Posted in Cloud Computing, Cloud Management

The Cloud: When worlds collide!

The Cloud:  When worlds collide!

I once wrote an article about a premise based phone system. It started off something like this:

In my honest opinion, there are few telecommunications solutions that can compare to the innovate and versatile IP Office by Avaya.  IP Office can do anything.  Seriously!  From simple tasks, such as making phone calls (you kind of need that in a phone system!), to ultra complex tasks, such as third party application hooks via VBScript and SQL Database dips.  With IP Office, the sky is the limit! 


I once saw a video where someone programmed the IP Office to make coffee!  For real!  Granted, that’s a bit extreme (unless you’re really serious about coffee); however, the point is that it CAN be done.  So, if your phone system can make coffee, it can CERTAINLY do other, less intensive and more business focused, tasks.  For example, mobility, presence, and contact center.

Now, you may be asking yourself, why am I writing about a premise based phone system, when this article is supposed to be about cloud communications?  Just bear with me for a moment, we’ll get there.  By the time you’re done reading this article, you will be in complete agreement with me that this article is, indeed, about cloud communications.

Let’s start with the basics:

What is a phone system?  On a very basic level, a phone system is equipment and software that connects telephones to phone lines, routes calls to and from the office, routes calls within the office, and may also present callers with a menu of selectable options.

What is a premise based phone system?  A premise based phone system is a phone system that is installed at the customer premises (your office).  Your phones and phone lines plug directly into the phone system via your building wiring.

What is a cloud based phone system?  Again, on a very basic level, a cloud based phone system is a phone system that is installed at the data center of a cloud provider.  Your phones and phone lines connect to the phone system via the internet.

Isn’t that interesting?  If you take apart the terminology, and look at it on a very basic level, a premise based phone system and a cloud based phone system is the exact same thing!  There really is no difference between the two of them.  There is no big scary animal called ‘The Cloud’!  It’s really all about your personal preference as to where it’s installed, or hosted.

You may be wondering, if that’s the case, then why all the hype about ‘The Cloud’?  If there really is no difference, then what’s the difference?

The answer is, there are differences:

Let’s start from a cost perspective.  Premise based equipment is purchased on, what’s called a CAPEX (Capital Expenditure) model. This means you have to pay for the equipment (Capital), which depreciates over time.  Cloud based service (note: I called it service, not equipment) is obtained using an OPEX (Operating Expense) model.

As written in the article “What is the difference between CAPEX and OPEX?”By J.B. Maverick on Investopedia ” An operating expense results from the ongoing costs a company pays to run its basic business. In contrast to capital expenditures, operating expenses are fully tax-deductible in the year they are made. As operational expenses make up the bulk of a company’s regular costs, management examines ways to lower operating expenses without causing a critical drop in quality or production output. Sometimes an item that would ordinarily be obtained through capital expenditure can have its cost assigned to operating expenses if a company chooses to lease the item rather than purchase it. This can be a financially attractive option if the company has limited cash flow and wants to be able to deduct the total item cost for the year.”

Because, with cloud, you don’t purchase any equipment, and just pay for the software you use as a service (SaaS), all you end up paying is a low monthly cost.  Furthermore, Cloud or SaaS scales with your business.  As your business expands, you add additional seats or licenses.  If your business contracts, or goes through downsizing, you decrease the number of monthly licenses.  With a premise based system, what you originally paid for is what you get.  If your business expands, you need to pay for additional equipment.  If your business shrinks, you don’t realize any cost savings.

So, what we see from here is that cloud based services are a much more attractive option, from a tax and cash flow perspective.

Another difference is business continuity.  With hurricanes and flooding taking place across the country, its inevitable that some business is going to be affected.  If your place of business is affected by a disaster, it’s bad enough that people can’t come into work.  It would be even worse if customers calling your office heard the dreaded busy signal or perptual ringing.  With a premise based system, if you wanted to ensure that your communications are functioning during a disaster, you would have to pay for your entire disaster recovery plan, out of your pocket.  With a cloud based solution, your provider pays for it.  Disaster recovery is included in your monthly fee.  Your cloud provider’s data center is backed up by multiple locations across the country, and even around the world.  Imagine, getting all this peace of mind for a low monthly cost!

By now, you’re probably wondering, this all sounds great!  However, I still don’t understand what does a premise based phone system have to do with cloud communications?

This week, I attended a roadshow given by Westcon, a global value-added technology distributor.  The show was the Avaya IP Office Release 10 and Unified Communications as a Service (UCaaS) Event.  What’s interesting about this title is that it combines both worlds, a world leading premise based phone system, and a cloud based solution.  I came to this event to learn more about both service offerings, and I was not disappointed.  I learned that Westcon now offers the SAME premise based award winning Avaya IP Office, hosted in the cloud!  This means, that the war between which one is better (premise or cloud), is officially over!  It’s the same product!  There is this old joke, where two people were aruging, and one person comes over to them, trying to settle their argument, and says “You’re right, and you’re right”.  So one of the guys turns to him and says, “Hey, we can’t BOTH be right?”  So the guy answers, “You’re also right!”  You know that joke?  It’s kind of like that.

You get the exact same solution.  The same system, the same features, only now it’s in the cloud.  You pay a low (OPEX) monthly fee, the solutions is scalable with your business, and you have the peace of mind knowing that you’re business is protected in the event of a disaster.  What can be better than that?  The two worlds have officially collided!

My question for you is, what are you doing in your business to enable you to save money while taking advantage of the latest innovation in technology?  I’d love to hear from you, please leave us a comment.

A little bit about SimiPlex.  We create simple solutions for all your telephony needs. Our goal is to ensure you have the best experience possible, while ensuring security, reliability, and excellent customer service. Above all, we work hard for you as well as providing affordable solutions. Check us out today!


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