Unified Communications: Technologies that Paved the Way for Cloud Communications Dominance

A Brief History of UCaaS

Guest post by Mark Dacanay of RingCentral

It was just a decade ago when only small and medium scale businesses saw cloud communications as a viable option for a business communications solution. Enterprises mostly ignored the emerging technology because they already had on-premises PBX phone systems and traditional telecoms that they had already been using for too long to take notice of a new alternative.

Technologies that Paved the Way for Cloud Communications Dominance

Technologies that Paved the Way for Cloud Communications Dominance

Fast forward to 2018 and cloud communications is poised to dominate the market through cloud-hosted unified communications solutions. On-premises PBX systems are on their way to being obsolete, while traditional telecoms are struggling to keep up with an always connected generation. In fact, the global unified communications and collaboration market is predicted to top $35 billion by 2019.

It seems like cloud-hosted unified communications is here to stay and is set to dominate the business communications industry in the near future.

But before we look more into the future, it is important to look back to the past. How did we end up here? How did cloud communications, specifically unified communications as a service (UCaaS), come to dominate?

To give you an insight, here are the technologies that paved the way for cloud communications dominance:

Development of VoIP

It was around 2000 to 2005 when companies started using IP networks to transmit voice data. The technology was called Voice over Internet Protocol or VoIP. Adoption was not that fast. In the early 2000s, very few calls were transmitted through IP based lines and companies still preferred the traditional PSTN. However, as internet connections became more stable, more and more companies saw the benefits of using VoIP. By 2008, 80 percent of all new corporate lines being installed were VoIP lines. Now, VoIP is used by most unified communications providers as its primary method of transmitting calls or voice data.

Virtualization of infrastructure

The 90s were all about hosting software on your own PCs, so it is not surprising that most businesses at the time also hosted their business apps on their own servers, within their own infrastructure. Intranet services or local web connections that could only be accessed within the premises of the company was a big thing back then. Aside from the familiarity with on-premises systems and infrastructure, cloud technology was still in its infancy and there were still various security concerns that needed addressing. After all, data is stored by a third-party provider and it is transmitted over the public internet.

It was not until Salesforce launched in 1999 that businesses were able to use an actual enterprise app delivered over the ‘net. Salesforce, like today’s cloud services, hosted their suite in a virtual server and delivered the service via the internet, which was accessed via their website. Since then, various cloud services have popped up including Amazon Web Services in 2002. Thus, the virtualization trend has begun. Organizations started delivering services (SaaS, PaaS, IaaS) via the cloud through different deployment models, namely private cloud (solely for one organization), public cloud (open for public use), and hybrid cloud (a combination of public and private). Security has also been addressed with most providers employing security measures like heavy encryption on all facets of data transmission.

Circumstances also aligned for the emergence of the virtualization of infrastructure. This includes the improvement of high-speed internet and the support of leading tech giants like Google and Microsoft. When these giants embraced virtualization technology, it also caused a domino effect within the industry as a whole.

Moving PBX from on-premises to the cloud

Private Branch Exchange or PBX has been around since the 40s. In the beginning, PBXs were simple systems managed by the local phone company itself. Calls were routed from the Central Office (CO) to a business customer. It was very simplistic back then but it paved the way for on-premises systems where companies invest in their own PBX infrastructure to route incoming calls within the company. As mentioned above, the virtualization of infrastructures presented an opportunity for PBX to be deployed through the cloud. Through the Software as a Service model (SaaS), cloud PBX started making noise around 2005 to 2010 as an alternative to on-premises PBX for small and medium companies who could not afford to invest in their own PBX infrastructure. But what started as an alternative to on-premises PBX soon became a viable business phone system for companies of all sizes because of its mobility, flexibility, and scalability, not to mention the numerous advanced features like auto-attendant, answering rules, caller ID, call screening, and call forwarding. As an actual business phone system, the cloud PBX has become the backbone of what we would call unified communications solutions nowadays.

Evolution of team messaging to team collaboration apps

Instant messaging has been around for a while with personal messengers like Yahoo Messenger but the technology did not take off with businesses right away. It was around 2010 when team messaging tools really became popular with companies with tools like Microsoft Lync and later apps like Jabber. Now, team messaging apps are more than just for chats. Apps like Slack, Glip, and HipChat are now full-on team collaboration apps with video chat capabilities as well.

Feasibility of stable audio and video conference

In the past, audio conference calls were a premium service only offered by traditional telecom companies. But with the rise of VoIP, the application of transmitting voice data over IP networks has also made audio conferencing more cost-friendly. In 2005, Lifesize Communication displayed the first video conferencing system at the Interop tradeshow with video showing 30 frames per second, with a 1280 by 720 resolution. By 2010, video conferencing has become a necessity for most enterprises and multiple video conference providers like GoToMeeting and Blue Jeans have popped up in the market.

The arrival of true Unified Communications as a Service

In the last couple of years, the main focus of the industry leaders in cloud communications is to combine these different communication channels into one streamlined service.

With a system that meets most, if not all, the business communication needs of a company and removing the need to rely on separate providers for each application, it is no wonder why cloud communications, UCaaS in particular, is set for domination in the future.

About the Author

Mark Dacanay is a Digital Marketing Professional who has been working with a B2B company offering cloud-based services for more than 5 years. He is obsessed with anything about the cloud – the technology, not the fluffy stuff in the sky. You can reach him through Twitter and LinkedIn .


Are You Planning to Kill Your PSTN or Just Waiting for it to Die?

We are living in exciting times as more and more fixed line operators have already begun to transition their PSTN networks to All-IP networks. AudioCodes’ recently released whitepaper “4 Key Points to Successful PSTN to All-IP Transformation” covers some of the leading operators’ PSTN migration plans. Some of these operators, like Deutsche Telekom, have already taken significant steps into this plan. DT completed the PSTN migration in Macedonia, Slovakia and Croatia and committed to shutting down all of its European PSTN networks by the end of 2018.

Good analyst and media coverage on some of these All-IP transformation projects can be found in Iain Morris’ Light Reading blog posts such as “DT Completes All-IP Move in Croatia” and “Does BT Lag European Peers on All-IP?”, I also recommend an interview with Axel Clauberg, VP of Aggregation, Transport, IP & Fixed Access at DT in which he discusses DT’s ongoing migration to an All-IP network architecture (DT’s Journey to a New IP World).

Though motivators such as the increasing maintenance costs of the PSTN switches, real-estate considerations and increasing competition from OTT players are making operators realize that they need to migrate their legacy networks to All-IP, the process is far from simple.  In fact, it includes many elements such as migrating the core network to IP, replacing the customer’s on-premises equipment, introducing new services to end-customers and more.


At AudioCodes we defined 4 key points with a recommendation for the operators to follow as part of their PSTN migration plans.

1. The Time is Right for All-IP Transformation

Even though there are many drivers for PSTN migration, the process is complicated and will take a long time. For some operators, PSTN migration is still a low priority, while others are ahead of the curve, but on one thing there is market consensus: PSTN migration will be necessary and urgent within the coming years. Many TDM switches vendors already declared end of life and support, challenging the operators with increased maintenance costs and a lack of spare parts and expertise. Adding to the equation, operators that already have plans for completing PSTN migration by 2020, will cause vendor support to decrease significantly. Operators need to have a plan of action now or risk being stranded with an obsolete network

2. Focus on Business Customers

Although one of the main triggers for operators to transfer to All-IP network is the significant decrease in the number of PSTN residential lines, they need to keep in mind that once they start the transition process, it will cover 100% of their network, including business lines. It is critical for operators to focus on their business customers during the PSTN migration process for several reasons:

  • In terms of revenue, business customers generate (globally) 44% of the total fixed voice lines revenue
  • Business customers, when compared to residential ones, are more sensitive to changes in voice services as they are critical to their on-going business operations
  • The potential future voice service revenue from business customers is much higher, compared to the residential market, when moving to All-IP services such as cloud UC services

3. Ensure a Successful PSTN Migration Process

A significant challenge to the transformation of PSTN to All-IP is the long process that operators will face, such as migrating on a massive scale on time and on budget and ensuring that the transformation has zero impact on existing services and end users. Focusing on these key pillars during the PSTN migration process will help operators to achieve optimal results:

  • Cover any deployment scenario and migrate 100% of the network with solutions for any topology type (on-premises and CO), for any customer size from SOHO and up to large enterprise, and for customers using any existing service
  • Avoid customer churn – make sure to have zero impact on end customers during the migration process and ensure high quality service after migration to the new IP network is complete
  • Minimize migration costs using reliable and easy deployment devices and automated services that will reduce engineering and support costs
  • Optimize migration time with quick installation and configuration of on-site devices by deploying solutions that offer wide-ranging interoperability, zero-touch provisioning and remote configuration tools
  • Enable future cloud services using devices that are “cloud ready”. This will ensure operators can achieve a quick, easy and cost-effective move to cloud services once the PSTN to All-IP transformation is complete

4. Use Smart Cloud Transformation

Congratulations! You have successfully migrated your network and services to All-IP. Now it’s time to start and harness the power of the new all-IP network and to generate more revenues from services such as cloud UC. Well, not so fast. During the PSTN migration process the operator will need to disconnect business customers’ voice systems from the PSTN and reconnect them to the IP network using VoIP gateways. 77% of these business customers are still using on-premises PBX systems, and although they will now be connected to the all-IP network, migrating their telephony services to the cloud is not a straightforward matter.

A ‘smart cloud transformation’ approach will allow operators to address this challenge:

  • Don’t try it all at once. A gradual migration that is based on hybrid and modular solutions will enable the operator, to connect their customers to IP services quickly and with minimum disruption, while also being able to migrate these customers to cloud services without needing to revisit the customer and reinstall equipment in the future. In addition, the on-premises PBX and the new hosted PBX can be merged into a single telephony solution
  • Provide solutions that will enhance the advantages of the cloud and that will enable to allay customers’ fears of moving to the cloud. Such solutions should include features such as superb voice quality, backup options, ‘always on’ services, and holistic management and monitoring that will enable the operator to guaranteed enhanced QoS and QoE


There is no doubt that PSTN migration will become a critical issue over the coming years. Service providers need to have a plan in place now to avoid hurdles that will become more difficult to surmount by 2020.

More information can be found in the AudioCodes white paper “4 Key Points to Successful PSTN to All-IP Transformation”.

WP - 4 Key Points to Successful PSTN to All-IP Transformation Journey