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Feature Article
October 2000

 

Online Exclusive Voice Over IP, E-Business Solutions Keep Multi-Tenant Units Competitive

BY JEFF BARNELL


Much has been written this year about deploying voice over IP (VoIP) in a corporate setting. While large enterprises can leverage their infrastructure and extensive resources to move toward IP integration, small and medium-sized enterprises (SMEs) -- with leaner budgets and space limitations -- may be left behind. Yet the same efficiencies that makes VoIP attractive to large companies are even more valuable to smaller organizations.

Consequently, property owners catering to SMEs should look for service providers that appreciate how integrated multimedia applications can reduce communications and infrastructure costs, and that have a scalable communications network in place to meet the growing needs of SMEs in multi-tenant commercial units (MTUs).

Ultimately, a network designed for both current and future business technologies will most successfully support SMEs' need to maintain their competitive stature and increase profits.

The Potential Of VoIP In MTUs
The MTU market itself holds much promise. While telecom providers vie for the business of large companies in central business districts (CBDs), non-CBD MTUs get far less attention. Due to their suburban location, smaller size, and diverse tenant structure, these MTUs are often overlooked. Of approximately 7.6 billion square feet of commercial multi-tenant office space, 72.6 percent (more than 115,000 buildings) is in suburban settings. These companies are smaller than "downtown" businesses, averaging 44,000 square feet per building, and accommodating modest-sized work forces. Ninety-one percent of U.S. companies have 500 or fewer employees.

Recent construction trends illustrate the continued growth of the suburban-based SME sector. Oncor International recently reported that within eight suburban markets, each had more than three million square feet of space under construction. These markets alone account for 45 percent of all new North American office construction today. As a result, an expanding and virtually untapped marketplace awaits MTU service providers -- one which is perfectly suited to the advantages of VoIP and other e-business applications.

Taking Advantage Of Multiple Benefits
While the lower costs of VoIP continues to be debated, it's clear that reduced long-distance rates make voice savings increasingly negligible. Instead, the real value for SMEs will lie in the efficiencies VoIP and other converged applications offer. Ultimately, when voice and data traffic are converged on a single platform, everything from Web-integrated call centers, VoIP phone cards, PIN access, and cardless calling will be simply a click away. Cost-effectively delivering these voice services directly to subscribers' desktops will allow MTU tenants to compete with large corporations in an unprecedented manner.

These efficiencies can be further extended when VoIP is offered in conjunction with a broad range of e-business applications and services. Because MTU businesses are themselves so widely varied, providers have numerous options when developing customized, turnkey solutions. Service packages could include unified messaging, click-to-talk customer service via the Web, click-to-chat, click-to-conference, groupware, collaboration via VoIP, and real-time video services in combination with existing e-commerce, accounting, human resources, and managed services.

Such business-enhancing services are particularly valuable to MTU tenants. First, a wide range of services allows the subscriber to utilize only those that their needs or budgets allow. As businesses' needs grow, so can the breadth of their selections.

From a cost standpoint, current managed services like Web hosting and managed voice mail also eliminate the need for SMEs to pay for and maintain large network infrastructures and technical support staff. Outsourcing eliminates the need and much of the cost related to purchasing and dedicating space for servers, groupware, and file servers. Moreover, managed services bridge the competitive gap between small and large businesses. This is especially important during times of economic downturns, when being efficient and staying competitive is even more critical to business survival.

For the building manager, multiple services combined with onsite technical support reduces workloads. Building managers can focus on growing and maintaining occupancy in other ways. Moreover, IP-based amenities make the building more competitive and provide a point of differentiation from other MTUs.

Challenges In Implementation
Numerous challenges will slow the growth of voice and data convergence. Telcos' enormous investments in circuit-switched equipment and extremely long equipment amortization cycles make offering VoIP a costly endeavor. Legacy telco switches don't support VoIP, as they were designed for the circuit-switched, not packet-switched, world. Consequently, the need to purchase the necessary and required equipment for VoIP can present an almost monolithic challenge.

In addition to these obstacles, many MTUs are currently served by the traditional CO (telco Central Office) model. So an MTU's desire to deploy VoIP and other evolving services may be constrained by the "minimum common denominator" syndrome -- what is done for one company is done for all, at a very high cost. Until there is critical mass requesting VoIP, SMEs remain largely unserved.

The PBX model is also problematic. Both the cost and space requirements for equipment create a bottom-line problem for MTUs. Additionally, common intelligent telephony features such as custom calling, number portability, toll-free numbers, national prepaid card calling, and emergency 911 are not yet reliably available over packet-switched networks.

Finally, VoIP does not yet achieve the same quality as traditional telecom over the public switch telephony network (PSTN). As a result, a dedicated IP network on public IP networks will be required to avoid congestion during periods of heavy use. Nevertheless, there are solutions which will make VoIP/business application integration a scalable, and attractive option.

Making It All Work, On One Network
With an eye towards providing converged services in the future, providers can best position themselves by building a network which is both capable of delivering the current carrier-class, digital voice, and e-business applications MTUs immediately require, and is also ready to accommodate VoIP deployment. To accomplish this, providers need to consider a balanced, optical network approach. This is best achieved through a regulated Competitive Local Exchange Carrier (CLEC) featuring an in-building infrastructure tied to a regional network center (RNC).

This scenario provides multiple advantages over the CO or PBX model. Foremost, CLECs already run both telco circuit-switched and packet-switched IP networks, and thus have the needed expertise in both areas. This enables a facilities-based CLEC with an RNC to cost-effectively support incremental changes as underlying VoIP technologies advance.

In addition, the RNC ties into a national network, providing the right amount of flexibility to meet the needs of customers (both for circuit-switched and IP-based services). As a result, a perfect balance is achieved: Building owners are no longer burdened to keep up with technology changes, nor are they tied to the CO's rollout schedule.

Finally, the CLEC can integrate directly into the national PSTN. This enables the flexibility to eventually evaluate and choose the best VoIP strategy, while still controlling its integration into the PSTN. Alternatively, non-BLECs (Building Local Exchange Carrier) will have to purchase service from a CLEC, LEC, or RBOC (Regional Bell Operating Company) who may not have a VoIP integration plan in place.

With the balanced network in place, providers will also need to develop a "blended" system during the transition to VoIP. Until standards are fully implemented, the conversion will require backfill VoIP capabilities with circuit-switched technology to provide the intelligent network services to which people have become accustomed.

Future-Ready Networks Benefit MTUs, Service Providers, SMEs
Being connected to a future-ready infrastructure is essential for SMEs. This type of design will be flexible enough to allow MTUs to take advantage of the broadest range of current digital voice and high-speed e-business applications, while preparing the way for VoIP deployment. Additionally, the RNC approach reduces communications and infrastructure costs as VoIP technologies advance, enabling SMEs to benefit from infrastructure improvements. It also allows SMEs to better compete with larger corporations, at the lowest possible cost. Finally, a fiber optic network enables providers to deliver carrier-class, immediate online access and services, as well as 24x7 service -- a significant value to MTU management.

With a solid understanding of the MTU market and a scalable architecture in place, the combination of existing value-rich e-business packages and future VoIP services offer the ultimate combination: Productivity and profits.

Jeff Barnell is UrbanMedia's vice president of marketing and is responsible for creating marketing and service leverage through branding, partnerships and programs. UrbanMedia creates and manages a network of business customers through the deployment of communications and commerce services. The company provides subscribers with comprehensive e-business solutions to the desktop, including dynamic content, e-commerce applications, and advanced voice and data services. Affiliated with the nation's leading real estate investment trusts (REITs) and property owners and managers, UrbanMedia is the first service provider to deliver free broadband access-a service giving property owners and managers a valuable new amenity for their tenants.



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