The Challenges of Hosted IP-PBX in the Large Enterprise Huw Rees VP Business Development 8x8, Inc.

What is Hosted IP-PBX “Hosted” means: The only equipment needed to access the service is a telephone The service is delivered over an IP connection The service does not require on-premise gateways to the PSTN

Benefits of Hosted IP-PBX Provides an essential service at a lower cost with equal or better capabilities than traditional solutions Low startup costs, services scale with usage needs No telephone equipment to maintain, upgrade or repair Phones can be located anywhere, can use an existing Internet connection

Other Benefits A phone service means that you have a service provider who supports you Typically no additional cost Hosted PBX service providers provide support for the entire service, not just the dial tone. For example, this means you can get support on how to set up or use a feature Or ..an agent can actually help set up or change an auto attendant New services like G.722 wideband codecs (HD Voice) are deployed automatically with no enterprise/user upgrades needed

Enterprise Deployments The previous slides apply to all businesses but do not address the unique issues associated with large enterprise deployments. Why are large enterprises not signing up for hosted IP-PBX services? Can we change their mind?

Hosted IP-PBX for Enterprise How is Enterprise different from SMB? Scalability – does it scale to 1000, 10,000, 100,000+ Availability – what is the proven availability? 99.99%? 99.999? Quality of Service – how does the service provider guarantee QOS? Is the service a fully converged service? Redundancy and Disaster Recovery – does the solution have redundancy built in with no single point of failure? What if a server, cluster or entire data center goes down? Security – is the system secure? Is it encrypted? How does it keep up to date to ensure no known security holes exist? Is the provider financially secure such that an enterprise can rely on a long term contract for services?

Scalability Hosted IP-PBX services now serve hundreds of thousands of phones. Typically this is done from clusters of servers in a linearly scalable model. Enterprise customers can now deploy unlimited extensions (seats) without the concern that the solution will not scale. The use of complex codecs such as G.729a reduces bandwidth requirements with very little loss in quality over G.711. Each active call, including ethernet overhead requires only 30Kbps of bandwidth

Availability Availability for hosted IP-PBX services has consistently improved year over year and is now better than 99.99% Availability to the enterprise is dependent on the availability of the IP connectivity. For highly available requirements the use of redundant links makes sense

QOS QOS has advanced significantly over the last few years. Even low end routers now have built in QOS features. QOS on the LAN is usually the single biggest issue in deployment of VoIP VLANs, COS tagging can completely eliminate these issues If QOS over the WAN is needed, this can be accomplished by the deployment of an MPLS circuit or even a separate voice IP circuit if it can be justified on a cost/bandwidth need The service provider needs to private peer with the MPLS circuit provider

Example Network Redundancy

Security The service should be tested and certified to be free from all known security vulnerabilities. The enterprise customer should ask for evidence of this (and it should be aggressively maintained) All users should be authenticated using a secure encrypted algorithm The phones should be capable of secure RTP if the customer is concerned with LAN sniffing There is no reason why a hosted IP-PBX service should not be sufficiently secure. Even the US Government has figured this out!

Case Studies Adecco A $20B multi-national large enterprise Selected a hosted IP-PBX with hosted Call Center capabilities Substantial savings in call center cap-ex (at least $500K saving per location) Realized after deployment that the flexibility paid great dividends. Adecco location had an H1N1 flu scare, all employees sent home. All could work from home with a headset connected to a softphone and web application for their call center functionality.

Case Study #2 McKesson $106B medical devices corporation Has sales people working from home or small offices throughout the US Moving all sales staff to hosted PBX Corporate directory Extension dialing Single (budgetable) bill for all users rather than thousands of individual expense reports. If a sales person quits, McKesson owns the phone number and can assign it to the new person instantly – no missed sales calls!

Case Study #3 The federal government (a “special” kind of large enterprise)! Stuck in the ’80s (actually the 1880’s) regarding telecom services Finally realized VoIP works, saves money and headaches Moving rapidly to hosted VoIP services….

Case Study #3 Cont… Networx – a $20B program over 10 years with “IPTelS” services (govt. code for Hosted IP-PBX) Other programs WITS3, DTSW, GSA OCIO etc…… DoJ JUTNet voice services 2500 phones at the HQ in DC Additional 17,500 phones in hundreds of other locations

Conclusions Hosted IP PBX services are ready for enterprise customers – and they are starting to come – slowly right now, but we expect an avalanche in the near future. Enterprise customers need to be careful who they select as a vendor for these services. Incumbent, old school vendors may not be the best choice either from a cost perspective or even a viability perspective (e.g. Nortel). Even the US government has figured out that Hosted IP-PBX is the way to go and they are aggressively deploying these solutions today