I’m currently sitting in the Sundance Mountain Resort in Utah, courtesy of Alianza, at a conference about “the future of telecom”. Alianza believes that the future of telecom is for voice to move to the cloud, so that all the telecommunications service providers (e.g. ILECs) can focus on being network providers (ISPs). Voice would then become an application that the ILECs can sell to their subscribers, but all the infrastructure for that service is in the cloud – hosted by a third-party vendor.
Alianza is not the only vendor making this pitch. Our long-time client Reinvent Telecom has offered a wholesale hosted PBX / UCaaS product for many years, and we’ve also recently worked on projects with GigTel and Toly Digital. There’s definitely some momentum around this idea.
In our previous article I explained how this all works from an architectural point of view. In my next article I’ll look at the downsides of going down this path – but for today I’ll let the vendors have free reign, and share the benefits of offering a cloud-hosted voice service.
We’ll look at these in detail, but these are the key benefits you’ll hear about:
- The cloud-platform has an active roadmap for new features
- You no longer have to worry about end-of-life hardware
- You move from a capex to an opex financial model
- There’s no need for specialist technical staff to maintain your switch
- You can focus your attention in other areas (the network and customer service)
- You will benefit from improved redundancy and resilience
Better roadmap for new features
This may not be a concern for residential lines, but if you’re selling to businesses you’ll be aware that your over-the-top competitors are continuing to enhance their service offerings with new features. If your existing UCaaS product has a static feature-set, then it will become increasingly outdated compared to the competition, and even existing customers will eventually become frustrated by the lack of modern capabilities. It’s therefore very important that you’re offering a UCaaS / hosted business product that has active feature development to stay competitive.
Say goodbye to end-of-life hardware
Ever since the first class 5 switches were available, telecoms has been going through a continual cycle of hardware replacement. A new switch would be purchased, would gradually age, support for the equipment would eventually end, and then you’d need to buy the next expensive replacement system.
One of the benefits of moving to virtual machines (locally) or a cloud-based platform is that your switch is no longer running on specialist hardware, so this end-of-life cycle is no longer such a concern. With local virtual machines you still need to replace the commodity servers occasionally, but with a cloud-based platform that’s someone else’s problem – you will never need to replace the hardware.
Move from a CapEx to an OpEx model
Historically there was significant government support available to fund the capital costs associated with upgrading to a new voice switch, but in recent years that has ended, which makes any major capital purchase harder for the business.
A cloud-hosted voice platform operates instead as an ongoing operational expense, which may reduce your operating margins, but doesn’t require a huge chunk of capital up-front. You might view this as a positive or a negative, depending on your business model, but it’s certainly simpler, and doesn’t require you to have the capital on hand for the next big purchase.
Simpler to operate – fewer technical staff required
There are actually two different potential benefits here:
- If you currently have a DMS-100, there’s hardly anyone under the of 55 who knows how to operate that equipment, and so there’s a shortage of technical staff. If you switch to a modern hosted platform it will be easier to find people who know how to use it, and to train new people.
- The other claim is that it is inherently easier to operate a hosted platform, because the vendor is actually operating it for you. You are no longer responsible for the infrastructure piece – for IP addresses and servers and software upgrades – and therefore you will save money on staffing.
Improved focus
Imagine if an airline not only operated the planes, but also built the planes and all their components, and even drilled for oil to make the jet fuel.
This idea can be appealing because you have full control, but the downside is that you have to be really good at a whole range of different businesses. Maybe it makes sense for you to focus all your efforts on what you do best.
For rural ILECs that’s generally going to be operating your local access network and providing engaged, local customer service. By outsourcing your voice platform to someone else you can simplify your business and focus on the area where you can create the most value.
Improved redundancy and resilience
Have you always dreamed of having a geo-redundant switch, immune from the risks of floods, earthquakes and tornadoes? Well this could be your chance – with a hosted voice platform your software may be running in two or three different data centers across the country, safe from the risk of natural disasters.
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So there you go – those are many of the reasons why you should consider a hosted voice platform.
I must admit that I’ve found it hard to write this list without counterbalancing these ideas. There are absolutely good reasons to consider this path, but there are also reasons for caution, so please don’t make any hasty decisions until you read our next article.
