VoIP – Awareness High say Timico

Trefor Davies, technology director at Timico says that awareness of VoIP in the business market seems to be at an all time high thanks to some high profile consumer plays such as Skype and from the perspective of Internet Telephony Service Providers, 2006 is shaping up to be an exciting prospect.

“The market is a large one and businesses have a range of VoIP options to choose from. Historically Centrex had a fairly limited 11% penetration in the UK compared with nearer 25% in the USA. A recent study by the Yankee Group in the USA now quotes 70% of SMBs as preferring to opt for a hosted VoIP solution.

If this is extrapolated it would suggest that the UK market for hosted VoIP services is going to be far larger than it’s historical Centrex equivalent. When the widespread penetration of broadband internet access is thrown into the mix then the SMB market in the UK suddenly becomes a hot prospect for an ITSP.

The corporate PBX has for a long time been categorised as mature with no new players. The advent of VoIP and VoIP standards such as SIP has brought a few new vendors into the game but by and large they have been developing systems that try to emulate existing platforms and feature sets and are selling a low cost proposition. They have not been able to compete with the support and channel infrastructure of the market incumbents.

The hosted VoIP market has particularly attracted a lot of VC investment and a small number of new names such as BroadSoft and Sylantro have appeared with reasonable success in some markets.

By and large however the solutions produced still emulate the old fashioned PBX feature-set and the opportunity to change the way people work by using internet hasn’t totally been grasped.”

According to Davies consumers have (unknowingly) embraced VoIP in their billions world wide. “They have done this on the back of free services such as MSN Messenger, Yahoo, AOL. This has happened because of the strength of the user interface. People like the idea of going online and seeing which friends are around to chat to. IM has quickly moved on to voice, video and file exchange and to the almost universal adoption of the technology.

This contrasts starkly with the business market that has been subjected to reinventions of old technology PBX features.

What PBX vendors have missed is the fact that the new internet way of working that has exploded in the consumer market does away with many of the hundreds of features that most people didn’t know how to use anyway. Consumers have been provided with intuitive, easy to use interfaces and have lapped them up.

Considering the above it is reasonable to ask why business doesn’t just adopt free consumer services and sound the death knell of the PBX market. The answer is that these consumer services come with absolutely no support and in fact fall short of the needs of business in a number of key areas:

– Little hardware support – for example they are PC only services and come with no desktop phones
– No Quality of Service
– Network security issues
– A shortfall in features

In partnership with Nortel Networks Timico have developed a hosted VoIP service set for the SME market. Timico VoIP for Business takes advantage of all the mass market usability of consumer VoIP applications and applies telephony, security and support together with some key features such as user programmable dynamic routing, voicemail to email Unified Messaging and self provisioning.

Feedback following a soft launch in 2005 has been that SMBs really love the solution. The needs of business can vary hugely and this has been reflected in the usage of different features.

For example a small booking agency has one analogue telephone line with DSL but uses VoIP desktop phones to make 5 simultaneous telephone calls over the broadband connection.

A software company has 60 staff that often work from home. The PC client with Instant Messaging and online collaboration allows people to see when co-workers are around to talk to and intra company communications have improved dramatically. Telephony costs have plummeted. This company would have been glad to pay for the service on the productivity improvement alone notwithstanding the cost savings.

Business contemplating implementing VoIP have up until recently bought a VoIP PBX and used old fashioned ISDN lines to connect locally to the PSTN. The selling proposition has largely been based on cost of ownership, with VoIP contributing lower costs because of the reduced infrastructure needed. The involvement of IP networks has in this circumstance has either been LAN based or based on leased line IP bandwidth between sites. QoS has either not been available or has been guaranteed by using expensive MPLS connections.

The advent of L2TP on some connections to BT Central has meant that ISPs can now offer a degree of control over QoS over DSL lines that has traditionally not been available. This control doesn’t extent to the DSLAM but typically business DSL connections don’t have a contention problem and thus bandwidth, the normal root cause of QoS problems, isn’t usually a problem in the DSLAM. Being able to control QoS over the downstream link using L2TP therefore allows an ISP to connect VoIP customers to the internet/IP network using low cost DSL rather than expensive MPLS.

Few ISPs and even fewer ITSPs are currently capable of providing QoS over DSL. In fact Timico are one of only two companies known to be providing this.

The hosted VoIP market is about to see a rapid expansion. There are many players after the pot of gold but Timico believe that offering a business grade service based on successful consumer propositions will provide them with a serious advantage in 2006.

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