How to Choose Between VoIP and Unified Communications

How to Choose Between VoIP and Unified Communications

Introduction Both voice over IP (VoIP) and Unified Communications (UC) represent large leaps forward from legacy telephony, which you have likely been using for years if not decades. The quality and reliability of legacy systems remain the gold standard in business communications, so these decisions should not be made lightly. This is especially important if you are considering a move while your legacy phone system is still in good working order. In time, all businesses will have VoIP and most will have some form of UC, but small and medium-sized businesses (SMBs) are still largely legacy-based. As such there are still fundamental business decisions to be made about how to invest in communications technologies. Adopting new technology always involves some degree of risk and uncertainty, and this guide will address these issues. Any business can make a strong case to deploy either VoIP or UC, as the associated technologies are quite flexible. However, there is an appreciable difference between a serviceable decision and an informed decision, and the latter will most always yield better results. To drive that informed decision, you must consider five sets of needs that cover the full gamut of stakeholders involved. These needs are distinct, but as the forthcoming analysis indicates, they are highly inter-related, and taken together we think you will make the right choice when considering VoIP and UC for the business. Consideration 1: What is driving the need in your business? Decisions must start with a need, and both have a ripple effect of implications from there. First and foremost, VoIP and UC are services, and they will be used by everyone in your organization. This is different from buying network hardware that only IT will ever see or care about. IT may have needs and they are certainly drivers for VoIP and UC, but they must play in the broader context of what s best for the business. Let s look first at VoIP. Despite being in the market almost 20 years, VoIP s penetration for business is relatively small. If there was a true need, every business would have moved on from legacy service by now. This is especially true considering how quickly other new technologies have been adopted, such as smartphones or Web platforms like Skype. In most cases, the existing phone service and/or phone system works fine, but there are overriding pressures to reduce cost, and typically cost savings is the core driver for VoIP. ziffdavis.com 2 of 8

There will, of course, also be situations where a change is actually needed. Your service provider may be exiting the legacy telephony business, in which case you must switch to VoIP or find another legacy provider. More likely, your phone system will reach end-of-life or simply be overmatched to meet your current needs and is now creating problems that are hurting the business. Whether the driver is cost reduction or fixing a real problem, VoIP is a practical solution, especially if you re just thinking about the status quo. In other words, you may want to keep telephony the way you ve always had it, maybe with a few extra features at a lower cost. For many businesses that s reason enough to adopt VoIP. The good news is that VoIP can be deployed fairly quickly and easily. In most cases, little or no capital outlay is required, and the bottom line benefits will accrue right away. It won t take a year to convince management you ve made the right decision. As the millennial generation takes holds among IT decision makers, the above-mentioned status quo will seem like a step backward compared to how the role of voice has evolved in the world of IP communications. When all communications modes can ride over the same data network and broadband connection, VoIP becomes part of something bigger as opposed to the self-contained world that housed legacy telephony for so long. This is where the overall need shifts from cost saving to serving the broader needs of employees and making them more productive. You don t have to look very long or far to see how we communicate differently and use different tools than when legacy telephony was dominant. The issue becomes one of providing the tools your employees need and the capabilities to communicate the way your customers now expect. In this scenario, cost no longer becomes the issue, and the Unified Communications conversation starts to make more sense. VoIP still has value but is really just a step along the way to UC and leveraging the power of broadband and IP communications. However, unlike VoIP, where the need can be measured by cost savings, the benefits of UC are harder to quantify, making the decision more strategic than tactical. ziffdavis.com 3 of 8

Consideration 2: What is driving the need for IT and your network? Needs can be defined on many levels, and when determining whether to deploy VoIP or UC, the state of your network is a critical factor. SMBs in particular are challenged by a tight economy, and most are hard-pressed to keep up with the pace of change in communications. Services keep getting cheaper, expectations continue to rise, complexity is growing and new solutions proliferate from both familiar and unlikely sources. Whatever the extent of your IT and network resources, there is a wide variety of VoIP offerings to choose from, making this a fairly minor concern. The main issue with VoIP is convergence shifting voice traffic off a dedicated telephony network and over to your data network. Since VoIP consumes very little bandwidth, your existing data network should be sufficient. The bigger change revolves around the migration from time-division multiplexing (TDM) to IP. If you feel totally ready for VoIP, a wholesale cutover is feasible, but this does require advance planning, including a network assessment for IP-readiness. Most businesses, however, prefer a gradual shift so they can build up confidence in VoIP. This is more costly since you will need to support voice on both networks for a period of time, and there are many reasons why this could be the right approach. Aside from converging voice and data on to a common network, you must also update the phone system. Here as well, you can choose to make a full changeover from legacy to an IP-based phone system and if so, the network must be able to support it. This depends largely on the state of your phone system, and if it s still in good shape, the alternative is to IP-enable the legacy phones with adapters until they reach end-of-life. This minimizes the upfront cost to deploy VoIP and keeps the network impact at a manageable level. If management is trying to keep IT as lean as possible, there are alternatives to premise-based VoIP. Even though SMBs can easily manage VoIP in-house, there is no shortage of hosted or managed services on the market. In broader terms, these are cloud-based VoIP offerings that place nominal demands on IT. This pay-as-you-go model is especially attractive to small businesses that have little or no IT expertise but want to take advantage of what VoIP has to offer. Since VoIP is a subset of UC, the network considerations for UC itself are more challenging. Supporting multimodal, real-time communications requires far more than new IP phones and some minor network tweaks, especially if you re thinking large. Whereas VoIP reduces costs and simplifies your network, UC can be transformational for the business and will likely call for network upgrades. ziffdavis.com 4 of 8

In this regard, your IT needs will be driven by the vision you can sell to management. Taking on a full-scale UC platform will likely require a capitalized investment in the network, but along with that comes a richer role for IT and great expectations for productivity gains from management. The underlying technology for UC is fairly manageable, and the real challenge will be your ability to provide proper network support and engage employees to get full measure from the applications. If you can deliver, IT s role in the business becomes enhanced, and if that s on your agenda, making the right plans for your network will be critical. If it s clear that this support will not be coming for IT, you can still drive an ambitious UC vision by opting for a cloud-based solution. Even more than with VoIP, the cloud is well suited for UC, especially given the complexity around full-featured platforms. So long as you are comfortable ceding network control, cloud economics for UC are compelling, and SMBs in particular can get a major communications upgrade that s well beyond what their current network infrastructure could support. Consideration 3: What are the needs of your employees? Looking outward beyond your network, the communication needs of employees will tell you which path to take, but this may be harder to do than expected. VoIP is similar to legacy telephony in the sense that the core product is complete and not likely to change much down the line. Most businesses will still be using desk phones five years from now, and if you expect landline telephony will remain the hub of everyday communications, VoIP is clearly the best choice. This is a pretty easy decision when their needs remain static, but even that can be misleading. Desk phones may be universal, but their usage is declining in favor of other modes. Some of this is easy to monitor, such as the proliferation of mobile devices or the rising use of chat or messaging. More difficult to gauge is how desk phones are being used, and for that, network usage trends will tell some of the story, such as the duration of calls. Other factors are harder to ascertain, such as the percentage of call attempts that are unsuccessful with no message being left. In short, given the wide range of options available to communicate now, landline telephony can be quite inefficient, creating a drag on productivity. ziffdavis.com 5 of 8

Communications patterns are changing in lockstep with the technologies, and the deeper you dig into what employees are doing, the easier it will be to determine if VoIP will suffice. No matter what their current needs are, choosing VoIP has little downside. In time, everyone will need more than VoIP, and eventually UC will be mainstream among SMBs. However, VoIP is still a big step forward from legacy, and initially that will be well received by employees. As they gain familiarity with VoIP, you can start planning ahead for UC since most providers can offer both. While it s possible to go straight to UC from legacy, most SMBs will start with VoIP first. Furthermore, UC solutions themselves are modular, so unlike VoIP, you can start basic and add pieces over time as needs dictate. Another consideration is the basic fact that employees do not really understand the UC concept, and nor do they really know what their communications needs will be in the future. This is where you need to be somewhat proactive when choosing VoIP or UC. Once you have determined that desk phones are not serving your business the way they once did, the move to UC will be easier to justify. UC provides a rich palette that goes well beyond telephony, and if employees are ready for this, they will adopt it quickly and easily. Conversely, you ll be waiting a long time if you deploy VoIP and hold back on UC until employees ask for it. Consideration 4: What are the needs of management? Regardless of IT s or employees needs, management will ultimately decide whether your next move is VoIP or UC. In some cases, IT will be on the same page with their wishes, and these will be the smoothest deployment scenarios. Others may clash, in which case IT will need to step up and perhaps defend a position that does not align with what management envisions. Each will be considered below for both VoIP and UC scenarios. The business case for VoIP is usually pretty simple, and if management is preoccupied with cost-cutting, this is an easy decision. They may simply mandate that IT makes the move and leave it to you to sort out the details in terms of the network implications and whether to stay on premise or move to a hosted provider. In cases where the phone system is aging, this brings up broader issues that need to be considered. While VoIP service will generate savings right away, there might be a need to invest in IP telephony, so the decision becomes more complicated. Businesses are not replacing legacy systems with updated legacy, so this move will come at some point. As such, the initial savings may not be much, but once the IP telephony costs have been absorbed, the ongoing cost of VoIP service will be attractive. ziffdavis.com 6 of 8

If the overall priority is to cut costs as much and as quickly as possible, that will likely steer you into the cloud, where can basically lease the whole package. Instead of laying out capital for an IP PBX or IP phone system for a conventional premise solution, a hosted service can factor the hardware cost into the overall monthly payment. Not only does this free up cash flow, but it gets things in place quickly, and both of these will please management in this scenario. This situation arises when management gets beyond looking at telephony as a cost-driven commodity. Your options open up considerably here, and this also affords IT more leverage in driving strategic decisions at a business level. If management isn t thinking this way, you really should try to getting them to see it, as the overall benefits stand to be much greater. Generally, management pushes for UC when they feel the need to drive employee productivity, as well as understanding the role communications technology can play here. In this capacity, they are no longer thinking about VoIP as a standalone service. Rather, they now see the power of an integrated communications platform to enable collaboration as well as support an increasingly fragmented and decentralized work environment. Being a strategic decision, cost reduction becomes secondary to productivity gains, but as noted earlier this also places the onus on IT to find ways of delivering those gains. Since UC productivity is much harder to quantify than VoIP cost savings, this will likely create some new challenges. You should factor this into the overall plan, as it may require new skills or resources, but if you can establish success with UC, IT s role will no doubt be elevated in management s eyes, and presumably that s a good thing. Consideration 5: What are the needs of the vendors? This will be more difficult for IT to read than the other considerations, but should go a long way to determining which path to take. Most vendors and service providers are moving towards some form of UC since the revenue opportunities are better than VoIP. However, UC adoption has been slower than anticipated, and with so much legacy telephony still in use, VoIP has a lot of upside ahead. ziffdavis.com 7 of 8

There certainly is a stratum of the market where VoIP is the core offering, and there many players vying for your business. Ideally they want that initial transition from TDM, since this is where the economics are the most attractive. This is a once-in-a-lifetime opportunity to displace the incumbent telecom vendor and become the partner of choice for the latest technology. Once that relationship becomes established, the vendor is in a great position to deepen their role and become the standard upon which new technologies will be adopted. Another layer down the value chain would be the other VoIP providers trying to displace the VoIP provider you just put in place. In some ways this is an easier switch since you re dealing with like services. Now the providers are competing mainly on price and maybe with some feature differentiation. If all you need is VoIP, there will always be someone selling it a bit cheaper. Since the business will be relying on VoIP for everyday telephony, you should be very cautious making decisions on this basis. You often get what you pay for with VoIP, and lower cost providers will invariably compromise in areas such as voice quality, service reliability or security. Also, unlike legacy telephony, VoIP is a month-to-month service without long term contracts. As such, the switching costs are low, so the temptation will always be there to consider cheaper providers. Going the other way up the value chain you will encounter VoIP providers that also provide some flavor of UC, as well as vendors that only offer UC, but includes VoIP. This is the domain of all Tier 1 telecom vendors and most of the Tier 2 players. Unlike pure play VoIP providers that have no installed customer base of their own, UC vendors are primarily motivated to protect their customer base, which initially was built on a legacy phone system. As such, when your legacy telecom vendor offers a migration path to UC, their need is self-preservation. If the business relationship has been good over the years, this will be their opportunity to lose. The telecom marketplace is currently in deep flux, and some vendors are doing a great job here, but others are squandering decades-long goodwill and losing customers to competitors with more aggressive tactics and/or a better solution. The UC vendor space will remain highly fragmented for some time, and to make good choices here, you have to be comfortable with their long-term viability and be sure that their product roadmap aligns with how your needs are expected to evolve. ziffdavis.com 8 of 8