TMCnet News
HOSTED SERVICES: The Great Differentiator [Rural Telecommunications](Rural Telecommunications Via Acquire Media NewsEdge) Business computing is on the move-down the street, across town or to faraway cities. Hosted services, sometimes called cloud services or managed services (these terms aren't synonymous, but they overlap to a large degree), have grown rapidly in the last few years. Instead of investing in their own IT operations, businesses increasingly lease data center space, hardware, software, IT management and technical support-or some combination of these-from specialists. This outsourcing is made possible by the availability of fast, reliable broadband connections. By using hosted services, businesses can minimize their capital budgets while taking advantage of the host's economies of scale and technical expertise. In addition, because hosted-service providers commit to keeping their technology infrastructure up to date, businesses can gain access to the most advanced services and features through hosted solutions. As their in-house equipment ages out, businesses often seek hosted solutions as replacements. 0 Many different types of companies, including software vendors as well as companies such as Amazon that operate huge data centers for their own use, have become hostedservice providers; telecom operators are among the more successful entrants. Telcos find that hosted services generate new revenue streams from their existing business customers and help retain these customers. In addition, offering hosted services can be a great differentiator. Some large operators leapt feet first into the hostedservice business by acquiring existing hosting providers. For example, in 2011 Verizon bought Terremark and CenturyLink acquired Sawis. Independent telcos usually enter the field gradually as an extension of their existing services and expertise. For this reason, they commonly start by offering hosted communications services and then may add unrelated services. Build a Revenue Baee National Information Solutions Cooperative (NISC; Mandan, N.D.), owned by rural telcos and electric cooperatives, provides back-office solutions to its members and other customers, often on a hosted basis. Ed Wolff, vice president for telecom and enterprise solutions, said a number of NISC's telco customers have been inspired by their experiences with NISC to begin offering their own hosted services, such as disaster recovery. He commented, "We bring members' daily data backups to a secure, off-site environment where they can be back up in four hours. They see us offering this service for a reasonable price ... and they wonder, 'Why aren't I doing this for my members?' They have the technical folks and the infrastructure, and, building on that cooperative concept, they're modeling what we're doing. They come to us for advice about best practices, and we readily share that information." For example, to offer hosted services, telcos must understand how to protect clients' security. and NISC has experienced security specialists on staff. Some telcos also need to beef up their sales and marketing operations when they begin offering hosted services. A few years ago, Wolff said, basic telephone service was profitable enough that telcos could offer ancillary services as loss leaders to reduce customer churn, but with recent changes in the regulatory environment, they can no longer afford to do that. Thus, telcos are now looking to hosted services to build their revenue bases. But even at market prices, hosted services still create customer "stickiness," Wolff said. In addition, according to Doug Remboldt, NISC's vice president of shared services, offering hosted services "allows telcos to present themselves as technology leaders in their communities. ... Customers see them as state-of-the-art." Mark Momerak, NISC's telecom product line manager, mentioned yet another benefit of offering hosted services, especially when accompanied by technical support: These services encourage formerly Internet-wary businesses to finally adopt broadband or upgrade their bandwidth tiers. Thus, Momerak said, hosted services not only add new revenue streams to telcos' bottom lines but also help increase sales of products and services they already offer. Prove Uoureelf KPU (Ketchikan, Alaska) was a pioneer of hosted services, beginning with hosted PBX more than five years ago. "It's been very successful with the major businesses in townincluding government offices, the school district, large industry-down to mom-and-pop businesses," said Kim Simpson, KPU's division head for sales, marketing and customer service. The hosted PBX solution can be accessed remotely, which means KPU technicians fix problems without a truck roll. In addition, Simpson said, the solution comes with a "multitude of features" that would require extra fees with an on-prcmiscs PBX. One popular feature is "Find Me," which allows a call to be transferred automatically to the user's cellphone and then back to the primary phone for voice mail if the user doesn't pick up the cellphone. Call routing can be highly complex and can vary by time of day. Once KPU proved it could do a good job with hosted PBX services, customers were willing to entrust it with other critical functions. For example, businesses began requesting that KPU manage their local area networks, and, Simpson said, "We ended up serving as consultants for many businesses without a full IT department.'' Recently, KPU added a managed Wi-Fi solution, which can be bundled with its Internet service. The solution allows businesses to allocate bandwidth between wired Internet and Wi-Fi, give out coupons for free service at designated times, and prevent employees and guests from making illegal downloads. One surprising Q use of business Wi-Fi is in stores, which can deal with long checkout lines by processing transactions on iPads or other mobile point-of-sale terminals. Like the hosted PBX solution, hosted Wi-Fi can be managed remotely. "We only started offering it a couple of months ago, and we can't believe how many people wanted to take it," Simpson said. In addition, KPU hosts businesses' backup servers at its data center. Though most of its customers for backup and disaster recovery are local, Simpson recently received an inquiry from a company 1,200 miles away. (Some businesses prefer to maintain disaster recovery sites at places that won't be affected by the same disaster as the main site.) One Succeee Leads bo Rnobhen Glenwood, a cooperative telco that serves central Nebraska, began its foray into hosted services with offsite data backup for business customers. Marketing Manager Troy Stickels said the venture was actually prompted by a partner that hosts business software, such as accounting programs, at Glenwood's data center. Local businessesmostly small manufacturers and agriculture-related businesses-can obtain disaster-recovery and backup services much less expensively through Glenwood than by hiring IT staff and setting up their own data centers. Based on the success of its first offering, Glenwood is now moving into "full-on cloud services like hosted servers, exchange email and file storage." In addition, it is "putting on the final touches" for a hosted PBX solution because, Stickels said, "we're starting to see more of a trend of people wanting IP services on the phone." Stickels said his sales staff must educate customers about how hosted services can save them money, but ultimately the customers understand that they need hosted services in order to be competitive. "It allows companies to expand," he explained. "One customer is planning an expansion, but the capacity of its current system wasn't adequate. Either they had to move to something new or upgrade everything." 'Provide UJell Rbove Whab Their Neede Rre* Eric West, director of marketing at Duo County Telephone (Jamestown, Ky.), said Duo has provided hosted PBX for several years and also provides unified communications. Business customers appreciate the IP hunt groups and conference calls, as well as three-way calls, direct inward dialing, four-digit extensions and other features. "It has all the features of an in-premises PBX, but it's more flexible and configurable to the customer's needs," West explained. Duo takes a proactive stance with regard to hosted communications, researching what is available in the marketplace and trying to anticipate what would be most relevant to local businesses (mainly small manufacturing and tourism businesses). When Duo adds new features, its sales staff places calls to customers to inform them of the additions and make sure they are using the service in the best way possible. At the same time, if customers request new features, West said the company tries to accommodate them as quickly as possible. "The level of services we provide-particularly broadband, with probably 75% of businesses covered with fiber-allow us to provide well above what their broadband needs are for their business expectations," West said. * THE PLUSSES DF HOSTED PB» Here's how KPU in Ketchikan, Alaska, highlights the advantages of hosted PBX/IP phones to its customers. > One company for PBX systems and phone line services. > The system "lives" at KPU and is managed 24/7 by KPU. > No expensive upgrades or charges for different/new features or changes. > No investment in a big system that will become obsolete. > Easy to add users to the system. > Easy to move user offices; just unplug the phone and move. > Ability to utilize a "tree" to route incoming calls. > Flexible routing of calls to groups or individuals. > Allows individuals to work from home or the road with the same feature set-take your office with you! > Flexible, customizable time-of-day and day-of-week call treatments. > Significant savings due to limitation of taxes and surchargers. > No limit on the number of lines in use like a traditional phone system. All calls come through. SOURCE: KPU Masha Zager is a freelance writer. Contact her at [email protected]. (c) 2014 National Telephone Cooperative |