“Hosted Voice Services: Are They Right for You?”

Andy Morrow Executive Director-VoIP Product Management, SBC Communications

www.sbc.com

IP Telephony Offers Great Benefits• Reduced Expenses (Admin, LD, Toll)

• Less Network Complexity

• Increase Employee Flexibility

• Anywhere-Anytime Access

• Increased Employee Productivity

• More Collaboration Options

• New MultiMedia Offerings

• Improved Customer Service

But Also Presents Significant Questions

• What technology platform should I implement?

• Will I need to throw out my existing investment?

• Will I really save money over my existing TDM solution?

• Can I operate in a hybrid environment?

• Do I have the staff to operate a VoIP network?

• Will my new VoIP investment become obsolete too soon?

• Will my selected platform be able to support new applications?

• Do converged networks really work?

• Will my business really recognize the promise of VoIP?

Customers Have Multiple VoIP Options

Reliance on Managed-

ServiceProvider

Low

Low

High

High

Owned/Leased Option Outsourced/Hosted Option

OwnedVoIP PBXOwned

VoIP PBX

ManagedVoIP PBXManagedVoIP PBX

OutsourcedVoIP PBX

OutsourcedVoIP PBX

HostedHosted

Economies

SBC PremierSERVSM Solutions

Reliance on Managed-

ServiceProvider

Low

Low

High

High

Owned/Leased Option Outsourced/Hosted Option

IPT SupportServices

IPT SupportServices

IP TelephonyAdvantage

IP TelephonyAdvantage

ManagedCare

ManagedCare

Hosted IP Communications

Service

Hosted IP Communications

Service

Economies

SBC PremierSERVSM Consulting Services

Architecture based on standards such as SIP & MGCP. Customers have choice of phones and can interwork traditional and IP PBXs into the network

Feature ServerFeature

ServerFeature ServerFeature Server

PacketNetwork

PSTN

IP Phones

Your Business Network

LAN

Can reside as part of the hosted network

• Core Packet Network Interface • Interfaces to trunks or lines• Centrex or PBX Interworking

• Call processing • Connection

management

• Advanced features • GUI Service Creation

Media Gateway Controller

(Softswitch)

GatewayGatewayGatewayMedia

Gateway

Hosted Architectures Offer Economies of Scale

Wireless – PDA, Laptop, Cell Phone

HostedBranch 3DS-1/FR

Private IP Backbone

(MPLS Core)

Frame/ATMHosted

Branch 2DS-1/FR

VoIP PBX Branch 4DS-3/IP

IP NVPNs Can Provide The Infrastructure For A True Converged Network

Metro Optical HQ Site 1

Opt-E-Man

HostedBranch 1DS-1/FR

VoIP PBX Branch 5 OC-3/ IP

DSL – SOHO

PSTN PSTN

Access Gatewa

y

A TCO Analysis Will Point You To The Right Solution For Your BusinessTCO Items To Be Considered• Cost of Required Equipment

• Infrastructure Upgrade Expenses

• Toll and LD Expenses

• Administrative/IT Support Expenses

• Power/Space Expenses

• Lifecycle Upgrade Expenses

• New Application Benefits

Hosted Solutions Often Win On A TCO Basis

Monthly Total Cost per Station

$53$55

$93

$35$37

$69

Illustrative Customer Examples

100-Station Customer Monthly Total Cost of Ownership per Station

1000-Station CustomerMonthly Total Cost of Ownership per

Station

Hosted VoIP Solution Managed VoIP PBX Solution

Managed TDM PBX Solution

Monthly Total Cost per Station

Do I Go With A Hosted or VoIP PBX Solution?

Factors Favorable to Hosted

• Multiple sites, geographically dispersed

• High percent interlocation/on-Net calling

• Customer wants to migrate to VoIP over time. Hosted is economically very scalable

• Customer has a mixture of telecom platforms (i.e., Centrex, VoIP PBX, PBX) – requires interoperability

• Customer does not want or have capital dollars to spend on a system

• Customer prefers a fully managed solution

Factors Favorable to VoIP PBX

• Fewer sites, geographic concentration

• Low volume of on-Net calling

• Availability of existing WAN Bandwidth. No need for incremental upgrades

• Willingness to perform a flash cut

• Desire for single global/national telecom platform

• Willingness to spend capital dollars

• Preference for do it yourself management

• Need for customized vertical applications

Customers Have Many Service Provider Types To Choose From

• ILECs

• CLECs

• IXCs

• Virtual Network Operators

• System Integrators

Assuring Service Provider Accountability

• Understand exactly what you are contracting for and what you will get

• Make sure that your vendor provides an End To End SLAs and holds ultimate accountability

• Understand all of your costs - including short and long term upgrades

• Understand your provider’s underlying network infrastructure, security capabilities, and reliability

• Understand your provider’s after sales support capabilities - user training-help desk-problem resolution

• Talk with reference customers to make sure their experience has been positive

Issues to Consider When Choosing a VoIP Managed Services Provider

Can the Managed-Services provider help me evaluate all of my options, or are they biased?1.

2.

3.

4.

5.

Does the Managed-Services provider have the skills to design, deliver and maintain a complex IP network?

Can the Managed-Services provider assist me in developing a migration plan from my current platform?

Does the Managed-Services provider have a product evolution plan?

Will the Managed-Services provider be able to deliver the true potential of VoIP?