business services: sip trunking, hosted pbx and beyond · this white paper concludes by reviewing...

BUSINESS SERVICES: SIP TRUNKING, HOSTED PBX AND BEYOND

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© 2012 METASWITCH NETWORKS. ALL RIGHTS RESERVED.WWW.METASWITCH.COM

CONTENTS

1 Executive Summary 2

2 Keeping Business Customers Happy 3

3 Solving the Communications Puzzle 4

3.1 IP (SIP) Trunking 5

3.2 Hosted IP PBX 7

3.3 Pulling it all together 10

4 Where Next? 11

4.1 Choose the Best Partner: Metaswitch 11

5 Conclusions 12

1 EXECUTIVE SUMMARY

TODAY’S BUSINESS COMMUNICATIONS MARKET IS BARELY RECOGNIZABLE AS THE SAME ONE FROM FIVE OR EVEN TWO YEARS AGO. MOBILE PHONES ARE AN ESSENTIAL BUSINESS TOOL AND THREATEN TO SUPPLANT THE TRADITIONAL DESK PHONE FOR OFFICE WORKERS. TABLETS AND SMARTPHONE DEVICES COMBINED WITH SERVICES SUCH AS SKYPE OFFER USERS THE ABILITY TO MAKE VIDEO CALLS WITHOUT EXPENSIVE EQUIPMENT. AND THE UBIQUITY OF THE INTERNET, COUPLED WITH CHANGES IN THE REGULATORY ENVIRONMENT, MEANS THAT CUSTOMERS ARE NO LONGER TIED TO THE

INCUMBENT TELEPHONE PROVIDER FOR SERVICE.

Service providers therefore face a fundamental challenge: as these customers shift away from legacy telephony to next-generation communication, carriers that cannot offer a value proposition to their customer base risk losing their business to more nimble competitors. Conversely, service providers that take advantage of the new opportunities presented can deliver richer services to their customers, increasing loyalty and revenue.

Hosted business services represent one way for carriers to address this trend and while there are numerous complexities involved, this white paper makes the case for hosted as a viable solution today. In essence, we see a superior value proposition rooted in three areas - ease of use for customers, compelling applications and ease of provisioning and management for service providers. This white paper concludes by reviewing the portfolio of business services solutions from Metaswitch and highlighting the qualities that make them strong solutions for businesses to consider.

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2 KEEPING BUSINESS CUSTOMERS HAPPY

BUSINESS CUSTOMERS ARE VALUABLE FOR SERVICE PROVIDERS AND SPECIAL ATTENTION MUST BE PAID TO MEETING THEIR COMMUNICATIONS NEEDS. IN THIS SECTION WE LOOK AT SOME SCENARIOS FACED BY BUSINESS CUSTOMERS AND IDENTIFY THE CHALLENGES AND OPPORTUNITIES THAT THEY POSE TO SERVICE PROVIDERS.

Figure 1 shows the typical business network. This organization has a number of challenges. First and foremost is the requirement to pay for two pipes into the enterprise: one for voice and another for data. Finding ways to reduce this ongoing operational expense is one of the most common reasons cited by enterprises for modernizing their communications.

The second major driver behind modernization is the need to retire or replace aging premise-based PBXs. These devices were enormously successful in their day and represent a mature, yet declining, market. Apart from the fact that systems put in during the early-1990s heyday of the PBX are reaching the end of their natural service lifetime, these systems are also inherently ill-matched to the ways that business users communicate today. For example, they do not all offer web-based access to voicemail from anywhere, nor integration with field workers using mobile devices.

• Some enterprises have already identified this issue and have replaced or upgraded their premise-PBX to more modern systems. This is a partial solution, but doesn’t resolve all the issues. For example, an IP PBX may offer new features such as incoming call pop-up, but not web-based voicemail or an auto-attendant. Therefore, service providers should treat customers with IP PBXs as potential sales targets.

A final reason for modernization is to allow the enterprise to offer more services to its users. A good example is provided by home-office users. In the past, a home office user would have a second line installed by the phone company, and the enterprise’s PBX would be programmed to treat calls to that line from colleagues as an extension call. These days, that user could be anywhere in the world, and enterprises need systems that seamlessly integrate them into their communications plan no matter what device they are using to communicate. Table 1 summarizes some of the challenges faced by modern businesses. In the next section, we’ll look at how the Metaswitch Business Services portfolio of solutions help service providers address these challenges.

CHALLENGE COMMENT

Need both reliable phone and Internet service

• Requires paying for ‘two pipes’: voice and data

Premise-based PBX is at or nearing end-of-life

• High maintenance costs

• Static feature set

Integrate mobile/roaming users

• Cellphone costs high

• poor integration into business extension dial plan

Offer richer services (e.g. conferencing, video calls)

• Requires expensive equipment

• Poor ROI on capex

FIGURE 1 Layout for a “typical” legacy business customer

TABLE 1 Communication challenges faced by today’s business

customers

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3 SOLVING THE COMMUNICATIONS PUZZLE

THE TYPICAL BUSINESS PHONE SYSTEM LOOKS LIKE FIGURE 1 - ONE OR MORE T1 CIRCUITS DELIVERING VOICE TO THE CUSTOMER PREMISE, A PBX ON SITE AND A NUMBER OF PHYSICAL DESK PHONES.

However, as discussed above, the actual communications flow is more like this, with voice being just one component of a multi-screen experience:

In this section, we’ll outline the solutions that service providers can offer to simplify this picture and become an integral part of their customer’s communications.

Figure 2 Communications flows in a “typical” business

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3.1 IP (SIP) TRUNKING

SIP TRUNKING IS OFTEN THE FIRST STEP THAT BUSINESS CUSTOMERS TAKE TOWARDS NEXT-GENERATION COMMUNICATIONS. WITH A SIP TRUNK, THE CUSTOMER’S PBX IS CONNECTED TO THE PSTN VIA AN IP CONNECTION TO THE SERVICE PROVIDER. SINCE IP IS INHERENTLY MULTIPLEXED, THE SAME CONNECTION THAT CARRIES THIS TRAFFIC CAN ALSO CARRY INTERNET DATA TRAFFIC SUCH AS EMAIL AND WEB TRAFFIC.

Unifying the voice and data pipe to the customer premise simplifies their connectivity and offers cost savings to their business.

AFTER

FIGURE 4 Network after SIP Trunking

BEFORE

FIGURE 3 Network before SIP Trunking

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What can service providers do to ensure that they are taking full advantage of providing a unified voice/data stream?

• The user experience is critically important. Service providers should make sure that their platform has been tested and pre-qualified to work with their customers’ PBXs. One requirement that service providers should bear in mind is that their platform should support the SIPConnect standards. These standards ease interoperability by providing a standard way for PBXs to register with the service provider. Metaswitch’s MetaSphere Call Feature Server, for example, offers support for both SIPConnect 1.0 and 1.1 standards.

• The service provider should be able to offer overlay applications. It would be perfectly feasible for a carrier to deliver an IP pipe to the customer premise PBX and leave it at that. However, this would be a missed opportunity. Compelling overlay applications drive revenue growth and increase customer retention. For example, service providers should offer services that enhance the user experience, such as a hosted voicemail service that allows the carrier’s customers to retrieve their messages from anywhere. Figure 5 below shows some of the overlay applications that a carrier can offer.

• There should be clear, ongoing benefits to the customer. Service providers must show customers that there are continuous benefits to selecting them as their SIP trunking provider. The initial reduction in operating expenditure is welcome, but carriers must continue to compete even after the cutover. One way to do this is to show customers how they can continue to drive costs out of their network. Burstable SIP trunks are a good example. With fixed trunks, customers buy a pre-determined amount of capacity and hope that they will never exceed it. To insure against that happening, they order excess capacity to protect them against unexpected spikes in volume. With a burstable trunk, customers purchase the capacity that they need in regular usage along with an option to “burst” up to a higher limit if needed (for example, to handle the spike in calls following a coupon promotion). Carriers can charge a higher rate for calls in this zone, and customers do not buy more capacity than they actually need.

FIGURE 5 Overlay applications for SIP Trunking customers

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3.2 HOSTED IP PBX

HOSTED IP PBX SERVICES REPRESENT AN EVEN RICHER APPROACH TO BUSINESS COMMUNICATIONS THAN SIP TRUNKING. WITH A HOSTED IP PBX (“HPBX”) DEPLOYMENT, THE CUSTOMER’S PREMISE-BASED PBX IS RETIRED AND ALL THE SERVICES THAT IT OFFERED ARE HANDLED BY THE SERVICE PROVIDER’S NETWORK. FIGURE 6 AND FIGURE 7 ILLUSTRATE THIS POINT.

There are several noteworthy features of the “After” state (Figure 7).

• Smartphone users are now fully integrated into the business’ communication plan, no matter where they are. For example, a smartphone user running a suitable app (such as Metaswitch’s CommPortal Communicator for iPhone and Android) can be dialed like any other internal extension whether they are in the office or not.

• The service now supports softphones in addition to the traditional desk handsets, allowing users a choice of devices on which to communicate.

BEFORE

FIGURE 6 Network before Hosted IP PBX

AFTER

FIGURE 7 Network after Hosted IP PBX

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VALUE PROPOSITION MATRIX FOR HOSTED IP PBX SERVICES

Table 2 below summarizes the core elements of HPBX services, along with the key benefits for both service providers and

businesses. This provides a more complete picture of the overall value proposition in that each attribute delivers a dual benefit for the service provider – first is how it helps their operations, and second is how they can gain new opportunities to build business with their customers.

HOSTED IP PBX ATTRIBUTE BENEFIT TO SERVICE PROVIDER BENEFIT TO CUSTOMER

Network operations to support the service are carrier-based

Leverage existing infrastructure and provide a new service to customers

Removes the task of network management and even allows the business to downsize or streamline IT operations

Communications services are IP-based New services to offset declines in legacy telephony

Can now integrate telephony with other modes to improve productivity

Offerings are software-based and draw from a broad range of applications

Services can easily be provisioned and updated over their network

Always have the most current versions of applications without the need to manage this internally – many of which cannot be supported with legacy systems

Offerings are essentially service-based and priced as a consumable resource

Represents a new form of recurring revenue from end user licensing fees

Reduces capital expenditure and lowers the cost of communications

IP services are flexible and standards-based

Can be offered to all customers, regardless of their existing phone system or vendors used

Can adopt hosted without replacing equipment, then add features/services over time

IP is a borderless technology Can offer hosted services to customers beyond physical footprint of own network

Economical, easy and fast way to extend services to branch offices, new sites and remote workers

End-to-end IP connection via SIP trunking Enables new services that can be monetized and creates stronger bonds with customers (such as HD audio/video)

New services improve employee productivity and lower trunking costs - but can also help differentiate the business from its competitors

Business continuity via 24/7 uptime and remote data backup

New revenue opportunity and distinct capability to bind customers to you

Like insurance, this is peace of mind to keep the business running, even under adverse conditions

Delivers a consistent, rich, integrated user experience

A better value proposition than legacy telephony, and one that is fully under their control

Can move on from the limitations of legacy telephony and provide tools to make all employees more productive – wherever they are

TABLE 2 Value Proposition Matrix for Hosted Services

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Our research indicates that this set of value drivers ultimately translates into a superior end user experience for customers. Reducing the matrix to its core values, hosted services deliver three primary benefits to the end users, the business itself and the service provider:

1 Ease of use for end users.

2 Value-added applications and services for businesses.

3 Ease of deployment and management for service providers.

Each of these elements can be further defined by the following examples:

EASE OF USE FOR END USERS

• For the end user, the value of hosted really comes out in its ease of use. The applications must be as intuitive as the telephone to gain adoption. Applications such as visual voicemail or an integrated message inbox may not be obvious to everyone, but once understood, they quickly become indispensable.

• Perhaps equally important for the end user experience is the accessibility of these applications. Hosted enables this by having a browser-based portal. Not only is it easy to use, but it gives employees full access from any broadband connection. This form of accessibility makes it easy for employees to work anywhere – their desk, a branch office, from home, or on the road.

• Hosted also supports all modes of working. This is largely made possible by SIP, the standard for multimedia, real-time IP communications. This goes well beyond what legacy services can provide by enabling a consistent experience and interface across all types of screens, devices and endpoints. With the exploding adoption of smartphones and tablets, this capability is now essential.

VALUE-ADDED APPLICATIONS AND SERVICES FOR BUSINESSES

• Hosted IP PBX can match the core feature set of a legacy PBX at a fraction of the cost - but more importantly, supports an essentially unlimited ability to add both new and custom features. Customization is key, as it allows the service provider to deliver applications that address specific business problems for their customers. This translates into a stronger value proposition than one based on the sheer volume of features supported by a legacy PBX.

• Hosted offers not just new capabilities but ones that businesses will find compelling. By supporting all modes over a common network (voice, email, chat, text, video, etc.), hosted brings businesses into the realms of Unified Messaging and Unified Communications. This sets the stage for richer, collaborative ways of working that go beyond everyday workflows. When applications can also be used to drive business processes, their value becomes compelling in ways that legacy telephony never could.

• Service providers can add new layers of value by extending hosted offerings beyond the desk phone to the desktop, the smart phone, the home office, ad hoc conferences, etc. SIP trunking is a key enabler of new capabilities that make these extensions truly valuable, such as HD audio and video. This paves the way for new applications that could not be supported in either a legacy or IP PBX environment, or would be possible but overly expensive with an IP PBX. The key here is for the business to understand that IP-based innovation is constant, and to leverage this they need SIP trunking as part of the hosted solution. There is also an important benefit here for carriers in that SIP trunking allows them to maintain control over customer connectivity as they move away from legacy trunking, either in full or in part.

EASE OF DEPLOYMENT AND MANAGEMENT FOR SERVICE PROVIDERS

• Provisioning hosted services is a key aspect of the complexity mentioned earlier. One example would be the initial configuration of all the phones or later on, the need for system-wide upgrades. With hosted, IT managers no longer need to do this, nor do they need to tie up resources with routine help desk inquiries. The easier hosted is to provision, the faster a service provider can go to market with minimal disruption for customers. This can be a key differentiator, especially when competing against an incumbent who will likely be less agile in responding.

• Ongoing management is also much easier with hosted, allowing service providers to be more responsive to custom-ers. For example, truck rolls are not needed for Moves, Adds and Changes (MACs). Not only does this reduce the cost of new deployments, but means that MACs can be done quickly – both of which can be deal-makers for businesses on the fence about hosted.

• Longer term, the efficient management of hosted services builds loyalty with customers and increases opportunities to sell or introduce new services. This is particularly important as communications services migrate to the cloud and by association erodes the value of the physical network infrastructure that most service providers are built upon.

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3.3 PULLING IT ALL TOGETHER

IN TABLE 1, WE SHOWED THE COMMUNICATIONS CHALLENGES THAT A TYPICAL BUSINESS FACED. WITH THE INFORMATION PRESENTED IN THE PREVIOUS CHAPTERS, WE CAN NOW REPRODUCE THAT TABLE AND UNDERSTAND HOW BUSINESS SERVICES SOLUTIONS ADDRESS THEM IN TABLE 3.

THE NEW USER EXPERIENCE

The range of features enabled by Business Services is so rich that an example may help to show some of the possibilities.

“Mary” is an employee at ExampleCorp, a business customer of an innovative service provider. Here is a typical day.

• 6:30am: It’s early in the morning for Mary, but her colleagues in the overseas office have been busy overnight. Using the CommPortal Mobile app on her cellphone, Mary is able to catch up on voicemails over breakfast.

• 7:00am: Something important came up and requires a quick call to resolve. Mary calls her peer overseas using the CommPortal Communicator softphone and discusses the issue. Since Mary is at home, the call is carried over her home Wi-Fi/broadband connection.

• 7:15am: Time to travel to work. The call is still in progress, but no matter — Mary can use the Call Jump feature to quickly transfer the live call to her cellphone without interrupting the conversation.

• 11:30am: In the office, Mary uses CommPortal Web to review voicemails. She needs to call another colleague back, so she uses CommPortal Assistant click-to-dial. It calls her on her desk phone, and then connects her to her colleague.

• 1:00pm: Time for Mary to run her weekly conference call. Mary calls into the N-Series conferencing bridge and can see who is present via her web browser while talking to her co-workers on the phone.

• 1:05pm: While Mary is on the phone, her boss calls. CommPortal Assistant notifies her of the call and, a few seconds later, shows her a speech-to-text transcription of the voicemail that was left.

• 3:00pm: The overseas product designer won’t be in for another few hours, but he needs to see the mock-up that Mary’s team has created. Using MetaSphere EAS video messaging, Mary leaves him a video message showing her demonstrating the new features.

• 5:00pm: Mary is getting ready to leave work, but is expecting a call from a supplier. Using CommPortal Web Easy Call Manager, she quickly configures her service so that calls to her office line are transparently routed to her cellphone.

CHALLENGE BUSINESS SERVICES SOLUTION

Need both reliable phone and Internet service • QoS capable to maintain quality

• Burstable trunks to manage variable capacity needs

Premise-based PBX is at or nearing end-of-life • Hosted IP PBX puts features in the cloud

• Customizable and extensible feature set

Integrate mobile/roaming users • Mobile apps, including soft-phone

• Seamless integration into business extension dial plan

Offer richer services (e.g. conferencing, video calls) • Requires no equipment

• Zero capex outlay

TABLE 3 Communication challenges -- resolved by Business Services

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4 WHERE NEXT?

THIS WHITE PAPER HAS PROVIDED A BRIEF OVERVIEW AND RATIONALE FOR SIP TRUNKING AND HOSTED IP PBX SERVICES, WHICH WE BELIEVE PRESENTS A STRONG VALUE PROPOSITION FOR BOTH SERVICE PROVIDERS AND BUSINESSES OF ALL SIZES.

In reality, few carriers have the internal ability or desire to develop their own hosted platform and deliver a complete end-to-end solution, even those at “Tier 1” status. Moreover, the very nature of the shift to “IP for everything” means that the market is elastic and competition fierce -- an incumbent telco can easily be supplanted by a fast-moving cable or agile CLEC provider, for example. This represents both threat and opportunity, depending on who you are. Incumbent telcos have not embraced the hosted model as readily as competitive carriers, some of which are built entirely around IP-based technology.

These differences have been noted by businesses, and industry research confirms an increasing preference among businesses to move from their incumbent when moving on from legacy services. One example is a recent study from Inzenka that focused on the hosted VoIP market for SMBs 1. A key finding was the declining incidence of SMBs deploying VoIP with their incumbent telco. In 2007 the incidence was 26%, but had dropped to 19% in 2010. Similarly, among those not yet using VoIP, the incumbent telco came to mind only among 17% of SMBs.

These service providers face a challenge in the sense that they cannot bring hosted services to market on their own but can see there is a growing demand among their customers. VoIP is the anchor service for hosted and the Inzenka market study discussed earlier validates this in several ways. In 2010, 89% of SMBs were either “Interested” or “Very Interested” in VoIP, and that’s up from 66% in 2007. Not only that, but they are interested now; 19% of this audience are interested in buying during the next year, and almost half – 48% - are interested in buying within the next two years.

To the extent a service provider sees either growing risk among their legacy customer base or an opportunity to offer something better to prospective customers – that should define the importance of finding the best partner possible for hosted services.

4.1 CHOOSE THE BEST PARTNER: METASWITCH

METASWITCH IS A VENDOR WITH FEW RIVALS FOR ITS LONGEVITY, CUSTOMER BASE OR TRACK RECORD OF INNOVATION. FIGURE 8 BELOW ILLUSTRATES THE KEY ELEMENTS OF THE METASWITCH BUSINESS SERVICES SOLUTION PORTFOLIO.

A focus of this white paper has been defining the value proposition, and the following are key areas where the Metaswitch Business Services portfolio addresses this very well:

• At a high level, Metaswitch provides a complete solution with both SIP trunking and a comprehensive application suite covering both core PBX features and the broader spectrum of “unified communications”. With this, service providers are in a position to retain customers regardless of their needs and immediately tap into the areas of growth that are rapidly displacing legacy services. We see this being important for two reasons.

• SIP trunking allows carriers to maintain the connectivity piece of the business as customers move away from TDM.

• The addition of SIP trunking to the hosted solution makes for a stronger offering that leverages the full potential of IP-based communications. For example, the Metaswitch CommPortal web GUI has been developed to make it easy for end users to manage and customize all their communications applications, with a unified mailbox to centralize all forms of messaging, including mobility. Aside from providing a consistent interface for all modes/screens, the portal is a prime branding opportunity for service providers.

FIGURE 8 Metaswitch Business Services Solution set

1 Small and Medium Business VoIP Market Study, Inzenka

Research, November 2010

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• Deep experience. Metaswitch has helped carriers across the world achieve success in hosted business services, and offers one of the widest and deepest experience pools in the industry:

• Domain consultancy leverages our deep experience in business services to help carriers succeed in the demanding business services market. We understand the end-to-end nature of delivering business services and can provide assistance and consultancy in areas including design, deployment, support and interoperability.

• Engineering and professional services. Our Professional Services division can help deliver an end-user experience that is tailored to your branding and corporate style. For example, we can take care of submitting mobile apps to the Apple and Android app stores that have your logo, color scheme and digital signature.

• Go-to-Market research and assistance. Our MarketVisions program provides advice, consultancy, brand-able collateral and go-to-market assistance for carri-ers ready to take on business services.

• World-class support. Metaswitch support is consistently rated #1 in the industry by our customers. Our engineers have in-depth experience of helping carriers deliver business services.

• Extensive interoperability — provides great flexibility for carriers to offer Hosted IP PBX to their customers. This holds for all types of endpoints but is particularly notable for HD-compatible IP phones, which helps showcase the value of SIP trunking. When businesses experience HD quality, all IP-based applications become more compelling, thus ensuring greater adoption and benefit to end users.

• Mobility – we believe this is the biggest growth engine for hosted services, but also one of the most challenging. Our Business Services portfolio provides a compelling set of mobile features that interwork seamlessly with the desktop, plus more advanced smartphone applications such as ad hoc conferencing, visual voicemail and speech to text. By being downloadable from the service provider, these smartphone applications provide another branding channel.

• Video is another strong growth area for service providers, and the CommPortal Communicator interface interoperates with all the leading video phones and video conferencing systems as well as permitting video messaging between endpoints. This allows for seamless communication across all SIP endpoints, and makes video both compelling and highly accessible for all types of customers.

• SIP trunking adds significant value for hosted services, and the Metaswitch solution is fully SIPConnect compliant. This enables service providers to support the full gamut of legacy and hybrid scenarios, which in turn means that businesses can move to hosted with minimal disruption to their existing telephony infrastructure, regardless of which telephony vendors are being used. This means that carriers can add SIP trunking to any of their customer deployments. Business Services will interwork with all vendor scenarios – Avaya, Nortel, Cisco, Siemens, Aastra, Mitel, NEC, Panasonic, etc. With this capability, they can enhance all customer deployments with advanced features such as HD audio and video.

• Service provisioning and network management were cited earlier as being more challenging than expected for most carriers. Behind the Business Services portfolio is the MetaView Network Management System, including the MetaView Explorer and MetaView Web administration portals, which may be transparent to business customers but is a core competence of Metaswitch, and completes the offering by making HPBX as easy for the carrier to manage as it is for their subscribers to use. Additionally, the Metaswitch solutions support industry standard interfaces for bulk and automated provisioning, easing the process of service order activation.

• Finally, the best way for service providers to retain customers and grow revenues is to have a fresh value proposition. Shifting the base from voice telephony to communications is a good starting point, but service providers must prepare for and facilitate a bigger shift from premise-based to hosted. In essence, the key value drivers will transition from network-based connectivity to cloud-based services and applications. Metaswitch has been at the forefront of this evolution, and our Innovators Community supports a dynamic ecosystem of third party developers who work with their APIs to drive a steady stream of new applications for businesses. For example, Metaswitch supports click-to-dial from Salesforce via an app written for that platform against the Metaswitch APIs.

5 CONCLUSIONS

There is a lot to consider here, but our overall conclusion is that Hosted Business Services from Metaswitch reflect the key qualities and attributes that define the type of solution that carriers need today to deliver value for their customers.

Metaswitch understands the complete set of needs, not just in terms of how carriers do business but also for what their enterprise customers need to stay competitive and leverage the latest in IP communications technologies.

business services: sip trunking, hosted pbx and beyond · this white paper concludes by reviewing...

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