Without a doubt, there are significant benefits to be
had from creating a single, converged network for your voice, video
and data, and even further benefits from moving to IP
telephony.
But before these benefits can be realised there are challenges
to overcome: full convergence will require at some stage an upgrade
to your PBX - perhaps on more than one site.
Upfront investment
Upgrading will require upfront investment that could stretch
your budget (although some suppliers offer packages to help fund
investment). While the case is strong where the PBX needs replacing
anyway, there is a tougher decision to make when the PBX is still
being depreciated.
It may be that you decide there is a strong case for bringing
the advantages of upgrading to selected parts of your organisation
immediately, and then bring others into the fold over time. But if
you have more than one site, it may be that one PBX needs replacing
while others do not, making it more difficult to plan a staged
roll-out of IP telephony over time.
Then there is the requirement to set up and manage the IP
telephony service, and to keep it up to date as suppliers add new
features and capabilities. This in turn means retaining the
necessary skills for the business. Paying a third party to host
your network could therefore be a smart move. Hosted services
essentially provide "a PBX 'in the cloud', managed by the service
provider", says John Blake, head of hosted IP telephony at BT.
These services will provide all the features that your business
needs - such as call transfer, hunt groups, short code dialling and
cheaper calls between sites - while helping you reduce the reliance
on upfront capital investment and ongoing investment in skilled
resource.
"Hosted services mean no upfront capital investment, the peace
of mind of knowing that your network is being managed by an expert
service provider, and inherent future-proofing," says Blake. "There
is no ongoing management by the user, except for straightforward
selection and management of features. Thus, the need to employ
skilled resource for set-up, maintenance and ongoing upgrades is
avoided."
Converged strategy
The fundamental requirement to get the full benefits from hosted
services is a converged network and appropriate network connections
into the service provider. You can then have a network to support
full IP telephony, web hosting, e-mail, desktops, IT security and
even multimedia.
Full multimedia-hosted services have a part to play in a
converged strategy, and they are being taken up by medium-sized
organisations.
Your hosted services can be linked to your existing PBXs, which
means that IP telephony can be rolled out to sites where it might
otherwise be difficult due to budget, skills or timing issues.
Since hosted services are managed centrally, you could benefit
from the best possible pence-per-minute rates by aggregating all
your call spend through a single PSTN breakout, while reducing
costs from traditional voice circuits to each of your sites (if you
have more than one).
With a converged network it is also possible to link your
network to suppliers - such as Microsoft, IBM, BT and HP - for
other hosting services
In general there are two types of business model for hosted
services: managed hosting and application hosting. Managed hosting
will offer infrastructure, IT services and skills delivered for
monthly payments, including system installation and configuration,
system administration and support, server monitoring and helpdesk
support services. Application hosting involves an application or
service delivered over a network, with pricing based on the number
of users.
Hosted services can include features such as e-mail, and
collaboration and enterprise applications such as SAP and customer
relationship management (CRM).
Critical applications
Chris Wynne, e-business hosting technical support and offerings
manager at IBM, believes there are two scenarios for considering a
hosted service.
The first is for support of critical applications, such as
providing a service to clients, data security or sales. "SMEs often
do not have the IT expertise in-house to ensure the reliability,
security and round-the-clock availability for such systems," he
says. "By outsourcing the management of infrastructure underpinning
these applications, they gain access to high-quality skills that
are available 24 hours a day, ensuring that service levels are
met."
The second scenario is support for IT systems that are not
critical to the business, such as e-mail, CRM and human resources
applications.
Siemens has a dedicated SME business unit, called Siemens
Solution 1, to offer services including hosting Microsoft Exchange
2003 (including Outlook Web Access), Sharepoint and Microsoft
Office, broadband services run over a virtual private network, plus
e-mail archiving and desktops. Voice over IP and mobile services
are also planned.
"Our portfolio is constructed to address the changing
requirements of our customers and the market," says Jonathan Evans,
head of marketing at Siemens Solution 1. "SMEs are more constrained
by resources than any other sector, but they do have complex IT
requirements."
Not surprisingly, a steady growth in demand for hosted services
from small and large companies alike is widely predicted. By 2008,
the market will be worth £15.5bn, according to a report last year
from Forrester Research. Demand for web hosting services should be
particularly strong in 2005, Forrester adds.
But one veteran figure in the software industry cautions against
the many claims made for hosted application services. Dennis
Keeling, chief executive of the Business Application Software
Developers Association, points out that hosted services under
another name, application service providers (ASPs), were a flop in
the 1990s.
"The market everyone expected to take off was the one for
application service providers," he says. "It was a brilliant
concept, to rent computing facilities instead of buying them. Many
of Basda's larger members provided an ASP service - Baan, JD
Edwards, Microsoft, Oracle, Systems Union, SAP - all with little
take-up."
However, today's hosted services are very different from the old
ASP ones. The performance of hosted services today will also rely
on a contract that spells out the obligations of both user and
supplier.
"As with any outsourcing contract, the relationship with the
hosting supplier must be properly understood and managed, and the
responsibilities for each party must be clearly defined and
agreed," says IBM's Wynne. "The discipline of processes and
procedures for handling complex technical issues must be
established right from the beginning; otherwise, a customer's
relationship with such suppliers can run into difficulties."
With the correct converged network in place, hosted services can
add true value to your business, both in terms of cost savings and
in increasing your flexibility and responsiveness.
Don't forget, though, that as you consider what they could do
for you, your competitors may already be taking advantage.