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Hosted IP TelephonyT H E C U S T O M E R V A L U E P R O P O S I T I O N
M A R K E T O V E R V I E W
Hosted internet protocol (IP) telephony services have steadily gained market acceptance as the superior communica:ons solu:on for the small-‐ and medium-‐sized business market, as well as for large enterprises.
Voice over internet protocol (VoIP) is an es:mated $15 billion industry with annual growth near 17 percent according to a July 2012 study by IBISWorld, which also es:mates that mee:ng voice needs over VoIP will soon be an area of business interest. Recent findings by Infone:cs also show an increase in small office VoIP by 14 percent in 2011. Similarly, demand for
cloud-‐based services as a whole is on the rise, reaching more than 178 million residen:al and small business offices worldwide, according to the same survey.
While there are many advantages that account for the adop:on of hosted communica:ons services, specific advantages are different based on which VoIP technology a business implements. Two VoIP technologies currently used by most businesses include hosted IP telephony and IP private branch exchange (PBX). This paper focuses on the customer value proposi@on of hosted IP telephony.
V O I C E S Y S T E M T E C H N O L O G YThere are many voice technologies available to businesses, including tradi:onal choices and op:ons that involve newer technologies.
Tradi:onal choices include PBX/key systems, and central office exchange services (Centrex). Over the past decade, they’ve
been transformed to use IP versus tradi:onal :me division mul:plexing (TDM). The movement to IP-‐based technology created two new op:ons for businesses: hosted IP telephony and IP PBX.
See the table below for descrip:ons of these voice technologies.
Technology Descrip8on
PBX / Key Systems
Private Branch Exchange (PBX) and Key Systems are telephone systems that serve one business. Key Systems typically serve a small business, while PBX serve larger businesses. Both reside on-‐premise and are owned and maintained by the business.
Businesses share access to the trunk lines into the PBX or Key System from the service provider’s central office. Thus, it is not necessary for each person to have a dedicated line. PBX Systems require a substan:al cash outlay for the equipment and are therefore cost prohibi:ve for many businesses. Key Systems are less expensive than PBX because it serves a smaller number of individuals.
IP PBX
IP PBX is similar to tradi:onal PBX, but u:lizes IP as the transport mechanism. IP PBX is the latest genera:on of PBX. It allows businesses to converge both voice and data traffic at the premise. Similar to tradi:onal PBX Systems, the upfront cash outlay to purchase and install an IP PBX is significant and cost prohibi:ve for many businesses.
Tradi8onal Centrex
Central Office Exchange Service (Centrex) is feature-‐rich local phone service offered to businesses by local phone providers. Businesses do not purchase a phone system with Centrex service. The service provider owns and manages all of the phone equipment necessary to offer the service. The service can be par::oned so many businesses may be served with the same equipment.
H O S T E D I P T E L E P H O N Y
Hosted IP Telephony Architecture
Hosted IP telephony follows a model similar to tradi:onal Centrex. The service provider owns and manages all necessary network equipment and hosts it within its point of presence (POP), also known as data center. The service is delivered to the business over broadband access from the service provider’s POP. Virtually any broadband access technology will work, including T1, DSL and Cable. The service provider can par::on equipment to serve mul:ple customers, providing a cost-‐effec:ve solu:on for service providers, which is a
feature-‐rich service at a compe::ve price point.
Onsite equipment businesses need for hosted IP telephony includes routers or Integrated Access Devices (IADs), and either IP or analog phones. Analog or IP phones can be used, but IP phones enable greater features and func:onality. IADs are necessary for analog phones, and they allow businesses to use exis:ng analog phones, modems, credit card machines, alarms, faxes, etc.
C U S T O M E R
V A L U E
P R O P O S I T I O N
The value proposi:on to businesses varies depending on the technology. Hosted IP telephony offers dis:nct value over IP PBX and tradi:onal voice solu:ons.
Benefit Hosted IP Telephony IP PBX Current
PBX Centrex
Low upfront capital requirements ✔ ✔
Standards-‐based equipment can be reused, re-‐deployed ✔ NA
Low risk of technology obsolescence ✔ ✔
Converge both voice and data on one access line ✔ ✔
UAlize unused, stranded capacity on exisAng access line ✔ ✔
One provider, one number for service and support ✔ ✔
Simplified moves and changes using intuiAve interface ✔ NA NA
Predictable, consistent monthly service costs ✔ ✔
Low network management requirements ✔ ✔
Supports increasing / decreasing workforce ✔ NA
Professionally hosted servers in secure locaAon ✔
End users have capability to reroute calls to any other device, even if primary phone is down ✔ NA
Enables feature-‐rich services for distributed workforces ✔ ✔
Remote workers have same capabiliAes as in the office ✔ ✔
Easy rollout of new features and services ✔ ✔
Includes features that increase business producAvity ✔ ✔
Reliability and disaster recovery ✔
Mobile phone integraAon and mobility features ✔
C O M P A R E
C O M M U N I C A T I O N S O P T I O N SThe value proposi:ons in the comparison chart can be categorized within three separate benefits:
1. Financial Savings:
Businesses save a substan:al amount of capital and opera:ng costs by deploying hosted IP telephony.
2. Service Reliability:
Voice network equipment residing in the service provider POP provides a high level of service and disaster recovery.
3. Features, Func@onality and Enhanced Applica@ons:
IP technology enables features and applica:ons that are not available with tradi:onal technology. The provider is the single service provider for all the customer’s telecommunica:ons requirements (e.g., local, long distance, internet access, virtual private networks).
A D V A N T A G E :
F I N A N C I A L S A V I N G SFinancial savings is one of the first benefits men:oned when discussing hosted IP telephony. The ability for businesses to go from two networks for voice and data down to one converged network creates savings. Overall savings are for both capital and opera8ng expenses.
F I N A N C I A L S A V I N G S
> C a p i t a l E x p e n s e S a v i n g s
Low Capital Requirements:
Hosted IP telephony has very licle capital requirement if a data network already exists. In par:cular, IP phones or IADs are the only capital expenditures necessary in most cases.
In comparison, PBX technology requires capital outlay for the PBX servers, along with the required phones. For this reason, many businesses decide to avoid the upfront capital-‐intensive IP PBX or PBX solu:on and u:lize a hosted IP telephony solu:on from their local phone provider.
Standards Based Equipment:
The equipment necessary for hosted IP telephony is standards-‐based. Standards-‐based equipment can be reused or re-‐deployed to work with other equipment that supports the same standards. It also offers more flexibility and op:ons from a variety of vendors, typically at lower costs.
IP PBX or PBX solu:ons have proprietary equipment that can only be used with par:cular vendors’ IP PBX or PBX, prohibi:ng proprietary equipment from being reused or re-‐deployed in most circumstances. It also results in an inflexible solu:on with limited equipment choices and higher equipment prices.
Low Risk of Obsolescence:
Technology changes at such a rapid pace that it is common for equipment to become quickly obsolete. Hosted IP telephony helps to reduce the risk associated with technology obsolescence.
1. Because the amount of necessary equipment is less, the risk also remains low.
2. The risk of obsolescence shies to the local phone provider because it owns and manages the voice servers.
3. IP PBX and PBX systems are easily outgrown as the organiza:on grows or downsizes, leaving few alterna:ves. Hosted IP telephony offers businesses the agility to ramp up or shrink number of lines in more real-‐:me so capacity is never an issue.
Converged Access Lines:
Moving two networks down to one converged network can save on the number of necessary access lines and subsequently costs. In most cases, current voice traffic and data traffic u:lize two separate T1 lines. Aeer converging, one of the T1s can typically be dropped or upgraded to more capacity circuits, such as cable or metro Ethernet; broadband is no longer dependent upon obsolete technology from the legacy phone company.
In either case, access costs are typically lowered. The same can be said for any data transport service including DSL, Cable, etc.
U8lize Stranded Capacity:
In certain circumstances, converging voice and data assists in elimina:ng ‘stranded’ capacity, or capacity that is not being consistently u:lized and therefore wasted. Adding voice onto an exis:ng broadband connec:on will increase the traffic and u:lize stranded capacity. This makes the exis:ng infrastructure more cost effec:ve.
One Provider, One Number:
Hosted IP telephony allows businesses to receive both voice and data service from one service provider. One number for ques:ons or support is u:lized for both. This helps to simplify the support process and reduce the number of necessary support personnel.
Predictable Monthly Expenses:
Hosted IP telephony shows businesses exactly what to expect in terms of monthly telecommunica:ons costs. There are no unexpected costs associated with soeware upgrades or hardware maintenance, and most billing or management service portals are built with transparency at the forefront, making monthly budge:ng predictable and easy.
Simplified Moves, Adds and Changes:
One of the biggest expenses incurred by dynamic businesses is phone moves, adds and changes (MACs). Tradi:onal systems required intensive efforts every :me an employee moved offices. IP-‐based technology simplifies this process for the enterprise administrator with a point and click web-‐based interface. The result: a MAC takes a few minutes and no expense, rather than paying a technician hundreds of dollars to perform MACs.
Low Network Management Requirements:
VoIP network management is the hosted IP telephony service provider’s responsibility. This frees the business from responsibili:es of ensuring the system is running as intended, and from dealing with tech glitches. There are no “Fork-‐Lie” upgrades because major changes in the hosted PBX environment are centralized and executed by the provider.
A business u:lizing a PBX solu:on maintains network management responsibility, and thus must have the appropriate personnel and procedures to effec:vely troubleshoot.
Flexible to Organiza8onal Changes:
Today’s workforces demand agility—they’re constantly growing and shrinking, which is cause for hardware problems with tradi:onal phone systems. In most cases, businesses must buy more ports than necessary with limited op:ons if their workforce fluctuates. Tradi:onal solu:ons may not easily expand if the workforce increases over :me. Hosted IP telephony services allow businesses to buy only what it needs, with the ability to add or remove new lines when necessary, and only pay for what’s being used.
F I N A N C I A L S A V I N G S
> O p e r a t i n g E x p e n s e S a v i n g s
A D V A N T A G E :
G R E A T E R S E R V I C E R E L I A B I L I T YThe ability to communicate with customers, vendors and colleagues is cri:cal; voice reliability cannot be compromised. Hosted IP telephony has been engineered with this in mind and modeled aeer tradi:onal services. In fact, hosted IP telephony has dis:nct reliability advantages over both tradi:onal voice and IP PBX services.
Professionally Hosted:
Few businesses would consider themselves experts in hos:ng servers or phone systems. PBX solu:ons require businesses to do just that – host their own phone system on-‐premise. If something goes wrong, the business is responsible for correc:ng it. Given the importance of communica:on, this creates a large burden on the business to be prepared for the unexpected.
In contrast, hosted IP telephony relieves the business from this responsibility. Because the local phone provider owns and manages server equipment, the business never has to worry. In addi:on, most would agree that the local phone provider has the skills, personnel and IT knowledge to more professionally host and maintain servers when compared to most businesses.
End User Control to Re-‐route Calls:
The most common problem with any voice solu:on is access line failure. If the ‘Access’ por:on of the network fails, end users have different op:ons depending on the type of voice solu:on u:lized.
Hosted IP telephony provides the greatest amount of op:ons and flexibility. If the access por:on of the network fails, it does not have an impact on the servers in the service providers POP. Everything up to that point works the same, except in the case of access failure, the system will automa:cally route all calls to the end users’ voicemail or preferred des:na:on (mobile, remote office, home office, etc.).
In addi:on, end users can easily reroute calls to an alterna:ve phone, re-‐assign their phone number to an alternate loca:on or enable
Simultaneous Ring services to ensure incoming calls are answered even in a disaster situa:on. Only hosted IP telephony gives users this much flexibility when access lines fail.
With IP PBX or PBX technology, the end user’s phone will not work (for external calls), and their op:ons are limited as the server resides on the business premise and is therefore connected to the failed access line.
Disaster Recovery:
Similar to problems in the access por:on of the network, end users have a variety of op:ons in the case of disasters when connected to a hosted IP telephony solu:on. In the event of fire, earthquake, or severe weather, end users have the ability to reroute all their calls to their wireless or home phone. The hosted IP telephony solu:on can also be set up to automa:cally make these changes for users in the case of a disaster resul:ng in phone failure. Because only IP phones are needed, disaster recovery is loca:on-‐agnos:c; IP phones can be connected anywhere there is a broadband connec:on maintaining configura:ons at all levels.
Server loca:on for hosted IP telephony solu:ons is also a cri:cal aspect. Service provider POPs are secure facili:es built to withstand more than tradi:onal office buildings, and many built in loca:ons typically more protected from natural disasters. For this reason, servers in a POP have a higher chance of surviving a disaster and maintaining service than a PBX sinng in a businesses office complex. Even if a customer’s loca:on is annihilated by a disaster, end users will have phone service or the flexibility to obtain phone service.
S E R V I C E
> I m p r o v e d R e l i a b i l i t y
A D V A N T A G E :
F E A T U R E S , F U N C T I O N A L I T Y ,
& E N H A N C E D A P P L I C A T I O N S
IP-‐based voice solu:ons enable many features, func:onality and enhanced applica:ons that are not possible with tradi:onal solu:ons. While financial savings and service reliability are cri:cal in the decision to move to hosted IP telephony, these addi:onal features and benefits are what businesses learn to appreciate more aeer using it over :me.
Cohesive Services for Distributed Workforces:
IP-‐based voice services break down the boundaries associated with tradi:onal services. Because traffic can be routed to any loca:on connected to the network, func:ons that used to be :ed to a par:cular loca:on can now be distributed over mul:ple loca:ons.
For instance, a call center can now be centrally located and support users geographically dispersed or support mul:ple loca:ons. This allows call center agents to work from any loca:on – even from home. In addi:on, one single voicemail system can serve a group of users in different loca:ons. This not only saves money by only having to u:lize one voicemail system but also allows all users to share the same voicemail system. Likewise, business groups can office in various loca:ons and use extension dialing saving the business money previously spent on inter-‐office communica:ons while s:ll ensuring emergency and local dialing plans remain intact.
Enable the Mobile Workforce:
Employees want the ability to work effec:vely from home or while traveling. At the same :me, businesses gain from remote employees by reducing required real estate, and increasing employee sa:sfac:on.
Cloud-‐based IP telephony enables a more mobile workforce in a variety of ways, including:
• Anyone with a broadband connec:on can plug in his or her device and take advantage of a uniform user experience
(UX); the same features available in the office are now available remotely and on mul:ple devices.
• Employees can access a web portal for their corporate directory, view call logs, setup find me services, schedule and hold conference calls, or even listen to their voicemail.
• Find-‐me-‐follow-‐me: Never miss an important phone call by having redirects in place from your office line to cell outside of business hours.
• Short Message Service (SMS) Msg. Now: Send and receive text messages with your office line as the sender for increased professional communica:on op:ons.
• Virtual Fax: Send and receive faxes through your exis:ng email system.
Easily Rollout New Features:
As new features become available on the hosted IP telephony plaqorm, the local phone provider can automa:cally make them available to your businesses via a cloud-‐based sync. There’s no need for truck rolls or installing any addi:onal equipment at the customer premise. IP PBX or PBX solu:ons typically require at least a soeware upgrade by the business to enable new available features.
Again, in an on-‐premise solu:on, the burden is placed on the business to perform tasks the service provider does in a hosted IP telephony solu:on.
P E R K S
> F e a t u r e s , F u n c t i o n , A p p l i c a t i o n s
MDM, Integra8on and Features:
According to a March 2012 study by Neilsen, smartphone adop:on rate has reached 50 percent. This, paired with predic:ons of a strong increase in mobile workforces in the coming years, has created a need for devices accessible on-‐the-‐go, and calls and applica:ons able to move from desk to cell.
BYOD cultures are common in today’s workplace. According to a 2012 Spiceworks survey featured within the link above, 75 percent of small businesses encourage personal devices at work. The benefits: increased produc8vity through the ability to use a device the employee is already familiar with and has on hand.
Tablet usage for business is also on the rise. According to a study by Gartner, tablet sales saw a 98 percent increase between 2011 and 2012. This same study forecasts enterprise sale of tablets to account for 35 percent of total tablet sales by 2015.
As trends develop, features and applica:ons will follow suit to meet demand. Hosted IP telephony services enable any mobile device to connect from any loca:on—with full features and func:onality enjoyed in the office.
End User Produc8vity Features:
Some enhanced features enabled by IP-‐based voice solu:ons include:
• Visual Voicemail: Have your voicemails sent to your email. Read and file or forward to others the voicemail.
• Dial from Outlook: Dial directly from corporate or personal directories, call logs, visual voicemail, or Microsoe
Outlook™ by clicking on the contact. Click-‐to-‐dial can be used to conference together two or more par:es.
• Find Me, Follow Me: Set up a profile for where you’ll be throughout the day. For example, from 8-‐12 you’re reachable at an office number, from 12-‐1 it’s your cell, and from 1-‐7 it’s your home office loca:on. The system automa:cally calls the appropriate number so you never miss an important call.
• Conference Bridge Solu:ons: Join a dial-‐in conference to improve project produc:vity. Par:cipants can see who is on the call via Floor Control that moderators can control the call through. Acendees can raise hands to vote or speak when all lines are muted. This service also provides local numbers in many countries around the world, avoiding interna:onal toll-‐calls for acendees abroad.
• Call Jump: Callers can move or “jump” an ac:ve call to an alterna:ve phone number. Like a white transfer, you never put a customer on hold while “jumping the call” (home, mobile, office, and so forth) even if the numbers are sourced from mul:ple vendors. The dialer for each of their phone number lines can assign unique codes. It’s par:cularly convenient for fast-‐paced callers allowing dynamic control of ac:ve calls without access to a PC.
Many other enhanced applica:ons are available depending on the solu:on implemented.
P E R K S
> F e a t u r e s , F u n c t i o n , A p p l i c a t i o n s
C O N C L U S I O NHosted IP telephony is an IP-‐based solu:on that provides unique benefits to businesses. IP-‐based communica:ons solu:ons enable many business benefits—including financial savings, greater service reliabili:es, and enhanced features and func:onality.
The increasingly mobile workforce demands innova:ve new technology to sa:sfy both business and personal needs of the new age employee opera:ng in a world of IP solu:ons.
From the business perspec:ve, it alleviates resources associated with installing, upgrading and maintain hardware and soeware necessary
with IP PBX or PBX solu:ons. The service provider does everything. Businesses receive more reliable, feature rich services—without the IT headaches or hardware investments.
Cloud-‐based compu:ng and communica:ons technology con:nue to rapidly advance, and SMBs con:nue to adopt. New buyers face the new challenges of recognizing, assessing and comparing the many available op:ons that support hosted communica:ons technology. Maintaining reliability, at a compe::ve cost, will be a challenge for service providers.
A B O U T
This material is for informa8onal purposes only and subject to change without no8ce.It describes Nexogy’s present plans to develop and make available to its customers certain products, features and func8onality.
Nexogy is only obligated to provide those deliverables specifically included in a wriEen agreement signed by Nexogy and the customer.
© LDTELECOM, 2013. All rights reserved.
Nexogy is a complete telecommunica:ons provider that gives small-‐ and medium-‐sized businesses the power to manage all of the communica:ons from anywhere, at any :me. It’s been providing communica:ons services to thousands of businesses since 1999, bringing new technology to your desktop and device, matched with outstanding support and customer service. Nexogy is a trademark of LD Telecommunica:ons, Inc.
Nexogy offers the following telecommunica:ons services, and more:
• Advanced Phone Systems• Basic Business Lines• Broadband Connec:on• Virtual Fax• Visual Voicemail• SIP Trunking• Interna:onal & Toll-‐Free Numbers• Web Conferencing & Video Collabora:on• Hosted IP Video Surveillance Services• Hosted Call Center Solu:ons
To discuss your business’ hosted communica:ons technology, please call 1-‐866-‐NEXOGY2, or visit nexogy.com/contact-‐nexogy.
