Business Phone Systems: VOIP PBX, Hosted PBX, Virtual PBX.

By Adding 15 OCS-compatible phones Microsoft puts Avaya and Cisco in its sights.

By Robert Poe on May 16th, 2007

Keep those blue screens of death jokes coming, but don’t be fooled. However funny it might seem to entrust your phone system to the software everyone loves to hate, Microsoft is on track to become a dominant IP telephony player. It surely won’t mind if people get the wrong impression about what it can or wants to do. After all, the more clear it is about its plans, the fiercer opposition it will encounter from entrenched IP PBX vendors like Avaya and Cisco, whose cooperations it needs in the meantime.

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Its VoIP phone announcement yesterday represented a significant step towards Microsoft’s IP telephony goals. Nine manufacturers unveiled 15 IP telephones that will be compatible with Office Communications Server 2007, Microsoft’s software for providing IP PBX functions over a corporate network. The manufacturers included ASUSTek Computer, GN Netcom, LG-Nortel, NEC, Plantronics, Polycom, Samsung, Tatung and ViTELiXThis means companies using Microsoft’s phone solution won’t be stuck with headsets. The announcement came just a couple of months after the software vendor made a big deal about a study — which it had commissioned — showing that its soft phones provided better call quality than some Cisco desk phones. Taken at face value, that might give you the impression that Microsoft saw the future mainly in terms of headsets and soft clients running on PCs. Yesterday’s announcement proved otherwise.Microsoft has been touting OCS 2007 as a large enterprise solution, complete with predictions that 100 million Office users will be using click to call within three years. But at least one observer thinks it’s looking at another target in the meantime.Frost & Sullivan Analyst Krithi Rao notes that a number of the phone manufacturers in the announcement have been targeting small and medium-sized businesses in the U.S.”I see [Microsoft] with their announcement telling small business customers that if you don’t need a full sized PBX with all possible call control capabilities, our solution, which has some level of telephony capabilities, can be deployed with these end points which are already certified with our solution,” said Rao. “And you have a communications system up and running.”At the same time, any move towards the low end of the market would — in addition to distracting unwary competitors — give Microsoft time to get its act together for an assault on the large enterprise.”I think right now OCS is a step in the right direction, but it still doesn’t include all the necessary call control features an Avaya or Cisco or Nortel have in their PBXs,” said Dell’Oro Group Analyst Alan Weckel. “As a standalone product it doesn’t work, so in this round they have to cooperate with all the PBX vendors in order for this product to be successful.”But it won’t need to cooperate, or to deflect attention from its real plans, forever.”If I ask you in the future what’s in the next version of Office Communications Server, say in 2009 or 2010, you might say they’ve added enough functionality that you no longer need another PBX for call control,” said Weckel. “The basic call control resides in the Office Communications Server, and the PBX is a peripheral device to do international call control and a couple of complex things like that.”By then, you’ll have long forgotten how humorous it was to think of putting such a critical activity as talking on the phone in the hands of a maker of notoriously unreliable operating systems.

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Though their prices may be similar, these 4 VoIP competitors distinguish themselves with exciting features.

Robert Poe on May 16, 2007

Still worried about being a Vonage user? Just because it’s not on the front pages this week doesn’t mean you shouldn’t be looking at alternatives, just in case. And you may be surprised at what other carriers can offer you. Vonage’s big advertising budget tends to drown out some of its smaller competitors but that doesn’t mean they can’t provide a good service.

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To save you from having to research companies and wade through a bunch of Web sites that give you as many options as the window stickers on new cars — without the uniformity — we’ve compiled a handy guide to some of the leading Vonage alternatives. Start with our previous article on the topic and then move on to these four. As you peruse them, though, keep in mind that service availability will depend on things like whether the provider has established E911 coverage in your area.

1. VOIP.COM

One of the rising stars of the business, voip.com offers unlimited North American calling for $19.95 a month for residential users, or $16.95 a month if you pay $203.40 for a year in advance. You can also get 200 minutes a month for a mere $9.95. The adapter to hook your standard home phone to your broadband Internet connection comes free. Alternatively, you can use a soft phone plan for $14.95 a month for unlimited calling from your PC using a headphone and downloadable client, or pay $3.95 for 100 minutes a month.But voip.com isn’t just about price, it’s also about all the other features and capabilities only VoIP can provide. For example, Main Number ($9.95 a month) gives you a single number that will ring on all your phones, whether work, residential or mobile, when someone calls it. Voicemail ($4.95) lets you access your messages by phone or Web browser, and have them emailed to your computer. Mobile Line 2 ($8.75) provides an additional number that will ring your cellphone, allowing you to differentiate between personal and business calls, for example.Naturally, international rates undercut most traditional carriers’. Voip.com will also launch business services soon, as well as a prepaid connect-a-call service (currently in beta) called Make a call.

2. SUNROCKET

SunRocket undercuts voip.com’s prepaid yearly price, but only by $4.40: its Annual Edition runs $199 for unlimited North American calls. Paying by the month also costs $24.95, with 200 minutes a month going for $9.95. SunRocket also offers cheap rates to 41 international “SunSpots” cities and countries in Europe and Asia under various per-minute or flat-rate plans.SunRocket allows you to add up to six additional “Signature” numbers, at $3.00 a month each, that ring on your main phone, but have their own voicemail boxes and feature settings. The numbers can be local or in another area code, to allow relatives around the country to call you for the price of a local (to them) call.

3. LINGO

Keeping up its end of the annual price war, Lingo offers unlimited North American calling (like the others, it also includes Puerto Rico in the package), for $195 a year. On a monthly basis, unlimited calling costs $21.95, which includes 21 international countries as well, while 500 minutes run $14.95. A $34.95 international package gives you unlimited North American calling plus 300 minutes to most overseas locations. Additional domestic numbers cost $4.95 a month, with international numbers, a great feature for those with a lot of overseas relatives, adding a mere $10.00 on top of other charges. Lingo also has small-business plans starting at $49.95.

4. PACKET8

8×8’s main Packet8 residential service runs $24.99 a month, or $199 a year prepaid, for unlimited North American calling. Adding unlimited calling to a bunch of Asian, European, and Latin American locations boosts the charge to $49.99 a month. Given its emphasis on business customers, it’s unsurprising that while Packet8 offers a small-company plan with a single inbound line starting at $39.99 a month, it also offers an impressive array of additional business-oriented features, capabilities and plans.Some of the features you will want to confirm on any service include E911 mentioned above as well as caller ID, call waiting, rollover, termination and installation costs and how long it will take to transfer an existing number to the new service.

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The smartest providers are finding new ways to attract customers and generate recurring revenue.

By Cindy Waxer on April 30th, 2007

Today’s VoIP resellers can rest assured that there’s simply no shortage of business opportunities being presented by VoIP. Consider this: Palo Alto, Calif., based Radicati Group Inc., recently forecast that nearly three-quarters of corporate phone lines will use VoIP within the next 3 years. Jumping on board are businesses ranging from mom-and-pop shops to blue chip companies such as Bank of America and The New York Times Co. But as competition heats up, and PBX prices decline, many VARs are seeking new ways to win customers — and revenue.

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A Shift to Software

Topping the list of fresh opportunities is VoIP software. “In the past, telephony solutions consisted of actual PBX hardware,” says Jayanth Angl, a research analyst at Info-Tech Research Group. “But today, things are becoming more software-based. So it’s a different model where VARs are selling system hardware but also selling software licenses, plus additional services.”It’s a trend currently being played out among today’s top vendors. Take, for example, Microsoft. The Redmond giant expects 100 million business users to make VoIP calls on its Office Communications software within three years. That is more than double the size of the current VoIP market. Two versions of Microsoft’s Office Communications software are now in beta testing. Jeff Raikes, president of Microsoft’s business division, says, “Software is set to transform business phone systems as profoundly as it has transformed virtually every other form of workplace communication.”Eager to ride the software wave, Nortel partnered with Microsoft last year to form the Innovative Communications Alliance. As part of this initiative, Nortel and Microsoft will transition traditional business phone systems into software, with a Microsoft unified communications software platform and Nortel software products to provide further advanced telephony functionality. According to Nortel, this software-centric approach will provide the easiest transition path for businesses, helping them reduce the total cost of ownership and better protect current investments.

Big Opportunities from Small Businesses

No longer reserved for deep-pocketed enterprises, VoIP solutions are now becoming increasingly user-friendly and cost-effective for small and midsize businesses (SMBs). VARs would be wise to reach out to these potential customers, according to industry experts. “These smaller organizations really weren’t addressed by the larger solutions. They really do have different needs and they’re looking for ways to improve productivity,” says Angl.In fact, so hot is the SMB VoIP market that many vendors are jockeying for market dominance. In late April, Mitel Networks announced its plans to acquire Inter-Tel. The acquisition, valued at about $723 million, accompanies a big push into the VOIP SMB space by Cisco Systems, Nortel Networks and Microsoft. “By coming together, we move to the No. 1 position among SMBs for IP telephony,” said Don Smith, CEO of privately held Mitel Networks, in Ottawa, Canada.

VoIP on the Go

Although it’s still early in the game, VARs would be wise to cast an eye towards mobile VoIP. Mountain View, Calif.’s Jajah Inc. announced a new mobile VoIP service that allows smart-phone users to make low-cost and, in some cases, free international calls. Customers simply enter Jajah’s mobile Web portal through their handset’s browser, enter their user name and password and then make either a free or low-cost call. Then there’s Fring Inc. which gives users access to P-to-P (peer-to-peer) VoIP offerings such as Skype and Google Talk. In February, Microsoft demonstrated its new Microsoft Windows Mobile 6 Smartphone software at the 3GSM World Congress in Barcelona, Spain. The system aims to enable carriers and device makers to add VoIP functionality to Windows Mobile devices. British Telecom in Europe, as well as HP, are reported to be among the first that will provide smartphones with new VoIP offerings for their business customers.“We’re definitely seeing a lot of interest [in mobile VoIP] in some specific verticals,” says Angl, pointing to warehouse environments in particular. Nevertheless, Angl warns that mobile VoIP remains a “very niche” market.

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Choosing the right features can make all the difference in your work day, and year.

By Robert Poe on May 1st, 2007

You may not currently have a huge choice in buying VoIP phones. After all, most companies buy phones that work with their PBXs, not the other way around. You’re often limited to your PBX vendor’s proprietary or third party vendor-certified models — at least until session initiation protocol (SIP) is mature and ubiquitous enough to become the standard (that might take a while).

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Still, when you have a little leeway to choose among either vendors or models, a number of factors can determine how easily you can live with your decision. Here are 5 cool functions to look for.

1. Is this my phone, or is it my PC?

A lot of developments have come together to make VoIP desk phones capable of doing things your grandfather’s — make that your older brother’s — phone couldn’t begin to. Start with soft keys, those programmable buttons that change depending on your task at hand. Add big, bright color LCDs that show, in words or pictures, what pressing each key will accomplish. And display step-by-step instructions via intuitive graphics, rather than having to dig through a manual written by engineers. The result: a phone that can be as comfortable and familiar to use as some of the better PCs or consumer devices around.

Include one more development: the integration between increasingly capable and user-friendly VoIP phones, and applications running on enterprise servers. It means that (with the right IP PBX and network architecture) you’ll be able to do everything on your desk set from reading and answering email, to accessing corporate databases and viewing a video message from the CEO on that big bright screen. But the quality of the user interface and the application integration are crucial. If they’re more confusing to use than your cellphone, you might want to take a pass.

2. A whole gigabit, just so I can talk?

Since 8Kbps can be enough to carry a voice conversation, you might think a gigabit Ethernet connection would be overkill. It’s up-and-coming in desktop VoIP phones though. The reason: VoIP phones and computers are both data devices. Connecting both of them to the corporate LAN takes up 2 data ports. But if you can hook your computer to your phone, and your phone to your LAN, you halve the number of ports your office network needs. Until recently, most phones have been designed to connect at the 10 Mbps or 100 Mbps speeds that accounted for the bulk of office LANs. Now, GigE enterprise networks, and computers and applications that take advantage of such speeds, are becoming more commonplace. That means purchasing GigE-capable phones will earn you bonus points for future-proofing your company’s IP telephony system.

3. HD? I thought that was for TV.

HD Voice is a Polycom term, but it highlights a broader trend in desk phones. Manufacturers are doing a lot to improve the sound quality of conversations, on the theory that if you can work more efficiently, you don’t have to struggle to hear and be heard. One significant effort involves the use of wideband codecs, which sample voice audio 16,000 times a second, rather than 8,000 times, as telephones have done since 1915. This opens up all kinds of possibilities in terms of increased clarity. It might even make it easier for your supplier’s interactive voice response system to understand that you’re having trouble with your order, not that you want to double your order.

4. Give me them wide open spaces.

There’s call quality, and then there’s speaker phone quality. The big push these days is to make desk phones function as well as specialized conference room speaker phones, so you can work out of the boardroom while the SEC is examining your hard drive. But doing that takes some clever physical design. One trick is to put as much space as possible between the microphone and the speaker, so they won’t interfere with each other. That means widening the base as much as possible without making your desktop phone bigger than your laptop computer. Another trick is leaving a big empty space behind the speaker, to let the sound resonate like in high-end audio systems. Handy reminder: when phone vendors talk about audio cavities, they aren’t talking about putting a microphone in your tooth.

5. Look, Ma, no moving parts!

Siemens may be ahead of Steve Jobs in making touch controls cool. Their recently introduced line of OpenStage phones lets you control all kinds of things without moving buttons or levers. You increase volume, for example, by simply sliding your finger from left to right along a slot, a blue glow in the slot extending to show how loud you’ve made things. The soft keys and iPod-like navigation wheel are similarly touch sensitive.

The keypad uses conventional push buttons, though, which makes sense when you’re trying to dial without looking. Speaking of which, does the phone you’re considering have a nib of just the right size on the 5 key, so you can navigate the keypad by feel alone? Manufacturers take such things seriously, and so should you, if you spend a lot of time dialing numbers that aren’t in your online directory.

The importance of coolness

There are a lot of other things to consider, especially the various forms of wireless connectivity, but don’t forget to ask yourself one thing: Does the phone look cool enough? We mean, you don’t want to spend all day, every day of the year, looking at a device that looks like Bill Gates designed it, do you? We didn’t think so.

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Infonetics report gives small IP PBX vendor higher marks than its giant competitors.

By Robert Poe on May 2nd, 2007

It’s no secret that ShoreTel’s success over the past few years has gone hand-in-hand with the growing interest of small businesses in VoIP. The Sunnyvale, Calif. based IP PBX vendor has done a good job of providing products that fulfilled that interest. But a new Infonetics report provides some surprising insights into the pre-IPO company’s success. Hint: it’s not just due to the fact that the PBX giants haven’t reached the low end of the market yet.

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It does start there though. ShoreTel offers VoIP gear it claims will scale from one to 10,000 users. While it’s hard to picture a one-user PBX, it’s a fact that manufacturers like Avaya, Cisco and Nortel are more focused, technologically and commercially, on large installations than on those smaller than a few hundred employees. So while it makes both high-end and low-end equipment, ShoreTel has had particular success in putting its products in spots where the giants were unable to fit. And its IPO plan shows how sweet those spots can be.The Infonetics study shows, however, that there’s more to ShoreTel’s surge than keeping out of the giants’ way. The survey comprised interviews with 240 companies of all sizes, all of which use VoIP now, or will do so by 2008. Among other things, the interviewers asked the companies why they are using, or will use, VoIP. It also asked them to rate the various vendors based on various criteria.It turned out that several factors made ShoreTel a particularly good supplier for the small-business market. For one thing, its products scored well in the area of price and value. By coincidence, price was the third most important driver (out of 12) for VoIP deployment among small companies, while it was ninth among all companies surveyed.ShoreTel products also ranked first in ease of use, another crucial concern at the bottom end of the market.”Ease of use is important [to small companies] because they may not have the dedicated internal people that can handle a phone system,” says Infonetics Directing Analyst Matthias Machowinski. “That’s why they need their equipment to be as easy to use as possible, so they don’t need to call a technician to make changes.”Even not being a giant is, if not an advantage, at least not a major disadvantage to ShoreTel in the small-business market. Large and medium-sized companies are particularly concerned about the staying power and financial stability of their PBX vendors, Machowinski notes.”People are going to own this equipment for a number of years, so they’re going to need to have ongoing support for a long time,” he explains. “So financial stability is definitely an important buying criteria.”But the survey shows that’s less of an issue for smaller companies, for whom factors such as price outweigh almost everything else.”Financial stability is definitely not as important for smaller guys compared to larger ones,” Machowinski says.Perhaps most surprising was the vendor’s overall ranking in the survey. Across all the categories, which included things like reliability, scalability, features, distributed architecture, security, initial and operational cost and open standards-based platforms, ShoreTel and Cisco came out on top of such established PBX vendors as Avaya and Nortel. This, despite the fact that ShoreTel, with some 230-plus employees, is a fraction the size of the others.Machowinski thinks the main reason the two came out ahead is that both jumped directly into the PBX market with IP models. That meant they had no legacy technology or customers to deal with.”The incumbents have to make sure to keep their existing customers happy,” he explains. “The management has to be done in a certain way, so they can’t just decide one day to make it all brand new.”That fact, along with the money it will presumably get from its planned IPO, could provide just the opportunity ShoreTel needs to move upmarket and become a serious competitor in the market for larger-scale enterprise IP telephony systems. At least now it shouldn’t come as a surprise.

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