Cloud Communication Services Stir Buyers' Interest

Although it has taken awhile for this sector of the market to heat up, communications-as-a-service (CaaS) is generating serious attention. Currently, it is a small market, with few vendors offering complete product offerings in the area of unified communications and contact centers but this will most likely change, as Forrester’s recent survey of decision makers in NA and Europe indicate a major interest in buying communications-as-a-service (CaaS) in the future. I believe that current budget restraints, limited IT expertise and unwillingness to undertake large capital expenditures is a driving force for this shift in buying behaviors.

Currently 3% of Network and Telecom decision makers deploy UC as a service. Additionally, for contact centers only 2% use the CaaS model today (with IVR as a major exception). However, 23% of decision makers stated they would consider both UC and contact centers as a cloud based service in the future.  This uptake in interest to use cloud services for communications may be a response to the general market acceptance of cloud services for other cloud services such as software-as-a-service (SaaS) and infrastructure-as-a service (IaaS) solutions that help companies better manage their IT expenses.

However, vendors need to do a lot more before this market gains traction. Today, most UC solutions available as CaaS are single applications and are not comprehensive product suites. Companies such as Microsoft, IBM and Cisco are examples of vendors that offer some UC applications as CaaS offerings. Customers that plan to roll out more complete UC solutions need to purchase premise-based software licenses for applications not supported in the cloud. Additionally, only a few contact center vendors have robust CaaS offerings for their product suites. Interactive Intelligence’s contact center CaaS offering is an exception, and the company actually grew its market share in 2009 while many of its competitors had reduced shipments.

I think buying patterns for both UC and contact center solutions will shift during the next few years from premise to cloud services, as more service providers recognize the full potential of the CaaS opportunity and develop robust product solutions. This will allow customers to pay per-user per-month or per-transaction for full lifecycle support and enable them to gain advanced UC and contact center solutions quickly and affordably. But I’d love hear from you. Do you think the technology is mature? Do you have any plans to implement CaaS?