NEC, a major player in the global communications industry, has announced its strategic decision to discontinue its premises-based unified communications (UC) offerings outside of Japan. This decision is driven by the evolving business landscape where companies increasingly favor cloud-based communications for their flexibility, scalability, and cost-effectiveness. NEC’s global shift from on-premises systems, including its traditional private branch exchange (PBX) offerings, marks a major turning point for both the company and the industry at large.

As digital transformation accelerates, particularly after the pandemic, the limitations of hardware-based communication systems are becoming more apparent. Cloud solutions, which allow remote workforces to operate seamlessly, offer a more adaptive infrastructure than physical systems. NEC’s exit from the premises-based market follows a growing trend across the communications sector, where enterprises seek Unified Communications as a Service (UCaaS) platforms that streamline operations and reduce IT overhead.

NEC’s move, while significant, is not entirely surprising given the industry’s shift. The company’s collaboration with Intermedia to deliver its UCaaS offering, UNIVERGE BLUE, will be central to its future strategy. This partnership ensures that customers continue receiving top-tier communication services while enjoying the benefits of cloud technology.

NEC’s Premises-Based Legacy

For decades, NEC was one of the leading providers of on-premises communications systems, including PBX, key telephone systems, and other business communication solutions. These systems were integral to countless enterprises around the world, particularly in sectors where reliable voice communication was critical, such as healthcare, education, and government.

NEC’s success in the PBX space was unmatched, thanks to the robustness of its hardware and its adaptability to the unique needs of each business. The company’s legacy includes the widespread adoption of its NEAX, UNIVERGE, and SV series, which provided essential communication services to millions of users globally.

However, the legacy of these systems is rooted in a time when on-premise technology was the only viable option for businesses. NEC’s PBX systems provided unparalleled control and reliability, but they also came with high maintenance costs and limitations in scalability. As digital transformation took hold, the appeal of cloud solutions became undeniable. Cloud-based systems provide agility, lower maintenance overhead, and the ability to adapt quickly to market demands.

Despite this shift, NEC’s premises-based systems were recognized for their reliability. In sectors like healthcare, where voice communication remains a priority, NEC continued to support organizations with its hardware solutions. However, as cloud communications gained prominence, even these industries began exploring hybrid models that blend on-premise reliability with the flexibility of cloud.

NEC’s strategic decision to move away from premises-based solutions globally is both a recognition of the changing market and a necessary pivot to ensure its continued leadership in the communications space. As businesses increasingly demand scalable, secure, and remote-friendly solutions, traditional hardware-centric models have become harder to justify economically. NEC’s exit from this market marks the end of an era, but it also opens new possibilities for innovation and growth in the cloud space.

The Global Shift to Cloud-Based Solutions

The transition to cloud-based communication platforms has been a defining trend across industries worldwide. For enterprises, the shift is driven by a need for greater agility, scalability, and cost efficiency. Cloud solutions allow businesses to streamline their IT operations, reduce capital expenditure, and support a remote and hybrid workforce—necessities in today’s dynamic work environment.

For NEC, this shift is not just about keeping pace with technological trends, but a strategic realignment that positions the company as a leader in cloud-based unified communications. The global market for UCaaS is expected to grow significantly over the next decade, driven by factors such as the need for flexible work environments and the rapid expansion of digital infrastructure in emerging markets.

Cloud-based communications provide businesses with a flexible infrastructure that allows for rapid deployment and scaling, making it easier to manage fluctuating demand. In contrast, premises-based systems are costly to maintain and scale, requiring significant capital investment in hardware and ongoing maintenance.

NEC’s decision to discontinue premises-based UC products outside Japan is a direct response to this growing demand for cloud services. Through its partnership with Intermedia, NEC offers the UNIVERGE BLUE platform, which delivers integrated UCaaS and CCaaS (Contact Center as a Service) solutions. These services enable organizations to leverage the benefits of cloud technology without having to fully abandon their existing investments in NEC hardware.

The rise of remote work during the COVID-19 pandemic further accelerated the adoption of cloud communications. Businesses that previously relied on physical office infrastructure were forced to rethink their communication strategies, and cloud solutions became essential for maintaining business continuity. As a result, the cloud has become the new standard for enterprise communications, and NEC’s move reflects this paradigm shift.

The Role of Unified Communications in the Modern Business World

Unified communications (UC) has become an indispensable tool for businesses aiming to enhance productivity, improve collaboration, and streamline operations. In today’s hybrid work environment, where employees may be spread across various locations, the ability to communicate seamlessly through voice, video, chat, and file sharing is critical to maintaining efficiency.

The traditional PBX systems that once dominated office environments are no longer suited to the demands of the modern business world. Today’s workforce requires tools that support mobility, real-time collaboration, and integration with various applications. Cloud-based UC platforms, like NEC’s UNIVERGE BLUE, deliver these capabilities, allowing businesses to manage communication across multiple channels from a single, unified interface.

One of the key advantages of cloud UC is its ability to integrate with other business applications, such as customer relationship management (CRM) systems, enterprise resource planning (ERP) tools, and collaboration platforms like Microsoft Teams and Zoom. This integration enables businesses to automate workflows, improve customer service, and gain deeper insights into communication patterns and employee performance.

Moreover, cloud UC platforms offer greater flexibility in terms of scaling, allowing businesses to easily add or remove users as their needs change. This flexibility is particularly important in industries like healthcare, where demand for communication services can fluctuate significantly. With cloud UC, organizations can ensure that they always have the right level of resources to meet their needs without having to invest in costly hardware upgrades.

Challenges and Opportunities

The transition from on-premises to cloud-based communications is not without its challenges. For many businesses, the migration process can be complex, requiring a rethinking of IT infrastructure and a shift in how communication services are delivered. Organizations that have invested heavily in on-premises systems may face significant hurdles as they work to integrate cloud solutions into their existing workflows.

One of the primary challenges is data security. While cloud communications offer numerous advantages, they also introduce new risks related to data privacy and cyber threats. Businesses must carefully evaluate their cloud providers to ensure that they meet industry standards for data protection and compliance.

Another challenge is ensuring a smooth transition for employees and customers who may be accustomed to traditional communication methods. The adoption of cloud-based UC requires training and support to help users make the most of the new technology. NEC has recognized this and is committed to providing comprehensive support to its customers during the transition process.

Despite these challenges, the opportunities presented by cloud-based UC are immense. Businesses that successfully make the transition can expect to see significant improvements in efficiency, cost savings, and flexibility. Cloud UC allows organizations to centralize their communication infrastructure, reduce IT overhead, and take advantage of advanced features like artificial intelligence (AI) and automation.

NEC’s UNIVERGE BLUE platform offers businesses a path to cloud-based communications without having to completely abandon their existing investments in NEC hardware. This hybrid approach allows organizations to gradually transition to the cloud while still leveraging the reliability of their on-premises systems.

NEC’s Global Impact on Communication Infrastructure

NEC’s influence on global communications infrastructure cannot be overstated. With a presence in over 140 countries, the company has played a pivotal role in shaping the way businesses and governments communicate. Its decision to phase out premises-based solutions marks a significant shift, not just for NEC, but for the industry as a whole.

In regions like North America and Europe, where cloud adoption is accelerating, NEC’s cloud-first strategy is well-positioned to meet the growing demand for scalable, flexible communication solutions. The company’s UNIVERGE BLUE platform, developed in partnership with Intermedia, has gained traction as a leading UCaaS and CCaaS solution, offering businesses the ability to integrate voice, video, messaging, and collaboration tools into a single platform.

In Asia-Pacific, where NEC has a strong presence, the transition to cloud communications has been more gradual. However, the growing demand for digital transformation across industries, coupled with the region’s rapid economic development, presents significant opportunities for NEC’s cloud offerings. By leveraging its existing customer base and expanding its partnerships with local telecom providers, NEC is well-positioned to capitalize on this growth.

NEC’s focus on innovation extends beyond communications. The company is a leader in various technology sectors, including artificial intelligence, biometrics, and smart city solutions. Its decision to prioritize cloud communications aligns with its broader vision of leveraging digital technologies to drive innovation across industries.

Industry-Specific Benefits of NEC’s Cloud Transition

As NEC phases out its premises-based communication systems and shifts its focus to cloud solutions through UNIVERGE BLUE, various industries are poised to benefit from this change. Although specific company case studies are not available publicly, it’s clear that certain sectors stand to gain significantly from NEC’s new direction.

Healthcare Sector

The healthcare industry, which has traditionally relied on NEC’s premises-based PBX systems, is now in a prime position to transition to cloud communications. Cloud-based systems allow healthcare providers to improve patient care by facilitating real-time collaboration between doctors, nurses, and administrators, even when they are in different locations. With features like video conferencing, secure messaging, and seamless integration with existing electronic health record (EHR) systems, UNIVERGE BLUE offers a robust solution tailored to the industry’s needs. Moreover, the ability to scale quickly makes it easier for healthcare providers to handle fluctuating demand without the limitations of physical infrastructure​.

Manufacturing and Logistics

Manufacturing companies with operations spanning multiple locations often face communication challenges, especially when using outdated on-premises systems. NEC’s cloud platform provides a scalable solution that integrates voice, video, and messaging to streamline communication across geographically dispersed teams. UNIVERGE BLUE allows manufacturers to easily manage their communication infrastructure and adapt to shifting operational needs, whether through enhanced collaboration tools or more efficient customer support​.

Government and Public Sector

Government agencies, particularly those with remote offices or departments that handle confidential data, require reliable and secure communication channels. NEC’s UNIVERGE BLUE platform addresses these needs by offering cloud-based solutions with advanced security features, ensuring compliance with data protection regulations while reducing hardware maintenance costs. By transitioning to a cloud-first model, agencies can improve inter-departmental collaboration, enhance public service delivery, and minimize communication disruptions during emergencies or remote work scenarios​.

Education Sector

Educational institutions, from universities to public schools, can leverage UNIVERGE BLUE to facilitate virtual classrooms, administrative meetings, and hybrid learning environments. The platform’s integration with common educational software, along with its ability to support large-scale video conferencing, enables educational organizations to offer flexible learning options. Schools can also reduce IT infrastructure costs by moving to a cloud-based model, which allows for easy scalability as student and staff needs change​.

By focusing on these industry-specific benefits, NEC’s cloud communications platform not only addresses the technical challenges faced by various sectors but also sets the stage for long-term operational improvements.

What This Means for the Future of Communication

NEC’s decision to exit the premises-based unified communications market marks a significant turning point in the evolution of business communication. As more companies move to cloud-based UC solutions, the need for flexibility, scalability, and integration will continue to shape the future of the industry. NEC’s UNIVERGE BLUE platform, with its robust set of cloud-based features, positions the company to lead this transition and support businesses of all sizes in their digital transformation.

The future of communication will likely be defined by technologies like artificial intelligence (AI), automation, and machine learning, all of which are increasingly being integrated into cloud-based UC platforms. NEC’s continued focus on innovation and partnerships will allow it to remain at the forefront of this industry shift. As more businesses embrace cloud-based solutions, the days of on-premises communication systems are numbered, and NEC’s bold move signals the dawn of a new era in business communications.

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Further Reading

Here are some additional resources on NEC’s transition from on-premises to cloud-based solutions:

• NEC’s Strategic Shift Towards Cloud-Based Unified Communications – This article discusses NEC’s phased exit from on-premises Unified Communications (UC) and its shift toward cloud-based services.
• NEC to Shutter On-Premises UC Operations Outside Japan – This UC Today article provides detailed information on NEC’s move away from on-premises UC services and its continued focus on the cloud through partnerships like UNIVERGE BLUE.