With many initiatives competing for finite resources,
decision makers have to weigh capital investment, fixed
operational overhead and exposure to risk carefully.
This detailed guide helps leaders develop a clear understanding of how to gain the full benefits of unified communications while minimizing all three of these investment parameters.
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Mitel Business Case for Cloud-Based-UC
1. A UBM TECH Business Case Builder
MAY 2013
Optimizing ROI:
The Business Case
for Cloud-Based
Unified Communications
With many initiatives competing for finite resources,
decision makers have to weigh capital investment, fixed
operational overhead and exposure to risk carefully. This
detailed guide helps leaders develop a clear understanding
of how to gain the full benefits of unified communications
while minimizing all three of these investment parameters.
CapEx
OpEx Risk
2. WHY UC?
UC transforms communications in two essential ways: First, it
provides better collective use of all available communications ser-
vices. Existing communication systems at most organizations have
evolved over time. Many communication elements may already
exist as discrete services. When voice, email, instant messaging,
unified messaging and videoconferencing are all tied together,
users can quickly take advantage of the organizationâs entire port-
folio of communications capabilities â including the tremendous
synergies between them.
Second, UC transforms communications with presence and
mobility. In an increasingly mobile and time-compressed business
environment, it has become essential to empower users to work
together wherever they are. UC facilitates this anytime/anywhere
collaboration by providing âpresenceâ â an indication of a per-
sonâs current status (available, busy, on the phone, for example)
that is visible to authorized users.Using these capabilities, individu-
als and teams inside and outside the organization can communi-
cate and collaborate far more effectively. Customers donât have
to leave messages on both office and cell numbers. Managers
can get immediate answers from subject-matter experts with a
few keystrokes in a chat session, even if both parties are on long
conference calls. Contact center staff can also quickly reach out
to experts in the business to answer customer questions. No orga-
nization can afford to forgo the substantial business benefits UC
offers in terms of:
⢠Individual and team productivity
⢠The acceleration and improved reliability of business processes
⢠An enhanced customer experience
⢠Greater overall agility
The biggest decision facing organizations, therefore, isnât
whether or not to deploy UC â but how best to do so.
IT DEPLOYMENT MODELS
Organizations can choose from four categories of models for
deploying UC technology solutions. These include:
Dedicated/site-specific model
In this model, software runs on propriety hardware or dedicated
industry-standard servers in the organizationâs data center. This
was the most common deployment model before the advent of
virtualization.
â˘
Hardware: The dedicated hardware needed in a site-specific
model typically leads to underutilization at every site.
â˘
Support: This model requires subject-matter experts to login
remotely or visit remote sites to resolve problems. Software
releases and technology refreshes often need to be applied
simultaneously at every location.
⢠Capacity: Each site must be independently provisioned for
maximum capacity to meet business requirements. If require-
ments increase, capacity must be scaled at the individual site
accordingly.
â˘
Availability: The impact of a technical failure is usually limited
to the site where the failure occurred. The cost of provisioning
redundancy, resiliency and physical security at every site can be
prohibitively expensive.
â˘
End users: This model is best suited to workers colocated at
fixed central and remote sites.
â˘
Cost structure: Typically CapEx-intensive, site-specific
models also require additional OpEx in the form of internal
support costs and/or an annual vendor support contract.
Private cloud model
In a private cloud model (also called an internal or enterprise cloud
model), software is deployed in an on-premises data center or on
hosted data center resources dedicated to a single organization. This
model enables an organization to realize cost savings through central-
ization and virtualization, while retaining a higher degree of control.
⢠Hardware: Hardware is abstracted from the applications using
virtualization. Because multiple applications share resources
within this virtualized environment, hardware utilization is
maximized.
⢠Support: Subject-matter experts can perform all support tasks
within the data center, thereby minimizing travel and expediting
A UBM TECH BUSINESS CASE BUILDER // MAY 2013
OPTIMIZING ROI FOR CLOUD-BASED UC
// 2 //
I
n todayâs mobile, hyper-connected global marketplace, customer expectations and
productivity pressures are escalating relentlessly. Employees, customers, partners and
suppliers need the ability to talk, message and share data anywhere and at any time. As a
result, unified communications (UC) has become an imperative. Consider the importance
of business communications. In a healthcare environment, communications may be a matter
of life and death. In a contact center environment, integration with customer relationship
management may demand access to very specific professional services. A few moments of
downtime could cost millions of dollars in lost business. Understanding these characteristics will
help to provide a decision-making framework for evaluating models, meeting with potential
cloud providers and building a business case for a UC investment.
3. problem resolution. Software updates and technology updates
are easily managed using virtualization management tools.
â˘
Capacity: Centralized resources including hardware, licenses
and connectivity can be dynamically allocated as needed to
fulfill business needs.
⢠Availability: Redundancy, resiliency and physical security
do not have to be provisioned at each site, so they can be
implemented much more cost-effectively. Virtualization also
facilitates business continuity.
â˘
End users: Private cloud models are better suited to sup-
porting mobile users, because centralized resources can be
accessed from any location.
â˘
Cost structure: Private clouds typically require CapEx with
a support contract, although hardware and software CapEx
can be avoided with private infrastructure-as-a-service or
platform-as-a-service offerings.
Public cloud model
Also known as shared clouds, public clouds are provided on an âas
a serviceâ basis â often with limited control over the underlying
infrastructure. Public cloud reduces the overall complexity of internal
IT, enables faster deployment and simplifies capacity management.
Service levels and cost are clearly defined and understood. Cost
savings are realized through the economies of scale that result from
sharing resources with other organizations.
⢠Hardware: The data center and associated hardware are
owned and managed by the service provider.
⢠Support: The service provider performs support tasks under
a service level agreement (SLA) over a fixed term. Economies
of scale give the service provider superior access to subject-
matter experts.
⢠Capacity: The service provider quickly delivers any increase or
reduction of capacity under the terms of the SLA.
⢠Availability: Investment in business continuity often exceeds
private cloud solutions.
â˘
End users: Public clouds can support users everywhere with a
secure Internet connection.
⢠Cost structure: Public clouds involve highly predictable per-
user OpEx, typically billed on a monthly or quarterly basis.
Hybrid cloud model
Organizations can combine public and private cloud models to
realize return on investment from existing capital expenditure,
fulfill specific compliance requirements and retain control over
mission-critical applications â while still gaining the functional
and economic benefits of the cloud. The hybrid cloud model also
enables organizations to migrate to the cloud gradually to avoid the
potential risk and disruption of an âall-inâ move to full public cloud
deployment.
Organizations that take this approach often distinguish between
âutilityâ and âspecialistâ IT services. Utility services are those that
do not require direct control, such as email, and are therefore more
likely to be migrated to public cloud models. Specialist services are
those that require more direct control because they contribute to
competitive differentiation â and are, therefore, more likely to be
managed internally.
Given the many demands competing for limited IT resources,
organizations have to be highly judicious when it comes to capital
investment, operating expenses and exposure to risk.
Fortunately, with the advent of the cloud, organizations can now
choose the UC deployment model that best aligns with their specific
tolerances for CapEx, OpEx and risk â so they can substantially
enhance business performance while conserving limited financial
and human resources.
A UBM TECH BUSINESS CASE BUILDER // MAY 2013
OPTIMIZING ROI FOR CLOUD-BASED UC
// 3 //
MitelÂŽ
(Nasdaq:MITL) (TSX:MNW) is a global provider of unified communications and collaboration (UCC) software,
solutions and services that enable organizations to conduct business anywhere, over any medium, with the device
of their choice. Through a single cloud-ready software stream, Mitelâs Freedom architecture provides customers in
more than 100 countries the flexibility and simplicity needed to support todayâs dynamic work environment. For
more information, visit www.mitel.com.
â ABOUT MITEL
Š 2013 UBM LLC. All rights reserved.
(continued on page 4)
4. A UBM TECH BUSINESS CASE BUILDER // MAY 2013
OPTIMIZING ROI FOR CLOUD-BASED UC
// 4 //
The capital expense associated with UC implementation falls into
three categories: hardware infrastructure, software licensing and IT
labor. The amount of CapEx a UC solution requires in each category
varies with each deployment model.
Hardware UC infrastructure
Organizations need sufficient server, storage and networking hard-
ware capacity to support UC applications with appropriate service
levels. The real-time nature of voice and video communications
makes it especially important to have sufficient server compute and
I/O capacity available for periods of peak utilization.
These CapEx hardware investments are:
â˘
High under the dedicated/site-specific model, because organi-
zations must bear the full burden of hardware procurement for
every location
â˘
Moderate under the private cloud model, because virtualiza-
tion and centralization mitigate upfront infrastructure costs to
some degree
â˘
Low under the hybrid cloud model, because select upfront
hardware costs can be offloaded to service provider(s)
â˘
Low under the public cloud model, because most if not all
upfront hardware costs are borne by the service provider and
included in monthly subscription costs
Software licensing
UC environments require the licensing of highly sophisticated
software modules that deliver reliable, feature-rich, real-time com-
munications capabilities and integrate existing resources such as
directory services. Organizations often roll out these modules in
stages to ensure a smooth adoption by end users and to stagger
costs over time.
These CapEx software investments are:
â˘
High under the dedicated/site-specific model, because organi-
zations must license UC software to run on all machines at all
locations and avoid underlicensing to ensure compliance
â˘
Moderate under the private cloud model, because virtualiza-
tion and centralization can mitigate per-machine licensing fees
to some degree
â˘
High to moderate under the hybrid cloud model, because
software costs can be selectively offloaded
â˘
Eliminated under the public cloud model, because upfront
software costs are borne by the service provider and included
in monthly subscription costs
IT labor
Installing, configuring and integrating UC-supporting hardware and
software can require a significant amount of labor. Organizations
that donât have the necessary skills in-house will have to invest in staff
training or retain specialized contractors to do this work.
These CapEx labor investments are:
â˘
High under the dedicated/site-specific model, because work
has to be performed on a âone-offâ basis at multiple sites
â˘
Moderate under the private cloud model, because centraliza-
tion mitigates labor costs
⢠Low under the hybrid cloud model, because organizations can
selectively offload support tasks to service providers
â˘
Low under the public cloud model, because UC applications
are already running in the hosted environment â and set-up
charges are typically included in monthly subscription costs
There is a degree of uncertainty for any of the CapEx investments,
because hardware, software and labor are all subject to cost overruns.
(continued on page 5)
Dedicated Private Cloud Hybrid Cloud Public Cloud
Hardware
Software
Labor
CapEx Requirements for UC Deployment Models
CapEx Implications of UC Models
5. A UBM TECH BUSINESS CASE BUILDER // MAY 2013
OPTIMIZING ROI FOR CLOUD-BASED UC
// 5 //
When considering the operational expense associated with prospec-
tive UC implementation models, decision makers need to account for
total OpEx, cost uncertainty and cost opacity. Each of these factors
varies depending on the chosen deployment model.
Total OpEx
OpEx for UC implementations includes costs such as infrastructure
management, user administration, software updates, and server
power and cooling.
Total UC OpEx is:
â˘
High under the dedicated/site-specific model, because of the
need to support multiple locations on-site and the need to
overprovision capacity at each site to ensure requisite service
levels
â˘
Moderate under the private cloud model, because â while
centralization and virtualization mitigate infrastructure owner-
ship costs â the organization still bears all software-related
ownership costs and administrative overhead
â˘
Moderate under the hybrid cloud model, because support
tasks can be selectively offloaded to service providers
â˘
Low under the public cloud model, because economies of
scale enable the service provider to provide all UC-related
infrastructure, software and management at lower cost
Cost uncertainty
OpEx, like CapEx, can be subject to uncertainty. In fact, because they
continually recur over time, OpEx overruns can be even higher. These
overruns can be driven by several factors, including the unanticipated
complexities of managing UC infrastructure.
The potential for unexpected UC OpEx is:
â˘
High under the dedicated/site-specific model, because of the
exacerbating effect of infrastructure at multiple sites
⢠Moderate under the private cloud model, because centraliza-
tion can mitigate unanticipated labor costs
â˘
Moderate under the hybrid cloud model, because the
infrastructure-related OpEx can be selectively offloaded to the
service provider
â˘
Low under the public cloud model, because the full respon-
sibility for delivering UC is shifted to the service provider for a
fixed cost
Cost opacity
Itâs one thing to overspend on some aspect of UC. Itâs another thing
to overspend and not know it. Cost opacity increases the likelihood
that UC will consume IT resources inappropriately. It also limits the
ability of organizations to easily and accurately chargeback or âshow-
backâ UC costs to business units.
UC OpEx opacity is:
⢠Moderate under the dedicated/site-specific model, because
visibility into the allocation of IT staff labor for infrastructure
and software management can be limited
â˘
High under the private cloud model, because â in addition
to IT staff labor for infrastructure and software management
â visibility into the consumption of infrastructure resources
themselves can also be limited
â˘
Moderate under the hybrid cloud model, because some labor
is done on a fixed-cost basis by the service provider
⢠Eliminated under the public cloud model, because all OpEx is
visible as a fixed monthly cost
OpEx Requirements for UC Deployment Models
(continued on page 6)
OpEx Implications of UC Models
Dedicated Private Cloud Hybrid Cloud Public Cloud
Total OpEx
Uncertainty
Opacity
6. A UBM TECH BUSINESS CASE BUILDER // MAY 2013
OPTIMIZING ROI FOR CLOUD-BASED UC
// 6 //
Decision makers must take into account several risk factors when
deciding how to best implement UC: poor project outcomes, business
continuity and inflexibility/obsolescence. Each deployment model car-
ries a different risk level for each factor.
Poor project outcomes
As with any IT initiative, UC projects can experience delays, functional
shortfalls and outright failures for a variety of reasons, including poor
planning and technical snafus.
The risk of poor project outcomes is:
â˘
Moderate under the dedicated/site-specific model, because
of the complications associated with deploying and managing
technology at multiple sites
â˘
Low under the private cloud and hybrid cloud models, because
infrastructure centralization mitigates project complexity
â˘
Eliminated under the public model, because the full respon-
sibility for delivering UC is shifted to the service provider for a
fixed monthly cost
Business continuity
Any interruption of communications services can have highly adverse
consequences for the business. Decision makers must therefore
consider how to best protect the business from such interruptions â
whether they are caused by technical problems or natural disasters.
The risk of business interruption is:
â˘
High under the dedicated/site-specific model, because each
site represents a potential single point-of-failure
â˘
Moderate under the private cloud and hybrid cloud models,
because virtualized infrastructure can be more readily replicated
at multiple locations for failover purposes
â˘
Low under the public cloud model, because the service pro-
vider can cost-effectively provision full redundancy of the UC
environment in multiple data centers
Inflexibility and obsolescence
Organizations must be able to quickly adapt to changing business
requirements â such as piloting new UC capabilities or onboarding
an acquired business. The ability to easily modify the UC environment
over time is as important as the success of the initial rollout.
The risk of inflexibility and obsolescence is:
â˘
High under the dedicated/site-specific model, because of the
time and effort required to upgrade UC resources at remote
sites
â˘
Moderate under the private cloud model, because organiza-
tions have to install and/or reconfigure software changes in the
centralized/virtualized environment
â˘
Low under the hybrid cloud model, because software changes
may in some cases be the responsibility of the service provider
â˘
Eliminated under the public cloud model, because the service
provider can roll out new capabilities and accommodate orga-
nizational change almost immediately
Some IT managers perceive risk in their loss of direct control over UC
implementations in the cloud. By making UC implementations more
responsive to the business at less cost, however, these implementa-
tions actually reduce risk â rather than adding to it.
THE BOTTOM LINE
Decision makers evaluating models for UC implementation should
bear in mind that cloud-based models reduce or even eliminate the
need to make CapEx investments in UC technology and keep UC-
related OpEx controlled and visible. They also substantially mitigate
the risks associated with UC implementation and ownership.
Different organizations have different imperatives when it comes
to CapEx, OpEx and risk â as well as different UC-related business
requirements â so one size definitely does not fit all. And, because
these imperatives and requirements can change over time, it is essen-
tial to choose a UC solution that can easily be migrated between
alternative deployment models.
UC offers substantial business benefits for productivity, business
processes, customer experience and agility. The range of imple-
mentation models available allows decision makers to choose an
approach that is right for their organizationsâ needs today and â
with careful selection of offerings from specific vendors â that can
adapt for future conditions. â
Risk Implications of UC Models
Dedicated Private Cloud Hybrid Cloud Public Cloud
Poor Outcomes
Business
Continuity
Obsolescence
Risk Implications for UC Deployment Models