Testing the Managed PBX Waters

By David Strom  |  Posted 2008-06-02

Corporations that haven’t yet gotten involved with IP telephony have a new method to test-drive this technology without a lot of up-front investment: They can use a hosted PBX managed services provider. While that’s a mouthful, the idea is relatively simple: Take a systems integrator that can provision an Internet connection between its office and yours, buy a couple of IP telephones, and the integrator takes care of the rest.

The PBX—what used to be called a telephone switchboard back in the days when Ernestine, Lily Tomlin’s TV character, operated them—is located at the provider’s premises. You get several advantages from this setup.

First, you don’t have to turn off your existing PBX just yet. You can experiment and outfit an entire branch office, a small department or a couple of brave users with the IP equipment. So the startup cost is minimal, and in some cases, you don’t even have to purchase new Internet connectivity.

Second, your users get to see some of the immediate benefits of having an IP phone. For example, the phone can be located anywhere in the world with an Internet connection, so the phone numbers can remain under the control of the telecom department. Even better, a widely distributed staff can call each other with just a three- or four-digit extension.

You also get other features, such as integration with voice mail and e-mail inboxes, find-me and follow-me services (in which a series of numbers that ring concurrently or in succession can be programmed into your phone). What’s more, all these features are available for almost no additional cost.

Third, if you purchase the right brand of phones, you won’t be locked into a particular IP PBX vendor or service provider, as most phones support international standards and can work with different vendors’ equipment.

“We use Polycom phones, and they work well with a variety of IP PBXs, such as Cisco’s and Mitel’s,” says Paul Emond, president of TechSupport.ca, an Ottawa-based Voice over IP telephony integrator. “You have to be careful when buying your phones to make sure they can work with other vendors’ equipment.”

“We see potential buyers who are interested in having a fancy system that previously only a large Fortune 500 company could afford,” adds Phil Hill, president of Vocalocity, an Atlanta-based IP telephony integrator. “And they are getting these phones and paying $40 a month for service.”

But don’t get too enamored with all the features, cautions Paul Chisholm, CEO of Boston-based Mindshift, another telephony integrator. “Most systems have hundreds of features, and most users know only a few of them,” he says.

A fourth benefit of any IP telephony solution is having a unified telecom service for everyone in your company, regardless of their location. “It puts the whole phone system under one umbrella, with one main number that can be transferred to anyone, no matter where they’re working,” says Vocalocity’s Hill.

Fifth, having a hosted PBX enables you to find out exactly how much money you will save with IP telephony. As the cost for per-minute long-distance calling has dropped, it is harder to see big per-minute savings for IP telephony. But there’s still room to improve the bottom line by saving on interoffice calling, cutting down the number of trunk or dedicated inbound lines and reducing annual maintenance contracts.

Finally, the hosted PBX service can scale upward without running out of lines or disk storage—or some of the other limitations of the older systems. “The concept is very scalable,” says Hill. “We can go from a single line to a thousand, and there aren’t any migration issues or the need for an on-premises PBX.”

For more than 250 lines, it makes sense for larger firms to buy their own IP PBX, and hire a consultant to package a high-speed Internet connection and Internet phones together. These firms also can leverage their initial investment in new phones.

Buyer’s Checklist

What do you need to look for when shopping for hosted telephony services providers? First, find out what kind of network operations center they have. Ask if it is on-premises, how often it is staffed, and what kind of response time is promised and actually delivered.

Next, examine what kinds of quality-of-service (QOS) guarantees the provider offers, how these are measured and what they’ll do if they don’t live up to their promises. And what happens when a disaster or network outage occurs?

One vendor, Bandwidth.com, offers this guarantee: “If you are down for more than an hour, we don’t charge you for that month’s bill,” says Henry Kaestner, founder and CEO. Fewer than 10 customers have received refunds in the past year,.

Another question to ask is whether the provider requires you to terminate your existing Internet connection, or whether they piggyback on that connection. Some providers do one or the other, while others do both or only require termination for the larger accounts. There are advantages to both methods, depending on what kind of QOS guarantees you’ve been given and how much of your existing Internet connectivity you’ll need for your voice network.

You also need to determine if your IT-telecom staff can handle the upgrade to IP telephony. If your staff is unfamiliar with setting up QOS and virtual LANs, a consultant may be in order. Be careful how you calculate overall QOS, and be sure to include the end-to-end network path your voice traffic will travel.

“You want to consider whether all your network components are giving voice priority over other data packets, including switches, routers and other network infrastructure,” Mindshift’s Chisholm says. “The last thing you need is dropped calls, annoying echoes and poor-quality connections.”

Another option is to start with a branch office and see how it takes to the IP-phone system before rolling it out across the enterprise. “This is a good way to get started,” says Chisholm.

You also need to decide if you are going to integrate your phone system with your existing e-mail network. A “unified inbox” can be easy or difficult, depending on whether you have a relatively recent vintage of Microsoft’s Exchange and Outlook software, how many users want this feature and what kind of storage is available to hold the digitized voice mail messages.

Another factor is how much your provider’s long-distance calling plan will cost. Just because you’re using IP telephony doesn’t mean long-distance calls are free. Make sure you have sufficient minutes to cover your calling pattern. If unlimited minutes are offered, be sure there are no hidden costs or fees.

Finally, anyone investing in IP telephony will want to carefully examine their existing data network and evaluate whether it can handle Internet phone calls. There are many technical aspects of data networking that will affect call quality, including the type of wiring used to connect computers and how routers are configured. “We do the end-to-end solution and all the engineering, and just do Asterisk implementations,” says Chad Agate, CEO of NeoPhonetics, a Tinley Park, Ill., phone integrator.

Part of this evaluation will examine whether users need mobile-phone support for their new IP telephony. It is worth examining whether this will be critical for a particular set of users and whether they want to use integrated solutions.

Not every business is ripe for a hosted solution, says Chris Gatch, CTO of Atlanta-based CBeyond, which sells an integrated package. “It’s all about whether the PBX has the right features that map to your business processes,” he says. “Make sure it has the features you need and that you have the right network connectivity to maintain a reliable service level.”

If your network infrastructure is aging, or if you need to upgrade your Internet connection, it might be better to outsource your upgrade, he says.