Are Service Providers Hedging Their Bets?

Comm on the Cloud

Are Service Providers Hedging Their Bets?

By Peter Radizeski, RAD-INFO Inc.  |  May 17, 2013

Every hardware vendor is “going cloud.” Digium (News - Alert) just launched Switchvox Cloud, its version of Asterisk Hosted IP-PBX. Let’s not forget that Cbeyond offered an Asterisk in the cloud service via its Aretta purchase before rolling out a Broadsoft Hosted PBX offering. Shoretel acquired M5. Mitel has a hosted service. VARs are using Cisco HCS. Microsoft (News - Alert) Lync is big in the Fortune 50 crowd.

Then we have Dell, which is taking itself private in order to transition from a hardware vendor to a cloud services company. Obviously, this transition isn’t easy for any company. Ask Microsoft partners or Mitel (News - Alert).

Transitioning to cloud is not as easy as slapping gear in a data center calling it cloud and you are off and running. Well, you are running – chasing revenue as fast as you can. As I learned from speaking with Sonian, building for cloud delivery is very different that moving it to a data center or virtualizing it. However, it will be a few years before the market grasps that yet.

It is as much about a culture shift as it is a revenue model shift from CAPEX to OPEX (News - Alert). I think most people do not understand this.

Selling hardware is easier than selling an intangible service – for the salesperson. There is bias from buyers and the sellers that owning the hardware is a better solution (even when it isn’t. I deal with it every day.)

Hosted PBX (News - Alert) isn’t for everyone. Therein lies the rub. Every provider thinks that everyone should be using Hosted PBX. Why? Certainly, single location small businesses can still utilize a premise key system. Cloud services are most impactful for a distributed, mobile or virtual workforce. Or the company has to be making the shift to cloud – building out a data center, virtualizing servers, deploying MPLS, migrating to EMR or some other big step toward a cloud IT infrastructure.

Everything is shifting to cloud. Companies are lured by the monthly recurring revenue and the declining hardware sales. I can’t tell if they are hedging their bets or they think everyone will be leasing a car over buying one soon.

Peter Radizeski is a telecom consultant and the owner of RAD-INFO, Inc.

Edited by Stefania Viscusi
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