Hosted VoIP for Business: What You Need to Know to Determine if it is Right for Your Organization.

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1 Hosted VoIP for Business: What You Need to Know to Determine if it is Right for Your Organization. An Industry White Paper from Alteva

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3 Summary No matter whether your company employs five or five thousand, its communications system is a vital priority. It is the main gateway to your customers, partners, investors and more. Selecting a phone system and vendor is one of the most complicated choices for decision makers, because there are multiple options, and each vendor you speak with will tout their option to be the best for your business. Before making a selection, it is important for you to educate yourself on Hosted Voice over IP, as well as the other options. This paper has been created to help you to: 4Understand 4 the various options and each of their pros and cons 4Learn 4 some common terms associated with VoIP 4Take 4 a detailed look at the business drivers for Hosted VoIP 4Review 4 the steps required for planning the move to Hosted VoIP By taking the time to review resources such as this paper, you can make a more educated purchasing decision for your organization. 3

4 Phone System Options Overview To make the best choice in selecting a phone system, it is imperative for the decision maker to clearly understand their needs and how each system will or will not fit into their environment. Key System Unit (KSU) A key system is the most basic of on-premise phone systems, and has been installed in many small businesses. With this system, the functionality is very limited and it lacks any voice and data integration capabilities. It has served as a common solution for business that enabled companies to avoid purchasing a full-blown PBX, before the existence of Hosted VoIP Solutions. Premise-based Private Branch Exchange (PBX) The premise-based PBX was first installed in 1968 and has gone through many versions, analog, digital and finally on-premise Voice over IP (VoIP). VoIP is the routing of voice conversations over the Internet or an IP-based network such as a Point-to-Point connection between two offices. Hosted Voice over IP (VoIP) This option puts a VoIP system in the Cloud, which means it is being managed outside of your location in a secure data center. 4

5 PHONE SYSTEM TYPE PROS CONS Key System Unit (KSU) Good for smaller companies Provides standard features Not as feature-robust and customizable as a PBX Requires costly installation, support and maintenance Requires wiring all outside phone lines and individual phones to the main control units Moving the phone system is a cumbersome event and requires relocation of the server Cumbersome for multi-location customers Premise-based Private Branch Exchange (PBX) including VoIP Robust Feature Set Less Costly for a Large Concentration of users to Usage Ratio in one Building Supports SIP Trunking Expensive upfront costs Expensive ongoing maintenance costs Limited disaster recovery capability Own and manage your hardware onpremise Requires dedicated IT person to manage the system Costly way to address Multi-locations No refresh of technology Hosted VoIP System Robust Feature Set Management of the system in the Cloud eliminates the need for additional resources Since the Call Control is in a secure data center outside of the customer premise telecommunication continuity is almost always guaranteed. 70% reduction in start-up costs Since VoIP is data, in this solution a 30% reduction in monthly telecom spend is realized through voice and data consolidation No ongoing maintenance fees Easily scalable up or down Since any new features are developed in the Cloud all new functionality is available through simple upgrades and is passed down to its customers at little to no chargemitigates technology obsolesce Not all Hosted VoIP Service providers platforms are built for the Enterprise 5

6 VoIP has skyrocketed from non-existent to a massive application targeting telecom carrier s voice revenues, explained George Van Horn, senior analyst with IBISWorld. Common VoIP Terms Explained SIP and RTP Session Initiation Protocol (SIP) and Real-time Transport Protocol (RTP) are the two components of a VoIP call. Session Initiation Protocol (SIP) is an application-layer control (signaling) protocol for creating, modifying and terminating sessions with one or more participants. These sessions include Internet telephone calls, multimedia distribution and multimedia conferences. SIP is an application layer call signaling protocol that initiates, modifies and terminates media sessions. It is text based and modeled on the request/ response method used in HTTP. SIP is a highly flexible protocol used not only for voice media, but Instant Messaging and video media as well. Many Hosted VoIP networks are built using the SIP signaling protocol. Other VoIP signaling protocols include MGCP (Media Gateway Control Protocol), SCCP (Skinny Client Control Protocol-Cisco Proprietary) and H.323. The Real-time Transport Protocol (RTP) and RTP Control Protocol (RTPC) is a standard packet format for delivering audio and video over the Internet or data networks. RTP is the streaming audio and/or video portion of a VoIP call or video conference. Session Border Control A Session Border Controller (SBC) is a VoIP session-aware device that controls call admission to a network at the border of that network and performs call-control functions to ease the load on the call agents within the network. The SBC is a specialized SIP-aware firewall that protects the softswitch platform from Denial of Service attacks through the use of its multi-processor signaling pipelining architecture. 6

7 Hosted VoIP Business Drivers Superior Quality Many people s first exposure to VoIP has been through residential or free services such as Skype, or through lower-end providers, giving the impression that VoIP quality is poor. But, there are providers that have built their Hosted VoIP solution to meet the needs of enterprise customers. With a broadband network designed and built specifically for voice quality, Alteva is one of the only service providers that solves the common voice quality issues and delivers the clarity, consistency and reliability that is critical to business. Alteva s bandwidth is sensitive to voice data and flexes to give voice the necessary bandwidth while other networks fail to distinguish between voice and common data transfer. The VoIP industry grew by % over the past decade, according to industry research firm IBISWorld. A Real ROI Whether your business is working with an existing PBX or looking to overhaul its entire phone system, Alteva s enterprise level solutions can bring you thousands, if not tens of thousands, of dollars in savings per month. The tremendous savings in local and long-distance calling is well known, but the ease of Alteva s system also delivers unexpected savings in the form of minimal management, maintenance and update costs as compared to a premise-based system. Lower Total Cost of Ownership (TCO) Cost is always an important component in the decision making process. Hosted VoIP users will see an average 75 percent reduction in startup telecom expenses over an on-premise system, but it is also important to note that they will reduce their total cost of ownership by up to 30 percent as compared to an on-premise PBX system. Unmatched Reliability Expect nothing less than clear, reliable service every time you pick up the phone from Hosted VoIP networks built specifically for large, global business. This type of hosted VoIP system delivers clear, crisp, uninterrupted calling, with weather-proof contingencies, future-proof strategies and disaster recovery measures firmly in place. Powerful Features Hosted VoIP systems offer a comprehensive set of phone and network features. Users enjoy state-of-the-art telephony and powerful options such as Hi-Def voice, call recording, call log reporting, conference calling, call forwarding, mobile access and much more. The ability to adjust these features as needed is right at the user s finger tips with some Hosted providers, through a Web portal or advanced applications that bring telephony features to the desktop. 7

8 Total Control With an easy-to-use interface, such as the above mentioned Web portal, businesses are free to maintain, update and expand their telephony system in their own time and at no extra cost. This is a big advantage, especially over the legacy PBX systems that are resistant to change and require the added expense of expert technicians to enact even the smallest update. Completely Scalable Need to add extensions? Opening a new satellite office? Want to upgrade to Hi-Def? With a Hosted VoIP provider, it s fast, easy and very affordable. Scalability is one of the keystones of Hosted VoIP system and because small companies get bigger and big companies become huge, Hosted VoIP is a great choice for every size organization that is concerned about scalability. Enhanced Productivity Especially when used as part of a complete Unified Communications solution, the mobility; find me, follow me and conferencing features such as Alteva Anywhere; Simultaneous Ring and conferencing capabilities make Hosted VoIP a key to increasing your employees productivity by enabling them to work more efficiently. These features become more and more vital every day to fast-paced national and global workforces with a need to communicate effectively any time, from any location to any location. With a cloud-based VoIP system, companies see improved employee efficiency and customer satisfaction because sales people and on-the-go executives can do business from any location, without ever missing a call. A Hosted VoIP system also helps remote offices and mobile workforces communicate and collaborate more effectively. Disaster Recovery/Business Continuity Another reason that companies choose Hosted VoIP over its competitors is because it is more geographically diverse to assure business continuity and disaster recovery. For example, Alteva s Core Call Processing Platform is built out in multiple datacenters that are diversified in regionally dispersed locations. Each datacenter is identical in design and is capable of processing all calls. Inbound numbers are registered to a specific carrier, but Alteva maintains multiple peering connections in each of its datacenters to process inbound calls. Outbound calls may be processed through each datacenter for regional redundancy, but also through multiple carriers as outbound is not carrier specific. 8

9 Steps for Planning the Move to Hosted VoIP Migrating to Hosted VoIP can be easy for some and overwhelming for others. There are many factors that go into purchasing any new phone system, so it is important to create a process in order to make an informed purchase. Before just delving in blindly, make a plan. Items to factor into your plan include: 4Identify 4 the decision making process. Because companies only purchase a new phone system every 7-10 years, the internal approval process for purchases may not be clear. Therefore, you could end up investing a lot of time working with multiple vendors only to discover that the President of the company already had a vendor in mind. That s why it is critical to understand how your company handles your purchasing recommendation. If you do not have this internal conversation before starting to speak with vendors, you may end up wasting your valuable time and experience a lot of frustration. 4Determine 4 how many phones you will need. Before speaking with any vendors, you should gather a count on the number of phones that you would like to include on a new VoIP system. When you start speaking with vendors, you should ask for a rough proposal based on this rough phone count. 4Ensure 4 a data jack everywhere you would like a VoIP phone. With VoIP it is important to have a RJ35 or data jack everywhere you would like a VoIP phone, including the lobby, kitchen and other common areas. Since VoIP is a data product it cannot use traditional telephone cabling. The good news is that almost all VoIP phones have a built in switch which allows a user to plug their VoIP phone into the wall and the computer into the back of the phone. Which means only one data jack is needed for both the user s phone and computer. 4Determine 4 how many locations will be getting a new system. For some organizations, it makes sense to roll out a new system to all locations at the same time. For others, it makes more sense to implement the new system one location at a time. This decision is made based on a variety of factors such as budgets and training consideration for users. It is important to consider both options and decide which makes the most sense for your organization. 4Details 4 of existing vendor contracts. Timing is usually critical to the decision to switch to VoIP, so it is also important to research when 9

10 the decision can be made without incurring penalties from previous vendors. Many times people are under maintenance agreements with existing vendors. That s why it is vital for you to do your due diligence and review the contracts you have with your existing vendors. 4Cost 4 Information and Budgets. You should gather information to compile a cost justification for moving to VoIP. Some of the items to include are: the number of phone bills you have; the existing costs each month; monthly or seasonal bill increases; hidden costs like upgrades, maintenance and PBX repairs. The better you can inform yourself and the decision maker about your current system, the easier your choice will be in purchasing a new one. Once you have gathered your contracts and invoices, you must identify the budget. You will need to consider both capital (hardware) and operational costs. Aside from phones, you must consider other hardware needs such as switches. You should also factor in operational costs such as upgrades, repairs and changes to the system, as well as your building lease(s) and how long you will stay at your current location(s). 4Include 4 All Costs. Don t forget that it is not just the hardware you are purchasing. Be sure to find out about the local and long distance charges, taxes and fees. Also, be sure to include the costs for T1, DSL lines, cable, etc. Once this is all laid out, you can then make a clear, informed choice about which system is best for you. 4Features. 4 It is important to determine which features are most critical to your organization by developing a needs and benefits analysis document that allows you to compare and contrast phone systems to the needs of your organization. First, you should identify the features your employees are currently using, then what features are missing that your company needs. As you start to speak with vendors, you will learn about the benefits that a feature rich VoIP phone system offers. 4The 4 Transition. In addition to features and functionality, it is important to gather information from the vendors you speak with regarding such issues as training, roll out, and how your company will adapt to a new system. It will be important to assure that your users will receive proper training; otherwise they may not use the more sophisticated options the system offers. If users are not informed about and comfortable with using the features, not only are those options going to waste, but so is the company s money. Be sure to properly analyze the user capabilities to assure they could expect to receive the level of training that they need on a new system. 4Think 4 About the Future. Remember, a phone system purchase is a purchase intended to last for many years. That s why it is important to investigate the topic of technology obsolescence and scalability. You 10

11 need to find out how easy or difficult it will be to make moves, adds and changes in the future. It is also wise to find out if there are charges for making system updates and for maintenance. Summary Purchasing a new phone system can be a daunting task because there are many elements to consider and weigh in making the decision of what system and what provider to select. It is a very important purchase to your organization, so there is much pressure on the people tasked with recommending a system and vendor. In the premises-based UC solutions market, we expect to see declining revenues for PBXs, audio bridges, and unified messaging solutions; however, these will be offset by increasing revenues in presence/im servers, Web conferencing servers, team workspaces, and video endpoints and infrastructure...in addition, we are seeing significant interest and now some large deployments in the UC services market, and we expect managed/hosted UC services to grow tremendously. Brent Kelly, Senior Analyst & Partner, Wainhouse Research That s why it is imperative to educate yourself and anyone involved in the decision. Even if you enter the process without knowing much about Hosted VoIP, you will gain knowledge the knowledge set you need to make a decision by reading papers such as this one and through your conversations with vendors. About Alteva Based in the birthplace of our nation along Independence Mall in Philadelphia, Alteva delivers cloud-based Unified Communications solutions across all 50 states and four continents. Alteva provides the most reliable network, the most responsive and proactive customer service, and the best value to customers in the industry. The highest priority at Alteva is providing every customer with all their communications needs including cloud-based Voice over Internet Protocol (VoIP), Microsoft Communication Services, Fixed Mobile Convergence and Advanced Communications Applications for the desktop. Building and maintaining a team of people with outstanding character, work ethic, and dedication to our mission enables this to be accomplished. 11

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