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The analysts agree: SMEs are driving the switch to UCaaS - Formation - Creative Technology Solutions
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The analysts agree: SMEs are driving the switch to UCaaS

Picture the scene, it’s the end of a long summer and all over the UK, parents are busy driving their adult children back to university.  They are all thinking the same thing: what happened to all the stuff?

A generation ago, returning students struggled under the weight of a hi-fi system, a TV and dozens of CDs and VHS videos. They might even have squeezed in some text books.

Today? A phone, laptop and some clothes. That’s it. Maybe some tattoos. But they don’t weigh anything.

What has any of this to do with unified communications and the mid-sized enterprise?

Today’s students are showing the way. They have gone to the cloud. And if you run a mid-sized enterprise, you’re next.

The analysts all agree: business is turning away from tin. It’s costly, it demands attention and it takes up space.

Gartner says we are in the midst of a huge cultural shift. It argues that by 2020, a corporate “no-cloud” policy will be as rare as a “no-internet” policy is today.

As a consequence it predicts spending on cloud UC as a service (UCaaS) will overtake on spending on-prem UC in 2021.

It says: “By 2021, 90 percent of IT leaders will not purchase new premises-based UC infrastructure — up from 50 percent today — because future cloud UC offerings will be far ahead in terms of features, functions, portals, analytics and dashboards.”

In this sense, UC is just one facet of a broader switch towards all kinds of cloud-based services – from business software to infrastructure to disaster recovery.

Multiple studies reveal this. An excellent and comprehensive example is IDG’s 2018 Cloud Insights study. Its headline finding was that 73 percent of IT representatives said they are already using at least one cloud application or had a portion of their infrastructure in the cloud.

IDG also revealed the average SME’s cloud budget increased from $286,000 in 2016 to $889,000 in 2018.

So what’s behind this migration? Again, IDG breaks down the reasons into a top 10. Among SMEs the reasons were as follows:

Improving the speed of IT service delivery – 66%

Enabling business continuity – 65%

Greater flexibility to reach to market conditions – 61%

Improving customer support – 60%

Lower cost of ownership – 50%

Savings on CAPEX – 38%

Need for real time info – 38%

Replacing proprietary tech – 36%

Reducing resource waste – 35%

Faster RoI – 21%

What’s interesting is that, when it comes to UCaaS, the SME appears to be driving the switch.

The reasoning is that bigger firms already have physical UC equipment in place and the resident IT teams to manage them, so they have more incentive to stick with on-prem installations.

SMEs have far less legacy to protect. They can see the appeal of knowable monthly costs that include outsourcing the maintenance of the software to expert third parties.

This is Gartner’s view too. It wrote: “UCaaS solution adoption is accelerating in the midmarket…small businesses will adopt cloud voice and conferencing faster than their large-enterprise counterparts through 2021, driven by capital budget constraints, increasingly compelling cloud options and limited internal IT resources.”

At Formation, we don’t really need Gartner to tell us this. We know from personal experience how SMEs are waking up to the compelling benefits of UCaaS.

And we know that these benefits are not just about ‘capital budget constraints’ to use Gartner’s clunky term.

Sure, UCaaS can be more affordable than on-prem. Certainly easier to plan for. But its real value is in changing the way businesses communicate with clients, colleagues and suppliers.

When you make UC an application layer in your software stack, you can have conversations with customers on the channels of their choice. You can give your team richer information that makes them more productive.

Yes, cloud UC can change the way you work. We’ve seen it many times.

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