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Making the Case for Hosted IP-PBX

It’s the economy…and it’s not stupid

Walter Snell

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What is a Hosted PBX?

• Misconception– A PBX sitting in a data center– Vonage or Skype– A inbound virtual PBX (e.g. Angel.com)

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What is a Hosted PBX?

• Reality – it’s software– One virtual platform for many companies– Web based administration– User dashboards– QoS management service– New provisioning methods– Complete telecom services– New features/unified communications

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Example Architecture

Key Concepts

• Hardware Redundancy

•Network Redundancy

• QoS Management

• Data Security

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Hosted PBX is for the SMB Market

• SMBs invest where challenges dictate– Many PBX and key systems are near retirement– Cost is the number one consideration– Lack of IT resources restricts advanced premise

solutions– “Best of Breed” is traded for “Ease of Use”– Ideal for the 10-100 size business

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Resource/Commitment

• Less Onsite IT Costs

• Easier to Deploy/Change Services

• Low Capital InvestmentReference: Yankee Group SMB State of the Market Report

According to Yankee over 30% of 2 million SMBs are in the market for hosted VoIP (aka the unfortunate 2 million)

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Hosted PBX Adoption Rates

SMBs adopt rapidly when the needs are highest and the solution is clear – Hosted PBX is nearing that inflection point

Reference: Yankee Group SMB State of the Market ReportOnly 30,000 business use Hosted PBX today

Out of 2.4 million

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Benefit #1 - ROI

• Cost Comparison for 50 person business

Startup Cost

50 phones $ 12,500 ($250 per phone)Setup $ 1,500 (30 per user)QoS Router $ 1,000 (Router)iQ Manage $ 1,000 (QoS Mgmt)Labor $ 2,000 (20 hours @ 100

hour)$18,000

Monthly Operations Cost

30 Employees $ 1,250 mo. 25,000 VoIP minutes $ 625 mo.24/7 Support $ 0IT On Site $ 0Software Maint. $ 0T1 Service $ 450 mo.

$ 2,325 mo.

Startup Cost

50 phones $18,000 ($350 per phone)IP-PBX $50,000 (Cisco Call Manager

Express)Assessment $ 3,000 (Network Assessment)Labor $ 8,000 (80 hours @ $100 hour)

$79,000

Monthly Operations Cost

30 Employees $ 0 25,000 minutes $ 1,250 mo. (.05 average)24/7 Support $ n/aIT On Site $ 500 mo. (consulting fees)Software Maint. $ 1000 mo. (15% annualized)PRI Service $ 450 mo.

$ 3,200 mo.

Hosted Premise

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Benefits #2 - Freedom

• Work Anywhere– Local and remote users– No WAN congestion problem that IP-PBX suffers– Mobile users – soft phone, cell phone, etc.– Home users – completely connected

• On-net Extension Calling– Dial an extension whether its in San Diego or

Japan– No cost calling

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Benefit #3 – Self Control

• MACD– Self manage Moves, Adds, Changes, Deletes

(MACD)– No Consultants needed

• Add new numbers– Order new phone numbers online– Local, US, even international numbers

• Order new services– No truck rolls – provision instantly– E.g. email-fax, video, collaboration, ACD

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Challenge #1 - Quality

• Quality is number one concern– If it doesn’t sound good, then it’s not good enough– It must never drop calls or jitter

• Reasons– Overloaded LAN – can’t handle VoIP– Poor ISP service provider network

• Solutions– QoS Management Tools– Managed WAN circuits (MPLS-DSL, dedicated T1)

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Challenge #2 - Reliability

• It has to work all the time– Premise equipment aims for 99.999%– Not there yet for hosted but close 99.99%

• Reasons– Network and Power Outages– Software/Hardware Problems

• Solutions– Routing Masks (inbounds move to cell, legacy)– Local failover to PSTN in critical business apps– POE (power over ethernet) + battery backup

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Hosted PBX to UCX (unified communications exchange)

Mobile Communications

Mobile Communications

Video/WebConferencing

Video/WebConferencing

EnterpriseIM Services

EnterpriseIM Services

Unified MessagingUnified MessagingCollaborationCollaboration Predictive Dialing

Predictive Dialing

Unified Communications ArchitectureUnified Communications Architecture

Multimedia Communications

Video Conferencing

Mobile Services

Unified Messaging

WorkflowAPI

WorkflowAPI

Hosted PBXHosted PBX

Telephony

Easy to add new features as businesses move up the technology value chain

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Enhanced VoIP Example – Hosted Auto Dialing

Sales Team

Location: Anywhere

Size: 1 to 100Salesforce Data Center

Location:

Upload call data to Hosted PBX

Smartcast begins predictive calling

Leaves voicemail on no answer

Pops live called party to agent screen

Routes live calls to sales agent

Starts/Stops based on Agent Activity

1

2

3a

3b

3c

4

Upload data

Outbound dials

Send live callers

Pop SF Record

1

2

3a

3b

Save up to $2000 per month per sales person in labor costs

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Review

• Hosted PBX services are ideal for SMBs• Low CAPEX and OPEX are primary drivers• Flexibility, mobility, and ease of use are other

advantages• Challenges are QoS and reliability• Enhanced features enable businesses to

reduce costs much further• Hosted PBX is nearing the inflection point