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VoIP PBX Trends: What You Need to Know NOW
Introduction
Business telephone systems have come a long way from the black rotary dial and cord switchboards of last century. Early PBX (private branch exchange) systems for business gave way to TDM (time division multiplexing) technology. Now IP PBX systems use the Internet Protocol to handle communications traffic in all of its forms more efficiently.
This Brief is written for those considering replacing an incumbent enterprise phone system with an IP PBX and seeking answers regarding how to sort through the multiple choices that are available.
Analysis
IP PBX systems have a variety of advantages when compared to legacy systems. For one, the small refrigerator-sized cabinet that took up most of a “telephone closet” has now been replaced by a much smaller-footprint computer in the case of premises based systems or by almost nothing at all if using a hosted service provider. In addition, IP PBX systems are more flexible, able to much more easily expand features, require less specialized expertise on the part of your personnel to manage and can lead to substantially lower telephony costs through the use of SIP (Session Initiation Protocol) trunking as an alternative to traditional telephone company lines.
IP PBX systems are not “one size fits all.” Instead, there are “horses for courses.” Just as some racehorses do better on certain racecourses, so too are some IP PBX solutions better suited to the specific needs of an organization. And there are a variety of alternatives available to businesses. These include systems that are installed on premises and hosted systems that house the core switching mechanisms off-site with only the physical telephone instruments residing at your location. Among the premises-based systems, there are many choices ranging from those focused on small businesses to those that are designed to serve large multi-location entities with a centralized control element.
Selecting the optimal solution for each organization requires a detailed requirements analysis before getting started. Let’s start with the basics: How many separate locations are to be served? Will each location have their own independent system or are these systems to be integrated together in some manner? How many users (seats) are required at each location? What features and functions are important? For example, is Auto Attendant or ACD (Automatic Call Distributor) important?
Once you understand your needs, it is important to identify providers that have solutions for your requirements. For example, if you have a single location with ten people, a system that is designed to serve hundreds or thousands is probably overkill. You do want to consider your potential for expansion and ensure that the system selected can elegantly grow as your needs expand.
Keeping in mind that the premises-based IP PBX is a computer system, it is important to understand how your vendor will manage bug fixes and support services. Is support available 24 X 7? The telephone system is your connection to the outside world and cannot be compromised. What SLA (Service Level Agreements) and/or other guarantees are provided to assure peace of mind that your system will remain viable? Interoperability is a major issue. Make sure that your vendor provides a list of other systems and ITP (Internet Telephony Service Providers) with whom they are certified as interoperable. Are you required to use the telephone instruments the vendor provides or are other instruments that may be less costly (including those already installed) still viable?
Is a premises-based solution the best one for your organization or should a hosted solution be considered? Each has its benefits and disadvantages. A premises-based system is a one-time capital expenditure with ongoing annual maintenance fees. A hosted solution has a perpetual service fee but may reduce the need for a full-time telephone technician. The short answer is that the decision depends on each individual organization. For smaller companies with multiple locations, hosted solutions may be ideal. In all cases, it is best to consider your requirements, consider your options, and select the solution that is both functionally and financially best for you. This includes fully considering the total cost of ownership for each.
Some of the key players in premises-based IP PBX systems include the following. This list is certainly not exhaustive and you should research available alternatives before selecting any one provider.
- 3CX
- Allworx
- Avaya
- Cisco
- Digium (Asterisk)
- Epygi
- Fonality
- Mitel
- Nortel
- Objectworld
- Panasonic
- ShoreTel
- TalkSwitch
- Trixbox
- Zultys
In addition, some of the key providers of hosted IP PBX solutions include the following.
It is important to remember that hosted providers are using the public Internet to process your telecommunications traffic, so know where their nodes are located and ensure that the latency does not impair call quality. This is especially important for companies that are not located in the same country as the hosted service provider. Current prices for hosted PBX services range from US$30 to US$60 per month per user. Other charges may apply as well.
Conclusion
Key points to consider in making a selection of an IP PBX system include the following.
Functionality – Have you determined the functionality that your environment requires? Do not be overwhelmed by voluminous lists of features from vendors. Rather, identify what is important to you and make sure that these are available.
Scalability – Make sure that the system that you acquire has the ability to expand as your business grows. You do not want to be locked into a system that you will quickly outgrow. Also, make sure that new features and functionality can be added easily without service disruption or costly upgrades.
Suitability within the current environment – It is always useful to get references from other customers that are comparable to you. In this way, you can ensure that you are considering a system that suits your needs rather than one that is too small or too large.
Transition challenges (e.g., existing telephone instruments, strain on the IP network, etc.) – This is a critical part of your evaluation. Will you be able to retain your existing telephones or must they be replaced? That can be a considerable cost element. Will your existing local area network/wide area network be able to support your new requirements? Do you have sufficient Internet bandwidth? Do you have a person or persons that are both available and capable of managing the transition internally?
System management – Who will be responsible for managing the new system? Will training be required? Will vendor support be available? At what cost?
Security – The Internet is inherently insecure unless proper precautions are taken to achieve an acceptable level of security risk. Do you have an information systems security policy and plan in place? If not, you need one. If you do have one, make sure that it is expanded to include your new VoIP telephony environment.
Telecommunications is going the way of the Internet. Voice, video and data will all be handled by packet switching rather than the more cumbersome circuit switching of the past. These solutions will enhance the way you do business and cost less. However, ensuring that you have thoughtfully considered the options and picked the best for you will pay dividends in the short term and long run.
For more information, check out this relevant Focus Research:
- How to Choose a VoIP Provider for Your Small Business
- Voice Ups the Network-Monitoring Ante
- 15 Ways to Use VoIP to Save Money During the Downturn
- How to Correctly Deploy a VoIP Phone System (by Pierre Kerbage, VP of Sales & Marketing, Zultys, one of the vendors mentioned above)
Events
- Marketing Thought Leaders: A Conversation with Julie Fajgenbaum May 25 @ 11 am PT
- The Do’s and Don'ts of Small Business Marketing May 29 @ 11 am PT
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7 Comments
Zichtebomb -
Thanks for your observations although I find the insults a bit unhelpful. Specifically, "not some guy that writes books and advises politicians that claim they invented the internet." To help you further, as a consultant, I have designed web systems for a major cable channel, designed and helped to implement electronic commerce plans for several of the largest insurance companies in the world, was responsible for corporate strategies and investment activities for one of the earliest hosted IP PBX vendors, and spent 10 years selling and training on PBX systems. That's just for starters.
This document was intended as an introduction for those that were not familiar with the topic. As you clearly are way past that, it was not meant for you. As to your suggestions, I agree with point #1. Doing a thorough needs analysis is always critical to finding the best solution for any business challenges. However, #2 is a problem. How do you find "trusted name brands?" Nortel was once a "trusted" brand. A far better approach - especially if you distrust smaller, more entrepreneurial providers - is to create a Request for Proposals, solicit all potential alternatives, have each submit a proposal based on your specific response requirements, used a weighted factor analysis to determine which solutions are best, ask the final 2-3 for their "best and final offer," and then make an informed decision. "Let them duke it out" when you have no idea if these are the best out there and without a clear set of decision crtieria is less than ideal.
I have done this dozens of times for both clients and employers and know it works.
Now would you like to debate my PRACTICAL experience further??
Joel
Nice reply, Joel.
Mr. Maloff, first, let me apologize for my insults. They were unnecessary and uncalled for. I keep reminding myself not post when I am having a bad day, but sometimes I slip up.
That said, I have to say I am puzzled as to your reply, and as such would like to take you up on your challenge, pitting my 23 years of practical experience against yours in a debate. So, as to the comments in your reply:
1. In the vast majority of cases, for an SMB to go through an RFP process is neither productive nor cost effective. I have witnessed, first-hand companies spending hundreds of thousands of dollars in resources trying to "disaster-proof" a $30,000 purchase. This is not a sound business practice. Of course, if your operations span many offices across multiple continents, it might. I reassert that the more prudent approach is to stick with a name brand from a trusted integrator. If you do so, you will NEVER be left out in the cold. Which leads me to my next point . . .
2. Do you know of a single Nortel customer that can no longer get support on their systems from anyone, anywhere? Let me help you -- no you don't. I have no love for them personally, but comparing them to a start-up is, how do I say this without being insulting, silly.
3. If they decided to plow forward with an RFP as you suggested, how good will it be if they don't have any internal IP telephony expertise? How would they know to scope SIP, H.323, MGCP, or some other proprietary protocol? Do they know how their faxing procedures will be affected when transitioning to a VoIP system (i.e. T.38 vs. FX0 vs. POTS line). You're a pretty sharp guy. Do you know the best ways to implement faxing in a VoIP environment Mr. Maloff? Do they understand the need for call recording, cost accounting, etc.? What about call and video conferencing, collaboration, presence? And what about the carrier side? T1's, PRI's, or SIP Trunking? Unless you are in the business itself, there is simply no way to know enough about every technology and option available, and therefore no way to properly craft an RFP. Which brings us to the crux of the debate; how do you get the expertise you need to make an informed decision. Well, there are only two ways -- yours and mine.
My way is to consult telephony resellers, such as Ms. Nims. After all, Ms. Nims' website says, "AV has partnered with several telecommunication service providers and offers a free evaluation of your existing services." See! She and her very experienced staff would be more than happy to do a deep-dive analysis of my company's telephony needs and put together a comprehensive quotation, which I am sure will include professional services for the implementation of the system and perhaps even day-2 and beyond support. And, remember, it won't cost me dime.
Conversely, you would have me either forge ahead with an RFP process that I am simply not qualified to perform or hire a telecom consultant, such as yourself, which I'm sure would produce the same results as Ms. Nims staff, but in doing so would be add 10%, 20% or even more to the cost of my system. And for what? Are you really more qualified than Ms. Nims to consult on a telephony system? Are you worried that Ms. Nims might be partial and only push the equipment and services that her company represents? It doesn't seem like it. Plus, she represents multiple telecommunications companies and thus has a slew of different solutions at her disposal. And while I don't know her personally, just from looking at her picture and reading her bio I would definitely trust her!
So, as I said from the beginning, I really don't see where what you are suggesting makes good business sense. However, perhaps I am just missing something that will come out in your rebuttal. God I love a good debate.
Zicthebomb -
Thanks once again for your comments. Let me start with saying that there are no right or wrong answers. You choose to advise novices to put their trust in vendors. I choose to advise them to put their trust in facts and research. There are far too many vendors of all sizes - large and small that have sales personnel who are trained in their products but not in the larger scope. They are neither skilled in the specific customer's business nor necessarily completely competent on their competition or the full implications of their solution.
Let me give you an example. An IP PBX is delivered on a server to a medium sized customer. For the maintenance agreement and warranties to remain intact, the customer cannot modify the operating system in any way. Unfortunately, the IP PBX vendor fails to properly harden the platform prior to deployment. Fortunately, an external penetration test shows that sysadmind has been left wide open and is ripe for attack from anyone that might wish to exploit the vulnerability.Whose fault is that? The salesperson for not knowing they were selling a flawed product? The customer for not knowing to ask the right questions? Your approach abrogates the responsibility for thinking through a business decision and puts the input required to do so squarely on vendors. Vendors are biased. That's not a slap. They are after their own interests first and foremost. I much prefer to both make decisions myself and advise my clients to make them with as many facts as are obtainable.
As to a debate on your points, let me respond to a few of your assertions:
1 - To assert that that using a name brand will ensure that a business is "will NEVER be.left out in the cold" is just silly. There are many examples of exactly such occurrences and to use infinitives such as never or always is counterproductive. It is the substance of the solution that is important - not the name brand - but then again, I often buy generics at the store for the same reason! Dismissing smaller, entrepreneurial companies without examining their value may ultimately cost a business more for less service.
2 - I did not compare Nortel to a start-up. I used them as an example of a large company in trouble. If you have a choice as a business of buying a critical component from a company that is high quality and stable versus one that is large, well-known, and selling off divisions, you have much to consider rather than a "slam dunk" as you imply.
3 - Now, regarding the RFP, you again missed the boat. It does not need to be a formal RFP as issued by government and large business. It does, however, need to contain the questions that are important to each individual SMB. They need to develop these questions and have vendors respond to them. I have seen hundreds if not thousands of vendor proposals. Many are boilerplate with no attempt to customize a solution. Having a company that does not specialize in technology or telecom sort through material that may or may not be relevant to their specific needs is not helpful. How many features does the typical IP PBX offer? Hundreds? more? How many of these are relevant to each business? A dozen? Two dozen? Feature names may differ from vendor to vendor. How does a business person make sense of all this?
To bottom line this, your answer is "Trust me." I used that line in high school. Didn't work that well then either. My answer - however a business wishes to do it - is to gather the facts, make the best decision for each organization, but always remember that the viability of any decision is yours - not the vendor's. I do not expect you to see my point of view. My clients, however, have found it to have saved them money and created a much greater level of comfort that they made the best decision possible for them at the time.
Joel
Joel, Zicthebomb
I enjoyed your debate. Once you filter out the posturing there is some beneficial information in there for the novice IP telephony implementors. Our company has, through concious decision and aquisitons aquired a plethera of different IP phone systems. I, like many others, am a "jack-of-all-trade, master-of-none" and as such I have a fair understanding of telephony and networking. However, the old black line between the two has faded to a light shade of grey.
When making decisions on new phone equipment we do rely heavily on the recommendations of our local resellers but, as stated, they are biased toward their particular product line. A general understanding of telephony principles and contact with several resellers should allow you, at a minimum, to determine a list of your needs. (it's not rocket science) Once you have this list you can develop a boilerplate RFP as a sort of wish list. The resellers will quickly tell you if they can meet your requirements. The trick is to contact more than one reseller and get a variety of options. If you have absolutely no understanding of telephone systems or what happens after you dial a number then it's either time to go back to school or hire someone to assist you (i.e. a consultant).
My particlar interest in roaming these sites at the moment is to try to determine the compability between the different vendors implementation of the SIP standard. I have not been able to gleen this information from the resellers because they focus on their own product line and don't really concern themselves with interfacing with other vendos equipments. We have IP PBX systems from Cisco, Avaya, Nortel, and other less known vendors but at the moment (with the odd exception) we have not implemented SIP trunking.
On a final note, we continue to have excellent support from Nortel. They had a great deal of expertise in the PBX field and I think Avaya will benefit greatly from their aquisition. I am certainly hoping that this will also enhance the IP trunking compatibility between the two product lines.
Nice post. All detailed and informative. Its really good to know about the VOIP PBX trends.
I am not sure what exactly this does to help. Anyone with even the most basic understanding of phone systems and computer networks could have written this. Then again, Mr. Mallof's bio states that all of his experience has been on the carrier side, with nothing related to CPE (customer premise equipment).
Regardless, there is no need to be scared and/or even overly concerned about the process. It requires neither the reading of books nor expensive consultants. You can receive expert advice on a much more granular level that what is stated in this article, and the good news is that you can get it for free from any decent telephony reseller. As such, here is the much simpler formula for purchasing a IP PBX:
1. Compile a list of your Business processes, both current and those you would like to see implemented over the next 36 to 60 months.
2. Find two or three resellers of trusted name brands. There are a lot of start-ups in this space so be careful or you will find that the "great deal" you got yourself two years ago has now turned into a system with that you can't get support for.
3. Let them build you what they feel is the appropriate system to meet your current and future needs.
4. Stand back and let them duke it out.
In the end, you will almost surely come away with a feeling of which system offers the best value proposition and which reseller is going to be around to help you two, three, or even ten years down the road. Much trash is written about salesmen and sales organizations. And while there are some inscrutable salesmen, just as there are in any field, most are well meaning people with PRACTICAL expertise, not some guy that writes books and advises politicians that claim they invented the internet.
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