A survey conducted by Interactive Intelligence today reveals UK c-level executives recognise the advantages of moving their business communications applications to the cloud – with 64% having already deployed or looking to implement a Cloud-based solution within the next five years. This innovation has been recognised most in the manufacturing and retail, distribution and transport sectors with 76% of respondents.

The survey reinforces the prediction made earlier in the year by analyst firm Gartner that 20% of businesses will own no IT assets by 2012. One of the key trends driving this is the increase in Cloud-enabled services signifying a major shift throughout the IT industry.

The CEOs taking part in the research said that one of the biggest benefits of Cloud-based communications would be the speed of adding new functionality and features without disruption to the business. Cost savings are still high on the agenda as 52% of those surveyed said the biggest advantage of cloud computing would be the drop in capital equipment expense and the reduction in internal IT department resources.

Richard Snow, Vice President and Head of Contact Center Research, Ventana Research, said: “Companies are right to recognise the advantages of moving systems to the Cloud which are reduced up-front costs, faster implementation and increased flexibility. However, if you take a look at the bigger picture, it’s all about innovation. With these types of Cloud-based solutions, companies can actually innovate in the way they communicate with the outside world and to their customers, creating a whole new way of conducting business.”

Dave Paulding, Regional Sales Director UK, ME & Africa, Interactive Intelligence, said: “The message is clear, adoption rates will continue to rise as the benefits of cloud-based communications or as we like to call it, Communications-as-a-Service (CaaS) become more obvious to business leaders. CaaS is the fastest growing part of our business and we think we are seeing this acceleration because people have realised the benefits of moving other computing and software to the cloud, so the next logical step is to consider their business communications systems.”

Findings from the survey suggest that security issues and lack of control are the biggest barriers for CEOs to migrate internal applications and services to public clouds, particularly in the financial services sector with 68% of respondents within this industry concerned about privacy issues.

“There are some distinct ways of mitigating security risks,” said Paulding. “At Interactive Intelligence, everything is housed in a 24×7 monitored data centre and we provide an option to allow voice traffic and voice recordings to remain inside a customer’s own network and firewall. In addition, each customer is supplied with an isolated environment where their software is running on a virtual machine. This approach to cloud-based communications provides the control, security and flexibility of a premise-based solution,” concluded Paulding.

When asked about preferred providers to host communications in the Cloud, 68% of CEO respondents said they were most likely to consider a traditional carrier or hosted VAR. This was followed by a communications company at 19% and of the 100 CEOs surveyed, 13% would prefer a start-up Software-as-a-Service provider.

“Telecoms providers are often the most obvious choice to make as they are already managing your communications systems, and contrary to popular belief, have been operating in some form in the Cloud for years,” said Snow. “Nonetheless, decision makers should firstly look at the functionality their business requires to succeed. Then start a search for vendors that match these needs, and only then, start to consider the cost, RoI and overall business case.”

Paulding concluded: “Over the next five years we will see an increasing adoption of Cloud-based solutions for businesses. Adoption of VoIP used to be in the single figures and it is only in the past seven years that have we seen it reach 60-70% market saturation. There are still many businesses which prefer on-premise solutions, but we think over the course of the next seven years this will change to a double figure adoption of Cloud-based communications.”