This article originally appeared in the Oct. 2011 issue of Customer Interaction Solutions

If functionality, flexibility and innovation are important keys to your business needs, then Communications as a Service (CaaS) is right for you. Learn about trends, benefits and drivers for cloud-based communications from Richard Snow, Vice President & Research Director for Ventana Research and Joe Staples, Chief Marketing Officer for Interactive Intelligence (News - Alert).

Q: Where should an interested company start their investigation into Communications as a Service?

Joe: “It really comes down to looking at taking their communications, the applications they’re looking for and having those served to them by a third party provider and changing the way they pay for that, moving from a capital expenditure to a monthly service charge.”

Q: Why so much success, when past hosted models didn’t get very much traction?

Joe: “The reason we’re seeing such an increase in traction or acceleration in cloud-based communications has to do with the trends. There are a number of companies that started the trend by experimenting with moving different computing or different software to the cloud and have found that the cloud was a good way of doing business. They discovered there was a lot of benefit to it.”

Q: How much momentum are you seeing in the area of cloud-based communications?

Richard: “I’m seeing quite a shift toward cloud-based communications, and people tend to forget that communications has been in the cloud forever. What we’re seeing is that companies are moving the way they manage their communications into the cloud.”

Q: Including how they “manage” communications, then, what are the overall drivers for customer adoption of cloud-based communications?

Richard: “The drivers for people adopting cloud-based communications come down to three categories: cost, resources and risk. However, when I asked people during my research, the drivers tend to be around flexibility in the way cloud-based applications and services can be managed; you can be flexible in terms of the volumes you use, can scale up or down to meet your business needs, but you can also use the functionality that you want. The bigger thing I find with people adopting cloud-based communications is innovation. With these kinds of solutions you can actually innovate the way your company runs, and how it communicates with the outside world and your customers.”

Q: What are some of the things customers should look for in a mature, solid cloud-based communications offering?

Richard: “The three things that people told me you should look for are summed up easily. It’s functionality, functionality, functionality. You should be looking for a system that’s got the functionality that delivers your business needs. People should look for a supplier that’s got a track record of providing solutions that are going to meet your business needs.”

Joe: “Customers still have a little bit of trepidation around security. That’s the thing customers brought up the most as a concern to migrating communications to the cloud. But there are some distinct ways of mitigating any kind of security risks. For example, at Interactive Intelligence we make sure everything is housed in a SAS (News - Alert) 70 24x7 monitor data center. We provide an option to allow all of the voice recordings and the actual voice traffic to remain inside the customer’s network, inside that customer’s firewall. We also provide every customer an isolated environment where their software is running on a virtual machine.”

Q: What percentage of the overall contact center market do you think will make the shift to the cloud in the next five years?

Richard: “I think over the next five years we’re going to see an increasing adoption of cloud-based solutions for the contact center, including communications. The adoption of Voice over IP (VoIP) was down in the single figures, but over the last seven years, I’ve seen that figure go to the 60s and 70s. It’s almost becoming the de facto choice and was largely driven by the same three things: cost, fewer resources and it enabled people to innovate. I anticipate a similar trend in this market place. Today people still prefer on-premises solutions, but over the next several years we are going to see this go from single figure adoption to 50%-60% adoption rates.”

For more information on cloud-based communications, please visit www.CaaS.com.