An Analysis of Cloud Migration

In August 2018, S-NET Communications commissioned a survey of IT and business leaders in order to get a better, more objective look at how cloud phone systems are being used as a strategic organizational tool. The State of Enterprise Cloud Communications is the best collection of data regarding the business case for cloud migration we’ve found anywhere.

We surveyed over 100 business owners and senior-level IT executives across industries which rely heavily on phone systems as their primary channel for communication with customers; including Financial Services, Legal, Accounting, and Healthcare industries. In addition, the survey results have revealed new insights into how business leaders are planning and implementing seamless, successful migration plans.

According to IDC's 2017 Enterprise Communications Study, (which separates the cloud communications market into two segments, Unified Communications as-a-Service and Communications Platform as-a-Service), UCaaS will grow to $33 billion by 2021, up from $20 billion in 2017, and CPaaS will grow to $8 billion in 2021, up from $1 billion in 2017. IDC suggests that, together, these components will constitute a cloud communications market worth $41 billion by 2021, a figure that represents nearly double its 2017 valuation. As you can see, there is a lot of buzz around cloud technology and the implications for growing businesses looking to keep pace in increasingly competitive markets. But business and IT leaders know “buzz” isn’t always an indicator of a business case for technology purchases. We’ve asked business leaders what’s driving the rush to the cloud — and they’ve given solid answers:

(68%) Cost Savings – Foregoing the capital investment associated with traditional infrastructure and complex hardware, cloud systems are set up with a pay-as-you-go pricing model, making it easy for businesses of all sizes to adopt new technology solutions.

(42%) Obsolete Technology - As current phone systems lose functionality or can no longer be serviced by vendors, businesses embrace either a full cloud deployment or a hybrid approach that combines both cloud and onsite solutions.

(36%) Strategic Benefits – Cloud based services are scalable and accessible remotely, providing the highest level of flexibility for modern organizations.

(34%) Security – Cloud communications allow employees to use solutions that automatically update in real-time for better security protection, performance, and maintenance.

(2%) Better Disaster Recovery – By using cloud technology that stores data off-site, businesses can quickly and easily restore system functionality in the event of an emergency.

Key Indicators for Migration

While the 61% of business owners and IT leaders surveyed had already or were in the process of migrating phone communications to the cloud, an important factor to consider is how an organization’s overall digitization strategy is prioritized compared to other strategic initiatives. The data shows that key indicators for phone system migration are company size and team structure, as well as reliance on voice communications. For small and mid-sized companies (0-499 employees), heavy reliance on phone communications and a need to realize cost savings over legacy technology, combined with little or no in-house support make transitioning to cloud phone systems an easy choice. 63% report that the majority of their communication with external customers/vendors/suppliers happen by phone 74% have 3 or less employees on their in-house IT team 39% said cost savings was their primary reason for migrating to the cloud Of respondents who report that the majority of their communication with external customers, vendors and suppliers happen by phone, 59% have already migrated to the cloud or are actively migrating within the next 12 months.

Not surprisingly, key components of a successful business phone system migration are related to preparation and process organization. The short and long term ramifications of a disruptive migration process can be costly for any organization, and when we consider that roughly ⅓ of respondents rate their migration experience as unsatisfactory - there are lessons to be learned for organizations still in the concept and planning stages for migration. Migration by Industry:

Accounting - 93%

Financial Services - 60%

Healthcare - 53%

Legal - 36%

Less than half (46%) of respondents who have already migrated to the cloud or are actively migrating to the cloud within the next 12 months have documented migration plans 32% rate their migration experience as unsatisfactory 38% chose not to engage outside resources to support in the migration planning and implementation.