Network-Based IP Centrex: More Features, Lower Costs

BY JEREMY SOREF

The battle for the enterprise is raging stronger than ever. IP-PBXs are gaining significant ground among enterprises while service providers wring their marketing and financial hands over how they can regain the lost revenues from Centrex. Now another option is available that delivers the best of both to service providers and enterprises alike: Network-based IP Centrex services.

Centrex services were originally developed to counter penetration of in-house digital PBXs. However, while they provided excellent value, Centrex services lacked the flexibility to evolve in response to the changing needs of customers. For example, over the past decade, enterprises -- both large and small -- have become more geographically dispersed and employees are increasingly mobile. Based on Class 5 switches located in the central office, Centrex services can't deliver features such as private dialing plans and abbreviated dialing for mobile workers with significant geographical reach.

However, the market potential for Centrex services is significant. According to Frost and Sullivan, there were 16.5 million Centrex-served lines in 2001. Assuming an average monthly subscription of $5 per served line, that translates into nearly one billion dollars in revenues annually. What's more, these users are among carriers' most valuable business customers, making it critical to retain them.

The deficiency in traditional Centrex services has led many enterprises to leverage existing LAN/WAN infrastructures with an IP-PBX, which offers the feature-richness and flexibility enterprises demand. However, the total cost of ownership (TCO) can quickly erode the value proposition of in-house IP-PBX systems, particularly for small- to medium-sized businesses. Substantial recurring annual costs result from ongoing provisioning, managing upgrades and other maintenance tasks -- not to mention the constant tuning and monitoring required to ensure QoS on a converged voice and data infrastructure.

IP CENTREX OVER THE NETWORK
Using the $5 figure cited above, an enterprise with 500 served lines will spend $25,000 annually for Centrex -- less than half the burdened salary of an administrator required to maintain an in-house IP-PBX solution. Assuming the same -- or better -- features, the economics of opting for a hosted solution with IP-PBX services speak for themselves.

So how can Centrex evolve to better handle the new enterprise environment? Fortunately, there is a "service-centric" alternative available to carriers that allows them to deliver services over the network -- irrespective of whether the underlying infrastructure is legacy circuit-switched TDM (time division multiplexing), IP or a combination of both. The approach is based on open service delivery platforms that fully disaggregate the service logic from the underlying signaling, call control and network transport. This enables home offices and mobile phones to be seamlessly included in the private numbering plan. Additionally, far-flung branch offices can be part of a single, hosted PBX, while still accessing their basic services locally.

The service-centric approach, based on an open service delivery platform, is gaining popularity among service providers. Concentrating service logic at the network level within a central service controller makes a lot of economic sense for the carrier. Upgrades and changes are made in one place only. What's more, the solution makes more efficient use of costly IP resources, such as softswitch ports, by reducing "hair pinning," or redundant use of these ports. But the real benefit -- service flexibility -- is shared by both service providers and their customers.

Unlike costly, inflexible Centrex features delivered on Class 5 switches, open service delivery platforms employ general programming models that abstract most of the underlying network specifics, freeing developers from the need to be experts in telephony engineering. In most cases, platform service creation and modification employ Java programming and environments similar, or identical, to those that fueled the phenomenal growth in creative Internet and IT applications over the past decade. The JAIN and Parlay/OSA initiatives have been central, in this respect, to providing a broad set of technology based APIs that carrier and third-party application developers can use for creating next-generation telecom services.

Drawing on an abundant supply of available Java application developers, carriers can dramatically shorten the time and lower costs associated with service rollouts and feature modification, making possible highly customized feature bundles -- even for smaller enterprise customers. Additionally, open service delivery platforms enable use of the Web as a vehicle for direct self-provisioning by customers. Users can customize the behavior of the hosted IP-PBX service themselves on a monthly, daily or even hourly basis to meet the dynamic reality of today's highly mobile enterprise environments.

WHAT YOU NEED, WHEN YOU NEED IT
The ultimate value to the enterprise of a network based, hosted IP Centrex service is that it can be bundled, cost-effectively, to meet very specific enterprise needs. The key is focusing on feature sets rather than services; for example, "Centrex-type" features extended to better support mobility and geographical reach form one such set. Once we move beyond the inherent limitations of device capabilities in the CO, it is possible to layer up additional features for the enterprise to choose from. Service providers around the globe are already looking at services such as:

• On-demand conferencing and network IVR that make use of IP-based media servers and the Web;
• Automated attendant features that can be provisioned and customized by the enterprise customer; and
• Automated Call Distribution (ACD) functionality with advanced routing features -- including location and presence -- for geographically dispersed call centers.

Individually, each of these feature sets offers value to enterprises. And enterprises can realize even greater value by combining the features they need in highly customized bundles that exactly meet their communication needs. The ability to change bundle composition and feature behavior dynamically using the Web delivers the ultimate in service flexibility beyond that available with an in-house IP-PBX.

The needs of the enterprise have changed significantly since the introduction of Centrex. Open service delivery platforms make it possible for service providers to deliver what customers need, when they need it, and on a cost basis that compares favorably with owning and maintaining IP-PBX equipment. This is good news for enterprises, which will be the chief beneficiaries of this service-centric approach by receiving more features and lower costs.

Jeremy Soref is product marketing director of Personeta Inc. He is responsible for marketing Personeta's TappS NSC product, a carrier-grade open service delivery platform, to telecom carriers and service providers. Personeta is a leading developer of intelligent Network Service Controllers (NSCs) that enable service providers to improve profitability by delivering value-added network-based voice services such as Voice VPNs, Network Interactive Voice Response and Network Hosted PBX services.