VoIP models and services: Complete guide

In our VoIP models and services: Complete guide, you'll learn why VoIP is not one size fits all. With clear, concise explanations of existing VoIP business models and deployment methodologies, you'll be able to weigh the pros and cons of each based on your needs. Is hosted VoIP the best fit for your organisation or would a managed solution better serve your needs (and security requirements)? Should you migrate to VoIP incrementally with a hybrid PBX or move directly to IP? What about Skype or Yahoo - are they ready for the enterprise? This guide will help you answer these questions and more.

Table of contents:

• Getting down to basics:
  The benefits and challenges of deploying VoIP.
• VoIP training, testing and budgeting:
  Enterprises across the board run into the same VoIP deployment issues. Don't make the same mistakes.
• Types of VoIP:
  Find out how hosted VoIP, managed VoIP, hybrid and pure-play solutions differ.
• Other VoIP business models:
  Skype, Vonage, Yahoo and Jajah are not just for residential consumers anymore.
• Five things every CIO should know about deploying VoIP:
  Ask yourself these questions before selecting a VoIP model.

VoIP: Getting down to basics

What is the significance of "IP" in VoIP? Besides being an acronym for Internet Protocol, it means that voice services are no longer tied to a specific network. VoIP also provides enterprise organisations with a significantly more network design flexibility.

With traditional (layer 2) voice, each location had to have its own PBX or key system and voice services were tied to that location. Every time a user moved, an administrator had to come in and reconfigure the PBX to move it around. Users were tied to specific desks. At the IP layer (layer 3), the call control or IP PBX, can live anywhere on the network. The IP PBX can be across the office, across town or across the globe, very much like any other client-server application. Also, since it operates at the IP layer, companies can use their data network or even the Internet to transmit voice, avoiding the toll charges that exist on today's PSTN. There are both benefits and challenges to VoIP (see below); however, the more VoIP evolves, the benefits will start to outweigh the challenges.

Benefits:

• Lower infrastructure costs, including lower network management and toll costs
• Advanced calling features
• Mobility of telephony features

Challenges:

• Service and voice quality is not 100%
• Unproven ROI and TCO metrics
• Security, compliance (emergency services)

VoIP training, testing and budgeting

Twenty-five percent of enterprises are already taking full advantage of VoIP, and 75% are looking to deploy it within the next two years. Enterprises that are not actively planning to deploy VoIP are at risk of falling behind their competition as this technology continues to evolve. However, to truly glean the competitive benefits of VoIP, network managers must learn how to manage the new network environment.

Historically, voice and data have existed on two separate networks. With an IP network, voice and data coexist on the same network, thus increasing the management complexity. Introducing richer, bandwidth-draining applications only convolutes matters more. It means that telecom managers have to learn how data networks function and network managers will need to become familiar with telcomm operations.

For this reason, training should be a big part of the overall implementation. A migration process will need to be put in place, and most importantly, a training budget needs to be established. One of the most common mistakes organisations make is not budgeting in everything from the beginning to end of deployment. Before many IT organisations deploying VoIP realise, the cost of implementation has spiralled beyond their initial budget.

Another crucial error made in many implementations is the lack of pre-assessment testing. Many have underestimated the importance of testing and have paid for it by having to fix problems in a production environment, which is much more expensive than troubleshooting in pre-production. Actively testing the service, voice quality and equipment can save managers a great deal of headaches and downtime. Testing must be done in the pre-assessment stage, and should also be viewed as an on-going procedure throughout the deployment.

Types of VoIP

VoIP exists today in many shapes and forms. Some require equipment on premise, some have the equipment located in the carrier network and some are a mix of IP and TDM. Which one is best? There is no single right answer. It depends on the needs of the organisation. Each option has its own pros and cons as shown below.

Hosted VoIP

Hosted VoIP is where the call control is located in the service provider network. This could be a traditional CPE-based IP PBX hosted in a service provider, but is more likely a softswitch-based service. A softswitch is a carrier grade IP PBX that's capable of delivering voice to multiple customers simultaneously. In either case, the call control is located in the carrier network and delivered over a data circuit so there is no need for an enterprise to have any CPE-based equipment other than a router to connect to the WAN (Wide Area Network). A hosted service obviates the need for any kind of up front cost and is normally charged on a per-user, per-month fee, very much like a traditional Centrex service.

Hosted services normally have fewer features than an enterprise class IP PBX. Most enterprise vendors build their solutions based on a standard called SIP (session initiation protocol), and then add new features by creating proprietary extensions. Because a softswitch hosts voice for multiple companies, the vendors normally follow the SIP standard exclusively meaning that they will lack the proprietary, pre-standard features. The majorities of service providers today provide a hosted VoIP service offering for those businesses who do not want to deal with the challenges of managing an IP PBX system and leave that to their service providers.

Managed VoIP

Managed services have become the recent trend of the communications industry as network complexities overwhelm most network managers. Managed VoIP differs from hosted VoIP in that, instead of the service provider managing the VoIP system on their own premise, they provide enterprises with the CPE. The managed service provider installs the CPE, tests it, and ultimately deploys it on the customer premise. The service provider also provides network monitoring and management remotely as well. This alleviates a great deal of complexity, and frees up resources that can be better utilised for some of the more important initiatives within an organisation.

One of the many challenges still surrounding managed services is security. Many businesses are still not comfortable handing all control over to their service provider. Another challenge that has emerged recently is the complexity of managing several different providers. Forty-two percent of enterprises prefer to consolidate their vendors, which would provide a single point of contact or a single "throat to choke" in the event of a failure. Enterprises looking to implement managed VoIP should look to service providers who are partnered with systems integrators that can provide a single point of contact.

Pure IP PBX

A pure IP PBX is a software-based version of a traditional PBX that's often delivered in an appliance. The pure IP PBX replaces the traditional TDM PBX. The data network is then used to deliver voice services. A pure IP PBX offers a high degree of flexibility in where the call control is located. Normally, migrating from TDM to IP is not a one-to-one replacement. Companies often rationalise the number of IP PBXs down significantly. I recently spoke with one company that rationalised 57 traditional PBXs down to three.

The downside of deploying an IP PBX is that the systems need to be "hot cut" over (moving from the legacy PBX to the IP PBX with no significant loss of service). Interoperability between the old system and the new system is often a problem. An example: users are often unable to forward voice mails from a traditional PBX from one vendor to an IP PBX from another manufacturer.

Hybrid IP PBX

This form of VoIP is perhaps the most widely used. Hybrid essentially means just that, a hybrid of old TDM network and IP. This provides enterprises with a clear migration path towards VoIP, and is particularly appealing organisations that have made a significant investment in TDM PBXs as it provides a means to retain some of that investment. In a hybrid environment, an IP card is inserted into the PBX and the IP network is used for toll bypass.

While in concept, hybrid does seem appealing, it can lengthen the migration cycle. Hybrid requires touching every PBX, and when the company wants to move to a pure IP system, it requires visiting every location again. In essence, companies would do twice the amount of work of moving to a pure IP system. Also, most hybrid systems do not provide the same level of application integration as a pure IP system.

VoIP deployment models

• Hosted VoIP

  • Pros: No upfront cost. Service located in the cloud means faster upgrades and repair time.
  • Cons: Lack of control. Limited feature set.
  
  

• Managed IP PBX

  • Pros: Little to no up front cost. Managed providers removes the burden of managing converged network.
  • Cons: Lack of enterprise control. Could limit vendor choice.
  
  

• Hybrid IP

  • Pros: Leverages existing equipment. Enterprise can migrate at a slower pace.
  • Cons: Doesn't allow for the same level of application.
  
  

• Pure IP

  • Pros: Flexibility in deployment strategies and total enterprise control.
  • Cons: Expensive upfront costs. Requires immediate migration to new system.
  
  

Other VoIP business models

Skype (peer-to-peer)

Skype has a significant presence with consumers. Increasingly however, Skype is emerging as an enterprise alternative, though the trend remains end-user driven. Today about 33% of Skype users are using it for business purposes. The danger with Skype stretching beyond enterprise walls is that it is difficult to control and manage. Topping the list of concerns among enterprise organisations is security. Because Skype is Internet based, network managers are hesitant to place Skype on their network.

To be competitive in the market, Skype has been seeking partnerships for a comprehensive security solution that can provide a more appealing product for enterprise markets. While Skype still has a long way to go to play competitively in the enterprise market, it certainly has the means to do so at a rapid pace.

Vonage

Vonage provides phone service via any bro