Overcoming the Limitations of IP Centrex

W H I T E P A P E R Overcoming the Limitations of IP Centrex

OVERCOMING THE LIMITATIONS OF IP CENTREX There is a plethora of marketing hype today espousing the virtues of IP Centrex to the Small and Medium Sized Business (SMB) market. Although these carrier offerings initially sound promising, a close look shows that the real beneficiaries of IP Centrex services are realized by phone companies and equipment manufacturers not by the SMBs themselves. SMBs can realize far more value at far less cost by selecting a managed service for business communications. This whitepaper defines IP Centrex and explores some of its myths. It also contrasts IP Centrex with the CrystalBlue Voice Service offered by Whaleback Systems and shows the advantages of a monitored business communications service over an IP Centrex service. BUILDING FROM TRADITIONAL CENTREX SERVICES Carriers have been offering Centrex services for decades. They originally included only minimal sets of voice features, such as four-digit dialing plans, three-way calling and call-transfer functions. Through the years, many phone companies gradually added more advanced features to meet market demand. Centrex was a profitable way for phone companies to provide PBX-like services from centrally located Central Office (CO) facilities. A CO would support the calling needs of any number of businesses, allowing carriers to realize recurring revenue streams while providing a lucrative market for manufacturers of large PBXs to sell their products. Carriers reached out to businesses with the value proposition that the business could benefit from rich telephony services without the hassle or overhead of purchasing and maintaining premises-based equipment. EXPLORING IP CENTREX Carriers have recently shifted toward IP Centrex by offering hosted Voice over IP (VoIP) services that theoretically take advantage of feature-rich voice services and the cost-efficiencies of the Internet. The efficiencies of VoIP bring many advantages that cannot be provided by traditional Centrex services, such as access to more flexible calling plans, lower-cost international calling, scalability and integration with PCs and data networks. To offer these services, carriers deploy a large VoIP system and try to make it attractive to SMBs by logically carving it up into a one-size-fits-all system by making centralized services available to many customers. The equipment and application vendors serving the carriers do not have a market imperative to build solutions designed for SMB requirements; they have economic drivers that encourage them to build large systems and applications that can be used by multiple enterprise customers. Carriers offering hosted VoIP services began using the term IP Centrex more for marketing reasons than to accurately reflect the value of the service. Centrex was originally developed so that large enterprises could benefit from huge, complicated voice systems that needed to be centrally located and managed. The costs of these complicated systems were passed on to the customers. Today s IP Centrex services are modeled in the same form and function and they pass the costs onto the customers while still suffering from lack of functionality. The reality is that most of the IP Centrex services offered today are neither feature rich nor cost efficient. THE ECONOMICS OF IP CENTREX The term Centrex implies centralized and exchange, so at a glance it appears that IP Centrex services provide advanced IP services. Carriers promote these services as centrally managed services with minimum cost and complexity. Many highlight that these services are centrally managed, without the need for internal IT staff to maintain business communications. But the reality today is that IP Centrex services rely on centralized and shared equipment and applications. Any problem anywhere in the system can create telephony problems for any company using the service, and it is time consuming to work with phone companies to discover and resolve communications problem over a shared service. 2

The cost efficiency of IP Centrex is a myth that must be further explored. The theory is that the SMB would reduce the cost of voice communications by selecting IP Centrex and outsourcing the management of telephony to carriers. Since the business would not have a PBX on premises, it would not have to manage and troubleshoot a sophisticated platform internally. However, an SMB selecting IP Centrex services is still burdened with the cost of buying or leasing IP handsets. Troubleshooting a service problem requires the SMB to work closely with the carrier, which can be a frustrating and time-consuming process. Moves, adds and changes still must be managed internally, and SMBs do not realize the true efficiencies of IP services because of vendor development cycles geared primarily toward the needs of large enterprise customers. IP Centrex also forces SMBs to over-engineer their networks and provision more bandwidth than would be otherwise necessary. For example, it is predictable that after lunch most users will dial into their voice mail. This causes a daily spike in busy hour call patterns. Because the voice mail is not stored onsite, each call for voice mail access consumes local calling bandwidth. SEEKING THE FEATURES OF IP The myth of feature-rich telephony available through IP Centrex services should also be explored. The reality in today s telecom world is that phone companies use large PBX platforms that are updated only to reflect the addition of services that are valued by a large group of business customers. This lowest common denominator approach results in bland service offerings that can barely be distinguished from carrier to carrier. New features and services are often developed primarily for the needs of the carriers biggest customers large enterprises, whose needs are much different than those of the SMBs. Since centralized PBXs and telephony applications are often shared by both large companies and SMBs, carriers and vendors must walk a delicate line in prioritizing and bringing to market new feature sets that appeal to the broadest range of customers. But packet-based services can offer tremendous cost efficiencies, particularly for SMBs that can access rich feature sets that improve business communications and employee productivity. IP Centrex services do not offer the robust VoIP capabilities SMBs need to capitalize on the efficiencies of IP, and the alternative of buying and deploying an IP PBX can be an expensive proposition. In this scenario, SMBs are still at the mercy of the IP PBX manufacturers, primarily since most of these platforms were designed for large businesses with functionality removed and the systems dumbed down to support SMBs. A new system solution is needed that provides the breakthrough efficiencies of IP with the cost-efficiencies SMBs demand. DEPLOYING BROADBAND PHONE SOLUTIONS DESIGNED FOR SMBS The primary limitations of IP Centrex services are that: They are not designed specifically for SMB requirements, but are services designed for large enterprise networks that are retrofit to address the SMB market. They do not deliver the broad spectrum of IP services that can enable SMBs to improve productivity. They pass along the high costs of centralized services to the SMB. 3 Although IP telephony services are very appealing to SMBs, IP Centrex services cost too much and deliver too little value in terms of features and benefits. The alternative of selecting, deploying and maintaining an IP PBX is no less appealing, because of the cost impacts and the burden on the organization to maintain and manage the system over time. Whaleback offers a superior alternative to selecting IP Centrex or purchasing an IP PBX. SMBs can now leverage the benefits of IP telephony over their broadband cable or DSL connection to: Streamline communications Improve worker productivity Optimize customer service Integrate voice and data networks Reduce capital and operational costs

SELECTING IP TELEPHONY AS A MANAGED SERVICE Whaleback developed the CrystalBlue Voice Service specifically to address the needs of the SMB market. It overcomes the limitations of IP Centrex services and offers the richest set of IP services available. It combines the features of PBX platforms and Key Systems Units and offers a feature set tailored to meet the needs of SMBs. The CrystalBlue Voice Service is an all-inclusive service package that makes the most advanced IP technology immediately affordable. This software-driven solution seamlessly integrates with existing IT networks to simplify system management and reduce ongoing communications costs. The SMB 1500 IP PBX is designed specifically for broadband. It is installed at customer locations and simplifies system administration, improves staff productivity and enhances customer service. System-wide upgrades, moves/adds/changes and station setting adjustments are achieved with a quick click of a mouse. In addition, the linear expandable system grows with a company to support from five to up to 1,500 phone stations. Whaleback s all-inclusive, flat-priced service package makes the most advanced technology immediately affordable for SMBs without the operational hassles of maintaining equipment. In essence, the Whaleback solution combines the same rich features as the larger and more expensive big business IP PBX platforms at a dramatically lower price point, while also providing the assured reliability and availability of a hosted IP Centrex service. ROBUST IP FEATURES SMBs are no longer faced with selecting either rigid, carrier-based services or buying an IP PBX originally designed for large companies. Whaleback's all-inclusive service package combines the features of PBX platform and Key Systems Units and eliminates hidden charges and unpredictable monthly costs. For a fixed monthly rate of only $49.95 per station, SMBs benefit from: Unlimited local and national calls Multi-line executive IP phones Shared and bridge line appearances RoadWarrior Functionality Intercom with hands-free response Group paging E911 lifeline support Local number portability Direct inward dialing Auto-attendant Desktop messaging Music on hold Caller ID Speed dial Call forwarding Remote access Video calling Conference calls First-class sound quality Desktop integration Linear expandability U.S.-based technical support Voice mail 4

IMPLEMENTING A TURNKEY SOLUTION Whaleback pulls the plug on traditional phone service and puts advanced Voice over Broadband (VoB) technology to work for SMBs. Whaleback offers a turnkey solution that reduces communications costs and simplifies business communications for SMBs. Companies can therefore implement a complete communications solution optimized for IP carrier interconnection. The Whaleback CrystalBlue Voice Service provides business-quality voice services with advanced features at a low, fixed monthly rate. It requires a very low capital investment and lets SMBs converge the advantages of VoB with desktop applications so they can benefit from a more intelligent phone system. CrystalBlue includes everything SMBs need for a business phone solution, including: The SMB 1500, a next-generation IP PBX designed for broadband Executive IP handsets Setup, configuration and training Remote maintenance and monitoring Local and long-distance calling for a flat monthly rate Whaleback or one of our channel partners will install the SMB 1500 and the executive IP handsets at the SMB location, and the SMB 1500 will be monitored around-the-clock by centralized, U.S.-based Whaleback personnel. There is no additional charge for upgrades and enhancements. Whaleback will conduct centralized call quality monitoring. The SMB 1500 generates alarms that alert Whaleback to take corrective steps if necessary to improve performance. Whaleback s all-inclusive service package eliminates hidden charges and unpredictable monthly fees. For a fixed monthly rate of only $49.95 per phone station, SMBs can better manage and control telephony costs while capitalizing on advanced IP features. SELECTING AN IP MANAGED SERVICE OVER AN IP CENTREX SERVICE SMBs selecting CrystalBlue Voice Service not only get more control over capital and operational costs; they also get the business advantage of enhanced IP services delivered over broadband connections. As with an IP Centrex service, SMB customers do not have to worry about premises-based equipment since Whaleback monitors and maintains the solution. SMBs can reduce bandwidth costs because all voice mail is stored on the SMB 1500, and they can avoid the cost and complexity of buying IP telephones by selecting IP phones offered by Whaleback that offer proven interoperability with the SMB 1500. The main reason SMBs have selected IP Centrex is because they do not have to manage it. Despite its cost and limited features, it has offered SMBs an outsourced solution for telephony. But Whaleback offers IP telephony as a managed service and provides the advanced features of IP with the simplicity of central management and monitoring. The following are some of the other advantages of the CrystalBlue Voice Service over IP Centrex: Each SMB 1500 platform provides exclusive service to a single customer. This contrasts sharply with shared IP Centrex services. No business is forced into software upgrades on the phones to support new services, and SMBs do not have to deal with the complexity of centralized communications resources shared by many companies. The solution is tailored to the needs of SMBs. Whaleback developed the solution specifically to address SMB requirements, and continues to develop new features to enhance SMB employee productivity. New features and enhancements are available at no extra charge. 5 Emergency calling. If the IP connection between the SMB and the carrier goes down, emergency 911 calls can be placed from any IP handset through the SMB 1500, which has an analog port available for Plain Old Telephone Network (POTS) dialing.

Reliability. While IP Centrex services rely on complex technologies and applications providing service to any number of business customers, CrystalBlue relies on proven technologies, and each SMB 1500 is onsite, supports only one customer and is centrally monitored and managed. Resiliency. The failure of any aspect of an IP Centrex service can impact all customers using the service. But CrystalBlue Voice Service is delivered to a customer through a managed, software-based IP PBX without the dependencies of centralized services. Security. Today s Session Initiation Protocol (SIP) phones probably have more intelligence than laptop PCs did five years ago, and with IP Centrex each SIP phone is a possible entry point for hackers. Super-intelligent SIP phones communicate through the SMB 1500, which is a point in the network that can be firewalled and made application aware to prevent incursion from hackers. The SMB 1500 serves as a back-to-back SIP User Agent (UA). It acts as an intermediary between two parties, but appears as an endpoint to both parties. It also serves as a Session Border Controller directly in the signaling and media path between two parties to protect the internal network from external access. Integrated PBX and Key System Functionality. Since the SMB 1500 offers both PBX and Key Systems Unit functionality, SMBs can benefit from both advanced IP features such as desktop integration as well as popular ease-of-use features such as group paging, intercom with hands-free response and shared and bridge line appearances. Speed of developing new features. IP Centrex services rely on large PBX platforms that address the needs of a wide range of users, so carriers are forced to wait for vendors to add functionality. Both carriers and their vendors have the potential to make the most economic return on new features that appeal to larger businesses, so SMBs must wait in line for vendors to develop new functionality and for carriers to package it into their IP Centrex services. In contrast, all of Whaleback s development resources are specifically focused on adding functionality that will improve SMB business communications. Central monitoring and management. Whaleback provides around-the-clock management of the SMB 1500. Customers are no longer dependent on large, complicated systems in the carrier s cloud to operate meticulously to deliver the latest functionality. Whaleback Systems offers the industry s only business communications system designed specifically for the needs of SMBs. Unlike IP Centrex solutions, Whaleback s CrystalBlue Voice Service is software-driven and premises-based. It simplifies system management and makes advanced telephony features easy to use. There is no equipment to purchase and upgrades are free, so SMBs can capitalize on the economics of a managed service and avoid worrying about obsolescence. Whaleback s all-inclusive service package eliminates hidden charges and fluctuating monthly costs, and allows SMBs to benefit from advanced business communications technology via an all-inclusive service that is available for an affordable price. ABOUT WHALEBACK SYSTEMS Whaleback Systems is the pioneering developer of the first business phone solution built from the ground up for broadband. Unlike traditional systems, the Whaleback CrystalBlue Voice Service is 100 percent premises-based and softwaredriven. It includes the only IP PBX with Key System Unit features and Road Warrior Functionality. Whaleback's all-inclusive, unlimited nationwide calling package makes the most advanced technology immediately affordable for companies that need between 5 and 1,500 phone stations. The Whaleback service is available through direct sales and through partnerships with channel partners and VARs. For more information, visit www.whalebacksystems.com. Whaleback Systems, Road Warrior Functionality and CrystalBlue Voice Service are trademarks of Whaleback Systems; other trademarks are the properties of their respective owners. IPCENWP-0206 6