On-Premise Persists: Why It Still Matters, and How NEC's Decision to Exit the Market Creates Opportunity
Published on:
July 19, 2024
On-premise solutions continue to be vital for many enterprises due to their superior data security and control, essential for industries like finance and healthcare. They offer deep customization, fitting specific needs and legacy systems, and provide reliable performance, especially for latency-sensitive applications. Additionally, while cloud solutions have a pay-as-you-go model, on-premise can be more cost-effective in the long run for predictable workloads. This balance of security, customization, and cost-efficiency ensures on-premise remains a strong option amidst the growing shift to cloud services.
NEC, the global unified communications vendor, recently announced its shift towards "as-a-service" solutions and its exit from its on-premise UC operations (outside Japan). NEC stated: “This decision follows a significant shift of market demands from on-premise to cloud-based services in recent years.” While the company will continue to support current customers, it will no longer accept purchase orders after 31 December 2024.
While many of the responses dovetail with NEC’s announcement, the majority of respondents believe NEC’s departure from on-premise is due to the high cost of maintaining on-premise solutions. Approximately one-fifth of respondents pointed to reduced demands for on-premise solutions as the main reason NEC is exiting the market, while another fifth of respondents believe this major shift by the IT giant is about financial performance and profitability.
Vodia also polled its LinkedIn followers:
The responses were quite similar to the first poll, with nearly 40 percent of respondents citing reduced demand for on-premise; another 40 percent believe NEC is looking to obtain a greater share of the cloud solutions market. Cloud solutions, however, might not be the best options for many enterprises and organizations, including government agencies, hospitals and military installations, among others. What are the options?
Staying On-Premise?
This seemingly cloud-focused move might be a surprising turn for some, but it presents an interesting opportunity for on-premise advocates.
The NEC "as-a-service" model could essentially create a hybrid solution. Imagine combining the control and security of on-premise infrastructure with the flexibility and potential cost savings of a service-based model - this could be a game-changer for enterprises, organizations and SMBs currently on the fence about the cloud.
Why On-Premise Endures
The cloud revolution has swept through IT, but the demise of on-premise, currently whispered, is greatly exaggerated. While cloud offers undeniable benefits, on-premise solutions remain the strongest solution for many enterprises, organizations and SMBs. Let's explore why on-premise remains relevant, and why NEC’s decision to exit this market segment presents an unexpected opportunity.
Several factors make on-premise solutions attractive:
Data Security and Control: For some industries, such as finance and healthcare, data sovereignty is paramount. Keeping data in-house offers greater control and potentially tighter security measures.
Customization and Flexibility: On-premise solutions allow for deep customization to fit specific needs - this can be crucial for organizations with legacy systems or unique workflows.
Performance and Reliability: On-premise infrastructure provides reliable performance, especially for latency-sensitive applications. Additionally, local IT staff can directly address performance issues.
Cost Considerations: While cloud offers a pay-as-you-go model, on-premise solutions can be more cost-effective in the long run, particularly for predictable workloads.
The Road Ahead
The future of IT will be a hybrid approach, one that leverages the strengths of both on-premise and cloud solutions. NEC's decision could be a harbinger of this shift, offering organizations a way to have their cake and eat it too. Here's how you can capitalize on this trend:
Evaluate Your Needs: Carefully assess your data security requirements, performance needs and budget constraints to determine the best mix of on-premise and cloud solutions for your organization.
Embrace Hybrid Solutions: Look for vendors offering flexible "as-a-service" models that complement your existing on-premise infrastructure.
Stay Informed: The IT landscape is constantly evolving, and rapidly. Keep up-to-date with the latest trends and technologies to inform your decisions about your IT strategy.
On-premise solutions are far from dead. By understanding the strengths these solutions offer and staying informed about innovative models like NEC's, organizations can enjoy the best of both worlds, ensuring a secure, flexible and profitable IT future.
When it comes to the most powerful combination of cloud on on-premise, Vodia can take your IT to powerful new heights. We’ve been a leader in both cloud and on-premise for more than a decade, and we’d be delighted to help you evaluate your current and future needs and implement the best possible hybrid solution for your organization. Find out how we can help, sales@vodia.com, +1 (617) 861-3490.
About Vodia
Vodia Networks, Inc. is a pioneering provider of B2B Cloud Communications Solutions catering to enterprises, contact centers and service providers. Vodia's PBX software boasts an extensive suite of business telephony features for on-premise and cloud-based systems and operates seamlessly across Windows, Linux or Mac platforms. Fully compliant with SIP industry standards, the Vodia phone system integrates effortlessly with a wide range of SIP-based devices and trunking providers, granting ultimate freedom in telephony. Vodia’s multi-tenancy platforms are compatible with an unprecedented number of technologies, including desk phones, softphones and APIs, for myriad third-party software and CRM systems. Our mission is to empower our partners and end-users with the world's best cloud PBX and personalized support to ensure their success at every turn. Visit Vodia on LinkedIn, Twitter and YouTube.
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