Khali Henderson Blog – Khali Henderson Group Editor, Telecom Division and Editor in Chief, PHONE+

Khali Henderson Blog
Khali Henderson Group Editor, Telecom Division and Editor in Chief, PHONE+ khenderson@vpico.com

 

 

Hullabaloo Over Hosted VoIP 06/28/2009 18:26   Hosted VoIP has the ability to polarize a discussion almost as quick as politics and religion. A recent discussion at Channel Partners Network, the LinkedIn group hosted by PHONE+ and the Channel Partners Conference & Expo, bears this out. The genesis of the discussion was a blog posted at Internet Telephony about the VoIP Surge Theory, which basically asserts that the recession has speed up VoIP adoption. Coincidentally, I just finished reporting on a similar topic for PHONE+. My article, “Hosted VoIP Sales Up In a Down Economy,” cites statistics that indeed first quarter sales of hosted VoIP have gone up. And, anecdotally, hosted VoIP service providers told me that they were experiencing unprecedented growth, which they attributed directly to the economy. The discussion at LinkedIn, however, quickly reverted to the hosted versus premises VoIP debate irrespective of the state of the economy. The opponents cited the classic argument of lack of control. Specifically, they said that hosted VoIP does not allow for customization or changes on the customer’s timetable, which could limit productivity. Costwise, they argued that the breakeven point on hosted versus premises-based solutions is around year four. As in my article, proponents of hosted VoIP cited the advantages of outsourcing – constant updates, included maintenance, built-in disaster recovery, pay-as-you-go pricing, no need for IT staff, etc. Transforming a business from centralized to virtual operationally for both hard cost savings and productivity gains was another argument in favor of hosted. I will add that in recent interviews with PBX manufacturers, many have mentioned they are exploring their own hosted offers. Samsung BCS and Avaya are two. Additionally, NEC just announced this month a hosted collaboration offer. These decisions – probably hard-fought internally – would not be coming without significant pressure to do so from the channel or user community. Or it may be that they just see the writing on the wall. As Jeff Ponts, EVP and founder of DataTel Solutions, wrote in his comments on Channel Partners Network: “I believe when SaaS and cloud computing gets to critical mass and widely accepted at the midmarket and SMB levels, physical PBX vendors of any size will be in trouble, and the majority of voice will be hosted VoIP.” There is a lot of muscle – Google and Microsoft to name a few – behind this move to a cloud-based model. Once there, as Jeff says, voice will be just one application in the cloud. Related Articles: Hosted VoIP Sales Up In a Down Economy     User Comments !   Why wouldn’t Goggle & Microsoft be for Hosted everything they’re business is dirven by marketing, software & the internet.  Small & medium size business will look at Hosted PBX, in a down economy because they’re is no capital outlay, but at the end of the day Hosted Services will catch up to them.  Cost will be one of the big reason’s, when the CFO of the company realizes they would of been better of  leasing the hardware with a one dollar buy out at the end.  Bandwidth will come into play, because you will need a lot more of it.  Opponents will tell you they can condense voice, but when business start to experience jitter and other problems they will start to understand.  Why do you think that many of your CLECs that provide VOIP extend it at 90 megs, (XO, Broadview, Paetec) just to mention a few.   Most businesses want to be in control of there own destiny especially when it comes to voice and data services.  At the end of the day companies will realize that service & cost in the Hosted world is not the way to go.  I believe that hosted services will go the way of ISDN.  Also remember the PSTN is not going away, at least not in my lifetime.   Posted by: Chuck Ergenzinger | July 01 2009 06:21:28 Hosted VoIP certainly has a place in the market. When a small business needs 3 to 50 telephones without the complications of a call center and the like, hosted can be a good way to go. By integrating services, voice and Internet access, some economies of scale can be reached. As for control and changes, in many cases, the end user can make adjustments to their specific telephone and a pre-designated person within the organization can make system wide changes. These are typically done through a web interface. As one who has worked with these systems, they certainly are a good answer to less up-front investment and as long as the provider supplies the access, the QOS remains high. Posted by: Bruce Berry | July 01 2009 08:52:32   It is amazing to me how many people want to continue this losing argument that hosted voice is only flash in the pan, too expensive or lacks responsiveness. Folks, there is no more voice, video and data. There is only data. Even the blessed dynamic T1 is delivered using packet technology and converting back to TDM. Extension of packet technology to the prem is only logical – ie. SIP trunking. Once a client choosing to look at SIP, they ultimately are encouraged to look at a converged network, moving any queuing into the cloud, implementing redundancy, features with business benefit and extensibility of voice into existing applications. In other words, they start looking at voice as a data application. Once this happens, it is over for the premises-based solution because the arguments of pricing crumble for the premises-based solution. True hosted VoIP means a converged network with support. Ideally, the transport portion is a class of service (CoS) network that has quality of service (QoS) enabled. The people selling hosted VoIP over public transport play Russian roulette with their client’s communications. Likewise, the premises equipment vendors ignore the benefits of a converged network and, in many cases, lack the technical ability to properly architect a CoS solution that includes voice because they are not able to comprehend the entire network solution or they lack the solution within their provider base. As for the responsiveness and service, I am still taken aback at comments like this. I have clients that stage phones so they can be turned up same day. I have seen router failures be replaced the next business morning. I have seen failover technology keep sites up when premises-based solution cannot. I remember having to wait days for my Inter-Tel vendor to get programming done, waiting for hardware to show up to fix something, being told “no – it can’t do that”. While many of the premises solutions have new self-maintenance and other gee whiz features, they still lack the extensibility of a hosted solution. Even the mighty Cisco has to release SIP phones that support Broadsoft because their own equipment-based mentality has been changed. What I really see is the reluctance of many people to realize the convergence of industries and technology. Jeff Ponts nailed it. Voice guys, it is time to learn data or die trying. It is time to realize that companies like Broadsoft are software based and that they are extending voice services via a data API for which your premises solution simply will not be able to compete. It is time to get off the price argument and understand the value proposition. Then again, keep doing what you are doing and guys like Jeff and I will keep winning business and our clients will keep enjoying their competitive advantages.   Posted by: Clark Atwood | July 01 2009 09:36:42   Without going and repeating what others have stated Clark I believe you are dead on. I have been working with VoIP in some form since 1997 an dstarted int the Hosted VoIP relm in 2001. in 2001 to 2006  saw that the companies that were purchasing Hosted VoIP were the SMB companies 5 to 50 employees since 2005 the size of companies buying hosted VoIP has continually increased in size. I know own my own IT services company and we sell both premised based (Cisco) and hosted VoIP (CallTower) and the size of companies that we see going hosted are the 150 users to 5000 user range. Also Chuck asked why wouldn’t Microsoft and Google be hosted everything? well I know that Microsoft is pushing the cloud computing and has made offers to purchase some Hosted VoIP providers but have not come to an agreement with any of them. The earlier comment that many Voice guys need to learn data or die trying is very true but i see that not only in hosted but in premise solutions as well. The guys tat have been doing PBX sales and installs for years are still lying to themselves that VoIP is not the solution and that the PBX will be here forever and those same guys if they don’t jump on the VoIP bandwagon soon (hosted or premise) they will be pan handling on the street corner very soon www.Pain-Free-IT.com/technology_blog   Posted by: Tom Hill | July 01 2009 10:47:23