You probably review your IT systems regularly to determine what is in need of replacement or upgrade, but what about your phone system? Does it date back to the last century? If so, you’re missing out on new technologies that can increase productivity and support a more distributed workforce.

Phone systems are traditionally based within the corporate headquarters, but you can instead opt for a modern, cloud-based, all-in-one communication platform that requires no hardware to be deployed anywhere within your offices. All you need is a big internet pipe.

That’s where Unified Communications as a Service, or UCaaS, comes in.

UCaaS is the software-as-a-service version of Unified Communications (UC) software, which combines of multiple communication technologies and strategies into a single, comprehensive, and integrated platform.

Communications technologies are typically separated and siloed, but with UC and UCaaS, all of the technologies — telephony (voice calling, voicemail, call forwarding), messaging (one-on-one and group chat), meetings (audio- and videoconferencing), and sometimes other collaboration features such as file sharing and virtual whiteboards — are integrated into one tool.

Traditional UC software can be deployed on-premises or in the cloud, but UCaaS technology is always hosted in the cloud by the service provider, with management access provided to the customer via a web interface. As with other XaaS products, UCaaS customers pay a monthly or annual subscription fee, and the provider, not the customer, is responsible for maintaining and upgrading the technology infrastructure.

End users make use of UCaaS communications from a variety of devices including desk phones, computers, tablets, mobile phones, and meeting room systems. The vendor supplies apps and interfaces that provide a coherent user experience across devices.

In addition to providing communication services, UCaaS platforms typically offer integrations with other business applications such as CRM and productivity apps, simplifying workflows.

UC and UCaaS platforms have been gaining ground on PBX (“Private Branch Exchange” or “Public Branch Exchange”) systems, traditional phone systems used to connect office desks together through standard phone lines from a service provider such as AT&T. Most PBXes are analog, which makes them unable to embrace modern technologies. You can’t so much as send an SMS text message over a PBX, much less videoconference.

But it is reliable, mature technology that has been around for decades. The phone lines hardly ever go down. Many, if not most, companies already have a PBX system that works fine for them.

Since it’s legacy hardware, however, PBX technology is not modified easily or quickly. Adding users could mean having expensive support personnel come out to the company site and require days to get the job done. Contrast that with UCaaS, where adding new users can be done in one minute on a website.

UCaaS offers all the features of a traditional PBX but with the flexibility of the cloud, such as the ability to add new services on the fly. And while a PBX uses expensive proprietary hardware installed in your facilities, UCaaS requires no special hardware, just a high-bandwidth internet connection.

That said, UCaaS can carry hidden costs. Like every other “as a service,” UCaaS pricing scales up with use. That can get away from you, cautions Megan Fernandez, senior principal analyst on the technology and service provider team at Gartner. In a high-use scenario, you could wind up paying more per month with subscription pricing than with a PBX system, especially since the PBX is likely paid for.

But UCaaS doesn’t operate in isolation, notes Denise Lund, research vice president for worldwide unified communications and collaboration (UC&C) and telecom at IDC. Unifying communications and integrating them with other business applications can boost efficiency across the workplace.

“What makes it cost effective is the fluidity of communications, regardless of what mode is being used,” Lund said. “If it's sophisticated integration into the enterprise or business software and workflow solutions, it can actually be really efficient in the context of somebody else's workflow.”

The most important determining factor for whether your organization needs UCaaS is what type of internal IT resources you have within your organization, says Fernandez. If your organization has limited IT resources and not much expertise on telephony equipment, moving to UCaaS gives you the opportunity to offload a large chunk of your IT infrastructure to experts with skills that your team doesn’t have.

UCaaS doesn’t just favor big enterprises, Fernandez notes. Startups and SMBs can benefit from it too, perhaps even more so than a large enterprise. “We’ll frequently find that small businesses have very limited internal IT staff and [lack] funds to manage that environment. And so there's that interest in making a move to the cloud,” she said.

It’s also important to ask what you’re looking to get out of a UCaaS system that you can’t get with a PBX. According to Lund, the two goals driving the majority of interest in UCaaS are increasing employee productivity and improving communication and collaboration with customers. Improving security and governance is another key aim for companies that choose UCaaS.

UC and UCaaS are both designed to help data flow seamlessly across the organization. In modern work environments, data resides in the cloud and in any one of several software databases, where it is constantly being moved, updated, and contextualized — and people may not be able to access it via traditional communications. The more data moves around your organization, the stronger the argument for UCaaS.

Agility and flexibility, particularly in the context of remote and hybrid work, are also driving interest in UCaaS. “It’s cloud-based, so it’s accessible from whatever the work location is. That’s a key driver over the last few years,” Lund said.

Organizations are also turning to UCaaS to integrate communications with other enterprise software like CRM and project management tools, or with their customer contact center environment. Indeed, many UCaaS providers are expanding their own offerings to include contact center as a service (CCaaS) as well as communication platform as a service (CPaaS), which enables integrations with business applications via application program interfaces (APIs).

The other major factor to consider is that most of the innovation in communication technologies is happening in the cloud. And again, since UCaaS resides in the cloud, customers can add new features on the fly immediately, rather than going through an expensive and time-consuming on-premises deployment. It’s almost getting to the stage where it’s hard to justify investments in on-prem solutions.

If your PBX system is older, it’s probably approaching the end of its service contract and lifespan, at which point it’s time to seriously consider a move to the cloud. However, your location may be a mitigating factor. According to IDC, cloud solutions aren't yet optimal everywhere in the world. Not every UCaaS provider has a ubiquitous global presence, and there may be connectivity challenges or a lack of trust in the cloud in some countries and geographies.

Note that if you do migrate to a UCaaS system, that does not mean you have to rip and replace your old PBX immediately. The two can coexist quite peacefully, and you can migrate off the PBX at your own tempo before going fully UCaaS.

Gartner has observed that brand recognition is of high importance to large enterprises shopping for UCaaS platforms. They tend to opt for trusted providers with demonstrable expertise delivering services in large environments. The opportunity to bundle applications and services is typically more important to small businesses, letting them consolidate contracts and acquire more services from a single provider.

Here are some of the key features and needs to keep in mind when choosing a UCaaS provider.

When you start the shopping process, the first thing to look at is what is offered as part of the core services. They should include as many of the following as possible:

Of course, your organization’s specific needs may weigh some of these features more heavily than others.

Gartner’s Fernandez cites the mobile experience as a major differentiator between providers. “We're finding that since the onset of the pandemic, there's a lot of hybrid and remote work. So mobility considerations play a little bit more importance in that decision,” she said.

One concern with cloud technologies is the potential for downtime. You cannot afford downtime for your communications, so be sure to check the target uptime in a vendor’s service-level agreement (SLA). Look for a contract that promises “five nines” (99.999%) availability, Fernandez advised.

With your business on the line, how quickly issues get resolved is of utmost importance. Look for 24x7 customer support via phone and chat at a minimum. Higher level plans sometimes offer dedicated support representatives.

Also, all companies are created differently and have different requirements. Your UCaaS provider will have off-the-shelf solutions, but what really matters is how well the service and support team works with the customer for onboarding and customized requirements, plus follow-on support. So you want to choose a provider based on their ability to custom fit to your needs and requirements.

Even with those precautions, you can’t always tell in advance how quickly a vendor will fix issues. “If an organization delivers poor service, that’s really the catalyst to switch providers,” Fernandez said.

Your UCaaS system must comply with government regulations just as much as a cloud services provider like AWS. Would you want your doctor’s office to be transmitting your medical records over an unsecured, non-HIPAA-compliant channel?

So make sure that your UCaaS provider checks off all of the security and regulatory requirements of your industry. That means HIPAA compliance for the healthcare industry, for instance, or GLBA and FTC Safeguards compliance for financial institutions.

The “unified” in UCaaS doesn’t just mean integrating voice, video, and text chat, it also means integration with your line-of-business applications. Without it you are not very unified. Workflow integration is a must-have, mandatory feature of any UCaaS platform. You want things like click-to-call within a messaging app, automated scheduling of calls and meetings to a user’s calendar, and other forms of automation, minimizing the amount of manual work that you have to do.

All of the major UCaaS providers offer at least some native integrations, as well as open APIs for custom integrations.

In particular, “integration with Microsoft Teams is getting to be more important,” said Fernandez. Zoom has become quite popular, but Teams has momentum, thanks to Microsoft’s ubiquity in the enterprise. Fernandez said there are about 280 million monthly active Teams users globally. “That's a pretty significant base of organizations that have enterprise license agreements in place with Microsoft, so the ability to integrate with Teams is getting to be more important,” she said.

What’s given Teams so much momentum is a function called direct routing, Microsoft’s protocol for integrating telephony services from a UCaaS platform into their Teams environment, according to IDC’s Lund. “It takes the UCaaS system from, say, RingCentral or Verizon and weaves that into the Microsoft Teams collaboration environment. It takes a UCaaS solution and expands it into a true unified communications and collaboration experience,” she said.

Teams’ chief competitor for videoconferencing, Zoom, is evolving rapidly but is still evolving, and it does not have quite the integration with line-of-business applications that Teams currently has, said the analysts.

Fernandez says the trend to watch for this year is the integration of more and more services under the UCaaS umbrella. For instance, the biggest trend that Gartner is seeing right now is the addition of customer service functions to UCaaS, because it has an external-facing, potentially revenue-generating element.

Lund also cites contact center integration as increasingly important, as well as “anything and everything AI.” In UCaaS, artificial intelligence is used for everything from noise cancellation and real-time transcription to meeting scheduling and business process automation, with more AI-driven features being added all the time.

UCaaS is no different than any other business purchase; you want to shop around among the various vendors. Since they are on-demand, UCaaS solutions are offered as a monthly or subscription. In comparing UCaaS solutions, see what is included in the basic service and how much additional services cost. What could start out as an inexpensive subscription fee can quickly add up if you have to pay for extra features.

To help you begin your research, we’ve highlighted some of the leading players in the UCaaS space, with brief descriptions of their strengths and shortcomings. Inclusion in this list is not a buying recommendation, nor is exclusion a sign not to buy.

8x8: 8x8 is a global provider of cloud-based communications and collaboration solutions to businesses of all sizes, from small to extra-large enterprises. It offers what it calls XCaaS (eXperience Communications as a Service), which provides a portfolio of services including voice/telephony, video, chat, contact center, and APIs, with UCaaS, CCaaS, and CPaaS components integrated into a single platform.

Cisco: Cisco is the leader in the networking equipment space, and unified communications is a natural fit. Its UCaaS strategy is built around its Webex platform. The vendor offers a broad portfolio of collaboration services, including voice, video, messaging, presence, conferencing, data content, and mobility, enabling workers to connect and collaborate anywhere, on any device. Cisco has a massive network of 62,000 channel partners worldwide.

Google: Google’s telephony, conferencing, and messaging services (Google Voice, Google Meet, and Google Chat) are offered under its Google Workspace platform, which also includes email, calendar, storage, shared documents, and more in an integrated workspace. While Meet and Chat are included with all Google Workspace plans, Voice is an add-on service, available in only about a dozen countries. Google Workspace products are not compatible with legacy landline phone systems, but they do interoperate with newer meeting room hardware from Zoom, Cisco, and others.

Microsoft: Other than Zoom, no company gained more from the Covid-19 lockdowns than Microsoft. Its Teams messaging and meeting app had the advantage of being bundled with the market-leading Microsoft 365 collaboration suite (which includes the Office apps and SharePoint), so it cost Microsoft 365 customers nothing to adopt. Microsoft went into overdrive with Teams, adding a host of meeting and chat features and offering a telephony option, Teams Phone, as an add-on. In 2022, the company expanded its reach, introducing a digital contact center solution that brings together contact center, unified communications, and customer service capabilities in a single, integrated on-demand platform.

Like most Microsoft products, Teams works best within the context of Microsoft’s environment and doesn’t play too well with others. MacOS users in particular have complained about a lack of feature parity between the Mac and Windows versions of Teams.

RingCentral: Unlike some other players on this list, for which UCaaS is one of many businesses, unified communications is all RingCentral does. It supports every global region through partnerships with AT&T, British Telecom, Telus, Vodafone, and Mitel, among others. Focused on providing a cohesive, single platform to customers, RingCentral also offers targeted, vertical-specific services. The company claims the highest levels of reliability, with 13 consecutive quarters of 99.99999% availability.

Zoom: A relative newcomer in this space, Zoom exploded in popularity during the pandemic lockdowns and has become the world’s most popular audio- and videoconferencing product. Its offerings include voice/telephony, meetings, messaging, and contact center. With 8,500 global channel partners, it serves several vertical markets — healthcare, government, education, and financial services — and has its eyes on manufacturing, retail, energy, and legal. As a newer UCaaS vendor, Zoom does not support legacy phone systems but does work with a variety of modern phones and meeting room devices.