Hosted Versus Premise based VoIP Deployment

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Hosted Versus Premise based VoIP Deployment

• By Mohamed El-Mohri
• CTO

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What is Hosted IP telephony?

• The ASP model for phone systems
• Service provider hosting the telephony Service
• Voicemail
• IP-Phones deployed on the customer data network,
  no need for a phone switch
• Provider connects the PSTN calls thru softswitch

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What is SIP Trunking?

• Where DID numbers are available.
• It provides the PSTN connectivity to a carrier
  via Internet
• Reduces or eliminates the need of a PSTN Line
• Replaces PRI circuits to Virtual circuits
• SIP trunks are scalable -gt increase number of
  channels unlike PRI (23 channels)
• No fixed geographical phone numbers anywhere in
  the world

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What is hosted VoIP services?

• Separating Telephony Services from Hosted VoIP
  applications such as
• Collaboration
• Conferencing
• Fixed to Mobile Convergence One Number
• Fax to email
• Hybrid Solution CPE IP-PBX with SIP trunking
• Keep Telephony Services local
• Hosting the Virtual Circuits and long distance

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Type of Services

• Conferencing
• Collaboration
• Remote workers
• Unified Communications
• Enterprise Inter-communications
• Contact Center

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Why Hosted VoIP?

• No PBX to maintain at any site
• Much lower capital costs
• Built in disaster recovery with Guaranteed Call
  Delivery
• No telco maintenance for IT staff
• No telco contracts to manage or PRIs to
  troubleshoot
• No annual maintenance fees
• MACs are free

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Hosted PBX vs. IP PBX Comparison
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Benefits of Hosted VoIP

• Low risk of technology obsolescence
• Disaster recovery Remote Fail-Over
• Transparent to user, no extra investment
• Reduced Total Cost of Ownership (TCO)
• Acquisition Cost
• Monthly Recurring Costs
• Annual Maintenance Costs
• Enhanced Productivity Headquarters and remote
  offices can take advantage of the same
  productivity applications and features,
  including integrated IP applications.

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Pros Cons

• Cost
• Future Expansion
• Control
• Flexibility
• Enhanced Features
• Ease of implementation

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Enterprise Value Proposition

• Enterprise-wide communication solution
• Single system for voice, data, video
• Self-paced migration plan to IP network
• Link all employees and locations without
  geographic limitations
• Improved total cost of ownership
• Converged access cost efficiencies
• Open standards lower cost equipment
• Web-based self-service lower MAC costs
• On-net voice calling lower long distance
• Improved service assurance
• Carrier-grade performance, survivability and risk
  management
• Increased employee productivity
• Speed projects and reduce travel with
  collaboration
• Tele-worker/mobile support find-me, follow-me

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Low TCO A case

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• Infotech, an independent consultancy, performed a
  three-year financial analysis on three IP
  alternatives
• IP-Enabled PBX
• IP PBX
• IP Centrex Hosted Solution
• for converged IP communications in both a
  100-user configuration with 10 teleworkers and a
  400-user configuration with 80 Teleworkers.
• Total Cost of Ownershipexcluded migration costs,
  upgrade costs for premises based solutions, and
  the differences in CPE costs.

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CPE transition to Hosted

• Hosted solutions are less likely to have
  post-installation problems because
  pre-installation site reviews are usually
  conducted by experts
• Because there is less need for customer
  participation in a hosted solution, hosted
  providers can provide a project time-frame with a
  good degree of accuracy.
• Hosted services can be deployed on a line-by-line
  basis. Premise-based equipment to a hosted
  service can co-exist with previously existing
  premise equipment.

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Cost Analysis Part1

• First Costs (Implementation)
• System
• Phones (300/IP phone, lt50/soft phone)
• Gateways
• Installation
• LAN Costs (in addition to existing network)
• Administrator Training
• User Training
• Soft Client Phones
• DSL Modems
• Remote Modules
• Local Facilities Installation (Trunks, PRI, ISDN
  and ADSL)
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• On-Going Costs
• IP-Centrex Line Charges (25/month)
• Facilities Charges (Local Trunks, PRI, ISDN and
  ADSL/Cable)
• Hardware Maintenance
• Space, HVAC, Power, Backup and Insurance

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Cost Analysis Part2

• Not Included In the Analysis
• Migration costs
• Savings due to one-phone at a time migration
  (large number of cost scenario permutations would
  have been impractical to present clearly)
• Cost to upgrade or replace PBX and IP PBX
  hardware or software (PBX equipment typically
  replaced after five years beyond scope. IP PBX
  is expected to need massive upgrades in years
  2-3, due to rapid technology change)
• End-user training (should be anticipated for IP
  implementations, but will vary widely. IP
  Centrex, for instance, has an option which will
  allow users to retain existing desk sets,
  eliminating such training costs)
• Economic benefits of virtual office (Teleworkers,
  multi-location, etc.). These soft benefits were
  covered and quantified in another Infotech study
  that appears separately.

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Advantages of Hosted

• With a hosted solution, problems are fixed.
  Premise-based solutions often require on-site
  visit to the premise. Hosted solutions circumvent
  this delay and can reduce down-time.
• In the hosted situation, a customer only pays for
  what they use in the premise-based solution, a
  customer pays for everything that they could use.
  
• Hardware and software upgrades can be managed
  more easily via a hosted solution than a
  premise-based solution..
• Maintenance issues can be more quickly and
  efficiently addressed in hosted solutions because
  the majority of equipment is centrally located

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Deploying Hosted VoIP

• Deployment Issues
• CPE T1 router, managed switches, VLANs, QoS
• Project Management 30-45 day implementation with
  many variables
• LNP Timing number ports and RCF
• Installation Upgrading data network prior to
  adding voice
• Implementation IT consultants dont know voice
  as well as data
• Training Very important!
• Work with customers IT consultant to coordinate
  network changes including DNS and IP address
  changes

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TCO Hosted vs. Premise IP-PBX
Lower TCO for all size enterprises in Softswitch
solutions
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Source TEQ Consult Group June 2005
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CAPEX and OPEX A comparison

Assumes PBX network infrastructure in place
Better CapEx, OpEx, and equivalent Telecom
Services for Hosted VoiP
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Source TEQ Consult Group June 2005