Understanding Total Cost of Ownership for UCaaS

March 10, 2021
Author: Craig Kathman
Blog | Collaboration | Communications | Digital Workspace

Everything has a price, and enterprises looking to consolidate their communications infrastructures are as price-minded as ever—especially at a time when remote work capabilities are paramount.

Many have turned to Unified Communications as a Service (UCaaS) in a bid to simplify the flow of information throughout an organization and outward to customers, vendors, clients, and more. In making this transition, enterprise leaders often compare the Total Cost of Ownership (TOC) directly between UCaaS and their existing on-premises communication solutions.

While it’s an understandable comparison to make, a truly thorough TCO analysis goes beyond the upfront capital expenditures and maintenance cost line items and considers all the key factors of a UCaaS adoption.

Total Cost of Ownership Key Factors:

  1. Data center savings
  2. IT staff savings
  3. Telecommunications spend
  4. OpEx vs. CapEx
  5. Flexibility

Here are a few of the areas your TCO analysis should cover:

UCaaS savings for your data center

A properly planned and implemented UCaaS solution can be a game-changer when it comes to your organization’s data center operations in terms of cost reductions, improvements in efficiency, and many other factors, including:

  • Servers and storage.
  • Software and virtualization.
  • Real estate.
  • Power and cooling.
  • Redundancy.
  • Physical security.
  • Compliance.

Under a UCaaS solution, the provider is responsible for all of the above, reducing the workload on your internal IT staff and making for fewer expenses that impact your bottom line. With your UCaaS provider managing software procurement and maintenance, virtualization licensing and deployment, access control, and any compliance requirements unique to your industry, your enterprise can more freely focus on long-term strategic business goals instead of day-to-day communication operations.

These potential savings of both capital and personnel power should be taken into consideration in your total cost of ownership analysis.

How UCaaS can lead to IT staff savings

Many organizations struggle to keep up with the overabundance of daily management responsibilities that on-premises legacy communications networks demand. These burdens can include:

  • Service request management: IT staff have to be ready to respond to help tickets submitted by users.
  • Monitoring and response: The mission-critical nature of enterprise UC systems means that 24x7x365 readiness is a must-have, which in turn requires a large commitment of on-call tech specialists.
  • Updates and maintenance: Whenever bug fixes and upgrades are rolled out, careful planning and preparation are needed to ensure these updates are implemented smoothly.
  • Vendor and billing management: The process of billing and procurement with multiple solution vendors can be extremely tedious and time-consuming.
  • Disaster recovery and continuity: Communication infrastructures must be robust enough to continue operations and recover from disaster in case the unexpected occurs.

All of the above factors also demand a high standard of excellence from the IT experts hired to manage them. UCaaS providers take on the burden of recruiting, hiring, and managing the experts needed to keep these factors in check—reducing overhead for your internal staff and giving your IT teams valuable time back.

Cutting telecommunications spending with UCaaS

Telecom expenses can account for some of the greatest CapEx drain faced by modern enterprises, especially when considering the investments necessary to update and maintain legacy voice networks.

Under a UCaaS framework, the struggles inherent to traditional telecom systems are ameliorated by a customized, collaborative, and scalable managed solution that can easily incorporate new users, new devices, and new applications as needed—no new CapEx expenditure necessary. Additionally, the predictable monthly charge of a managed UCaaS framework means surprise expenses are a thing of the past.

UCaaS savings in an OpEx model

Another crucial component of your TCO assessment is a comparison of capital expenditure (CapEx) models and operational expenditure (OpEx) models, as this difference can be crucial information when making a decision regarding UCaaS adoption.

In a CapEx model, a large upfront investment of capital is needed to implement new technology or a new service, like an on-premises UC solution, for example. In addition to the upfront cost, this approach often involves ongoing maintenance costs as well.

In contrast, UCaaS functions as an OpEx model, meaning a fixed amount is spent per user. This makes it easier for enterprises to plan and budget for their UCaaS expenses, which are spread out over time as opposed to being concentrated in one large upfront capital investment.

Also Read: Cut costs and create a future-proof network with managed NaaS and UCaaS solutions

UCaaS offers flexibility in user count

The ability to adapt to changing conditions is another key factor that should be weighed in your total cost of ownership assessment, especially for enterprises with seasonal user bases that grow and shrink throughout the year.

With on-premises UC, adding or subtracting even a single remote site can eat up months; additionally, large capital expenditures may be required to increase capacity when user engagement surges. A UCaaS solution takes all of these factors out of the equation, offering unbeatable flexibility and agility when faced with shifting user counts.

The low initial capital costs of UCaaS technologies mean that it can also be onboarded on a trial basis, allowing an enterprise to “test drive” the solution and ensure it’s a fit for their organization’s unique needs.

A complete total cost of ownership analysis takes into account the above factors and usually results in substantial savings for UCaaS versus an on-premises solution.

Continue reading: Frost & Sullivan report places CBTS in top bracket for UCaaS innovation and growth.

Contact our team of experts for more information on how UCaaS can save your organization time and capital expenses.

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