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Feature Article
October 2003

Telecommunications Technology Of Choice: IP Centrex


In the twenty years since federal deregulation broke up the Bell system, the telecommunications industry has evolved both technologically and structurally. The majority of these changes and innovations have been driven by the business world�s demands that their telecommunications solutions make them more efficient and make their employees more productive.

Perhaps the most revolutionary of these new innovations has been the introduction and acceptance of IP telephony. Prior to deregulation virtually every business used Centrex services for access to calling features. As small-to medium sized PBXs and key systems became more feature-rich and affordable, businesses moved away from Centrex in order to gain control of their telecommunications environment. With IP telephony, users have, for the first time, access to �Centrex-like� functions not available in the PBX or IP PBX environments, and they don�t have to give up control of their telecommunications environment.

There are two primary ways companies can take advantage of IP telephony: they can install an IP PBX, or they can use IP Centrex services. IP PBX systems are best suited in locations where there are several hundred employees at a single site. Because of these size requirements, large centralized corporations and government agencies have, for the most part, been the benefactors of IP telephony. The staffing and support requirements for the installation of an IP PBX system and the associated LAN infrastructure have kept smaller companies out of most IP telephony solutions.

While well suited for larger centralized locations, IP PBX systems are not necessarily ideal for decentralized organizations. Companies that have smaller offices, 200 employees or less, are faced not only with the problem of staffing with IP telephony-savvy employees, but they also must deal with the economics of installing an IP PBX. This combination of staffing and economics has made IP telephony a dubious choice for many small to mid-sized companies. Even larger companies and organizations that have embraced IP telephony find that it is difficult to fully implement a solution in their branch offices, so inevitably they end up with a mixed environment of IP telephony and traditional PBX systems.

The answer to both of these problems may lie in IP Centrex, which provides all the advantages of installing an IP PBX but eliminates many problems associated with deploying an unfamiliar technology. In addition, the economic benefits of IP Centrex make it a viable solution for both smaller offices and satellite or branch locations.

IP Centrex comes in two flavors: IP only, and a combination of IP and PBX. The first of these options is a pure IP telephony environment that replaces traditional handsets and the PBX with intelligent IP telephones. The second option combines traditional telephony with IP Centrex; the lines terminate in a wiring closet and the office still maintains a key system or PBX.

There are only two requirements for the first example of the IP Centrex installation: a connection to the IP Centrex provider and a customer LAN that is certified for voice. The advantages of this approach are self-evident.

For companies who have embraced IPT with the purchase of an IP PBX, adopting IP Centrex for the branch or remote locations is a logical and natural progression. In fact, IP Centrex technology allows users to set up these branch locations in a way that integrates the calling and features of their existing IP PBX. So features like voice mail, four-digit dialing, transfers, and voice conferences can be shared and consistent through the entire corporation.

In the environment where the PBX is eliminated entirely, IP Centrex has many distinct advantages. Since all intelligence is within the service provider�s network, disaster recovery can be built right in. Anywhere the customer has access to a broadband connection can become a recovery location. For example, imagine a business of 120 employees that has had an unfortunate incident like a fire. By simply moving a phone or taking a phone to a new location, possibly even an employee�s home using a cable modem, the employees and company can immediately resume business communications. And despite such a drastic change, the outside caller never sees a change in service; to them it appears as if it is business as usual. The calls are still answered by the voice mail system and can be retrieved as usual.

But it doesn�t take an emergency or disaster to reap the rewards of IP Centrex. By placing an IP phone at an employee�s home, any business can immediately change the size of their workforce or their hours of operation. During a peak time or season, workers can log in remotely and have all the features as if they were sitting at their desk. And best of all, they can have these benefits from anywhere there is a broadband Internet connection.

IP Centrex is very adaptable to access methods but is especially well suited for under-served or remote areas. IP satellite systems using VSAT technology can be set up to provide immediate or mobile access. These systems are currently operating in rural and remote areas of the world with great success, in support of oil and gas, construction, and foreign operations including military personnel in theaters of operation over seas.

All the advantages of IP Centrex and IP telephony will be deemed useless if the superior quality provided by traditional carriers cannot be maintained. Traditional providers have provided service with �pin drop� quality and have near perfect network availability. IP Centrex must be provided in a way that maintains this high benchmark.

Network availability, another frequent concern in the decision to switch to IP Centrex service, can be matched through carrier-grade facilities and good operating procedures. The more difficult task is the management of voice quality. One interesting solution to this concern is to make the customer�s local-area network part of the service provider�s network responsibility. The customer�s LAN, if not installed and managed properly, can have a negative impact on voice quality -- so much so that if not handled correctly, the voice quality demanded simply can�t be met. The combined effects of latency, packet loss, and jitter can lead to deteriorated voice quality, and it is imperative that the customer understand how the service provider views and manages the caller experience.

IP Centrex is a good option for virtually any size company, from the small business with just a few lines to the large and multinational business with dispersed locations. For the small business, IP Centrex works well because it is impractical to buy, install, and manage the systems needed to support the applications and features inherent to IP telephony. For the larger businesses, IP Centrex can either become their �outsourced� IP telephony strategy or augment their existing IP PBX systems for remote or smaller offices. In any event, IP Centrex is emerging as a preferred solution for taking advantage of IP telephony.

Jerry Cady is president and CEO of PingTone Communications. PingTone Communications provides managed IP dial tone service to companies deploying Cisco Systems IP phones.

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