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Hosted PBX: A Viable IP PBX Alternative?. July 2005. Agenda. State of the market Hosted PBX vs. IP PBX TCO: hosted vs. premises Case studies Co-existence Future trends. State of the Market. Hosted Voice: State of the Market. Large players are deployed - PowerPoint PPT Presentation
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Hosted PBX: A Viable IP PBX Alternative?
July 2005
2
Agenda
–State of the market
–Hosted PBX vs. IP PBX
–TCO: hosted vs. premises
–Case studies
–Co-existence
–Future trends
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State of the Market
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Hosted Voice: State of the Market
Large players are deployed–E.g., Verizon, MCI, BellSouth, SBC, Telstra, Singtel, T-Systems
CLECs expand–E.g., US LEC, McLeod, XO, CBeyond, BroadWing 100+ others
Residential distracts enterprise deployments (temporarily)
–The Vonage effect
Hosted voice follows IP PBX deployment path
–Trials, branch offices, HQ
Big names deploying–E.g., US EPA, State of Minn., U Kentucky, GMAC, Coca Cola, Texas A&M
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Which Service Providers? Examples
Competitive Carriers
Managed SPs / SIs
Incumbent Carriers
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Hosted PBX
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Hosted PBX Follows Software Trends
30 years of PBX domination– Centrex fought back with
limited success– IP PBX same evolutionary
model
IP Telephony changing market– From hardware to software
Enterprise software apps migrating to data center– E.g., CRM, ERP, Web hosting,
directory services, email, etc.
Is voice just another data center
application?
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Enterprise Sites
Like IP PBXIP-based software model
Rich PBX + multimedia functionsWeb-based control, MACs
Hosted PBX: Best of PBX & Centrex
Consistent Global Service Delivery
Like CentrexScale, reliability
Purchase incrementallyCentralized control, mgmt.
Hosted PBX
Open, standards-based
Best ofboth worlds
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Attribute Hosted PBX IP PBX
Scale • Millions of users • 1-10K users• Lower numbers of IP phones
Networking • Centralized mgmt. and MACs• Uniform dialing plans• Uniform service set
• Hard-to-manage dialing plans• Service islands
Total Cost of Ownership
• Lower cost with outsource • Higher when total costs factored in
Openness & standards
• SIP-based• Open CPE
• Proprietary• Closed CPE
Convergence • LAN AND WAN • LAN only
Survivability • Robust, IP + geographic • Multiple points of failure
Reliability • 5 9’s for system• Solaris-based
• 4 9’s for system• Windows-based?
Technology Risk • Borne by service provider • Borne by enterprise
Management • Centralized system mgmt. • Mgmt. based on each system
Hosted PBX vs. IP PBX Comparison
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Hosted PBX Economics
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VoiceCon IP PBX RFP Specifications
System requirements–Single system image
–Standard business features
–Transparent station/system feature operation
–Centralized support services• Attendants, messaging, system
management
–Enhanced 911 support
Messaging–2750 users, 3000 max
–125 ports, 175 max
End points–2700 IP sets
–250 analog ports• Conference phones, fax, backup
lines
Primary HQ Site• 1,500 IP line stations• 100 analog ports
Region 1• 500 IP line stations• 50 analog ports
Region 2• 250 IP line stations• 50 analog ports
Branch 1• 200 IP• 25 analog
Branch 2• 100 IP• 10 analog
Branch 3• 75 IP• 10 analog
Branch 4• 50 IP• 5 analog
Sat 1• 15 IP• 2 analog
Sat 2• 10 IP• 2 analog
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2005 VoiceCon RFP: TCO Comparison
Hosted 31% less TCO than 9 system average–34% less than Avaya, 32% less than Cisco
Additional benefits–Carrier grade reliability and survivability–More flexibility to support change, i.e, adding/removing users, sites–Less risk: no technology lock-in, stranded assets
TCO only improves with the addition of sites and users
Summary of Solution Costs – Per Month, Per User
Solution Avaya Cisco Avg.- 9 Bids HostedVoice Equipment + Maintenance $14.48 $9.44 $10.70 n/aCarrier Voice Services n/a n/a n/a $18.00Access $12.68* $12.68* $12.68* $3.70*Minutes $5.00 $5.00 $5.00 $5.00CPE (Layer 2/3 Switching) $2.68 $2.68 $2.68 $2.02Phones $8.04 $10.55 $8.58 $5.60
Install & Support Staff $25.13** $25.63** $25.88** $10.66**
Total $68.01 $65.98 $65.52 $44.98*Estimated using market pricing inputs**Uses some estimates, some RFP data
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Hosted PBX TCO Beats Existing PBX
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
5K 10K 15K 25K
Networked PBXs
Networked IP PBXs
Centralized Softswitch
Enterprise Stations
Monthly Total
“Softswitch solution” offers lower TCO for all size enterprises
TEQ Consult Group – June 2005
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Services/OpEX Costs Overshadow CapEX
$0
$10
$20
$30
$40
$50
$60
$70
$80
CapEx* OpEx Telecom Services
Networked PBXs
Networked IP PBXs
Centralized Softswitch
Monthly Cost/User
Softswitch delivers better CapEx, OpEx, and equivalent Telecom Services versus IP PBX
*Assumes PBX network infrastructure in place
TEQ Consult Group – June 2005
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Case Studies
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State of Minnesota
Background–Large-scale multi-office deployment, 62K users–Offices interconnected by private network
Problems Addressed–Multi-layer administration –Manage call traffic across public and private networks
Key Drivers–Future-proofing to next decade–Open, standard CPE–Substantial TCO savings (voicemail)–Customized interface and services for different agency requirements
“This will further help the state meet current and future telephony needs.”“We will be able to increase the eligibility of state agencies to take advantage of the benefits of IP telephony, which will result in toll savings, circuit consolidation and lower administration costs."
Keith Payden, State of Minnesota Chief Information Officer
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University of Kentucky
Background–18K students –Unsatisfied with Cisco Call Manager deployment
Problems Addressed–Networking existing equipment, IP PBXs, hosted users –IP PBX scalability
Deployment–Reloading Cisco phones with SIP for BroadWorks –Delivered by Lucent & Alltel
Key Drivers–Reuse of existing Cisco IP phones, switches, routers–Able to meet scalability needs• E.g., Solaris vs. Windows
–Carrier-grade service offering
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From PBX to Hosted PBX: Before & After
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IP PBX Interworking
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Hosted and IP PBX: Coexistence
SIP Trunking– Provide connectivity to IP PBXs
– Save on capex: no need for PRI gateway
Virtual Services for Existing PBXs and IP PBXs– E.g., Click-to-dial, auto attendant, attendant console,
Enterprise-wide voice mail, ACD/call center, voice VPN
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IP PBX SIP Inter-working
Build a next-gen integrated communication bundle designed to enhance the deployment of IP (SIP) PBXs.
SIPConnectSIPConnectCurrent NetworkCurrent Network
IP-PBX Legacy TDMLegacy TDM NetworkNetwork
IP Phones
Customer Premisessold and managed by
Channel Partner
GW
VoIP TDM
IP-PBXCarrierCarrierVoIPVoIP
NetworkNetworkIP Phones
Customer Premisessold and managed by
Channel Partner
VoIP
SIP
GW
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Enhanced Services for PBX Users
IP Platform–Start with trunking service–Add Voice Mail–Add Unified Messaging
TDM IP
Voice Trunking
Voice Mail
Connectivity
Basic Service
Enhanced Services
Voice Trunking
Unified Messaging
IVR, Find-me/Follow me
Hosted PBX
Remote/Tele-worker Service
No offering
Voice Mail
Auto Attendant
Add Click-to-dialAdd Auto Attendant/IVRAdd Find-Me/Follow-MeAdd Remote/Tele-worker Services
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SIPConnect™ Overview
Partnership
Specification– Open source: www.sipconnect.info
Availability– From Cbeyond today– Additional carriers adding service
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Future
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Hosted PBX vs. IP PBX: Sweet Spots
10
1000
10,000+
1 10 100+
Number of Sites
Nu
mb
er o
f E
mp
loye
es
Fortune 500
RetailSME
Campus
Hosted PBX Sweet Spot
IP PBX Sweet Spot
Hosted PBX Sweet Spot
Hosted PBX Sweet Spot
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InfoTech Forecast for Line Shipments
This forecast reflects historical, end-user demand, emerging offers, and channel capability trends
0
2,500
5,000
7,500
10,000
12,500
15,000
17,500
20,000
Hosted IP-PBX
Centrex
Managed IP PBX
IP-PBX
KTS
PBX
Hosted IP-PBX 61 195 726 1575 2688 3866
Centrex 711 586 487 414 356 310
Managed IP PBX 222 300 467 821 1493 2182
IP-PBX 3631 5386 6097 6690 7342 8243
KTS 4106 4473 4572 4356 3930 3305
PBX 4314 3120 2286 1698 1222 904
2003 2004 2005 2006 2007 2008
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Hosted vs. IP PBX: Avaya “Sell” Report
Hosted: Steal ~15% of IP PBX market in next 4 years– Reasons:
• Broadband = more hosted competition (vs. Centrex monopoly)• IP = hosted parity with premises offers• Avaya poorly positioned for hosted
Source: Janco Partners Inc. November 2004
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Future: Mobile Hosted PBX
Same Hosted PBX Application–Mobile handset looks like IP phone
–For existing and 3G networks
Extend Existing Services–Group mobile subscribers into an “enterprise”
Support for Dual Mode Handsets
–Use WiFi inside and cellular outside enterprise
Managed IP Network
Enterprise Sites
IP Access Network
Mobile Phones
Wireless Network
Support Mobile Handsets with Hosted PBX Enterprise Application
VoIP Application Server
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Summary
–The Hosted PBX market is moving into the mainstream
–Large carriers, enterprises are embracing Hosted PBX globally
–Hosted PBX can have significant TCO savings vs. an IP PBX
–Hosted PBX has lower TCO vs. doing nothing
–Future = SIP inter-working, mobile integration
–Hosted PBX can provide a great alternative to an IP PBX
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For More InformationScott Wharton, VP Marketing
220 Perry Parkway
Gaithersburg, Maryland 20877
USA
+1.301.977.9940
www.broadsoft.com
