Messaging & Unified Communications

Data center modernization is the hottest topic of the new decade, but it's hard to plan for it effectively when so many different hot trends seem to be aimed at the topic. CIOs and IT planners report that senior management is easily confused by the relationships among three particular technology shifts -- virtualization, cloud computing, and Software as a Service (SaaS). Vendor marketing, which tends to link products and services indiscriminately to any hot trend, isn't making things easier.

The goal for all these technologies is the same: to contain or reduce the cost of supporting business operations using information technology. It's how these technologies achieve that goal which makes them different and which governs whether they can be deployed together or whether they will collide.

Software as a service (SaaS)

SaaS lets companies support key applications (CRM, ERP, etc.) by licensing worker "seats" on application software that's deployed by a provider. The provider maintains the hardware and software, upgrades facilities and fixes problems, thus eliminating the cost of deploying the application on a company data center. SaaS applications are accessed via a network connection -- normally over the Internet.

Because the SaaS model eliminates self-hosting of the software, it's most effective where self-hosting an application would be difficult -- for example, when there are few workers who need it (and the cost per worker would be very high) or because the skills needed to install and maintain the application aren't available in the local labor pool. Small to midsized businesses are very likely to find SaaS a better option than deploying their own applications.

Benefits and challenges of virtualization

If SaaS is an application model, virtualization is a technology. As it's popularly used today, virtualization is any technology that allows resources to be viewed as "logical" and "physical." Applications are run on logical resources, and these are assigned to an optimum physical resource based on a variety of cost, performance and availability policies.

Virtualization is a technology that allows a physical server to appear to applications as multiple "logical servers." Many companies have purchased new servers for each new application they deploy, in some cases resulting in thousands of underutilized servers that have to be individually powered, cooled and maintained. With virtualization, a much smaller number of servers housed in concentrated data centers can replace the inefficient distributed mass of servers, often reducing costs by more than 50%.

The challenge of virtualization lies in the issue of utilization. If a server truly has excess memory, disk and CPU resources available, then virtualization can provide for server consolidation and savings. If resources are limited, then virtualization will affect application performance. Some users have also found it difficult to manage virtual server farms, though tools from vendors like Cisco, HP, IBM, Microsoft, Oracle, and EMC/VMware are making that easier. Most report that virtualization does require more professional skill in house to manage. Companies that can benefit broadly from SaaS are less likely to benefit broadly from virtualization.

Cloud computing blends SaaS and virtualization

Cloud computing is in many ways a harmonization of SaaS and virtualization into a much broader and more flexible model. As a model for IT infrastructure, cloud computing -- or the private cloud -- provides a way for enterprises to structure their data centers to efficiently use server, storage, and network resources. Cloud computing can extend virtualization across a wide area network (WAN) to build a single virtual cloud data center. Because a cloud data center can include the servers and storage of multiple physical data centers, it provides a larger pool of resources for applications to share than would be provided by simple server virtualization -- further improving cost efficiency.

The public cloud can offer companies a way to host applications off-site, for backup or as an overflow capacity resource in periods of peak demand. The public cloud can host SaaS applications more cost effectively, too. The cloud computing architecture provides a way to link the public resources with private cloud resources to create a hybrid cloud, enabling cloud computing to build a seamless application fabric across virtualized servers, SaaS services, and public/private cloud computing facilities.

SOA to transform SaaS, virtualization and cloud computing

An older and in many ways more confusing technology cuts across all three of these modern software innovations -- service-oriented architectures (SOA). SOA is a software design and development methodology that componentizes applications into modular services that are then assembled in various ways to promote customization to worker needs and reuse of common software elements. SOA facilitates cloud computing by making software easier to distribute in the cloud. It can be an alternative to virtualization in server-sharing, or it can use virtualization to improve performance and reliability. Finally, SOA makes everything a service and thus supports the SaaS model, not only for complete applications but also for components of applications. As SOA principles remake applications, SOA will transform all three technologies.

SOA may be transforming, but from the user's perspective, cloud computing is harmonizing. Many would argue that cloud computing is the unification of virtualization and SaaS, but it's more complicated than that. There will be applications of virtualization that are not "cloud computing" for years to come, and there will also be SaaS applications that do not use virtualization in application hosting. All three technologies have their place in managing capital and operations costs for IT. But it does seem likely that cloud computing will become the overarching framework in which most virtualization is applied and that the majority of SaaS providers will employ cloud computing to serve their users most economically and reliably.

About the author:
Tom Nolle is president of CIMI Corporation, a strategic consulting firm specializing in telecommunications and data communications since 1982. He is the publisher of Netwatcher, a journal addressing advanced telecommunications strategy issues. Check out his SearchTelecom.com networking blog Uncommon Wisdom.

Cloud computing, software as a service (SaaS), virtualization and service-oriented architectures (SOAs) are technologies designed to reduce the IT costs of supporting business operations. Each technology addresses business challenges in a different way. Find out how cloud computing, SaaS, virtualization and SOA differ and how they can be combined for maximum efficacy.

Networking and telecom pros know they must prove unified communications (UC) return on investment (ROI) to their CIO, CEO or CXO before purchasing and implementing unified communications solutions and that ROI needs to be actualized in less than 18 months, right? Probably, but I'd like to promote the idea that in the near future, providing a business case for short-term UC ROI may not be as necessary. More and more, I'm finding that enterprises recognize the inherent value of UC in terms of its impact on worker productivity and the organization's bottom line, and they don't always have to prove a hard ROI before making the argument for these solutions.

Do we need to prove unified communications ROI?

Think back to the early days of email and voicemail -- did companies need to prove a hard unified communications ROI before purchasing these solutions? No. CIOs knew that in order to be competitive, they needed to invest in these systems. Voicemail was rationalized based on the fact that you would no longer need a secretary or receptionist to take messages and leave you a "while you were out" handwritten message. There's no ROI in this scenario unless the receptionist was laid off, which rarely happened. Email became a must-have solution initially in order to communicate within the organization and eventually outside of the organization.

In most cases, we don't question whether or not we need email and voicemail -- they're basic communication tools that virtually every organization needs so that workers can be efficient and effective. The same should be said for UC. Wise CIOs know that tools like presence awareness, click-to-call and click-to-conference, and mobile capabilities such as single-number reach, teleworker and mobile extension are going to be the norm in terms of enterprise communications. It's not a question of whether, but when. I would wager that in two to three years, the business case for UC will be so evident that proving hard unified communications ROI before purchasing and implementing UC solutions will not be necessary in most cases.

Yes, unified communications ROI is still needed

For the time being, despite the obvious benefits of UC, ROI is still needed to get executive and budget approvals. In today's economy, an 18-month ROI is generally required for UC implementations. So how is UC being justified in these organizations?

Unified communications reduces costs, improves efficiencies and optimizes business processes.

Reduce UC costs

The most obvious way UC implementations can be justified is by reducing expenses such as toll costs, cell phone charges, travel costs, and meeting expenses. Through the conferencing and collaborative capabilities of UC solutions, such as audio/Web/video conferencing, as well as shared workspaces and document sharing, the need to travel can be reduced or even eliminated, saving hundreds of thousands and even millions of dollars. Bringing conferencing capabilities in house rather than using a service also reduces costs.

In a UC world, communication capabilities become software applications, reducing the need for multiple servers at each location and branch. Rather than having separate PBX/IP PBXs, email, voicemail, conferencing systems, and so on -- each on its own server at each location -- these capabilities can now be applications on standard hardware, integrated into a single, integrated UC platform, eliminating hardware costs and reducing the maintenance costs for these systems.

Checking someone's presence status before calling can eliminate unanswered calls, and IM can inexpensively replace the need for local and long-distance phone calls. Similarly, the use of voice messaging dramatically decreases once companies start using UC and presence capabilities, as people won't bother to make a call if they see that the person they're trying to reach is unavailable. This results in the need for fewer servers for voicemail storage and fewer ports -- another cost saving.

And, of course, using VoIP and peer-to-peer call control reduces toll charges. In addition, a user answering a call on a mobile device can seamlessly transfer the call to a physical desk phone after entering the office, reducing cell phone charges (or minutes used).

Companies can also save money on real estate by enabling more workers to telecommute. By giving workers UC capabilities to let them work from home and access all of their enterprise communication capabilities, companies can reduce the need for office space, as well as the associated heating, cooling and electricity costs.

Improve UC efficiency with conferencing and collaboration

In terms of improving efficiencies, conferencing and collaboration capabilities let geographically separate teams and workgroups collaborate on projects -- meaning faster product development, faster crisis response, and quicker customer-problem resolution. One software development firm uses Web collaboration between its sales engineers and product experts to prepare proposals and responses to RFPs. The system automatically initiates meeting requests with the appropriate people, reducing the bid cycle from 56 to 15 days.

In another example, a manufacturer with remote field sales teams was able to increase customers' ability to reach the sales teams by using its "find-me" mobility features. By using presence and click-to-call capabilities, sales teams were able to immediately find help from the sales support and logistics teams, resulting in a 20% year-over-year increase in sales.

Business process optimization

The biggest unified communications ROI bang for the buck is from business process integration and optimization. By embedding the UC capabilities into CRM, ERP and vertical business applications, the ROI, which is generally based on eliminating delays and speeding up problem resolution, can be tremendous.

Many case studies illustrate the benefits and ROI of UC-enabling business processes. For example, Global Crossing links its UC solution to its provisioning and network inventory systems, eliminating the need for staff members to call around to get help with process exceptions. When an exception occurs, the software looks up the assigned technician to solve the problem, and if that technician is available, the system initiates an IM session with the appropriate people. If the assigned tech is not available, the software finds a qualified and available alternate technician for the IM session link-up.

In cases where a voice conversation is needed, the two technicians can initiate a click-to-talk session between their two PCs. The time spent calling for help has dropped dramatically, and voice messages have been almost entirely eliminated. The result is a 75% lower cost per transaction, with an 80% reduction in response time.

We can also look at ROI in terms of business process optimization for vertical applications, such as the healthcare industry. For example, costs can be reduced in the healthcare industry based on increased collaboration between doctors, nurses, specialists and so on. One medical facility uses a phone-based "Ask a Nurse" program to field calls from individuals who want advice from nurses. Using UC capabilities such as IM, voice conferencing and presence awareness, the company was able to utilize virtual agents to respond to patient questions, eliminating the need to build a new contact center, which saved the company $11 million.

Another hospital uses UC to optimize patient flow. When the patient arrives and needs to be admitted, the admissions desk assigns an available bed and triggers a workflow that sends an update to the handheld devices of the hospital staff, who can then prepare the bed and be ready for the patient's admission. The result was a 30% reduction in patient waiting time and improved productivity of the hospital staff based on the ability to reduce the amount of time spent on coordinating activities.

Conclusions about unified communications ROI

Despite the obvious benefits of UC, in the vast majority of cases, companies will need to prove a solid ROI in order to get the financial approval and backing to implement unified communications. There are many ways in which ROI can be determined, but it will be dependent on the individual company's business processes, vertical market, use cases, and so on. In the next few years, however, UC will be perceived as a basic communication tool that all companies will need, just like voicemail and email today, and the need for hard ROI will not be as great.

About the author:
Blair Pleasant, president and principal analyst of COMMfusion, LLC, and cofounder of UCStrategies.com, provides consulting and market research analysis on voice/data convergence markets and technologies aimed at helping end-user and vendor clients both strategically and tactically. Prior to COMMfusion, she was director of communications analysis for The PELORUS Group, a market research and consulting firm, and president of Lower Falls Consulting.

Proving short-term and long-term unified communications ROI is a prerequisite of implementing UC solutions, but is it really necessary? Find out the many ways to determine UC ROI and why justifying UC ROI upfront will become less important.

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"We're starting to see products pop up that monitor what [employees share] on these sites," said Irwin Lazar, vice president of communications and collaboration research at Nemertes Research. "Many IT departments have dealt with this around email and messaging…. It's just a matter of extending it onto public social networks."

Enforcing social media governance may sound like a task for HR, but Lazar said the responsibility is falling on the shoulders of message compliance specialists, who are tasked with making sure employees aren't intentionally or inadvertently breaking policy with their posts and tweets.

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