IP Convergence: Beyond VoIP, Beyond Cost Savings

I appreciate the time you have spent in reading my blog and developing a thorough set of questions - great discussion!

 "You mention that several large MNC have chosen to buy a pre-built platform versus building their own. What do you believe have been the factors that precipitated this? Is it because of the 'operationally proven' aspect or are there other factors at play?"

Absolutely, the cost of the initial equipment deployment is a small percentage of the overall costs in building an operational proven capability.

Traditionally IT departments had a Telcom team for Voice, WAN team and LAN team supporting a variety of mainframe manufactures protocols (SNA, DECnet, etc .) . The acceptance of IP in both WAN and LAN environments blurred the distinction resulting in a 'merger' of teams to form a Data team.

VoIP transcends the current IT operational model in that Voice is data and managed by a Data team. However, the Data teams typically lack of telephony experience (DiDs, PRI, Moves, Adds and Changes, etc.) which result in risks in building a operationally proven capability.

"As a carrier, do you feel you will be the dominant supplier of hosted VoIP services over untraditional competitors to the mainstream market? What do you believe to be the carrier competitive advantage when voice, collaboration, and unified communication services are just 'another application on the network'? Have you had success with proving a positive RoI to a hosted VoIP solution for the customer owned PBX group?"

A thorough ROI requires one to capture existing, build costs and hosted/managed costs.

The following costs in managing an existing PBX should be considered:
1. Yearly maintenance costs
2. Yearly headcount costs
3. Parts and new headsets costs or risks

The following build costs should be considered:
1. Cost of upgrading LAN environments to support Quality of Service (wiring, switching and routing)
2. Equipment costs
3. Installation costs
4. Headcount augmentation , training and operational process development
5. Ongoing operational costs
6. Communication cost savings - loops, minutes, bandwidth

The following managed/hosted costs should be considered:
1. Cost of upgrading LAN environments to support Quality of Service (wiring, switching and routing)
2. Equipment costs and financing
3. Installation costs
4. Ongoing operational costs
5. Communication cost savings - loops, minutes, bandwidth

The decision basis is to compare a build costs to existing costs , managed/hosted costs to existing costs as well as build vs managed/hosted costs.

Further, the ROI needs toconsider other fiananical requirements such as: how captial is captured on the balance sheet, and technical requirements such as: local surviability.

Global Crossing is a domiant supplier for VoIP globally today and I would expect to maintian our position as we continue to add new and exiciting new offers.

"What type of training do you typically provide to your hosted VoIP customers? How long is it and what does it cover? Do you include examples of real-life business use of the technology?"

A move to managed/hosted is a move by an enterprise to outsource the risk of Capital, Technology Adoption and Operations. Training is focused on how to interact with Global Crossing using our web based portals, customer service organizations in realizing the end to end benifits.

"Is the same rigor applied to the network audit in a customer managed versus a hosted solution? Why or why not? Can the same thing be extrapolated to the security of the network in a customer managed versus a hosted solution?"

There's more rigor in a managed/hosted enviorment as the service provider is carrying the risk of providing an end to end service.

In unmanaged enviorments, Global Crossing is responisble to clearly defined Demarcations while the customer is responsible beyond the Demarc.

Security of a customer's network is a priotrity and begins within Global Crossing's owned and operated network. We insure a depth of defense strategy of our VoIP core and any connections that begin at a customer location.

"Do you feel the sales cycles differ between a customer built VoIP solution and a hosted one? To what do you attribute this to?"

In my experience I've seen customers who begin a discussion with managed/hosted, while others begin with a build discussion and move to consider managed/hosted to either justify the build or seek a lower cost in realizing the benifits of VoIP and convergence.

"When a main-stream market customer has a requirement for a contact centre solution, do you still believe that a hosted VoIP offering is the best solution? Do you have a hosted contact centre solution offering that integrates with your hosted VoIP solution?"

Contact centers have deployed IP/VoIP within their infrastructure long ago, the move to consider a hosted IP contact center is a move that is similar to managed/hosted VoIP. It's all about moving the risk of capital and operations to someone else that can leverage the scale of their operations.

"What is your SLA that accompanies your hosted VoIP solution? Do you have a variety of SLA's available, dependent on the customer's needs? Is this an additional chargeable component or is already factored into your pricing model? With your hosted VoIP solution, who has the responsibility for first, second, and third level support? What has been the feedback from your customer's in regards to this approach? In your experience, what has been the root source of most problems - the customer's LAN, the WAN, or the hosted service? "

Typically an enterprise is responsible for tier 1 support in managing their user base for pro-active service components such as: Move, Adds and Changes, Station number assignment. While the provider is responsible for tier 1 support in re-active service components like a service fault failure.

The agreed upon SLA sets expectations and arbitration in the event of remediation , in my experience I've seen customers who want to maintain some level of control (Moves, Adds and Changes) while others do not.

And finally, I hate to say this, but root source problems are typically found within a customer enviornment like a communications closet.

I'd like to hear your position and experiences on similar topics!!

I agree with your assessment of where the market is heading in regards to managed VoIP services.  VoIP services along with the broader category of IP Telephony and Unified Communications add a level of complexity to the network that a small percentage of organizations will be brave enough to take on.   The dilemma I see is convincing the dominant PBX owner group to consider a managed service.  They are used to touching and feeling the technology and like the feeling of being in complete control.  Often they feel they are utilizing a more cost effective solution over a hosted offering.  What do you believe will be the convincing factor(s) for this group?  The existing hosted market is indeed small, relegated to a few managed PBXs and a smattering of Centrex service.

You mention that several large MNC have chosen to buy a pre-built platform versus building their own.  What do you believe have been the factors that precipitated this?  Is it because of the ‘operationally proven’ aspect or are there other factors at play?

As a carrier, do you feel you will be the dominant supplier of hosted VoIP services over untraditional competitors to the mainstream market?  What do you believe to be the carrier competitive advantage when voice, collaboration, and unified communication services are just ‘another application on the network’?

Have you had success with proving a positive RoI to a hosted VoIP solution for the customer owned PBX group?

What type of training do you typically provide to your hosted VoIP customers?  How long is it and what does it cover?  Do you include examples of real-life business use of the technology?

Is the same rigor applied to the network audit in a customer managed versus a hosted solution?  Why or why not?  Can the same thing be extrapolated to the security of the network in a customer managed versus a hosted solution?

Do you feel the sales cycles differ between a customer built VoIP solution and a hosted one?  To what do you attribute this to?

When a main-stream market customer has a requirement for a contact centre solution, do you still believe that a hosted VoIP offering is the best solution?  Do you have a hosted contact centre solution offering that integrates with your hosted VoIP solution?

What is your SLA that accompanies your hosted VoIP solution?  Do you have a variety of SLA’s available, dependent on the customer’s needs?  Is this an additional chargeable component or is already factored into your pricing model?

With your hosted VoIP solution, who has the responsibility for first, second, and third level support?  What has been the feedback from your customer’s in regards to this approach?  In your experience, what has been the root source of most problems – the customer’s LAN, the WAN, or the hosted service?

With the move to VoIP, IP Telephony, and Unified Communications taking organizations further and further away from their core business, it would appear to make good business sense to outsource this component of communications in order to allow scarce and valuable staff resources to focus on projects or solve problems to increase revenues, reduce costs, or increase the level of customer service being provided.  These things work to give the organization a competitive edge and should be the focus of internal staff efforts.