IP Telephony Round Table
Connect 4
Shara Evans puts
her questions to our
exclusive four-man
panel featuring:
Rob Pierce, MD, ANZ,
LG-Nortel
Question 1:
There are tens of thousands, if not
hundreds of thousands, of small
to medium sized businesses with
legacy phone systems that they
own and are happy with. What
added value makes the upgrade
to IP telephony worthwhile?
RP
While telephony has continually evolved over the past
100 years, only in recent years has this change become
revolutionary. The march to voice and data convergence has
been relentless – a new technology ready to assume the space of
traditional telephony and bring businesses some significant
benefits and added value, including:
•True mobility for all staff. WiFi handsets sharing generic
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Tim Watson,
CEO, Activ
Brad Dolphin, CEO,
ValueNet
Ray Smith, GM ANZ,
Samsung Comms.
access points with other devices on the LAN, softphones or
videophones installed on laptops or PDAs connected simply as
extensions to the office system. Or indeed remote teleworking
solutions for employees working from home – either by fullyfledged remote services gateway (providing them with local
PSTN redundancy), or an IP handset simply plugged into an
ADSL modem.
The Strategic Path Executive Panel on Solutions for the SMBs
• M
anaging devices on your LAN/WAN has always been
part and parcel of the IT world, but not necessarily the
telephony world. The move to IP telephony has given network
administrators much more scope to manage the telephone
system via smart admin tools, either over a web interface or
the LAN. Moves, adds and changes may be made without
the need for third party involvement. Relocating an extension
is as simple as moving the phone – everything else happens
automatically within the IP phone system because the
phone’s embedded MAC address is assigned the extension
number and feature set.
• Networking between offices has never been more powerful.
Centralised attendant, centralised voicemail, or redundancy
in the case of a service failure are all benefits of the converged
world. Call savings are possible as long-distance VoIP calls
can transit-off at a local exchange and inter office calls be
transmitted over the existing data links. Call centre overflow to
remote agents maximises staff utilisation for national or global
companies.
BD
If people are truly happy with their phone system then
they are unlikely to need or want to upgrade to IP
telephony. What we find is that there are generally one or two
fundamental problems businesses would like to solve with a new
phone service, often including:
•Moving office.
•Outgrown existing system and have
had a shock at the upgrade costs involved.
•The need to achieve some real business
efficiencies.
• Customer service.
• Disaster recovery planning.
• Mobile work force.
• Seasonally growing or shrinking their business.
• Need to integrate multiple sites, or add
additional sites.
Although solutions to some of these problems are not specific
to IP telephony, the need to upgrade their old system enables
these businesses to evaluate additional benefits IP telephony can
provide, and in particular, the benefits of a fully managed (hosted)
service. Hosted IP telephony adds extra value by seamlessly
enabling additional features and functionality across multiple
sites. This simply cannot be replicated with traditional PSTN or
IP-PABX solutions.
Other benefits that are derived from a move to IP include the
potential to establish a converged voice and data solution leading
to ongoing efficiencies because:
• No longer need separate voice, data and VPN services
– they can all be combined into one access product from one service provider. No longer do you have to call and
manage multiple service providers.
• With the move to IP, voice can now be managed by an IT
person where previously this would involve a call to your
PABX provider.
TW
IP telephony reduces your voice total cost of ownership
and offers many new productivity features.
Combining your data and voice requirements into a single
network reduces capital and maintenance costs. VoIP reduces
or eliminates your line rental costs (up to 30 percent of most SMB
phone bills) and call costs.
IP telephony has software roots and was built with software
applications in mind so the features available with an IP-based
solution will exceed that of a traditional solution.
RS
At Samsung we are finding that the majority of customers
who are implementing IP telephony are doing so to
achieve additional flexibility and applications that their current
legacy telephone system cannot provide. The clear benefits of
IP telephony are organisational flexibility, reduced office space,
reduced call costs and overheads, improved mobility and work/
life balance for staff.
One of the main IP solutions delivered by Samsung will enable
remote sites, (remote branches or staff), and mobile staff, to be
connected to the office telephone system as if they were internal
extensions. Remote/home workers, for example, can plug an IP
handset straight into their broadband service and the IP handset
will be treated by the head office communications system just like
any other extension. Unlike legacy telephone systems, there is no
distance limitation to how far IP extensions can be located from
the main telephone system, down the street or on the other side
of the world.
Smaller branches or sites, that have traditionally required their
own legacy telephone system, can now be provided with IP
extensions from the main site allowing these extensions to be
fully integrated into the main office system, providing access to
all the telephone functions that internal users are used to – from
simple call forwarding and transfers to advanced features such
as centralised operator services, voicemail, automated attendant
and call distribution.
By providing a Windows-based softphone on a PC, road warriors
that regularly work away from the office can enjoy the full
functionality of their normal desk phone on the move.
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The Strategic Path Executive Panel on Solutions for the SMBs
Question 2:
Most vendors offer other solutions in
addition to the “pure IP” option. What
do you believe influences a business
customer’s choice between traditional
environments, hybrid systems and
pure IP telephone systems?
BD
The buying decision between these is usually determined
by a business’s ‘problem space’ and their business
outlook. Some companies do not have a high demand for added
functionality and predominately make more outgoing calls.
In this case, a free PABX and cheap calls can be a hard number
to beat.
Hybrid systems generally are a compromise in one area or
another, and are usually associated with adding VoIP connectivity
between multiple sites while maintaining traditional PSTN
connectivity elsewhere.
The choice of a pure IP solution, which we define as IP on the LAN
and IP on the WAN, is more likely to be chosen by businesses who
are keen to embrace the new world and have sufficient knowledge
so that the full benefits of a pure IP solution can be realised.
A further consideration is opened up by a pure IP solution that
is fully managed i.e. no on-site hardware for call control or PSTN
gateways. Some businesses immediately see the benefits of
this; others are still comfortable to see the ‘grey box’ on the wall
in the kitchen.
TW
The feature set. IP telephony may offer new features
but the customer may not need them and they will have
to buy new handsets which is often the biggest cost.
A hybrid solution spreads out the cost and offers some IP-based
advantages early on to those in the business who would most
benefit (e.g. sales teams).
RS
Ultimately the decision to implement pure IP system or
a hybrid system will depend on the individual customer
requirements. For that reason Samsung OfficeServ 7000
converged communications systems can be configured for a pure
IP environment, (that is, all users have IP extensions connected via
a LAN/WAN) or as a hybrid system, which is a mix of traditional
digital/analogue extensions and IP extensions, as well the option
to provide data switching, routing and security features. For
greenfield sites this ‘all in one’ solution can provide all the voice,
data and IP capability in the one converged platform.
Recent independent surveys have shown that the majority of
small business customers are implementing a hybrid solution,
rather than a pure IP solution.
The reasons for this is that with hybrid solutions customers can
achieve the benefits of IP without the cost and perceived risk of
a total forklift upgrade often necessary to implement a pure IP
solution, to ensure quality of service is achieved. Most existing
customers already have an existing voice cabling and LAN
infrastructure, so there is not necessarily an advantage to moving
to pure IP. In these cases customers tend to prefer lower cost
digital telephony for the majority of users and use IP for specific
applications, i.e. remote sites or users.
RP
Customer’s requirements differ greatly and it is these
requirements that can determine the type of telephony
solution they may opt for. A customer may require certain
applications or technologies that only are available with pure IP
telephony, such as advanced multi media applications. A customer
may be moving to a greenfield site and thus take advantage of
reduced cabling infrastructure costs. They may wish to manage
one network – data and voice or simply take advantage of the end
of lease, or end of life of the current phone system.
There are also businesses where the need to change is not so
compelling, such as small single-site businesses or those with
little dependence on technology. Such organisations can still take
advantage of the IP revolution by IP-enabling their existing system,
or by installing a modern hybrid system.
Question 3:
What features are customers likely to
lose if they seek a multi-vendor solution
rather than a single vendor solution?
TW
Probably not much in the IP world. As the standards
mature, interoperability of different vendors’ equipment
is not that difficult. Protocols like SIP are making this happen with
traditional PBX vendors now offering SIP capable iPBXs.
RS
A single vendor solution is designed so that all the
components are fully integrated, fully tested and
fully compatible to deliver a full feature set. This eliminates any
possibility of compatibility issues with multi-vendor solutions and
the loss of advanced features not supported by all vendors.
The other, often not recognised, advantages of a single vendor
solution include a single provider of technical expertise, project
management and a single point of responsibility for problem
solving. Consistent management interfaces also ensure the whole
of life costs should be lower.
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RP
Customers with multi-site locations considering a
multi-vendor solution need to assess their telephony
requirements and particularly the interoperability of these systems.
Choosing different vendor solutions for each of their sites will
minimise the features available across the network and possibly
introduce compatibility and demarcation issues. Only basic
features as specified in the generic protocol, such as call forwarding
or call transfer, may be available and multi-vendor solutions
may add significant cost and resource time to IT departments.
A single vendor solution reduces network complexity and
management costs.
Having single vendor solutions across multi-sites provides staff with
a common feature set. Paging or transfer functionality, for example,
is the same on site A as it is on site B. Staff can move across sites
without the need for retraining or desktop familiarisation.
BD
This really depends on what type of service they are
looking for. In the case of some IP PBX systems, you
now have choice of different vendors’ handsets that are “keyed” to
the specific vendors’ PBX. However, non-proprietary systems can
allow components to be reused in other vendors’ solutions should
you wish to change or update in the future.
Installing a multi-vendor solution could also force the business
to take responsibility for the overall integration which can be an
expensive exercise if this isn’t a core part of their business.
Question 4:
What’s the role of the hosted IP
telephony (IP Centrex) service? And,
what criteria should businesses use
to decide between a hosted service
and an in-house telephony system?
RS
Hosted IP telephony or IP Centrex does have advantages
for some customers. It particularly suits companies that
have a large number of small sites wanting unified operations with
limited requirements for sophisticated networking between sites.
Sites can be quickly built since the programming is mostly in the
hosted IP provider’s core equipment. Once the WAN service is
installed then it is possible to provide fast installation of on-site
equipment by unskilled staff, or even the customer themselves.
Hosted solutions also have the immediate financial advantage of
reduced capital expenditure.
However, in-house telephony systems offer most small to medium
business customers a number of advantages. While the initial
capital outlay for a hosted solution may be small the whole of life
costs tend to be higher. The freedom of choice between carriers to
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ensure the most cost effective call costs is lost. Hosted solutions
generally offer a reduced feature set compared to those available
on in-house systems and the changes in the feature set are often
controlled directly by the provider. Businesses prefer the flexibility
of customising their own feature sets, which is readily available
with in-house systems.
The majority of customers also require the enhanced features
of today’s in-house telephony systems including wireless voice
and data, computer telephony integration to the desktop, choice
of handset types and options for remote working. The other
significant disadvantage of hosted solutions is the WAN link is a
single point of failure. If this connection goes down then all the
hosted users are off the air.
RP
Hosted IP telephony provides an alternative to traditional
in-house telephony. Historically driven by carriers
and pitched at large enterprise, hosted telephony brings some
advantages to businesses: no capital costs, single service level
agreements and hosted management.
Deciding between hosted services and in-house telephony is not
a difficult decision for SMEs. The majority of SMEs in Australia
choose in-house telephony solutions for a variety of reasons. Inhouse telephony solutions can easily be integrated with customerunique applications. Customers have a choice of carrier, (they
are not just confined to the IP Centrex provider’s own network)
and have greater flexibility specifying a system to meet their own
business requirements.
Highly sensitive organisations often feel more secure if their inhouse system resides on their own network rather than hosted
externally.
In the past, moves, adds and changes to Centrex solutions have
been sluggish and convoluted. While large enterprise can often find
a work-around for this situation, SMEs seldom have this luxury.
BD
Being a provider of a fully managed hosted IP telephone
service, ValueNet firmly believes this is the future
for service delivery. Having said that, we see the industry in a
transition phase where some businesses see the immediate
benefits of a hosted system, while others still see a benefit in
owning their PABX/IP PBX, having proprietary handsets, having
multiple providers for voice and data, having multiple maintenance
contracts and not knowing whether to call the PABX supplier or
their service provider if they cannot receive calls.
Businesses see the key benefits of a hosted solution as:
•Significantly reduced capex costs.
• No ongoing maintenance cost on hardware.
• Ability to provide true voice and data convergence.
•Businesses spread over multiple sites can be configured as
one virtual site providing equipment and operational savings.
The Strategic Path Executive Panel on Solutions for the SMBs
•Superior performance and flexibility in terms of
disaster recovery.
• Single point of call for service support .
TW
IP Centrex is the easiest solution to buy. Just choose
your handset and you pay a monthly fee for each
user. No matter how many offices you have, they are linked to
a centralized PBX. You can implement the same capability inhouse as well, but it would probably cost more and take longer
to implement.
Rob Pierce, MD, ANZ, LG-Nortel
Tim Watson, CEO, Activ
The criteria should be based on convenience and cost. If there
aren’t any ‘must have’ features with an in-house solution then
outsource it.
Question 5:
What role can VoIP trunks provide in
conjunction with an in-house
telephony system? Can internetbased VoIP services safely be used
for VoIP trunks? How can voice
service quality be guaranteed using
internet-based services?
RP
VoIP trunks simply provide additional connectivity to the
world. They can be employed as “tie-lines” enabling intersystem connection utilising direct or leased data lines, or SDSL
(or at least BDSL) services. They can provide a very economical
means of linking small systems or remote offices together.
Provided a substantial ISP hosts the services – preferably one
that uses its own infrastructure, and thus controls the quality and
reliability of service – reliability should be reasonable.
Modern encryption techniques employed by leading CPE
equipment suppliers ensure that voice transmissions over the
internet are secure. However, voice quality is another matter. While
the installation of devices such as switches supporting quality of
service can be controlled within an office environment, once the
data leaves that environment there are no guarantees. Even if
the ISP offers VoIP graded services, packet loss or congestion
can occur almost anywhere on the web. However, this situation
is improving quite quickly as the web expands and capacity
exceeds demand.
BD
A number of providers are offering cheap calls via VoIP
trunks. This service is usually promoted as an add-on
to an existing service where the legacy phone system is used for
calls requiring a toll quality service and the VoIP trunk for calls
that can tolerate variable quality, for example between branches.
Brad Dolphin, MD, ValueNet
Ray Smith, GM, ANZ, Samsung
This can be a useful product for businesses that are looking at
cost savings as the absolute key driver and their current call cost
is the only problem with their existing telephone service.
Due to its inherent design and underlying technologies, nothing
over the internet can be guaranteed. Some calls may be perfect
while others may not; and therein lies the problem. Guaranteeing
every call as toll quality requires a substantial increase in
investment from the service provider – which may not necessarily
translate into the cheapest call costs on the market.
TW
VoIP trunks to a packet switched network will work
seamlessly on business grade internet links if the ISP
specifically supports VoIP. Many business ISPs are looking at
doing this and some do already.
The ISP’s network either trunks VoIP traffic to the PSTN network
or routes it through to another user on their network. They cannot
control VoIP to VoIP quality outside of their network.
RS
VoIP trunks can be used to offer lower cost links to
the carrier’s network, resulting in significant savings in
overall communication costs. Multiple voice channels can be
provided over a single IP connection resulting in direct savings
on line charges in addition to lower call charges. For multi-site
businesses with high call traffic between sites or calls between
charging zones the use of VoIP trunks or tie lines for toll by-pass
can also result in significant savings.
If the internet-based VoIP services are secured appropriately then
they can be used for VoIP trunks. At present business grade voice
quality cannot be guaranteed when the VoIP traffic is sent via the
internet. When all major ISPs are able to offer class of service
control for customer traffic through the internet then business
grade quality of service for VoIP may become a reality.
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Question 6:
What criteria should SME customers
consider when choosing a service
provider for VoIP trunks or hosted
IP telephony services? How do
business customers ensure they have
number portability when choosing a
VoIP provider? What pitfalls should a
business customer watch out for?
BD
When making a decision about VoIP in general, and
specifically about which provider, you need to clearly
understand what your problem is with your current system. For
example, not being able to add new handsets because the PABX
has reached capacity; you require more flexibility in call flows to
provide improved business efficiencies, to support mobile workers
or to improve customer experience when calling the business.
Once the problems are clear, you can set about choosing a
provider. Ask your intended provider to explain what services they
provide in the following areas:
•Presales support. Are they willing to come in and
provide a no obligation evaluation of your
current systems and propose ways to improve
business call flow?
•Get the provider to explain how they
guarantee call quality
•Are any legs of a voice call going via the
internet or on a shared link without any quality
of service support?
•Will the provider provide any service
level agreements?
•Does your provider take full responsibility for the service?
This is especially the case when a VoIP trunk or hosted service
is provided over a third party (or existing) DSL service. The VoIP
provider may refer you back to this provider if you experience
voice quality problems.
TW
SME customers need to ask the right questions of
their intended VoIP or hosted IP telephony provider.
Availability, reliability and quality are the keys to success. SMEs
may find that some service providers offer attractive solutions that
are based on public internet access services, but we believe that
this form of connectivity is unreliable and unpredictable.
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Solutions should be built upon private network infrastructure –
which allows for the implementation of quality of service in order
to provide predictable call quality, performance and reporting for
the customer’s sites, as well as consistency through our network.
Businesses need also be aware that VoIP may require integration
and hardware expense.
RS
The major considerations SME customers should
consider prior to selecting a service provider for VoIP
trunks or hosted IP telephony services are:
•Does the service provider’s network support QoS
throughout the network including connection
between the customer’s site and the service
provider’s core network?
•Does the IP connection between the SME
customer’s site and the service provider’s network
have sufficient capacity to handle the voice and or
data traffic required?
•Does the service provider provide a written
service level agreement (SLA) consistent with the
customer’s requirements?
•Does the service provider’s SLA guarantee number
portability at the conclusion of the contract term?
•What, if any, back up is provided in the event of a
major failure in the service provider’s network?
Written guarantees from reputable service providers should
ensure a positive and cost effective VoIP experience.
RP
Czech novelist Milan Kundera said: “There are no small
parts, only small actors.” When it comes to choosing a
service provider for VoIP trunks or hosted IP telephony services
it’s best to stay with a large act. Use a provider, who will provide
SLAs and has core internet access with redundant network
infrastructure. Generally ISPs, carriers or Telcos that provide,
maintain and utilise their own infrastructure are a good starting
point.
Our best advice indicates that, as service providers purchase
blocks of (in-dial) numbers in a given location, at this time, number
portability cannot be guaranteed between providers. However, the
larger the provider, the greater the chance of securing portability.
If you’ve determined that the use of VoIP services can save
you money and improve business efficiency, it’s important to
remember that you are running a business and as such, should
employ business-grade services. There are many grades of DSL
services from a host of providers. If you purchase the absolute
cheapest service, chances are that’s exactly what you will get.
Finally, from a health and safety perspective, insure that remote
sites have a local line and that the system software will force
The Strategic Path Executive Panel on Solutions for the SMBs
“000” calls out on the local line. This is essential for correct CLI/
call trace and thus services dispatch address in the case of an
emergency.
Question 7:
What capex items should SMEs
include in their budget when adding a
VoIP system to their LANs?
BD
This will vary from business to business, depending
on the actual implementation. In many cases, the
real ‘gotchas’ occur in year two when the maintenance and
support cost of modern IT hardware and software hit home. In
some cases, the hardware vendors make more profit out of the
ongoing support costs than they do upfront.
TW
IP handsets, switch upgrades. Activ believes that one
expense often neglected within the migration from
traditional PBX systems to VoIP systems is the cost of integration
– particularly with hybrid systems that perform traditional and
next-generation services.
Question 8:
Service bundling: what services
should customers try to bundle with
their VoIP service? Are there any
services that should not be bundled
with a VoIP service?
RS
TW
RP
Collaboration with the desktop will be the next phase – allowing
our customers to easily integrate common messaging or even
their proprietary applications and services into their telephone
and/or IP video infrastructure.
The additional capex items required depends upon
whether a pure IP implementation is proposed. In this
case the SME would need to ensure the budget is available to
purchase QoS capable LAN switches which preferably support
power over Ethernet. In a multi-site implementations QoS enabled
routers and WAN will be required. UPS backup for the LAN
switches should be a strong consideration.
Specifying requirements when implementing a VoIP
solution is just as important as choosing the actual VoIP
system. It is vitally important that exhaustive research is undertaken
on your network requirements in the form of a comprehensive
network audit and that no shortcuts are taken when building or
readying your network for a VoIP solution.
Important capital expenditure items SMEs need to consider in
their budget range from:
•Cabling (minimum of Cat 5E) capable of supporting
the delivery voice and data throughout the building.
•LAN switches that support QoS, VLAN and PoE.
• Routers.
•Intra or interoffice bandwidth upgrade.
•Access Points supporting 802.11a/b/g allowing
WiFi handsets or indeed PDAs loaded with softphone
software to operate in conjunction with other wireless
devices in the office, such as laptops.
• Uninterrupted power supplies.
•Extra cabinet space for VoIP system.
• Increased internet services with SDSL connection.
• Hardware costs for a new pure IP telephone system or;
•Hardware costs to IP enable an existing system if
this is the selected option.
Business grade private networks. Activ has developed
much of its VoIP and IP Centrex offerings around quality
of service, which allows predictive call quality and control from the
handset through the WAN across the core to the handset or to
PSTN handoff.
BD
This primarily comes down to what link is used to
connect the business to the service provider and how
the service provider manages the various services on this link.
Many providers of VoIP have no control of the traffic on this link
and therefore cannot prioritise real-time critical packets such as
voice over general internet browsing and email traffic. In a fully
managed network where the service provider has full control of
all elements of the service (access circuit and backbone network)
there are no services that should not be bundled with VoIP.
RP
Bundling of services from a single carriage or service
provider has proved to be both successful and costeffective in recent years. Customers can maximise discounts in
this way but again need to ensure that the provider is utilising
substantially their own infrastructure and thus able to exert direct
control over all, or at least critical, services.
Any pay-out figures for early termination need to be high lighted
up front. Service level agreements should be a standard part of
any contractual arrangements, including services bundling.
Certainly from an accounting perspective, the “one-provider,
one bill” principle (or at least the minimum number of accounts)
makes managing a company’s communications costs much
more efficient.
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