1 The Next Step In IP Telephony: Hosted PBX Services Scott Wharton, Vice President of Marketing.

1

The Next Step In IP Telephony: Hosted PBX Services

Scott Wharton, Vice President of Marketing

©2003 BroadSoft®, Inc. Proprietary and Confidential; Do Not Copy, Duplicate, or Distribute - 2

Agenda

IP telephony roadmap

Hosted PBX services

Market/technology trends

Value proposition

Case studies

Market projections

Summary


IP Telephony Roadmap

1995 200119991997

Va

lue

Bad Quality

International Arbitrage

Hosted Voice:

e.g. Hosted PBX, Voice VPN, IP Centrex, Prepaid, UM, etc.

2003


DesktopCollaboration

DesktopCollaboration

MessagingMessaging

Corporate Voice

Networking

Corporate Voice

Networking

EnhancedServices

EnhancedServices

Self ServiceManagementSelf ServiceManagement

Core PBX Functions in

Network

Hosted Voice Example: Hosted PBX

PBX Functions in the network• E.g., Connectivity, Call Forwarding,

Conferencing, Voice Mail, Music on Hold, etc.

Self Service Management• Custom branded web portals (user,

enterprise, reseller, carrier)

Corporate voice networking• Location-to-location calling

Messaging• Unified voice and fax messaging

Enhanced Services• Auto-attendant, IVR, conferencing,

call centers, mobility, follow-me, one-number

Desktop Collaboration• Web conferencing, instant

messaging and presence, document sharing, desktop video


Network Layout

LargeBusiness

SmallBusiness

LAN

Medium Business

LAN

PBX or Key System

LAN

IP Phones

Line Gateway

Router

Switch

Class 5Switch

PSTN Data Network

MediaGateway

NetworkGateway

Broadband Access

DSL, T1, Ethernet, 802.11x

SoftswitchMGCP

SIP

Application Server


Paradigm Shift


The Communications Challenge

1990’s

Help!

TodayWWW


Market Trends: What’s Changed?

Outsourcing more common• Same model as web hosting and email• Companies under increasing pressure to

outsource non-core functions (telecoms)• Increasing technological complexity

Increasing telecommuting and mobile worker population

• Require expensive remote support and communication services from company

• Companies subsidizing these costs

Labor costs rising relative to equipment costs

• High cost of IT staffing• Skilled employees hard to find and retain for

non-core operations


Technology Shifts

Ubiquitous CAT 5 wiring and IP technology

Technology obsolescence accelerating

• PBXs lifecycle more like the PC market

IP PBXs blazing the trail• VoIP now considered mainstream

Hosted voice services now available

• Meet and surpass CPE features• End of product lifecycle for Class 5

switches


Hosted PBX Value: Enterprise

Combine benefits of Centrex with PBX• features + management control with capital savings

Improved total cost of ownership • Converged access• Open, lower cost capex• On-net Voice VPN calling

Move technology risk to carrier• Not locked into technology, move gear between sites

Improved service assurance• Carrier-grade performance, survivability & risk

management

Increased employee productivity• Speed projects & reduce travel with collaboration • Tele-worker/mobile support, find-me/follow-me• Web-based self-service


The Case for IP over Legacy

Legacy IP

•TDM Voice

•No end-user control

•Proprietary and closed

•Multiple networks

•Expensive MACs

•IP Voice

•Web-enabled control

•Open & standards-based

•Converged network

•Cheaper MACs


End User Benefit Comparison

Network IP Tel.

24x7 support

Maintenance costs

Mixed tech

Multi-location

Capital cost

Ongoing upgrades

Scalability

Simplicity

Survivability

Total cost of ownership

IP PBX

Distribution channel

Equal

MACs, CTI, Convergence


Hosted PBX Beats IP PBX Solution Cost

$-0

$50,000

$100,000

$150,000

$200,000

$250,000

Year 1 Year 2 Year 3

Traditional PBXIP - Enabled (New)

IP - PBX

Network IP Telephony

So

luti

on

Co

st

100 User IP and Convergence Total Cost of OwnershipAn Analysis of Three Alternatives

$135,001

$60,192

$82,480

$219,229

$85,220

$109,434

$237,283

$105,724 $126,399

Source: Phillips-Infotech Oct. 2001


Case Studies


Case Study: Large Enterprise

Background• Large chemical company• 13,000 employees• 150 locations in 60 countries• Building IT competency as

competitive advantage• Bundled voice/data package

from service provider

Problems Addressed• Hybrid network, primarily

comprised of 42 PBXs• Multiple voicemail systems• High cost of LD traffic

– Only top 4 locations networked

• Sporadic use of unsecured IM

Key Selling Points• Uniform services for all

employees• Enterprise networking; click-

to-dial anyone in company• Personal mobility services• Secure instant messaging• Single internal phone list


Case Study: University Campus

Background• World-renowned university• Serves 35,000 students,

faculty, administration, etc. • University recently merged

telecom & data departments• Chose hosted voice platform

after full competitive evaluation vs. IP PBX

• Three year Centrex migration

Problems Addressed• Must be profit center by 2005;

– Plan to sell service to local companies, other universities

• Dissatisfied with current Centrex offering

Key Selling Points• Convergence of voice/data• Open platform, not proprietary• Able to meet scalability needs

– E.g., Solaris vs. Windows• Ease of partitioning system &

managing different sets of services between user groups

• Comprehensive service set from a single platform– E.g., voice, messaging, IM


Case Study: Government

Background• Major city government• 15,000 employees• 68 locations

Problems Addressed• Mixed use of PBX, Key

Systems, and Centrex• Proprietary phones not

interchangeable between systems

• Some people without voicemail

• Limited features available across departments

Key Selling Points• Integration of voice/data• Self-management• Enterprise-wide dialing plan• Disaster recovery for voice • Openness of platform and

variety of access alternatives, now and in the future


Market Projections


IP Voice & Legacy Projections

Share between Hosted and PBX is up for grabs again

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2001 2002 2003 2004 2005

PBX/KTS Centrex IP PBX Hosted Voice

Source: Gartner Dataquest, Gartner Consulting

Enterprise Line Shipments (000’s)


Summary

• Enhanced IP telephony services are next step in market

• Market and technology shifts favor outsourcing

• Hosted PBX offers enterprises better services with cost savings

• Solutions commercially deployed and available today

For more information:

Scott Wharton+1-240-364 5107

[email protected] www.broadsoft.com

1 The Next Step In IP Telephony: Hosted PBX Services Scott Wharton, Vice President of Marketing.

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