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The UCaaS Enterprise Spend Black Hole

Many enterprises are struggling to understand where they are spending their SaaS dollars from Cloud Communications (UCaaS) solutions such as Zoom, Teams, RingCentral, and Webex to Enterprise SaaS solutions such as Office 365. The result is a potentially large spend black hole that will continue to snowball over time without unified visibility across all of these UCaaS solutions.

In light of the COVID-19 pandemic, widespread and rapidly adopted work from home policies have driven a significant and unexpected increase in UCaaS spend. The trend only looks to be gaining momentum:

IDC reported that 2020’s Q3 data showed the Hosted Voice/UC public cloud UCaaS market grew 23.3% over the same time in 2019.

The nature of work is being reimagined. Employees require more fluid work arrangements and business travel will remain a rarity for some time. Face-to-face discussions will continue to be the exception, replaced by online collaboration in all its forms.

Gartner predicts that in-person meetings will account for just 25% of enterprise meetings by 2024. That’s a drop from 60% prior to the pandemic.

The way businesses communicate—internally, with customers, and with vendors and partners—has fundamentally changed, and the way they track, analyze, and manage SaaS spend also needs to evolve.

Why Has UCaaS Spend Become a Black Hole?

Managing a bevy of UCaaS platforms is a challenge and traditional TEM solutions aren’t designed for today’s complexities.

Key Challenges:

Lack of Standardization

Each UCaaS platform is a snowflake. While the services they provide may be similar, packaging, pricing, contracts, and services can differ significantly. Moreover, vendors are constantly adding new features and services, which may include new APIs. This makes it very challenging to keep on top of spend and governance given the rate of change and lack of standards.

Another compounding factor is a lack of standard pricing structures, which makes it difficult to compare between different UCaaS providers. This also means contracts can vary substantially between different services. Many enterprises find that they are on the back foot when it comes to negotiating their UCaaS contract—by not bringing data to the table they don’t know what they need and may spend less initially but get dinged on overages or spend too much by buying services they don’t need.

Multiple APIs

A typical UCaaS offering such as Zoom may have hundreds of APIs with each UCaaS provider sporting its own array. This means managing even one UCaaS platform can be a complex and difficult task. Many enterprises use several UCaaS services for various use cases. Managing and governing each UCaaS service in a consistent way from onboarding/offboarding to expense management is a monumental task.

High Rate of Change and Increasing Complexity

The true scope of the problem becomes clear when you multiply the complexities listed above by all the UCaaS applications organizations have deployed since the pandemic began.

Put simply, the UCaaS marketplace isn’t stationary and traditional approaches to spend management aren’t sophisticated enough to give you the insight you need to control your UCaaS dollars.

A Lack of Visibility Compounded by Hidden Waste

Without a centralized view of UCaaS spend, enterprises are potentially experiencing significant waste. Waste can take many forms and it’s often difficult to find without the right approach:

  • How many subscribed users have hosted a meeting?
  • How many paid accounts have gone unused?
  • How many UCaaS phone users are there and what hardware are they using?
  • Are users leveraging expensive bridges when more cost-efficient services are available?
  • Do all users require a subscription based on their consumption patterns?
  • Would some paid accounts be better served by the free service tier?
  • How can UCaaS call and service overages be avoided?

The reports available from UCaaS service providers rarely provide a complete picture of consumption and licensing patterns. They are intended for end-user management, governance, and basic provisioning. UCaaS providers are focused on providing value for their solutions, not holistic UCaaS spend optimization and governance.

This means additional solutions are required in order to gain true visibility into who’s leveraging UCaaS applications and how efficiently the user base is consuming their respective UCaaS service.

A Fortune 500 company sought to negotiate better rates for a primary UCaaS platform but didn’t have enough consumption data to accurately forecast usage levels. By implementing a unified Telecom and UCaaS expense management solution capable of delivering complete visibility into UCaaS/SaaS usage, spend and waste.

An Innovative and Holistic Strategy Puts an End To The UCaaS Spend Free-For-All

Enterprise digital transformation is an ongoing process, but the problem of UCaaS overspending calls for a comprehensive and unified approach to bring expenditures under control.

Near real time insights, centralized management, and end-to-end automation are required to do effective UCaaS spend management and governance.

When looking for a UCaaS spend management solution, one needs to consider the following capabilities:

  • API-based discovery, optimization, and management
  • Unified visibility across all UCaaS and telecom spend
    • Variable consumption including bridge, telephony via traditional PBX, and UCaaS BYOC/Phone services
    • Subscription usage across all services from UCaaS phone to webinars and host subscriptions
    • Call accounting across all telephony services
  • Self-service – empower users to address potential waste
  • Automated reclamation of subscriptions
  • Showback / chargeback expense management with HR integration
  • Centralized invoice processing and management
  • Maintaining the most cost- and service-efficient contracts

With all the pieces in place, you can finally banish the black hole and regain control over your communications spend.