Selling Unified Communications: Pricing Pressures, Lack of Killer App Create Challenges for UC Adoption

By Paula Bernier, Executive Editor, IP Communications Magazines  |  October 01, 2010

This article originally appeared in the October 2010 issue of Unified Communications magazine

To make UC more accessible and manageable for small and medium companies, hosted UC solutions are becoming more common. In fact, Nemertes Research, author of the “Managed and Hosted Unified Communications (News - Alert)” report, expects UC-based managed services to double or even triple by next year.

However, not every organization is ready to take the plunge into UC service. That may be because they’re not sure if they want to trust their communications to off-premises equipment and managers. It may be because they’re still fuzzy on the value proposition. Or it may be because they’re waiting for managed service providers to lower their pricing further.

If the latter is the case, says Scott Gode, vice president of product management and marketing at managed services provider Azaleos Corp., businesses shouldn’t hold their breaths waiting for a big price drop. While managed services providers like Azaleos understand the pressure today’s businesses are under to control their costs, and some prospects are asking for price breaks to make this work for them, Gode says he doesn’t expect that to happen soon because key UC technology suppliers like Microsoft and Cisco (News - Alert) are unlikely to lower their prices because it’s early in the market and they don’t want to be stuck with low margins now or in the future. The only thing that is likely to change that reality would be if a new player like Google (News - Alert) were to make a splash in business UC and set lower prices, says Gode of Azaleos, which sells Microsoft-based services.

In the meantime, managed services providers like Azaleos are doing their best to sell customers on the savings they can generate by decreasing travel and instead relying on UC solutions to enable communications among employees and with clients and partners. And Azaleos sets itself off from the competition by delivering monitoring and management solutions as part of its offer.

Gode adds that the one thing that’s still missing in the UC space is a killer application. That’s something Azaleos is looking to provide, he says, but will reveal in the future.

Elsewhere on the  cloud-based UC front, Alteva (News - Alert) has developed a way to interconnect its hosted voice and messaging services with the Microsoft Communication Services product suite, including Microsoft Exchange, SharePoint and Office Communications Server.

Meanwhile, Qwest Communications has introduced a new UC solution. Based on Cisco technology, it’s called Qwest (News - Alert) iQ Hosted Unified Communication Service.

Eric Bozich,vice president of Qwest product management, says the service provider has for several years offered a hosted UC solution based on Cisco’s call manager. But for that service, the UC gear sits at the customer premises. That model works really well for larger customers with thousands of employees, such as state governments, organizations in the higher education space and large businesses with dispersed environments, he says.

The new Qwest iQ Hosted Unified Communication Service, meanwhile, locates the UC hardware and software within a data center or centers, he says. That way, the cost can be shared among various customers, making it possible for Qwest to make high-quality UC solutions available to much smaller customers.  The service delivers integrated voicemail and e-mail, presence, IM and voice. Videoconferencing, integrated with Outlook, also can be a component of the service.

Initially Qwest iQ HUCS targets businesses with 50 to 100 employees per location, but could involve customers with several locations, and can address even businesses with as many as 5,000 users at headquarters, says Bozich. However, in the future, he adds, Qwest expects to bring this solution to even smaller customers, as the platform gains more efficiencies the more it is used.

Edited by Tammy Wolf