting on board the ‘cloud’ bandwagon as it rolls over the rim. But thinking about it, wouldn’t that make them all lemmings?
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