Hosted Solutions - the Third Way !

In recent years a third alternative has emerged, Hosted Solutions - or "Software as a Service". Why does this apply to Telecoms? Because nowadays you can buy Telephone System functionality without having to buy a Phone System.

How does it work? All the clever stuff is done by the Service Provider, at their end, all the customer does is rent the services they need, and, usually, manage them via a Web Browser.

So why is it good, and who is it good for? Well, its good for:

1. Companies with low IT skills
2. Companies who dont know exactly what or how many telecoms services they need
3. Companies who dont want to tie up capital in a Phone System
4. Companies who are wary of buying technology that will be outdated as soon as they buy it - rented Services tend to add features pretty rapidly
5. Companies that have several offices in various locations, or staff working from home
6. Compaines that need "resilience" ie. a system that can route calls to an alternative destination if the preferred destination is not reachable

Sounds perfect? Well, there are also downsides:

1. Cost - on a call for call basis the cost will be higher over the longer term, although there are increasingly competitive deals emerging all the time
2. Control - you are limited to the features and capabilities of the Hosted Phone system, and if you need something special or unusual it will either not be possible, or, if it is, will tend to be very expensive to customise
3. Data security - if you, for example, record your calls, you dont have control of the archive or its security

You also need to ensure the Hosted Phone System Solution has "diverse routing" capability ie. if it is VoIP based they can send calls to analogue handsets in your offices if the IP trunks fail (and they will!). IP trunks are improving in reliability all the time but dont forget you are getting "cheap" calls at the expense of not "owning" the connection from end to end for the duration of the call, you are sharing it ....

Clever stuff though, and its what I use for my businesses ....

To VoIP or not to VoIP? The case for VoIP.

VoIP is great for sending calls long distances at minimal cost. If you've tried it to call Aunty Mabel in Australia you will know Skype works - and if you have used it you will be aware of the quality of call you can achieve most of the time.

So if you need to call colleagues long distance, talk to overseas suppliers, make internal calls to staff working from home or even if you run a cheap long distance call shop then Voice over Internet Protocol is the technology of choice for you.

However VoIP can also be used for making internal calls between sites or even to remote parts of your offices that dont have telecoms cabling, and more and more phone systems are coming onto the market that use it.

Plus you can also use VoIP for moving external calls around if call quality isn't vital to you - if you have ever called a customer support operation that has foreign staff and poor call quality you will know what I'm talking about. In the above case, you need to ask if the companys image suffers if their customers experience poor call quality.

You can of course use VoIP to build top quality call handling systems - but you need a top quality data network to move calls over. The crux of the matter is the network needs to be prioritised for voice packets. This is because, simply put, VoIP works by breaking the conversation into little pieces and then sending them across a data link. If you think about it sending pieces of data across a link, if a piece gets lost the far end requests it gets sent again, but if a piece of a voice call gets lost, then there is no point in asking for it to be re-sent!

The technologies required to do this are called Voice Optimisation and to get good call quality every link along which you send calls requires to be Voice Optimised - using "Quality of Service" (also called "Class of Service") and "Packet Prioritisation".

On a network you have direct control over (normally the Local Area Network or LAN) you can ensure Voice Optimisation, but on links or "Circuits" between sites or to the Internet you have to specify they are to be used for VoIP to the Service Providers you are renting them from eg. BT, Virgin, Cable & Wireless. You really need to read the small print carefully and match the quality of the Circuit to the requirements of the VoIP phone system you are using.

This is, of course, why Telecoms Resellers like to order your Circuits for you - plus many get commission from the Service Providers, but that is another subject for the blog, the many ways Telecoms Resellers make money out of you...

The key question you need to figure out the answer to is - what benefits will you get from using VoIP and do the benefits justify the costs? Obviously this answer varies from company to company so there is no "right" answer, but it is the business process you need to go through to arrive at a decision.