internet telephony conference & expo east the business case for smbs to migrate to hosted voip
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Internet TelephonyConference & Expo East
The Business Case for SMBs
to Migrate to Hosted VoIP
Bill DermodySales DirectorM5 Networks
www.m5net.com
Contact: (312) 957-8140bill@m5net.com
Telecom is bewildering
Business Continuity Hybrid SystemsVoIPInternet TelephonyDigitalAnalogPC-basedOpen SourceMedia ServersSIP, MGCP, H.323RoutersSwitchesSkinnyGatewayBorder ControlEthernetPOTSISDN
ConferencingCollaborationVideoCall CenterPresenceDSLTrunk-sideCentrexChannelized T1Integrated T1Central OfficeInterconnectCSU/DSUQoSEarwaxVoice VPNManagedMobilityWirelessLNP
SoftphoneCat 3, 5, 6PoERegulationBillingOutsourcedCIDE911ANIDIDRCFWiFi, WiMaxDirectory ServicesToll-freeDiversityKey SystemRedundancySLAPBXT1
vXMLIADOn-PremiseNetwork MonitoringATMFaxHostedPRIUnified MessagingCTI
The discussion should be about business, not technology
They come in roughly three sizes:
SOHO ENTERPRISESMB1-10 staff Everyone in one room
ORVirtual teams & road warriorsOwner deals with phones
10-500 staffFew IT staffDepartmentsLAN, maybe a few offices CTO, CFO or Owner buys Phones
500+ StaffCampusesWANsIT & Telecom Departments
Most SMBs Will Outsource Their Phone System
Yankee Group believes 70% of SMBs prefer the idea of a hosted phone system today, but can’t find a competent provider
InfoTech predicts 48% of SMB sites will use a hosted solution by 2010
IP Centrex Subscriber Forecast
Source: Gartner DataQuest (Sept 2006)
IP Centrex Subscriber Forecast
1761,291
3,075
6,209
9,948
13,810
17,693
20,324
22,56224,161
0
5,000
10,000
15,000
20,000
25,000
30,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Year
Su
bs
cri
be
rs (
00
0s
)
According to Gartner, In 2014 there will be 24 million IP Centrex Users Existing 12 million users from legacy centrex upgrades Additional 10 million users from SMB market (<100 seats) which they believe is
conservative Additional 2 million users from medium- large businesses
Higher Service Availability, SLAs, etc. Improved Business Continuity Simplified Vendor Management Multiple locations networked Leveraged Expertise
• Training • Installation • Feature Deployment• Security • QoS• and more
Outsourcing can Save Time & Money
Lower Initial & Ongoing Cost of Ownership
• No need to purchase or maintain a phone system
• Better line usage - ~30k/simultaneous stream
• Better rates/minute without Telco dependencies
• Efficient processes
Outsourcing Can Save Time & Money (continued)
Total Cost of Ownership- 1
Direct cash outlay displacement:
• Local and long distance lines and services.
• Third-party conferencing services.
• Capital investment/lease of a PBX
• Maintenance and support fees
• Software upgrade/implementation fees
Total Cost of Ownership- 2
Internal management costs:
• Managing the PBX and vendors
• Managing lines capacity and growth
• Upgrade management
• Moves, Add, and Changes
• Answering users’ questions
Plus, what is the cost of not having:• Disaster recovery protection?• The ability to work from home or satellite
office as if you were at the office?• The flexibility to add, shrink, change
staffing and have immediate phone functionality?
• Unlimited lines for burst call volumes?• Peace of mind of knowing you have the
best solution available being maintained 7x24 by industry professionals?
• State-of-the-art front/perception to market
Total Cost of Ownership- 3
How It Works:Sample Hosted VoIP Architecture
Benefits Customer avoids buying PBX Superior business continuity Scaleable to multiple locations Single, accountable, vendor
Remote access (e.g. home, road) Focused application delivery expertise Operating cost savings Constant feature upgrades
Hardened Hardened Telecom/Data CentersTelecom/Data Centers
Hardened Hardened Telecom/Data CentersTelecom/Data Centers
Gateways Access Router
Redundant Phone Systems
Multiple Telecom Providers to the PSTN
Multiple Service Providers to the Public Internet
Broadband/DSL Connection
M5 DSL(backup)
M5 T1
M5 T1
M5 DSL(backup)
Inbound & Inbound & Outbound CallsOutbound Calls
Inbound & Inbound & Outbound CallsOutbound Calls
InternetInternetInternetInternet
Customer Customer Main LocationMain Location
Customer Customer Main LocationMain Location
Data LAN Router
Customer Customer Secondary Location(s)Secondary Location(s)
Customer Customer Secondary Location(s)Secondary Location(s)
Customer Customer Home Office(s)Home Office(s)
Customer Customer Home Office(s)Home Office(s)
What a Typical Hosted Solution Provides
Personalized auto-attendants Unique phone number and voicemail for each end-user Robust end-user feature set Multiple locations (e.g., 1 phone system for corporate and branch offices) Satellite office (e.g., same business phone number from work and home) Unlimited local and domestic long distance calling Internet service Redundant phone and Internet access Free support
Potential Business Benefits
Is telecommuters/off-net support worth it?• Mi8 distributes the call center• Infinity Consulting Group works from home• Platform Learning sets up work teams• Trevor Stuart saves on real estate
Do I support road warriors?• Softphones• Webportals
Is better information valuable?• Coldwell Banker tracks ads• National Parts Depot tracks staff• Stadtmauer, Bailkin does timesheets
More Potential Business Benefits
Do productivity gains justify the investment?• Off-net productivity/Gap-time• Unified messaging• Dial-from PIM• Presence
Am I a big conference caller?• On-site bridges start at $15,000• Technology changing fast
Is easy sub-tenant support worth money?• M5 grows into its space• Office Suite Group outsources telecom• 424 W. 36th St. attracts tenants
Is there value in a rapid deployment?• Brooklyn Brewery’s PBX explodes• Montfort Healy’s Telco closet is flooded• Maxon’s Restoration gives up on a vendor• KGTR attacked by terrorists
Even More Potential Business Benefits
Now, let’s look at some Success Stories
Investment Bank40 Seats; 1 Location
The Challenge: Needed to replace an outdated Nortel key system due to office relocation Wanted an easily upgradeable, software-based phone system that could be managed remotely and provide additional functionality Unsure they had time and resources available for implementing and managing the complexities of VoIP technology.
The Solution: Evaluated IP-PBX, hybrid, and hosted solutions from multiple providers, measuring installation and monthly recurring costs as well as costs for cabling installation Rated vendors based on his minimum requirements for conference calling, call forwarding, redundancy, remote access, QOS guaranty, and client references. Upgraded infrastructure and installed M5’s Outsourced IP Phone System
The Results:“M5’s service is reliable and the advanced applications it provides allow us to meet clients’ needs at a higher level than before.”James BerkeryChief Information Officer, Berkery, Noyes & Co. LLC
Cost Comparison
Prices are for 1 location & 40 end-users; based on client’s analysis
Comparison of Key Criteria
(Based on client’s analysis)
Craft Brewery40 Seats; 1 Location
The Challenge: An electrical shortage caused the companies premises-based phone system to catch fire and shut down phone service for the entire complex.
The Solution: After assessing the situation, M5 devised an emergency plan for restoring Brooklyn Brewery’s phone service. Within one week, employees were up and running on a provisional solution. A few weeks later, Brooklyn Brewery went fully live on M5’s Outsourced IP Phone System with a dedicated T1 circuit and backup DSL.
The Results:“M5 gives us all the flexibility of a large, in-house phone system without the associated overhead and maintenance headaches. M5’s customized configuration abilities allow us to manage call flow and conduct business in a way that is more efficient for our organization.” Eric OttawayGeneral Manager, The Brooklyn Brewery
Construction Management Firm60 Seats; 2 Locations
The Challenge: Company inherited an onsite Nortel phone system after moving to a new office Employees mainly work from field offices, and the limited features and expensive expansion costs associated with their premise-based phone system required them to share voicemail boxes and made communication with clients difficult.
The Solution: Impressed by its reliable network and competent service delivery team, Horizon signed on with M5. M5’s virtual communication services made Horizon’s several offices appear as one physical location to their clients.
The Results:“M5 helps our company achieve a higher margin potential through increased business communication transactions, competitively priced calling plans, and the ability for employees to use their M5 phones around the country without incurring additional fees.” Kenneth BorrusoChief Operations Officer, Horizon Engineering Associates, LLP
Law Firm50 Users; 1 Location
The Challenge:Water damage in the telecommunications closet ruined the PBX. Finger-pointing between the phone system maintenance company, the phone service provider and the PBX manufacturer intensified the problem and prompted the firm to find an alternative phone system solution.
The Solution: M5 brought in temporary IP phones and the FrontDesk receptionist application and plugged them into the company’s existing DSL line so that attorneys no longer had to rely on cell phones for communication with clients M5 project managers conducted a thorough planning session with the firm, devising a long-term phone system strategy and walking them through the entire implementation process
The Results:As a law firm that works on dozens of client cases simultaneously, we could not riskthis type of business disruption again. By switching to an outsourced phone system, we now have a more advanced and more reliable solution along with greater peace of mind knowing that M5 assumes responsibility for all of our voice and data needs.”Donald NeumannManaging Partner, Montfort, Healy, McGuire, & Salley (Personal Injury Law Firm)Client since 2005
Bill DermodySales DirectorM5 Networks
(312) 957-8140bill@m5net.comwww.m5net.com
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