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Last week I had the opportunity to attend the CANTO show in Trinidad, which focused on the communications infrastructure business in the Caribbean. Being a first time attendee, I was surprised by the energy, friendship and challenges facing many of the countries in the Caribbean. We hear about how the communications infrastructure is important to a country’s economy, but the leaders of these countries stressed the importance of building world-class infrastructure to ensure the continued economic development of many of these small island nations. I was truly impressed by the work done by government and carriers to bring wireless and broadband to these countries and how much progress has taken place.
At BroadSoft we are encouraged by this commitment, and have introduced an initiative to offer our solutions to these island nations where broadband access is still limited. By providing our rich overlay BroadWorks features on traditional fixed and wireless TDM networks, these providers can offer services such as “find me, follow me” calling and fixed-mobile convergence, i.e. unifying desktop phones with mobile devices.
We have had the pleasure to work with a few carriers in the Caribbean and they have been some of our most innovative and focused customers. To continue to support this innovative thought-leadership, we took the opportunity at CANTO to demonstrate video conferencing (thanks to Polycom for shipping us the latest VVX video phone), Unified Communications (thanks to a Microsoft OCS integration) and finally media phones (thanks to OpenPeak for shipping us their phone).
Along with lots of leading edge technology, and insightful dialog on the social economic situation in the region, the organizers of CANTO put on some excellent evening entertainment, so that we could learn and enjoy the rich “Trini” culture.
When is a “trunk” not just a trunk? When it delivers the advanced communications services that businesses demand.
While we firmly believe in the industry’s move to hosted communications services, we understand there will be situations where a business can not convert overnight. During this transition period, service providers have an opportunity to show their customers a clear path to the benefits delivered by a fully-hosted environment. They can accomplish this by delivering SIP/VoIP PSTN connectivity to an enterprise’s IP PBX. But since no one wants to repeat that too many times, the process is commonly referred to as “SIP trunking.”
SIP trunking has traditionally been pitched by service providers as a lower cost alternative to TDM voice circuits, but the truly exciting aspect of SIP trunking is the numerous other benefits and capabilities it enables. Unfortunately these advanced communication capabilities haven’t been well communicated to the business community. Put that together with initial technical implementation challenges and spotty PBX vendor support, and it’s no surprise there has been slow adoption. However, the industry has focused on promoting the benefits of SIP trunking recently, and we’re seeing increased adoption and a greater awareness of SIP trunking in the enterprise space
This trend is also confirmed in a recent Infonetics report, showing that the SIP trunking market has finally moved into the mainstream. It’s now a very big growth opportunity for service providers. According to Infonetics, SIP Trunking is currently the fastest-growing segment of VoIP services. It’s expected to have an 89 percent CAGR from 2008 to 2013.
We’re definitely seeing that in the market today, especially with larger organizations. We have seen a rash of recent SIP trunking RFPs that indicate enterprises are finally realizing the benefits of SIP trunking over traditional TDM voice.
So how does SIP trunking go with hosted? SIP trunking is a highly complementary service offering to hosted Unified Communications (UC) – and something that significantly increases the addressable market for service providers. They can now support customers regardless of where they are in their migration path. SIP trunking also helps service providers sell into companies with hybrid hosted/premise deployment models.
To date, SIP trunking has been largely focused on recreating current TDM voice services (“trunks”) over IP. While useful, that’s only one possible use. We see the true market potential of SIP trunking in its ability to act as a hosted services “conduit” and to carry media other than standard PSTN quality voice – capabilities impossible with TDM.
Here are some examples of the unique capabilities that a service provider can deliver to an enterprise with SIP trunking:
- Unified Communications “as a service”
- Fixed Mobile Convergence “as a service”
- Wideband audio and video telepresence
- Fixed Line Short Message Service (SMS)
These capabilities are in high demand by enterprises – especially during the economic downturn – and represent a significant opportunity for service providers. Companies are not going to toss out their telephony networks overnight. Providers need to offer businesses an evolutionary path for advanced communications services that in many cases makes use of existing telephony infrastructure.
Change is scary, especially for the largest enterprises. But the productivity gains and the cost savings are undeniable, and SIP trunking puts companies on the path to the future of communications.
An important part of the Obama Administration’s $787 billion stimulus package is $7.2 billion for grants and loans designed to expand broadband access in the United States.
The bulk of the funds — $4.7 billion — will be distributed through the National Telecommunications and Information Administration (NTIA), and the rest through the Rural Utilities Service (RUS) program out of the Dept. of Agriculture. The government is making a very clear statement — broadband is so essential that funds will be made available so telecommunications service providers can expand access and reach every citizen in the country.
As you might guess from the name of our blog, we think this is an extremely valuable and important investment in the country’s future. It significantly impacts millions of Americans, service providers and our company as well.
We believe the stimulus bill will help service providers — both fixed and mobile — expand their footprint and speed up the deployment of broadband, especially in the Tier 2 and 3 rural markets. Wireless carriers welcome the stimulus dollars since it helps them support ongoing investment in so-called 4G networks, which will provide much higher broadband speeds to the smartphones of the future. And the millions of Americans who gain access through the investment will help keep those networks busy.
For providers, the stimulus bill will create new and significant revenue streams. In addition to providing access, providers can layer on value-added services, e.g., VoIP, IPTV, etc.
Some would say it’s about time we had a national broadband policy. (Actually we’ll officially have the national plan in 211 days, when the FCC is required to publish it.) The U.S. has fallen behind many industrialized nations in offering broadband to citizens, as measured per capita by population size. A report published by the International Telecommunications Union showed that the U.S fell from 11th to 17th from 2002 – 2007. That slide represents millions of people shut out from the communication and productivity tools provided by broadband access.
Broadband powers a new wave of multimedia communications, including video and mashups that marry VoIP with Web 2.0 — these are revolutionizing how consumers and enterprises connect, communicate and collaborate. VoIP technology makes possible features like unifying voice mail and email, “find me, follow me” calling and integration into business applications like Salesforce.com and social networks like Facebook.
What does the bill mean for BroadSoft? More broadband deployments = greater opportunity for more advanced, multimedia communications over IP. Entirely new business models have emerged thanks to broadband, such as cloud computing and Software as a Service (SaaS). These new models help make advanced communication services available to businesses of all sizes, and residential consumers as well.
BroadbandIgnite will return to this important topic on a regular basis. The expansion of broadband to every American citizen is overdue, and is vital for maintaining the productivity and competitiveness of America in the 21st century.
Small to medium-sized businesses (SMBs) are reeling from the current economic recession. And these businesses are the backbone of our economy. There are nearly 4.5M SMBs with between 1 to 19 employees – as reported by the latest U.S. census data – and they are all seeking ways to control costs and ride out the current storm.
In the now famous words of President Obama’s chief of staff Rahm Emanuel, “a crisis is a terrible thing to waste.” To translate that into this context, the current conditions provide SMBs an opportunity to replace antiquated telephony systems with unified communications (UC).
UC is the convergence of telecom and desktop applications and is being driven by the growing adoption of VoIP. According to the International Engineering Consortium, UC describes all forms of call and multimedia message-management functions controlled by an individual using a single mailbox for contact and content access. Communications can be from a wide range of devices over both fixed and mobile networks, and people can choose their preferred methods of communicating whether that be voice, IM, SMS, video, etc. UC also incorporates presence, so it allows an individual to indicate availability (e.g., available, on a call, in a meeting).
The bottom line — UC breaks down barriers of communications. People can now communicate to anyone, anywhere, at any time.
While many companies have been leveraging hosted VoIP environments for some time now, it’s interesting to note that a recent study commissioned by Siemens found that SMBs and larger enterprises face the same UC challenges. Take a look at this graph that highlights the productivity costs of the top 10 communication challenges:
The study showed that common communication barriers, such as time lost juggling multiple phone systems, distractions from unwanted calls and email spam, and the hassles of moving in and out of various technologies to coordinate communications can kill productivity. These issues result in 17.5 hours of unproductive knowledge worker time per week, wasting an average of $26,041 per worker per year. The study does not suggest that all that money can be recouped via a UC solution, but on average companies can realize savings of $5,209 per worker for a deployment investment of $225 per worker.
Businesses get incredible productivity benefits and improve the efficiency of how their employees communicate from UC communication features, but deploying an on-premise solution is expensive and challenging. And especially so for SMBs, who can’t afford the remedies and don’t have the in-house telephony expertise. The solution is Hosted UC. Telecommunication service providers are now playing a key role for businesses by hosting UC “in the cloud,” i.e. Software as a Service (SaaS) model.
This approach does not tie companies into proprietary products and will not compromise the demands of their own business. They can focus on their core business versus spending time, money and resources managing complex communications infrastructures.
The short term costs and efforts are minimal compared to the increased efficiency, productivity AND savings that will be realized from moving to a secure, hosted UC environment. And you need to choose a hosted provider with a track record of successful integration to remove the headaches of migrating.
So amidst the day-to-day belt tightening, don’t miss the opportunity to integrate the handset, the desktop and the mobile device of your employees. You’ll increase productivity, reduce costs and be better prepared for the economic upswing ahead.
As Leslie has discussed, the results from hosted service providers have been very good in an economy where so many businesses are in decline. In contrast, one declining category includes PBX vendors, many who have reported a 20% loss in line shipments during the first half of this year. We just finalized our 2nd quarter reporting and our performance results are very positive. We have always maintained the business philosophy that we make money when our customers make money. Many of our customers saw their sales grow 20% in Q2 over Q1 of this year, so clearly, the success of our customers is helping to grow our business quarter over quarter, year over year.
What is exciting is the fact that hosted telephony growth is a global trend. During the second quarter I visited with customers from the Americas, across Europe and Asia Pacific and all told me that their networks have been growing. Our service provider customers are serving larger and more demanding enterprises with hosted PBX, Unified Messaging, Collaboration and Call Center services. The expansion of hosted communication features in their services portfolio has also helped them to increase their monthly recurring revenue.
My prediction is that this is the start of a favorable trend for hosted service providers. The benefits of a hosted solution are becoming clearer in the minds of business owners and executives. And our industry has a renewed focus on innovation. Employees face unique communication challenges within their specific industry or vertical market. Innovative service providers and third party developers are building new, integrated applications that help employees more effectively communicate in their specific vertical industry. By continuing to add value to our networks that address expanding customer requirements we grow our collective businesses.
I’m looking forward to seeing what hosted service providers are selling in Q3.
The first quarter results in our industry were encouraging and certainly confirmed companies are shifting to hosted IP communication solutions at a much more rapid pace. SMBs realize VoIP isn’t just about voice any more – it represents a host of rich communication experiences, while allowing them to focus on their core competency.
The proof is in the results of service providers. According to data released by Infonetics in May, U.S. service providers experienced an average of 43% year-over-year growth in Q1 for hosted IP telephony services.
As we continue to crawl our way out of the global recession, these results are a bright spot from a financial view, and deliver guaranteed long-term benefits for end-users. The immediate benefit will be costs savings, but as SMBs expand the use of more modern communication methods, they will also come to rely on new features only made possible by the integration of voice and data services.
SMBs clearly understand the immediate benefits of hosted telephony as an alternative to investing in a premises-based PBX. Outsourcing non-core services is in vogue for SMBs. They appreciate they no longer need to purchase equipment upfront and pay for “seats” they will grow into in the future. But even more important, SMBs appreciate they do not need the hassle of owning and maintaining an internal telephony network, and they can “future-proof” equipment thanks to the rapid pace of innovation. Going hosted makes sure that a SMB’s telephony infrastructure doesn’t go the way of the rotary phone.
The typical business features everyone has come to expect include voicemail, call forwarding and do-not-disturb. But not every company appreciates that their communication services can expand way beyond just voice with a hosted solution.
Other tools include a call-center application that requires only a PC and broadband connection, an auto attendant, phone and video teleconferencing, unified messaging of voicemail & email, custom ring back, video messaging or a video auto attendant for directing calls. There are also numerous ways to increase productivity directly in Microsoft Office, such as a click-to-call feature that lets you quickly and easily connect to colleagues in your contacts directory. An online presence awareness tool lets you see if a co-worker is free for a call or chat before you reach out to him – reducing interruptions. And with one click, you can escalate communications from IM to an audio call to a video call.
And all of this flexibility has never been more affordable. These types of unified phone and email communications cost an SMB up to 50 percent less than the cost of a traditional on-premise solution.
So the time is now. The companies that don’t move now to a hosted VoIP structure will rapidly find themselves at a competitive disadvantage to competitors who have switched. Switching immediately saves money, makes employees more productive and provides more ways to service customers. I’d call that a stimulus package!
The results are in… Infonetics recently released a new report of the top providers of IP Centrex and Connectivity in North America. Their North America Business VoIP Services Leadership Matrix is a source of pride for us at BroadSoft. After all, eight of the top 10 providers listed are BroadSoft customers.
The report takes into consideration the carriers’ market strategy, financial stability, service capabilities and support options. These four factors obviously drive growth, and there continues to be significant upside and tremendous opportunity for growth in the VoIP market. Hosted IP telephony has been a bright spot in the current economy. Infonetics also reported in May that, during the first three months of 2009, US service providers experienced an average of 43 percent year-over-year growth for hosted IP telephony service.
Much of this current growth is due to the available cost savings with a hosted service, including the elimination of any installation, maintenance or management costs. However, carriers are continually drawn to the power of our VoIP applications because of our innovative communication services. We are helping our customers succeed in an incredibly competitive market by enabling them to deliver innovative communications solutions, which go beyond voice options, and address the changing needs of their business customers.
As communication services continue to advance, it is imperative for telecommunications providers to ensure their customers are taking full advantage of all there is to offer. So many of the new ways businesses need to communicate to remain efficient and competitive — such as video teleconferencing, enabling distributed workforces to receive all media via a single device, unified communications via integration with software such as Microsoft Office Communications Server — flow directly from the IP telephony tools to end-users.
Based on the latest numbers, it looks like we are headed in the right direction to drive growth of IP enabled communication services.
Many of us have heard of the promise of video communications for years, but have been disappointed with the overall experience. I believe that has changed. I recently started using a VVX personal video phone from Polycom, and think the time for video has arrived. Why? Here are my reasons:
- High-quality experience: you can actually see and hear the person. In fact, these phones use high definition codecs for audio and video, making the voice better than toll quality.
- The terminals themselves are cost effective and easy to use. Calling someone is as simple as picking up the phone and dialing, a standard phone number. It couldn’t be any easier.
- Bandwidth is cost effective and ubiquitous. This extends to people who are working at home using high-bandwidth services with great quality and speed.
But the most important reason is that these personal video phones change the way we communicate with the other party. In this era of email, instant messaging, text messaging and tweets, we all miss the basic personal-to-personal communications that can be created with a video phone.
It is amazing how often we struggle to focus when talking to someone on the phone. We read emails, check websites, and some of us even play games on our computers. Last year, when I started using high-definition codec for audio, I realized that my conversations improved and became even more effective. After a few weeks, I became hooked on high-definition audio and really had a hard time spending time on calls with the poor quality that are indicative of so many cell calls today.
When we started rolling out video phones within BroadSoft, I wondered if we would really use them for internal calls. Many of us have worked together for 10 years, so I wasn’t sure if they could add much value. I was pleasantly surprised. The most obvious and important change with a video phone is that you have to look at the person you are talking to, creating that personal connection that we often lack with audio-only calls. I am amazed at the quality difference in a call when both parties are focused and can see the expressions of the other person. Both parties become 100% focused on the conversation, with no distractions. We often look for business tools to improve how we work together, and I could not be more convinced that personal video will be just that. My ability to see and talk to a team member really flattens the world.
The industry challenge now is to create larger network effect; that is, making it easy for all us to use this amazing technology to speak to each other. Once we solve this, we will not only gain the benefits within our companies, but also between our companies. I would love to be able to talk to all of our customers over video. This should be the challenge for our family of great service providers.
See you on video!!
Mike
Michael Tessler
Scott Hoffpauir
Leslie Ferry
Alex Doyle
Curtis Hartmann
Shirish Andhare
Paul Adams
