The Future is SIP Trunking

By Greg Galitzine

Andre Temnorod is not one to mince words.

The Chairman & Chief Executive Officer of Broadvox (News - Alert) does an excellent job of translating when he distills the company’s official mission statement:

“To be the premier provider of VoIP, SIP and IP communication applications and services delivered by the most skilled and motivated team in the industry generating excellent long term shareholder value…”

into the concise:

“Broadvox is an ITSP dedicated to providing the best service with the highest quality at the lowest price possible.”

That Temnorod is keen on providing high-quality Internet telephony services to his customers should come as no surprise. He’s been toying with the idea of creating a successful VoIP-based business since 1995, when involved in the white-box PC manufacturing business, he and several colleagues began looking for a differentiator to set themselves apart from the pack.

“I started looking at some early developments and some early products that offered Voice over IP,” Temnorod said. “At that point, it was proprietary Voice over IP. We were looking for an Ethernet card with built-in voice capabilities. We were hoping to be able to plug phones directly into PCs. While we had our computer company, we did some layman trial and error. The end result was, we determined that customers really don’t want to use their PCs for phone connections. The bottom line is: even if the PC crashes, they want to retain communication through their phones.

“So I kept up with developments in VoIP. Back in 1999, I launched my first VoIP startup which we sold after a couple of successful years. Then in 2001, I started Broadvox. The whole premise of Broadvox was to deliver distributed Voice over IP services on a secure and reliable network to any carrier company that could use them.”

Today, Broadvox provides managed VoIP services to a variety of customers across multiple markets, including SMBs, enterprises and carriers. It has deployed a global VoIP network and serves more than 160 telecommunications carriers, CLECs, ISPs and over a thousand enterprises to terminate and originate traffic to the tune of nearly 20 million minutes a day.

Broadvox has built a private IP network designed to transport traffic with assured quality criteria supported by state-of-the-art network elements from companies like Cisco (News - Alert), Lucent, Adtran, Sylantro, Sonus, Telica and others. The company’s network is constantly growing and evolving, and Broadvox is currently in the process of standardizing on Sonus network gear.

Furthermore, the company mans a 24x7 network control center monitoring performance on a continuous basis.

And so, since 2001, Temnorod grew Broadvox into a successful independent wholesale VoIP carrier providing services to a number of prominent retail VoIP providers.

“I don’t want to mention any names,” he says. “But if you take the top 10 providers, we provide origination and termination service to probably seven of them. The total wholesale SIP business represents around 90 percent of our revenues.”

Temnorod continued, “In early 2007, we launched a national marketing campaign focused on our retail SIP Trunking product and the development of a new channel of distribution for it. I believe our future is SIP Trunking.”

I asked Temnorod to share his vision for Broadvox and to describe how the company is positioned in the next-generation telecom market. According to Temnorod, “Our vision is to become the leading provider of SIP Trunking services to SMBs and enterprises in North America. Currently, we have an excellent business as a carrier’s carrier but we have seen the rapid adoption of IP telephony as an opportunity to evolve our business. We can provide the same cost savings and reliability of our traditional business to this rapidly growing business customer base.”

The company offers a solution known as the Broadvox Go!Anywhere SIP Trunking solution. According to Broadvox Chief Technology Officer Sergey Galchenko, “Go!Anywhere is a great solution for most companies that want to replace traditional phone lines and PRIs. Economically, it’s a fairly easy decision because they’ll achieve phenomenal savings on their monthly expenses related to phone calls (we’ve seen up to 70% savings). There is also an inherent flexibility to our SIP Trunking solution that enables companies with multiple locations to share trunks and create a lot of custom network configurations that they couldn’t do with traditional phone lines or even most other SIP Trunking vendors.”

Galchenko describes the benefits of the Broadvox solution thusly. “Our customers have access to the same suite of features they had with their legacy services like Local Number Portability (LNP), 911, Directory Assistance, etc…, but they also get the latest and greatest in everything provided by SIP. For example, we can perform load balancing across multiple locations, provide virtual phone numbers for distant markets, share trunks among sites and more. Broadvox also has a very diverse network in terms of both the hardware and the service providers we work with which enables us to provide a customized solution for each customer based on their unique needs.”

Temnorod explained further that the Go!Anywhere solution can be tailored to a customer’s specific requirements.

“Our SIP Trunking package can be customized based upon the desired number of simultaneous calls, long-distance volume, toll-free call volume, number of DIDs, local number portability requirements, and other capabilities,” he said. “Each business defines its service package with Broadvox, not the other way around. Moreover, we are using an indirect channel of Value Added Resellers or VARs to sell the product, giving them greater flexibility to address the unique demands of their customers.”

Mark Bresler (News - Alert) is Broadvox’ Vice President of Channel Sales, and among other things, he is responsible for the success of the company’s reseller focused activities.

Bresler described what Broadvox looks for in a reseller, what they expect from their partners and how they go about becoming Broadvox certified.

“What we look for in a VAR is that they truly add value,” Bresler said. “The days of telephony company carriers engaging agents are almost over. Agents are legacy-types who have customer bases that they want to convert over and over, typically to go after a lower price and more commission. That’s their incentive to flip the base to another carrier. In this world of IP, we really need VARs that bring additional value in their ability to identify and deploy customized solutions to the end user.”

“As an ITSP, we feel that for our SIP Trunking program to succeed we need to focus on our core competency which is delivering premium quality services and we need to partner with VARs that focus on their core competency which is the creation and deployment of a voice optimized LAN including any CPE necessary to ensure a successful solution for their customer.”

“We’re able to provide support for VARs around the interoperability of the CPE they represent by way of our SIP Engineering Group who jointly create technical application notes with that VAR’s particular CPE manufacturer.”

“So what we’re looking for as our partners are predominantly interconnects and network integrators.”

Bresler continued, touching upon some of the differentiators the Broadvox program offers.

“Broadvox is very different from the other VoIP carriers in that Broadvox employs ‘best in class’ metrics that would most likely be seen in a public utility or an incumbent local exchange carrier. We look at the total customer experience and meticulously manage the life cycle of the account throughout the contract term.”

“We have very well-designed processes both for VARs and end users. We provide several tools for the VARs on our Web Portal that enable them to view and maintain control of their accounts.”

According to Bresler, “Initially there’s the discovery phase where we make a determination of whether it’s a good fit for the VAR and for us. There are some requirements based on some aggregated monthly recurring charges across a ramp-up period that qualify the reseller for a certain percentage of commission.”

“The entry-level residual commission percentage is around 15 percent, but we have some VARs who are making significantly more than that.”

Education is another key area that needs to be addressed. Bresler for one believes that educating the reseller channel is “…paramount. It’s a dire need. It’s absolutely essential.”

“Even though Broadvox as a carrier really ultimately should not be responsible for educating VARs on specific OEM gear, we find ourselves becoming knowledge experts for every type of gear being deployed to ensure success.”

“The bottom line,” Bresler concluded, “is that unless people actually educate themselves about the technology and feel comfortable with it, they’re not going to be able to go out and sell it to their end users. We are going to help them do this”

CEO Temnorod pointed out one more key advantage of the Broadvox reseller program: compensation. “We believe we’re going to be compensating our resellers better than our competition will, quite simply because we have more margin on the product. Competing vendors have their softswitch supporting either hosted or SIP Trunks, and they have to take that traffic and send it to the carrier. We are the carrier for our customer base and we have extra margin because we own our carrier network.”

In addition to resellers, Broadvox is hard at work developing relationships with their technology partners, that is to say those companies that make the equipment that customers wish to connect using SIP trunks.

Eric Eckman is Director of Business Development and plays a major role in developing the Broadvox technology partner ecosystem.

According to Eckman, “The biggest key to our ecosystem is the depth and breadth of partnerships. This is such a rapidly changing field with the established PBX (News - Alert) vendors revamping their product set, new PBX vendors coming on board, new solutions around unified communications, contact centers, and communication-enabled business processes (CEBP), that it’s important for Broadvox to support the widest possible range of solutions. Our VARs and end-users have different requirements, and they choose different solutions to address them. We’re committed to making sure that we can offer seamless service no matter what our customers choose.”

“We seek out partnerships with the vendors that our customers want to work with. From both a technical perspective as well as in providing support, we know that it’s extremely important to provide a highly qualified and united team to make life easy on the companies that are using our service.”

Eckman explained that would-be partners must undergo a very detailed certification process.

“It starts with the engineers working together and testing all the functionality of our service in conjunction with the functionality of the PBX or software solution. We make sure that everything works, we document how to set it up, and we establish all the support processes in advance of actually deploying the combined solution. This process is repeated whenever we or our partners make upgrades or changes to any facet of the solution.”

On top of growing their ecosystem of resellers and partners, Broadvox is also planning to expand their network by adding SuperPOPs in several cities, including Seattle, Denver, Chicago, Atlanta and Miami in addition to existing facilities in New York, Los Angeles and Dallas.

Temnorod explained, “We’re redeploying our own network back to about eight markets that will be very heavily connected through the private network. We are actually buying fiber from market to market to connect our gateways. And those gateways are much bigger than what we used to have, with the capability of handling up to 20 DS3s.”

“What we do is we backhaul any local interconnections whether it is a local ILEC, CLEC or end-user customer to one of our super POPs. It’s more cost effective for us to handle traffic this way.”

To help manage this expansion, Temnorod says that Broadvox will possibly add secondary network operations in Dallas within two years as well as an additional set of Voice over IP engineering resources in Dallas also.

As his company looks to expand their network operations, Temnorod also spoke about his faith in the future of IP Communications.

“I see little that can slow the growth of IP Communications. At one time it was thought that regulatory bodies might impede its progress but that no longer appears to be the case. The current success of IP communications might be impacted by some service providers with underdeveloped business plans or poor execution. Over the last year or so we have seen service providers go out of business as a result of over-reaching or not gaining an understanding of their target customer base.”

“Many of the new service providers are under-funded and led by inexperienced management. That creates a level of uncertainty, which impacts the adoption rate of new service offerings such as SIP Trunking. We have been delivering SIP-related services for over eight years and our new initiative is supported by an experienced organization and profitable business line. We expect the growth of IP communications to only accelerate as we progress along the adoption curve. Most industry analysts agree with this assessment of the market as it is forecasted to have double digit growth for the next five or so years,” Temnorod concluded.

As for the future of the IP telephony industry, Temnorod believes that consumers are still driven by cost when it comes to replacing their communications service.

“However,” he says, “the greatest benefit will come as the innovators begin to develop new applications leveraging SIP. It will be new applications and improvements in productivity that will form the long-term foundation for the growth of IP telephony. Innovative applications will result from the many developers that decide to leverage the open SIP standard to build a broader range of applications, moving from standalone systems to integrating applications based upon unified communications and solving key business needs. In doing this, they will sell a new generation of products.”

“At Broadvox we believe we will have an impact by participating in various forums working to establish the baseline for user expectations. Those expectations will influence the direction of the successful SIP application developers.” IT

Greg Galitzine is Editorial Director of TMCnet. To read more of Greg’s articles, please visit his columnist page on http://www.tmcnet.com.

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