A Brief History of UCaaS
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.
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:
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.
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.
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.
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.
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.
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.
Guest post by Mark Dacanay of RingCentral
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 .