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July - 2010 - issue > Technology
On-Demand Vs On-Premises Collaboration
By Kiran Datar
Monday, July 5, 2010
As collaboration gains adoption within enterprises of all sizes, it’s fast becoming a valuable tool for the productive knowledge worker. Organizations now recognize the compelling value of interacting any time and anyplace with peers, customers, and partners, and seek to round out their collaboration solutions with integrated instant messaging and asynchronous workspaces as well as on-demand system management.

Accelerating interactions while boosting productivity means organizations accomplish more in less time — and at lower cost. Once an enterprise realizes obvious gains from Web collaboration, it first becomes an initiative, then a mandate. Extending the ability of employees to reach global colleagues, customers, and partners via a hosted collaboration model ensures that productivity will increase substantially.

The evaluation and final decision for choosing between a hosted service or an on-premise, self-managed model usually falls to the IT department. The key considerations for making this decision encompass architecture, infrastructure, manageability, and total cost of ownership. Organizations must typically develop a full cost-profile of choices, not just the purchase price.

Organizational Requirements for Hosting Collaboration Solution
Deploying a full-featured collaboration suite that addresses the needs of several departments calls for a single point of administration. Because IT frequently administers collaboration, well-architected, managed solutions requiring minimal time and resources are favored. The table below represents the typical short-list for selecting a collaboration solution.

Comparing Technologies of Hosted vs On-Premise Collaboration
The architecture of any software delivered as a service has commonalities that transcend applications. On-premises solutions are generally chosen to provide a sense of tighter security to the organization at the expense of reach and costly IT support — both of which are of paramount importance to the company. On-demand services provide intense, standards-based security shielding without compromising reach. With service monitoring available to collaboration administrators, the company relying on hosted solutions need only manage access. In the case of an on-premises system, there is regular software change control, plus server and network provisioning that come into play both internally and externally.

An important distinction between hosted and on-premise collaboration is that both collaboration and conferencing have attained ‘utility’ status due to widespread adoption in everyday business processes. Providing such a communications utility, not only internally, but also externally — tying partners, customers, and remote employees together — could place a huge burden on IT staff. These features will persist in addition to meeting expectations for service, performance, and privacy.

Three Major Concerns among CIOs

1. Scaling up the number of sessions
In the on-premise case, scaling involves adding servers and increasing IT headcount. The additional hardware cost plus the capital expense and incremental IT headcount create a stair-step increase in cost. In the on-demand case, the cost of scaling is absorbed by the service provider. The service is always over-provisioned in order to have capacity available, and there are no additional IT costs for adding users.

2. Reducing network congestion and maintenance
An on-premise solution requires that all network congestion, application provisioning, and bandwidth management be handled by IT and telecom services within the enterprise. This may involve firewall filtering, access-control lists (ACLs) in routers, and other network infrastructure configuration and monitoring exercises. In the on-demand scenario, all of these issues are managed as a service.

3. Assisting users
As collaboration usage grows in the enterprise, hosts and attendees often ask for assistance. This support is more readily given by the service provider that maintains over-provisioned customer service resources. This eliminates the bottlenecks normally associated with internal IT teams fighting fires in favor of a scalable, 24x7x365 support team, that’s well trained and ready to move users forward.

The Checklist for CIOs
There are several important items to consider when evaluating an on-demand collaboration solution vs an on-premises one, including:

• How much work will my IT teams have to perform?
• What will the support desk impact be?
• How do I scale the solution when my organization grows?
• Will the service provider be more reliable than a self-built, on-premise solution?
• Do a global network and dedicated backbone make a difference for my worldwide operation?

Hosting and on-premise collaboration both provide great benefits for organizations needing to connect with global partners, customers, and employees. Each approach has associated requirements that weigh against benefits, but are tempered by cost. Organizations must weigh the value of a solution by balancing the total cost of ownership against mission-criticality and the timing of return on investment.

Time, then, becomes the most valuable commodity, followed closely by IT resources. How much time is required to deploy? (IT efforts) How long before users adopt the solution? (Training ramp-up) When will we experience process time reduction? (Adoption and proficiency) How much downtime will we experience? (Availability, scalability) How quickly can problems be resolved? (Support, service) Will communications remain totally private? (Security, threat detection).

Quantifying people’s time shows clearly the costs with which IT must contend. Knowledge-workers who use the collaboration system consistently and proficiently will attain rapid benefits through accelerated results and abbreviated business process.

The on-premise approach will require significant upfront and ongoing efforts by the IT and training departments. The hosted, on-demand approach alleviates these efforts and shifts the responsibility and resource expenditure onto itself, freeing the organization to realize the benefits of widespread collaboration use across all business processes. With a multi-tenant architecture, dedicated global network, and highly available services designed to scale to a large number of concurrent users, the hosted service provider will deliver a return on investment much faster than an on-premise solution.

The author is Managing Director, Cisco WebEx India
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