Clouds Rolling InClouds Rolling In

For both customers and vendors, cloud imposes major new uncertainties.

The idea of cloud deployment for UC continues to gain mind share, though there are also persistent challenges. In the 2014 Information Week survey on UC, respondents clearly showed an interest in migrating toward more cloud components for their communications. Respondents were asked, "What is your primary deployment strategy for UC today? What will your strategy be 24 months from now?" and here are the responses and trends:

* "100% on premises" = 40% currently, falling to 30% in 2 years.
* "Hybrid; primarily on premises with some cloud" = 24% currently, falling to 22% in 2 years
* "Hybrid; primarily cloud with some on premises" = 17% currently, rising to 20% in 2 years
* "100% Cloud" = 3% currently, rising to 9% in 2 years
* "Not yet determined" = 16% currently, rising to 19% in 2 years.

This seems mostly to be a picture of uncertainty--more people say their future strategy is undetermined, while there seems to be mostly fluctuation among those who see a hybrid cloud future, when it comes to estimating whether that hybrid will be heavier on the cloud or premises side. The only definitive large movement is away from the idea of 100% premises deployments for UC.

Part of me finds that last result unsurprising. Everyone knows that things are moving to the cloud--even if they don't really believe it, or believe in it. So it's not necessarily surprising that, even if you don't know what exactly your communications will look like in 2 years, you expect it will include at least some cloud.

The percentage growth in expected pure-cloud deployments is strong--a 3X increase in those expecting pure cloud UC--yet the market share still doesn't crack the communications market's version of the Mendoza Line--the 10% share that Centrex routinely claimed in the old days. And the Information Week survey included companies of all sizes; 39% had annual revenues of less than $100 million--SMB being the sweet spot for cloud UC.

Cloud promises to be a disruptive force if and when it does really hit, and not just for the end user. One statistic stood out to me in the most recent quarterly financial report from Interactive Intelligence, which has arguably been the leader in cloud for the contact center.

Interactive turned in its usual stellar numbers in just about all areas: Total orders were up 42% Y/Y, with cloud orders coming in at an impressive 165% Y/Y growth, and total revenue growing 8% Y/Y. The only dark cloud (so to speak): Interactive recorded a rare quarterly loss, which the company attributed to its rapid cloud growth--from 31% of total orders a year ago to a fairly staggering 59% in the just-completed quarter.

There's obviously good news embedded there: The company's deferred and unbilled cloud revenues for the quarter grew 56% Y/Y, as it shifted to the recurring-revenue model that the cloud imposes. Given Interactive's aggressive embrace of the cloud--an embrace in which its customers are clearly joining--what we're seeing here seems to be growing pains more than a permanent downward shift.

But these are growing pains that afflict just about all the vendors and partners in the communications industry. The cloud threatens to darken a lot of vendors' skies, at least until they adjust to the new reality.

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