The Hidden Costs of Moving from On-Prem UC to the Cloud: What No One Tells You

Why Cloud UCaaS Looks So Good on Paper

There’s a good reason cloud-based Unified Communications (UCaaS) have taken off. All going well, you don’t need to worry about hardware, software updates, or hosting, and it’s easier to scale up or down. For the CTO, access to the latest technology is exciting. For the CFO, the promise of low upfront expenditure and smooth cost forecasting is enticing.

But here’s the rub: while the monthly subscription model sounds simple, many teams find that once you start digging into the detail, the costs start adding up in places they didn’t expect. The shift from on-premises UC to the cloud comes with its own set of challenges, and trade-offs that often get overlooked.

The upside? If we can identify these costs and risks early, we can plan and deploy our migrations in a way that allows the business to enjoy the potential of the cloud, without the hidden pitfalls!

1. Subscriptions: Predictable Doesn’t Always Mean Cheaper

With UCaaS, you’re paying a per-user fee every month, agreed and set for 1-3 years. Sounds manageable, right? It is until your user needs fall mid-contract, but you still pay for the original total. Or you grow and need to add users and extra features that come as bolt-ons, higher rates, or require upgrading to a more expensive licence tier.

So, while you avoid a big up-front spend, your OpEx can balloon if you don’t stay in control.

Take a typical Microsoft Cloud Licensing review we did recently for a new customer. They were oversubscribed on licenses by >20%. Most employees were on the top licence tier but very few were using any advanced features. And they had been planning to renew for another year of fixed costs. So, it was predictable, but not the savings or return it appeared to be at the outset.

2. Migration Isn’t Plug-and-Play

Getting from your current setup to UCaaS isn’t just about flipping a switch. You’ll need to:

And then there’s the hidden bit: if you’ve got custom integrations or legacy kit, connecting them to the cloud can take serious engineering time. It’s not just a technical cost; it’s a planning and resourcing challenge too.

At Damovo we are often approached by enterprises who attempted to do a big-bang migration that didn’t work out as expected. The most common “oh, if only I had realised that before” is that UCaaS does not yet replicate all the features and integrations they had before and took for granted. If those features are business critical, then that can add unbudgeted cost and complexity.

3. Resilience Can Get Expensive

On-premises UC often has dedicated failover and disaster recovery baked in. With UCaaS, the cloud provider offers redundancy, but only to a point. If you want guaranteed uptime with multiple layers of fallback, you’ll probably need to invest in additional connectivity, backup SIP trunks, and even edge appliances.

For highly regulated enterprises it may require using several different cloud and backup providers to ensure compliance with industry standards and customer expectation. Many who do this will revert to a hybrid cloud/on-premises model to save costs.

4. Compliance: Still Your Problem

Even though your data is in the cloud, you’re still responsible for compliance.

UCaaS solutions are built to fit as wide a range of businesses as possible so if you’re in a regulated sector e.g. finance, healthcare, public sector, this is serious. You’ll need to make sure your UCaaS provider can tick all the right boxes for GDPR, HIPAA etc. Or you may be obligated buy extra tools just to meet compliance standards. That’s money and time you didn’t plan for.

A newer example is companies moving to the cloud to avail of the latest Gen AI tools. But data, GDPR, workers council compliance etc. are often an afterthought. Many companies are later obliged to turn off all AI features pending compliance, resulting in big delays realising a return on their investment.

5. Change Management and Training Aren’t Optional

Don’t underestimate how much effort goes into helping your teams switch platforms. Admins need to learn new dashboards, IT staff new policies and end users how to place or transfer calls.

Without decent onboarding and support, productivity takes a hit, and your helpdesk gets flooded. Even worse is when your team don’t use the cutting-edge cloud features you are paying for. It can save resources and money if you factor in training time and possibly hiring-in short-term support during the rollout.

6. Security Gaps You Didn’t Think About

Moving UC to the Cloud can increase the attack surface with different vulnerabilities and access points into your environment.

Cloud platforms are secure, but only if they’re set up properly. Identity management, access controls, multi-factor authentication, endpoint security are the cloud security must-haves, and all of this requires careful configuration. The vendor provides the tools, but often it’s down to you to use them properly. This shared responsibility is often a different model than we’ve been used to.

And once you’re in the cloud, you’ll want to do regular red team tests or even full penetration testing. Another hidden cost if it wasn’t part of your initial budget.

7. The Hidden Cost of Running Both Systems at Once

Most businesses don’t just switch everything off on Friday and go live on UCaaS on Monday. There’s a transition period, sometimes months, where you’re running both platforms side by side. This hybrid model means:

• Dual licensing
• Double admin overhead
• Increased support workload

And let’s not forget contracts. You might still be tied into support or maintenance agreements for your on-prem gear during the overlap.

You might have also built up some internal skill over the many years to support the legacy system and reduce the reliance on your service partner. That doesn’t always translate to new cloud systems. Feedback from our customers is that it is surprisingly difficult to find partners like Damovo who can support the legacy and the new technologies together, let alone without charging a large cost increase.

8. Vendor Lock-In Is Real

UCaaS platforms can be sticky. Once you’re fully committed, switching away can be painful. Many providers use proprietary tools, APIs, and admin portals that make it hard to leave. Even the UX and user adoption efforts required when switching can put business off changing platforms for a long time.

In the last 18 months we’ve seen a spate of price increases from almost all UCaaS vendors. Some have even increased prices twice! Depending on your contract these costs are often immediately applied or a nasty surprise for an upcoming renewal.

At Damovo we encourage our customers to do testing and phased migrations to limit the risk of being locked in early to what turns out to be an unsuitable platform for your business needs.

What You Can Do to Avoid the Pitfalls

a. Run a Proper TCO Assessment

Look at the total cost over 3+ years, including licences, training, migration services, and compliance tools. Think of what if might cost to replicate key features that you have today. Don’t just compare monthly licence fees.

b. Start with a Pilot

Test everything with a small team first. Make sure call quality, integrations, and admin tools actually work for your setup.

c. Don’t Ditch On-Prem Too Quickly

If some of your current hardware still has life in it, use session border controllers (SBCs) and gateways to bridge the two. This can smooth the transition and protect past investments. Phase the migrations.

d. Bake in Compliance and Security Early

Choose a platform that supports your regulatory needs out of the box. If in doubt, involve your legal and risk teams during the evaluation. Consider a hybrid model, at least initially, to de-risk.

e. Pick a Partner Who’s Done It Before

You don’t have to go it alone. Damovo works with organisations across Europe and the US to plan, implement, and support UC transitions, not just on paper, but in real-world environments with real-world complexity.

Wrapping It Up

Let’s not scare ourselves unduly! Moving to the cloud for UC is a smart play for many businesses, but only if you go in with your eyes open. The headline savings and simplicity often hide real, tangible costs that show up later in the process.

With the right plan, the right support, and a clear view of the road ahead, you can make the switch work for you. But if you’re a Damovo client thinking about taking that leap, our advice is simple: bring in expert help early. It’ll save you time, money, and a lot of avoidable headaches.