SERVICE PROVIDERS AND TARGET MARKETS
Hosted IP service providers represent a spectrum of profiles. Some are the unregulated divisions of the traditional carriers, such as Verizon or AT&T. Others are "new and untraditional" entities that have only recently entered the voice telecommunications business and see it as an application to run on a converged data network. Still others are relatively new, but their management and perspective is more traditionally voice-oriented. Almost all service providers focus on SMB markets up to 100 stations but sometimes considerably smaller.
In any event, customers should consider the following criteria when investigating Hosted IP solutions:
* How long has the provider been in business?
* What is the "engine" for its Hosted IP offering? Is it state of the art, such as the Softswitch architecture described earlier?
* What types of facility houses the switch? Is it a “hardened” facility with redundant HVAC and power, such as uninterruptible power supplies (UPS) and generators?
* How has the service provider designed for high availability in terms of redundancy, disaster recovery, physical and logical security, route diversity, and remote monitoring and reporting?
* Does it have "referenceable" customers similar in size, applications, and complexity to your situation?
* What service level agreements and guarantees does it offer for availability and service outage avoidance?
* How does it compensate for outages?
* Does the service provider have a clear and documented implementation process that it is willing to share?
* Are there any technology "refresh" provisions for the core technology or end points?
* How will it support any advanced applications?
In any event, the surge of interest in Hosted IP has brought out many new providers. Some have good business models and know what it will take to do well, namely solid offerings, good sales and marketing and, most importantly, the implementation, support, and long term commitment to the customer.
SUMMARY AND CONCLUSION
Hosted IP is becoming a popular alternative for many organizations, especially in the SMB market. Hosted IP improves on traditional Centrex in several respects, but its principles, especially the economic ones, are quite similar. The matrix below summarizes Hosted IP’s potential strengths and weaknesses.
No single solution is right for every organization. An organization must understand its business priorities and weight them accordingly. Then it must evaluate potential solutions, such as Hosted IP, in a rigorous and objective manner. Price and the length of commitment, especially now, will be an important factor in developing a TCO. But price and TCO should be viewed in relation to the overall solution’s ability to meet the business communications requirements. If the solution does not meet the customer’s critical business requirements, then the outcome will be bad, no matter how little it costs. As a wise person once said, "The bitterness of poor quality remains long after the sweetness of low price is forgotten."
Byron Battles (www.battlesgroup.com) and Rick Hathaway are independent telecommunications consultants committed to finding the best value telecommunications solutions for their clients. Each has over a quarter century of telecommunications industry experience. They are Past President and President, respectively, of the Society of Telecommunications Consultants.
