One of the more interesting sessions for analysts at Cisco C-Scape late last month was the advance briefing on their HUCS platform – Hosted Unified Communications (News - Alert) Services. That’s a mouthful, and one of the more awkward acronyms out there, but it could well be the next growth opportunity for service providers and their enterprise customers.
From Cisco’s (News - Alert) perspective, HUCS is part of a broader initiative to roll up a wide range of premise-based collaboration applications, and support them in the form of an integrated hosted solution. These applications run the gamut, including presence, contact center, WebEx, mobility and UCM – Unified Communications Manager. Taken together, this becomes a one-stop-shop for all things Cisco, and opens up some interesting opportunities for their customers.
You may think I mean enterprises here, but the customers I’m talking about are service providers. Cisco and their channels have a pretty good handle on selling to enterprises, but HUCS gives them a new window to extend their reach into carriers. What they can’t sell directly to enterprises, they can now sell indirectly with hosted services. Sounds like a good two-pronged strategy to me.
Readers of this column will know I’ve written here and elsewhere about the various trends driving the adoption of hosted telephony in the SMB market, which has a distinct use case. Hosted in the enterprise is more daunting, given the scale of operations and sunk costs around PBX (News - Alert) systems. However, as the cloud gains momentum and voice becomes increasingly integrated with other communications modes, the case for enterprise hosted UC grows stronger.
This market shift hasn’t been lost on Cisco, and they’ve hit the ground running. Following the briefing at C-Scape, they have since announced HUCS trials with major carriers, namely Verizon (News - Alert), British Telecom, Orange and Swisscom. That’s pretty strong company, and it’s clear that Cisco is aiming high to establish market leadership out of the gate.
On a basic level, it’s easy to see the appeal of HUCS. First and foremost, it’s a new service for carriers to sell to their most important customers. Being Cisco end-to-end, service providers can deploy this right away, and not be concerned about all the front-end glitches of making the various components work together. With HUCS being run out of the carrier’s data center, they get a centralized solution that runs under their control. This helps keep costs down and allows them to manage resources as they scale up to meet growing demand.
Perhaps more importantly, carriers can take full advantage of the cloud in that these services are truly borderless. For the first time, telcos can truly behave just like an Internet provider. Just like Google (News - Alert), Microsoft, Skype, Yahoo, etc., telcos can use the cloud to offer services wherever there’s an Internet connection. While the likes of AT&T and BT have long operated globally, they do so via interconnected networks.
HUCS opens up new opportunities, not just domestically, but globally. On the most basic level, service providers can now offer hosted UC to any enterprise in their home market. Building on this, they can also service the full set of needs for enterprise customers with global locations. The ability to integrate communications on this scale across one network and a single platform is a very attractive proposition. Taking this a step further, carriers can now serve enterprises out of region, which allows them to enter new geographic markets. The most notable example is BT, who now plans to offer hosted services to U.S. enterprises.
The opportunities here for both Cisco and service providers are promising and potentially very large. There are many reasons why enterprise hosting hasn’t caught on, so we’re still in a trial stage. However, the cloud has come a long way, and the communications-as-a-service concept is gaining a lot of credence now. Once voice formally joins the ranks of IP communications and lives in the cloud, all bets are off for premise-based solutions. This may take a few years, but I think that will be the final end game for telephony as we know it today.
Anyone attending C-Scape saw first-hand how Cisco is thinking big, and HUCS is just one example of this. The mixed messages arise, however, in the fact that Cisco is now touching on just about every facet of both networking and communications. If Cisco were to win every RFP, there would be little room left for all the other vendors, many of whom have been long-term partners. This begs the question about how their competitors are reacting to HUCS.
Avaya is their closest rival, and interestingly, they have not gone down this road yet. They have, however, done the next best thing - extend their partnership with HP, as they now have a common foe to compete against. Avaya’s Aura UC platform is a strong offering, and appeals to a broader user base than HUCS. I’m sure Avaya is following HUCS closely, and will counter as needed, but let’s hope they’re not too late if they need to follow suit.
Microsoft bears mentioning here. They’re not a UC player in the mode of Avaya or Cisco, but there’s a lot at stake for them. As applications keep moving to the cloud, many are also moving away from the desktop. The value proposition shifts along with this, and Microsoft has to work a lot harder now to defend their franchise. Along these lines, IntelePeer recently announced a partnership with WorkSpace Communications to offer a hosted UC solution that’s based on OCS. I don’t think this will compete head-on with HUCS for Tier 1 enterprise customers, but it’s a move into the hosted arena. For the sake of competitive balance, I hope we see many more Microsoft-based hosted offerings. After all, it’s too early to concede the world to Cisco and Google, right?Jon Arnold, Principal at J Arnold & Associates, writes the Service Provider Views column for TMCnet. To read more of Jon’s articles, please visit his columnist page.
Edited by Stefania Viscusi