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The Edge
March/April 2001

Ralph Hayon The Real World: Hosted Telephony


Reality television is all the rage in the new millennium -- "Survivor," "Big Brother," and the one that started it all, MTV's "The Real World." Reality TV drives home an interesting concept: What is real is different from what is perceived.

The hosted telephony industry is no different -- people need to understand the reality of the technology, and most people do not. It is not because they are unintelligent (for they are), but mainly because they don't have direct experience, and their knowledge is based solely on what they hear from others.

At a recent conference I ran into a gentleman who we will call Mr. X. Mr. X had just become a participant in the "Real World of Hosted Telephony" and quickly received a rude awakening. It appeared that the sales organization of his company was successful in selling a hosted IP Centrex solution to a fairly large enterprise customer. The problem was, the technical team didn't have the solution nailed, as they say. So what did they do? They approached a large vendor to provide VoIP. Unfortunately, this large vendor, as is the case with many large vendors, did not have the solution they needed.

Unfortunately, Mr. X's problem is not uncommon in today's telecommunications environment. Providing a hosted telephony or IP Centrex solution is no easy task. There is a lot of talk about these types of solutions. But in reality, many of the existing vendors, who simply are trying to expand beyond their legacy offerings, don't really have a grasp of VoIP, or the needs and expectations of their customers. Many vendors are too attached to their legacy offerings, too detached from new technology, and too far from their customers to truly understand what is needed to provide "IP Centrex" services.

So what are the 'Real' hosted telephony issues?

  • Multi-tenant (IP Centrex) Support
  • Business Phone Features
  • Telephone Voice Quality
  • Architecture/Design
  • Scalability
  • Reliability
  • Carrier-Class
  • Cost

Many of today's proposed solutions are based on the PBX mentality -- one customer, one box. In a hosted telephony environment, this changes dramatically. Now, different customers can be partitioned so that unique dial plans, voice mail, and automated attendant capabilities can be provided for each customer from a single system. Hosted telephony platforms need to be, and can differentiate themselves by being, multi-tenant

A good example is a building where many businesses reside -- the fashion designer on the first floor, the accountant on the second, and the wholesale reseller on the third. Each needs to have its own dial plan and voice mail accounts. Further complicating matters, the wholesale reseller has locations in four cities across the country. In the past, each location required a dedicated PBX or iPBX to get the telecommunication services they needed. Today, a multi-tenant hosted telephony solution allows a carrier to easily support all of these customers from a single hosted platform.

Probably the strongest advice one can provide to those wishing to get involved with hosted telephony solutions is to engage a partner that understands the issues, has direct experience, and is aware of what is needed to deliver hosted telephony systems that work. And when I say partner, I mean a company that goes beyond the status of "vendor."

Hosted telephony solutions require partners that can help you design your total network, understand the quality of service issues, and honestly tell you what works and what will not. They should understand all of the key issues discussed above and should have the ability to discuss them in an honest and open way. They should help you build this new business, not just sell you a softswitch, feature server, or IP telephone.

It is also important to understand that the market is changing rapidly with new products being introduced at a torrid pace. Some of these products and solutions can help drive sales and retain customers -- but some don't work as billed or have the capabilities needed. Most carriers are not equipped or prepared to understand or handle this. A partner with true VoIP experience assures successful deployment in this fast moving market.

Hosted telephony solutions, and especially those that are broadband VoIP-based, are the future of telephony. This is a radical departure from what people understand today, and is the next logical progression of a Web and Internet-based infrastructure and economy. For most in the communications industry, this blending of the Internet and telephony is a new and exciting paradigm shift.

Welcome to "Reality Telephony." I hope you enjoy the show.

Ralph Hayon is president and CEO of congruency, Inc., a Communications Applications Service Provider (CASP). He can be reached at

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