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Cloud Communications The Top Five Advantages For Your EnterpriseAuthored by: Steve Shepard, President, Shepard Communications Group, LLC

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Cloud Communications The Top Five Advantages for your Enterprise

Authored by:

Steve Shepard, President

Shepard Communications Group, LLC

Commissioned by XO Communications

Introduction 1

1 - Lower Total Cost of Ownership (TCO) 3

2 - Self-Management 4

3 - Productivity 5

4 - Business Continuity 6

5 - Focus on Core Competencies 7

In Summary 8

Hosted PBX 9

About XO Communications 10

About Steve Shepard 10

The Top Five Advantages for your Enterprise XO Communications

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Many would consider Cloud Communications to be a new phenome-non in the pantheon of IT capabilities and resources, but that’s not exactly true.

Cloud technology has been around since 1968,

when the first computer users logged in to the

corporate mainframe (probably an IBM System

360 or the equivalent) using their 3270 “dumb

terminals” over a blazingly-fast 1,200 bit-per-

second analog facility. Thankfully, we have

evolved a bit since then. Today’s cloud services

go far beyond the technological capabilities

of those early days, offering much more

than the ability to share costly IT resources

among a large group of people. Today’s cloud

solutions radically improve resource flexibility,

manageability, productivity, security, reliability,

and operational effectiveness.

Make no mistake about it: Cloud technologies

are here, they’re real, and they’re the answer to

your most vexing communications problems.

Let’s begin our discussion with a quick

overview of generic cloud-based technology.

The resources required to deliver processing

power, enterprise storage, complex

applications, functional enterprise application

platforms, or corporate communications are

complicated, expensive environments. Most

corporations have one or more data centers

dedicated to the delivery of these and other

capabilities. Applications are being moved into

the cloud, for example, because by hosting

them centrally, the client can provide access to

all employees, regardless of location, and

can guarantee that the applications are

not only the most current version, but also

completely free of viruses, malware and other

intrusive elements.

Introduction

“Make no mistake about it: Cloud technologies are here, they’re real, and they’re the answer to your most vexing communications problems.”

Introduction XO Communications

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The truth is that corporations have these data

centers because they have to – until recently

there has been no cost-effective alternative.

Today, however, that is no longer the case.

The astute enterprise must pay attention to

a question being asked by cloud providers:

If you’re not in the business of running data

centers, why are you running data centers?

Today’s IT environment has adapted to this

reality, one result of which is the emergence of

organizations dedicated to delivering storage,

processing power, applications, platforms, and

communications from a centrally-managed,

universally accessible place – the cloud.

The companies that offer these services are

numerous and capable. Amazon’s Elastic

Cloud offers storage on-demand. VMWare

provides computing power-on-demand.

SalesForce.com offers a suite of sales support

applications, all delivered to roving or fixed

sales personnel, regardless of their physical

location. Google Apps provides an entire

enterprise platform that offers communication,

collaboration, and cooperation to all employees

within the enterprise. And XO Communications

offers a cloud-based communications service

that allows multiple locations to communicate

as if they were physically adjacent.

In a cloud-based environment, all of the

functionality resides “in the cloud” – within

Web-accessible data centers that are centrally

managed. The resources behave as if they

were on the user’s computer, when in fact they

could be across town, across the continent or

on the other side of the world. And while cloud

based computing, applications, platforms and

storage have received a lot of attention in the

last few years, perhaps the most exciting new

entrant – and the one that will fundamentally

change the way businesses communicate – is

Cloud Communications.

Introduction XO Communications

“Perhaps the most exciting new entrant – and the one that will fundamentally change the way businesses communicate – is Cloud Communications”

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Changing the Paradigm:

Lower Total Cost of Ownership (TCO)

1 Seven Best Practices for Cloud Computing. Cumulus Technologies; http://www.cumulus.com.au/pervasive-news/pervasivenews/19-seven-best-practices-for-cloud-computing.

1Today, the enterprise relies on a variety of communica-tions modalities: voice, texting, e-mail, and video chat, even social media applications like Facebook, Twitter and Yammer.

In fact, according to research from technology strategy firm

Cumulus Technology, one-quarter of business process improve-

ment initiatives today include integration of information from

enterprise social computing solutions1. Connectivity options,

therefore, must evolve beyond standard enterprise applications,

legacy systems, and databases, to modern Web service and

Web 2.0 APIs. This is where the cloud shines.

Consider this: the cost elements of a voice solution are not trivial.

They include the monthly fees associated with multichannel PRIs

required for site-to-site connectivity; the potentially significant –

and variable - cost of monthly local and long-distance usage; the

people, software and systems required to administer, manage,

operate, monitor, and maintain what can be an extraordinarily

complex communications infrastructure; and perhaps most

important, the capital expense associated with having to own

and operate a collection of depreciable assets.

With a cloud solution, however, this cost structure flips on its

head. The capital expense (CAPEX) associated with network and

terminal equipment follows the communications application into

the cloud, leaving the customer with operating expenses (OPEX)

only – and far less oversight and management activity, which in

turn leads to lower costs.

This is the benefit of the converged network that a cloud solution

makes possible. Each of the communications modalities listed

earlier is delivered from a different source, and each must be

separately managed and administered. For precisely this reason

the concept of Unified Communications emerged a few years

ago, thanks to the arrival of IP as a central unifying force in the

world of enterprise communications. Thanks to IP, all of these

disparate modalities can be unified under a common system,

thus reducing the complexity of operations and the total cost

of ownership (TCO) involved in administering the daunting

task of effective, multi-site enterprise communications. There

are no up-front equipment costs (other than a possible LAN

upgrade to handle voice); there are no costs associated with

network management or infrastructure maintenance; there are

no access charges, since all voice and data communications

are carried across a single converged IP network; and the risk

of technological obsolescence, always a behind-the-scenes fear

of IT budgeters, completely disappears, since maintenance of

technological currency now becomes the responsibility of the

cloud provider rather than the enterprise. The network literally

becomes future-proof, something that makes IT managers

smile for days.

Lower Total Cost of Ownership (TCO) XO Communications

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Remember our earlier admonishment:

“If you’re not in the business of running data centers, why are you running data centers?”

Nowhere is this a more appropriate question than in the area of

Self-Management. In today’s hyper-competitive communications

marketplace, companies benefit enormously when they place as

much control of the relationship between the service provider

and the customer in the customer’s hands as possible. It is clear

that service providers in today’s competitive environment are

being pushed by their customers to place a great deal more

emphasis on simplicity, transparency, the ability to customize the

relationship between the customer and the network, and real-

time choice of delivered services.

Self-Management as a central element in Cloud Communications

speaks directly to this. Needless to say, there is a certain amount

of up-front work required to prepare your network for the arrival

of IP, but the very fact that you are thinking about a cloud-based

communication solution means that you have probably already

done much of this prep work, meaning that any additional

required support will be minimal.

Enterprise-scale PBXs are complex devices that require

administrators to complete comprehensive training and

certification. This adds to the cost of operations.

But with a cloud solution, any required activities such as

adding or modifying profiles of users or modifying features

– the infamous “moves, adds, changes and deletes” – are

accomplished via a simple Web interface, and are therefore as

scalable as the enterprise itself. And because the enterprise is

in control of all functions related to managing the relationship

between itself and the network cloud, there is no need to be

dependent on a service provider to handle routine tasks, nor are

there any fees associated with the changes.

2

Changing the Paradigm:

Self-Management

Self-Management XO Communications

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What would be the point of moving to a cloud-based communications solution if it failed to deliver a significant leap forward in terms of organizational productivity?

With a cloud-based communications solution,

the “tyranny of twisted pair” disappears,

because enterprise communications

functionality can now be delivered to any

device, at any location, with a single phone

number, dial plan, and guaranteed voicemail

forwarding to an e-mail account, regardless of

geography. In other words, the enterprise can

enjoy complete IP-PBX functionality without

having to buy an IP-PBX.

Calls made in the environment, regardless of

the originating device, appear to the called

party as if they were made from the main

office, thus preserving brand identity and

customer intimacy.

And because of the power of truly unified

communications, calls can be transparently

moved between desk, mobile and home

phones to ensure seamless communications

and uninterrupted customer service. The

result? A leap in organizational and personal

productivity, as the functional playing field

among fixed phones, mobile phones and video

devices is leveled – permanently. Instead of

having to focus on the infrastructure, users can

focus on what it does for them.

Changing the Paradigm:

Productivity

Productivity XO Communications

“ The enterprise can enjoy complete IP-PBX functionality without having to buy an IP-PBX. ” 3

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Business continuity, formerly known as “disaster recovery” or “disaster avoidance,” earned its stripes in the early days of cloud infrastructure when data storage made its way into the cloud.

The ability to back up critical data on multiple servers in different

geographic areas as a way to avoid disruption by geopolitical

events or natural disaster went a long way toward assuaging IT

managers’ concerns about business continuity following such

an event. When companies like XO took that same concept and

applied it to enterprise communications, a whole new level of

reliability emerged. Suddenly, weather and natural disaster – both

of which seem to have become more common of late – pale into

relative insignificance in terms of their ability to adversely affect

enterprise communications. Even in situations where weather or

other disruptions prevent employees from going to their primary

work location, they can still be fully productive because the cloud

houses all of the functionality they need to do their jobs, and that

functionality can be delivered to them, regardless of where they

are physically located. Calls can be routed to mobile devices or

to fixed facilities that are unaffected by whatever problem

is occurring.

Furthermore, the infrastructure is completely secure:

There is no physical hardware required at the enterprise

location, which means that even in the event of a complete loss

of the facility, full-featured communications can continue in an

uninterrupted fashion as long as employees can find a working

phone. Running a corporate communications infrastructure

is an expensive, complex, and human-intensive process –

not to mention a heavy consumer of CAPEX. By shifting the

expense, capital and operational burden of communications

to the enterprise cloud provider, those same financial and

human resources can be redirected to core business activities.

In some companies, IT and IT support, including enterprise

communications, can be as much as 3-5% of total revenue .

Imagine the impact of redirecting a large portion of that to other

activities that positively affect customer service, intimacy or

stickiness? That would be a well-received decision by senior

leadership, and its strategic value would be equally well-

received. Moving non-core business functions such as VoIP to

a reliable outsourcing entity like XO means that resources that

would otherwise be spent on these non-core functions can

be redeployed into activities that provide a clear competitive

advantage, without sacrificing service quality in any way.

Business Continuity XO Communications

Changing the Paradigm:

Business Continuity

4

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5Running a corporate communications infrastructure is an expensive, complex, and human-intensive process – not to mention a heavy consumer of CAPEX.

By shifting the expense, capital and operational

burden of communications to the enterprise

cloud provider, those same financial and

human resources can be redirected to core

business activities. In some companies, IT can

represent as much as 3.5% of total revenue.

Imagine the impact of redirecting a large

portion of that to other activities that positively

affect customer service, intimacy or stickiness?

That would be a well-received decision by

senior leadership, and its strategic value

would be equally well-received. Moving non-

core business functions such as VoIP to a

reliable outsourcing entity like XO means that

resources that would otherwise be spent on

these non-core functions can be redeployed

into activities that provide a clear competitive

advantage, without sacrificing service quality in

any way.

Changing the Paradigm:

Focus on Core Competencies

“ By shifting the expense, capital and operational burden of communications to the enterprise cloud provider, those same financial and human resources can be redirected to core business activities.”

Business Continuity XO Communications

2 Gartner, Inc. IT Metrics: IT Spending and Staffing Report, 2011. Published 25 January 2011

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In Summary

Corporate communications is considered by most IT directors to be an important but largely tactical activity.

When it moves into the cloud, however, enterprise

communications rapidly becomes a strategic function because

of its ability to directly affect a significant number of revenue and

service-impacting functions in the enterprise.

The five areas that cloud communications affects which are

described in this paper – the ability to lower the total cost of

ownership of the communications function, the ability to move

control and management away from the service provider and

put it in the hands of the customer, the enhanced productivity

that results from the irrelevance of physical location, the ability

to not only survive a major disruptive event but to in fact be fully

functional in spite of it, and perhaps the most important of all,

the ability to focus valuable human and capital resources that

would otherwise be consumed by non-core functions on those

functions that are revenue and customer service affecting, are

clearly strategic in importance.

Yet all of them result from one simple change: creating a

trusted relationship with a best-in-class cloud communications

provider and working with that provider to create an IP-based

unified communications infrastructure that supports multi-site

offices, teleworkers, and mobile workers, allowing them to

achieve their highest possible level of productivity by erasing the

complexity of communications.

In Summary XO Communications

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Even if your head is already in the cloud, you can work with a provider with proven VoIP and cloud communications capabilities: with the right products, the expertise and the business sense to help you succeed.

XO Communications can help you migrate to the cloud simply,

flexibly and cost effectively. Hosted PBX helps businesses

with locations across the US integrate complex voice and

IT environments, centralize voice applications, and take

advantage of the productivity and economic gains of cloud

communications.

The company’s IP-based Hosted PBX service allows multi-

location businesses to scale their communication requirements

as required, while at the same time reducing the CAPEX and

OPEX spend typically associated with the management of

enterprise-wide communications. In fact, for those companies

that can classify the one-time setup and installation fees as

capital expenditures, the conversion to Hosted PBX could be

done with no CAPEX at all.

At the same time the service allows enterprise customers

to accelerate the deployment of VoIP and the rollout of a

comprehensive unified communications strategy. And

because the XO solution is an end-to-end IP environment,

client companies enjoy a wide array of tangible and

measurable benefits that result in a significant return on their

communications investment. These benefits include:

• The ability to transfer the operations and management of the enterprise communications function to a capable and trusted partner, thus freeing up resources for redeployment.

• The knowledge that the monthly per-employee cost is predict-able on an enterprise-wide basis. Calling features and tele-phones are included in the overall price.

• Awareness of the fact that because of the cloud architecture, site-to-site calling will incur no additional cost across the entire enterprise.

• The ever-present ability to upgrade to a full suite of IP-PBX features and to VoIP telephones without the need to purchase new PBX equipment, and the attendant ability to avoid tech-nology obsolescence and benefit from “fuure-proofing.”

• A broad range of calling features, local and long-distance call-ing, enterprise-wide, multi-site high-definition voice and video, secure online feature management, and SIP-enabled, high-definition phones.

XO has been in the communications business since 1996,

developing an enterprise-centric network that satisfies the

growing and evolving needs of its enterprise customers. XO’s

one million VoIP subscribers using over 43 billion minutes of

VoIP traffic a year prove that XO is a leader in IP services,

including network-based cloud solutions.

XO Enterprise Cloud Communications XO Communications

Hosted PBX

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About XO Communications

About Steve Shepard

Dr. Steven Shepard, Ph.D. is president of the Shepard

Communications Group. A professional writer, educator

and industry analyst with more than 25 years of

experience in the technology industry, Dr. Shepard

specializes in international telecommunications issues,

the social implications of technological incursion and

the analysis of financial issues related to technology-

dependent businesses. He is the author of 45 books on a

wide variety of topics and regularly speaks to audiences

throughout the world, and has clients in more

than 50 countries.

Mr. Shepard can be reached at:

Steve@ShepardComm.com.

About XO Communications XO Communications

XO Communications is a leading nationwide provider of

advanced communications services and solutions for

businesses, enterprises, government, carriers and service

providers.

XO customers include more than half of the Fortune 500,

in addition to leading cable companies, carriers, content

providers and mobile network operators. Utilizing its unique

combination of high-capacity nationwide and metro networks

and fixed wireless capabilities, XO offers customers a

broad range of managed voice, data and IP services with

proven performance, scalability and value in more than 85

metropolitan markets across the United States.

For more information, call your XO sales representative,

visit www.xo.com or call: 800.474.1703

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