A couple of weeks ago we published a survey to our email subscribers and on LinkedIn that aimed to get a high-level understanding of how service providers felt about hosted voice platforms.
In particular, we wanted to understand whether telcos were interested in retiring their class 5 switch and moving all their subscribers to a cloud-based platform. After all, that’s the pitch we’re seeing from companies like Alianza.
In this article we’ll review the results and try to answer a few questions:
- How many service providers have already retired their class 5 switch?
- How many have added a hosted platform alongside their central office switch?
- What do we expect to happen in the future?
How seriously do people take this idea?
We received over 50 responses to the survey – many more than we usually receive when conducting these kinds of informal surveys – so right from the outset we can conclude that this topic intrigues people.
The most important question we asked was “Which of the following statements best describes your situation with respect to Hosted Voice Platforms?” with the overall results shown by the pie chart below.
- The blue and the red segment (38.5% between them) represent respondents who (to varying degrees) are not particularly interested in hosted voice platforms. They may have done some research, but it’s not on their radar in the short term.
- The orange and teal segment (7.6% – 4 respondents) represent those who have either already retired their class 5 switch, or who are planning to do so.
- The yellow segment (25%) represents those who are actively exploring the idea, but are concerned about the various obstacles (regulatory, financial, etc.).
- Finally the green section (28.8%) represents the majority of the users of hosted platforms today – people who are not (currently) trying to replace their class 5 switch, but have added a hosted voice platform as a second system in their network – most commonly to provide more advanced services for business users.
Are these ILECs or CLECs or what?
We asked respondents what type of service provider they were, and the majority are ILECs (54%) or “traditional CLECs” with TDM connectivity (30%) with the others being VoIP-only providers of various kinds. (Note that 85% of the respondents have a Metaswitch in active service – not surprising given the content of our newsletter.)
I wondered if the above results would vary for different types of service provider, but mostly (with a couple of exceptions noted below) things are fairly consistent across the board.
- ILECs are more likely to be “exploring but concerned” (yellow) at 35% – perhaps not surprising since the regulations are more of a factor for ILECs.
- Traditional CLECs are more likely to use hosted voice as a second platform (37%).
Summary: what have we learned?
We intentionally kept this survey very short – just 4 real questions – in order to maximize the number of people who took the time to complete it. Nevertheless, I think we can draw several important conclusions from the data.
Conclusion #1: Hosted voice is widely used… as a second platform
I was surprised by how many service providers already used some kind of hosted voice platform in their network. This suggests that these products are field-tested and work well – and also accounts for the growth in customer numbers you hear about from GigTel, Alianza and others.
Conclusion #2: Class 5 switch replacement is currently very rare
The survey results gave us two people who have done it, and two who are planning to do it. We are actively working with two clients at the moment who are somewhere in the midst of this process – so we know it’s happening, but based on the data these folks are the early adopters.
Conclusion #3: This topic is worth exploring more deeply
As I said earlier, the number of responses tells us immediately that this is an important question for people. In addition, we know that a large segment of respondents are interested in the idea but have concerns (or are testing the waters with a second platform).
This is a fairly complicated topic – with regulatory concerns, financial analysis, technical design work involving multiple vendors and potentially a migration project – so there’s plenty to learn about. I’m therefore planning to dig more deeply into the situations people are facing, and write more about how this all works, so you have better information as you consider your options.
I personally don’t have a strong opinion about how aggressively service providers should move to the cloud. I suspect long-term we’ll end up with voice as an application in the cloud, but in the world of telecoms, change happens slowly – and each individual service provider will need to make a judgement call about priorities.
Come on! Give us a prediction!
If you force me to make a prediction, I’ll say this:
I am 100% certain that in 10 years more of you will have replaced your class 5 switch with a hosted voice platform… AND I am 100% certain that in 10 years some of you will still have a Metaswitch with TDM interconnect sitting in your central office, providing reliable service to your customer base.
Beyond that, I’ve got nothing. But I’m definitely looking forward to talking more with you about this topic and sharing more of what we learn.