Who is afraid of the cloud?

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Cloud“The Cloud” – everyone is talking about it. Studies, market reports and analysts refer to it as the “next thing” and as the opportunity that communication service providers (CSPs) must not miss. Well, it is not so easy!

Revenue opportunity for the service providers

There is no doubt that the telecom market is changing. The increased competition and the commoditization of traditional telecom services have negative impact on the CSPs revenues leading them to evolve beyond network connectivity and seek new revenue opportunities.

The good news is that the cloud trend that we are seeing for some years in the market has reached a point where CSPs can create “real” business value. According to Informa’s Telecom Cloud Monitor (, the number of CSPs selling Cloud services has increased from around 60 in 2009 to about 230 in 2012 and there is a consistent growth in CSPs cloud spending.

CSPs active in cloud services by region

Cloud services allow the CSPs additional revenue streams with new value propositions that they can offer. For example, a CSP can leverage its key strengths in communication technologies to offer hosted unified communications (UC) services that combine data, voice, security and more, but at a lower cost as compared to on-site platforms. Another example is the provision of cloud applications such as business sales automation, invoicing and billing, and storage and backup in the cloud.

Why should businesses move to cloud-based services? Well, there are some good reasons for doing so including cost flexibility, business scalability and simplifying communication services.

Can we trust the cloud?

How can the CSPs deal with customers’ fears of the cloud? These customers, most of them being small medium business (SMBs), are scared of putting key business functions into the cloud because if something goes wrong, they fear it could stop their business in its tracks. So, CSPs need solutions that will enable them to allay these fears.

We need to remember that CSPs have a unique advantage over other cloud players such as Over-the-Top (OTT) providers, given their existing data and voice communication networks. This is the biggest asset differentiating them from others. Using their existing managed networks, the CSP can guarantee end-to-end Quality-of-Service (QoS) that is critical for SMBs that need to perform at an enterprise level. The CSPs are known for their existing secure networks, providing them with a strong brand advantage when dealing with SMBs that are concerned with putting their sensitive business data in the cloud. And of course, CSPs have the advantage of existing local footprints and existing customer relationships.

The SMB customers that move to the cloud, in most cases do not understand technology and products, but they do require solutions and services. From the CSP perspective, the most critical factor for the SMBs will likely be the quality of experience (QoE) – keeping customers satisfied and avoiding churn. As mentioned above, CSPs are in a unique position given their existing managed communication network including the on-premises access equipment. The on-premises equipment is the demarcation point to the CSP data and voice cloud services. Without QoE assurance in this equipment, it will be extremely difficult for the CSP to sell and deploy reliable and trusted cloud-based services.

SMBs and Cloud

Protecting the business

As part of my work in AudioCodes I meet regularly with leading CSPs and hear their perspectives regarding their SMB customers’ needs when moving to cloud-based services. One of the things that they are most wary about is the business continuity, meaning, how can they make sure that the data and voice cloud services are always available? Consider the implications of an unreachable business, even if it is just for few minutes. Of course this will reduce customer satisfaction and eventually cost the business money. Or consider the example of a small insurance company that cannot access to its customer data base in the cloud and how bad that would affect the business customer support service.

In the real world, failures happen, and yes, there will be cases when the voice or data services in the cloud will be unreachable. So the question is how can we protect ourselves from such a scenario?  And the answer is: Backup, Survivable & Resilience.

SMBs and Cloud Appliance

One solution is to use business routers with backup and survivability features. One of the great things about such a product is that it allows the CSPs to allay their customers’ fear of the cloud and provide them the confidence they need to place their key business functions in the cloud.

The approach is to use multiple WAN interfaces, backup PSTN interfaces and suitable software. With redundant WAN interfaces, you can make sure that in the case of a connection loss to the primary WAN the router will auto-switch to the backup network (for example the 3G/4G mobile network) assuring the SMB customer’s an “always on” Internet connection.

The router also ensures that critical business telephony services will continue to operate in the case of a connection loss with the hosted PBX. This is done using unique software features that will auto route the outgoing calls to the backup PSTN and will maintain internal business telephony operations.

So, the next time you are considering cloud-based services, ask yourself, are you protected in the case of a connection loss to the cloud? There is no reason why you shouldn’t be.

Image Credit: Flickr user Karen Ka Ying Wong

Small Businesses - Big Opportunity

SMALL businesses, BIG opportunity

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Small Businesses - Big OpportunityI recently read an article about the importance of small medium businesses (SMBs) and their benefits to countries’ local economies, and wondered how this is reflected in local communication services deployed in those countries.

There is no doubt that VoIP technologies have changed the communications world and the way that Communication Service Providers (CSPs) do business. Still, looking at the SMB segment (I refer here to companies with more than 4 and less than 250 employees), it seems that out of a total of 75 million worldwide SMBs, only 12 million are connected to VoIP services and the rest are still using legacy TDM lines.  Clearly, there is huge opportunity here for CSPs as well as for VoIP equipment providers.

According to an internal analysis we conducted in AudioCodes, based on market research reports we expect that by 2017 the number of SMBs connected to VoIP services will more than double to 25 million with an average annual growth of more than 3 million every year!!!

Worldwide SMBs connected to VoIP Services

In the past, the needs of SMBs were quite modest in comparison to those of the enterprise. But this is changing – and fast. The communications needs of SMBs have grown far beyond a managed PBX and an Internet connection. The increasing awareness of the need for data and cloud services, together with the availability of affordable platforms, encourages SMBs to acquire advanced communication services that will help their businesses grow.

Win the SMB market with QoE Ingredients

When facing SMB customers, CSPs need to take into consideration that these SMB customers are limited in their budgets and do not have the technical resources as do enterprises. At the same time, CSPs understand that in order to succeed in the SMB space, they must offer a compelling service bundle for the right price, and probably, the most important factor will be QoE.

We need to remember that even if in most cases the SMBs let the CSPs manage their communication services, they are fully aware of the importance of these services and the critical impact they can have on their business.  Accordingly, they carefully evaluate these services when interacting with CSPs. SMBs expect their businesses to be always available, with no less than excellent voice quality and fast Internet service. They expect a productive environment for their employees with suitable and accessible data tools and they are very concerned about security. And, of course, the solution must be affordable.

Business Communications Needs

Faced with this significant opportunity, CSPs are challenged to provide SMB customers with the expected QoE starting with the on-premise business routers. Using the right business routers with features such as business continuity and consistent performance, will allow CSPs to deploy data and voice services with high QoE that will help them to capitalize on these opportunities.

More information can be found in the “Big Solutions for Small Business” white paper and at AudioCodes Multi-Service Business Routers Page (