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Is it Time to Change Out Your Legacy PBX for a Cloud-based Solution?

TMCnews Featured Article


March 20, 2012

Is it Time to Change Out Your Legacy PBX for a Cloud-based Solution?

By Peter Bernstein, Senior Editor


One of the joys I have is my role as moderator of various webinars. While there are many reasons, including finding out what is on the minds of attendees, the main one is the opportunity to gain new knowledge about industry trends and insights from those on the front lines of their markets. The recent webinar, Are You Ready for a Change from Premise Telecom Equipment, which featured Steven Greiwe, ASM (News - Alert) Eastern Region for Panasonic, is a case in point. Not only did it detail the usual industry statistics about the growing move to the cloud by enterprises of all sizes for a myriad of computing and communications capabilities, it also provided some context for why and the benefits which are worth sharing.


Numbers you can count on

There are two observations Greiwe presented that had a bit of a wow factor for me. The first was what Panasonic (News - Alert) through its research discovered about the reasons small to medium sized businesses (SMBs) are moving their voice communications out of the telecom closets and into the cloud. It confirmed what many have been saying, but is worth repeating in its granularity. While time-to-deployment and lower cost are the biggest and most obvious drivers of cloud-based solutions the numbers from the research are impressive:

Lower overall costs 79%
Speed of implementation and deployment         71%
Gaining functionality that is not available in a licensed software package    59%
Lack of in-house IT staff to maintain a  traditional software solution   56%


What jumps out are not the high percentages associated with the first two items, but the respondents’ rankings of the last two as critical drivers of their consideration of cloud-bases solutions. One of the things that has come to fore in my discussions with industry analysts concerning unified communications (UC) and other increasingly critical collaboration and business optimization functionality has been the number of licenses they already have for such functionality but never use despite having paid for it. The reasons tend to be associated with the last point about not having the in-house staff to maintain (I would add the word “integrate” as well) software solutions. Moving to the cloud solves that challenge as it is lowering overall costs and speeding the time to implement new capabilities and deploy them.

The second set of observations was an even bigger eye-opener as it demonstrates the custom productivity that can be achieved by SMBs moving to a hosted solution. Below are the highlights:

  • ROI of 301% with a payback period of 7.4 months
  • Savings of 25–50% in travel costs
  • Savings of up to 20% for entire IT budget
  • Reduction in training requirements by 25%
  • 10% lower audit costs

Benefits

          Value per user, per year

Improved productivity

Collaboration savings

Business Intelligence cost avoidance

Travel cost savings

Reduction in training costs

Conferencing savings

Annual benefits

$771

$281

 $89

$280

 $39

 $63

                              $1,523

What this translates into is an overall potential savings of $17M across three years for a company with 3,000 employees. Yes, 3,000 employees is hardly an SMB but scale only accounts for a small delta in looking at probable differences between such a large organization and SMBs. The point is that the savings are there. What this means is that dollars for the justification of moving to the cloud exist based on very favorable rates-of-return on investment (ROI) and total cost of ownership (TCO) calculations. In other words, this proves the maxim that, “the bottom line is the bottom line.”

Finally as Griewe noted, the great thing about moving to hosted solutions is that it can be an evolution rather than a revolution, meaning “pay as you grow.” When done smartly, the move away from legacy TDM premises-based PBX’s (News - Alert) to the cloud does not have to create chaos with end users, system administrators or CFOs. Just as importantly, the introduction of smart SIP endpoint as integral parts of a migration means no loss (in fact in some cases can mean a valuable upgrade) in functionality, reliability, accessibility and security. It also means less concern over the speed of deployment of important new applications across the enterprise, the enforcement of policies and rules, and concerns over system backup and availability in terms of risk mitigation resulting from a catastrophic event. The latter being the complicated way of saying, your key personnel can be up and operating at full steam extremely quickly.

Is it time for you to empty that telecom equipment closet and move to the cloud? Listen and watch the webinar to hear in more detail why the move may be right for you and the time may be now.




Edited by Rich Steeves







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