John Malone
John Malone is the President and CEO of The Eastern Management Group. He heads one of the world's premier communications...
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John Malone | May 09, 2018 |


Hosted PBX Providers Need Not Start from Scratch

Hosted PBX Providers Need Not Start from Scratch UC opportunities abound across verticals, with thousands of use cases.

UC opportunities abound across verticals, with thousands of use cases.

The world remains in the early stages of hosted UC, and service providers have ample time -- years, perhaps -- to jump into the market. But to save time, money, frustration, and do-overs, they must carefully select the platform for their service and features.

The Eastern Management Group is engaged in a multi-year study of the global hosted PBX market. We recently published research in a new report, "Worldwide Hosted PBX Market 2017-2022." With market data from more than 9,900 companies studied, we share some of our hosted PBX infrastructure research and analysis in this post.

You Talking to Me?
To which service providers are we referring? Every service provider. That's 6,000 telcos, 1,000 mobile network operators (MNOs), thousands of mobile virtual network operators (MVNOs), and an astronomical number of cable companies. That's because UC opportunities abound across verticals, with thousands of use cases.

Becoming a UCaaS or hosted PBX provider doesn't have to be expensive. Nor must it take a long time. We'll focus on three platform alternatives and have a look. (We don't address white label in this article.)

For some time, to enter the hosted PBX business as a service provider required a softswitch. Companies such as BroadSoft, now Cisco, have sold softswitches and UC features to hundreds of service providers. These purchases are a viable option for many service providers. The platform, a capital expenditure, can be moderately inexpensive, depending on size. Softswitches are often available with hosted PBX feature packages modestly priced at a few of dollars per month per seat for a passel of UC and PBX features.

Some Assembly Required
A softswitch takes a service provider time and money to roll out. The OSS, BSS, data centers, portals, network (unless over the top), staff to maintain and operate, and business processes are required. Since service providers already have elements of these capabilities, that's both a plus and a competitive advantage over many VoIP and IP PBX providers. But deploying hosted PBX using a softswitch can be a multi-year effort that has been proven out by many Tier 1 carriers.

Service providers may shorten their time to market considerably by using communications platform as a service, or CPaaS. With CPaaS, available from companies like Metaswitch, MNOs, telcos, and other carriers can launch complete hosted PBX services for customers in about three months. CPaaS, a turnkey solution from the platform company, frequently includes a built-in OSS BSS wrapper. No carrier data center is required. The CPaaS provider takes care of all sales training and customer marketing materials. CPaaS companies may invoice and collect payments from the carrier's customers, and even split commissions between the service provider and agents.

Carriers often incur no upfront cost and don't require a long-term contract... or possibly any contract. They pay a per-seat, per-month license fee (price) to the CPaaS company. While the licenses are costlier than those with a softswitch alternative, they should be low enough for carriers to profitably sell new services.

Application Platforms: PBX and UC Applications via APIs
A service provider shouldn't offer a full inventory of hosted PBX features when just a few may do. Here's why. All service providers don't target the same customers, and all customers don't have the same needs. Or a service provider may wish to avoid colliding with one of its peers.

For example, consider AT&T and Verizon -- market leaders targeting enterprise customers. Each carrier offers the whole megillah of hosted PBX services that might number 100 or more, perhaps from a softswitch platform.

But assume AT&T wants to enter a new market, say, Cameroon, in Central Africa, where it's starting out dead last behind MTN Cameroon, Orange Cameroon, Camtel, Cameroon Mobile Telecom, and Ringo. Get the picture? The portfolio will be different. It'll scale down from enterprise customers to the scores of micro business customers. It'll have different PBX services to sell, and maybe just a couple. And it'll break some china to build market share quickly before expanding elsewhere in the market.

Service providers, and especially MNOs and MVNOs, that don't want to offer a complete set of hosted PBX features may turn to application platform companies. They enable service providers to buy a solution and just put it in the network. Gintel, for example, sells UC platforms with containerized applications like PBX and UC, with optional APIs, to Tier 2 and Tier 3 MNOs and MVNOs. The solutions augment basic voice, data, and messaging capability. In this case, the APIs are neither softswitches nor CPaaS. They enable connectivity to third-party solutions. Interfaces provided from the platform allow connectivity to an IP multimedia subsystem (IMS) or softswitch. Companies like Gintel may partner with other platforms enabling a wide spectrum of capabilities.

Bottom line is there are hundreds of verticals with UC opportunities for service providers (e.g., healthcare, personal services), applications to sell (e.g., virtual PBX, outbound ACD, virtual phone numbers), customer segments to be converted (e.g., single line, SOHO, under 10-line, enterprise), and ways to go to market (e.g., supplier partnerships). There are now thousands of use cases, as any prospective vendor will tell you. And the partnership opportunities with suppliers have never been greater.

All that's left is determining hosted PBX services to offer, and then choosing a platform.

This article reflects Eastern Management Group's consulting experience and the company's exhaustive "Worldwide Hosted PBX Market 2017-2022" report. For any questions ask our researchers.


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