Cloud communications is the most recent evolution of cloud-based services, and before that, businesses had little reason to associate it with telephony and voice applications. This Focus Brief provides some basic background regarding what has changed and why the cloud is relevant today for businesses, especially SMBs.

Cloud services has a broad meaning, and for now, the main idea is that services are hosted in a data center and run over an Internet infrastructure. Until recently, these services have been data-centric, but with the evolution of VoIP, voice has started become part of the cloud phenomenon. While the cloud is not well understood by most businesses, this trend is good news for all forms of communications, particularly voice. The following analysis explains this further, along with what it represents for SMBs.

The key driver in this context is Google and their recent impact on Web-based communications. Having saturated online search, Google has shifted into this space for growth, with the most important examples being Google Apps, Google Voice and Google Wave. Google really is the most successful cloud operator and they have proven the viability of large scale, Web-based applications. With these particular examples, they have shown how well Web-based communications applications can be provided from the cloud.

This has had two important implications for the broader landscape. First, they have demonstrated that a cloud-based platform can be just as effective as a software-based platform, but at a much lower cost. As a result, Microsoft is now moving to offering its services on a cloud-based platform, something they would have never previously considered. When these two companies follow the same path, you know that the cloud has arrived, and if it's good enough for them, it's good enough for SMBs.

Second, if voice services can be delivered from the cloud, the concept of hosted telephony becomes more powerful. Instead of relying on a facilities-based service provider for hosted VoIP, SMBs can equally well turn to a cloud-based offering. This means they can look beyond local or regional carriers and take a best-of-breed approach in finding the right cloud service that meets their needs.

To varying degrees, businesses have been able to do this for IT services, but not telecom. What makes cloud communications so attractive here is the idea that the cloud can now become a platform for all modes - voice, data and video. Most hosted services have been built around voice, and are usually referred to as hosted VoIP. Cloud communications is a richer concept, and is feasible because this environment serves as a platform upon which all these modes can seamlessly work as well as integrate.

A real strength of cloud communications is its flexibility. If SMBs only want telephony, they can do that. They can just as easily add the other modes, and as they do, the value of the platform becomes greater. Voice does not exist here in isolation. With all modes being hosted in a common infrastructure, the applications become more useful for businesses, especially when integrated with their business applications. That is, if a business is running on Microsoft, it could be hosted in the cloud along with all the communications applications, making it very easy to integrate the latter with calendaring, address books, etc.

Not every business needs this, or even thinks that way. However, the point is to show that the cloud is emerging now as a bona fide alternative for business telephony service. Google – and to a lesser extent Microsoft – have brought both mainstream awareness and credibility to cloud communications. They have validated the SaaS model, which now has a more relevant offshoot for the Focus.com audience – CaaS – communications as a service.

For SMBs, this means more powerful choices, not just for VoIP, but all the other modes and applications that are now falling under the Unified Communications umbrella. Equally important, the cloud is all about flexibility. Businesses can add these other layers whenever they want, as well as scale usage to exactly match their needs. This is the on-demand aspect of cloud services, meaning that businesses never spend more than they need, whether adding/dropping staff or branch office locations.

I haven’t touched on the more obvious benefits such as rich features or lower costs, and that’s by design. These should be self-evident to SMBs, and perhaps I could address those in a future brief. The message I’m trying to convey here is more strategic and to get businesses thinking differently about the cloud.

There is a lot of hype right now around cloud services, and while much of it is warranted, businesses may find it confusing. It would be shortsighted to let this confusion turn SMBs away from the cloud, as I feel the time is truly right here.

Businesses need to do a bit of homework to better understand the cloud, and this Brief is intended to be a starting point. While they don't really need to understand the inner workings of the cloud, they do need to recognize this is a different model that presents new ways of doing things. Businesses only interested in cheaper phone service will not be drawn to the cloud, but that's fine. There are many others who see a bigger picture, and the best way to do that is by looking up at the cloud instead of straight ahead to the horizon.