Guide to IP-PBX

Hard facts on IP PBX savings

By Robin Gareiss, Nemertes Research

How organizations are spending money when it comes to VoIP is clear, but how are they saving it?

Despite published reports to the contrary, companies are saving money with VoIP, but those savings may not show up immediately. We still find companies saving money on WAN costs, cabling, ongoing operational costs and administrative duties. Companies also are spending more money in other areas, including operational start-up, repair and handsets.

Organizations save 15% to 40% on their WAN costs when they move to VoIP, and the average saved is 23%. Three primary areas of saving are:

1. Migration to Multiprotocol Label Switching (MPLS), typically from frame relay, asynchronous transfer mode or leased-line networks. VoIP is the driver to switch to MPLS, but the overall costs for the same-speed circuits are less.
2. Integrated access, whereby companies combine voice and data over the same access lines, eliminating underused pipes.
3. Integrated core circuits. Organizations combine their voice and data networks, resulting in an average use of 60% and peak use reaching 75% to 85% on extremely well-managed networks. They eliminate the need for idle, higher-speed circuits in the core.

What's more, cabling a new building for an all-IP network continues to save organizations about 40% compared with wiring for time-division multiplexing (TDM) and IP. In some cases, companies even consider using all-wireless networks that eliminate the need for many desktop drops. But for now, the majority are using Category 5 or Category 6 cable, with one or two drops per desktop, rather than TDM's three or four drops.

MAC continues to be a big cost-saver when a company switches from TDM to VoIP. The trouble with large enterprises is that they don't see all the savings at once, because their rollouts evolve. Companies are spending $124 per MAC, on average, with a range of $65 to $400, depending on the city where the MAC takes place and whether a third party is handling it. By switching to VoIP, those per-MAC costs drop to less than $10.

Overall, when we factor these numbers combined with the additional training -- and often staff -- required in the early days of VoIP, the net savings are 20% to 30% compared with TDM. This includes overall monitoring, maintenance and updates on the VoIP system, but it does not include problem isolation and resolution. These savings also reflect the first two years of operation. After that, we expect the savings to increase because internal expertise improves

What to know before you buy an IP PBX

By Tim Greene and Phil Hochmuth

Before you get too far into interviewing vendors about their IP PBX products, you should have a good understanding of what you need and whether their products will work in your environment. Here are some points to consider:

1. Know what you want. When selecting IP-PBX software and hardware, decide early on whether you're going to do a complete replacement of your existing telephone system, or work out a gradual migration. This decision has a huge effect on the complexity of your deployment, because gateways that bridge old analog phones and PBXes to new VoIP telephones and IP-PBXes can be costly and difficult to program-especially if you think you're only going to have co-existence for a few weeks or months. If you can avoid or at least minimize the use of analog gateways to old phones or to your legacy PBX, you can reduce cost and complexity. However, this savings may come at a different cost: a more difficult and risky cutover to the new phone system.

2. Know what you've got. Businesses need to figure out exactly what hardware makes up their existing network infrastructure and, more important, whether it will support technology that can improve voice quality. For instance, routers and switches that support virtual LANs and traffic shaping go a long way toward carving out enough reliable bandwidth to prevent degradation of VoIP connections.

In addition, make sure all desktop deployments pass the PAS test. That is, desktop phones should have two things - power and switching (PAS). Make sure phones can be powered via standard Power over Ethernet (802.3af is the IEEE standard). Make sure the IP phones deployed have built-in LAN switch ports. This will allow for a single LAN cable to support a desktop PC and IP phone (the PC connects to a LAN port in the switch, which uplinks to the LAN).

3. Consider bandwidth. If audits reveal that bandwidth may be an issue, it could be time to consider an upgrade from, say, Fast Ethernet to Gigabit Ethernet. Even if such an upgrade seems like overkill now, it makes sense to project network-traffic increases from all applications over the next three years to determine whether such an upgrade is inevitable.

4. Use the right codec. To minimize bandwidth that VoIP requires, customers can choose from a variety of codecs that take the voice stream and encode it for transmission over network wires. This can be as little as 8Kbps or as much as 64Kbps, but businesses should listen to a variety of them to determine which ones produce acceptable quality. The ones to choose, especially if bandwidth is tight, are those that use the least bandwidth.

5. Remember 911. VoIP doesn't allow for easy 911 calling, because the voice server has no idea where the phone is; it knows only its IP address. The phone could be anywhere on any network segment, and its location could change if the user moves the phone to a different network jack. Emergency personnel could be sent to the wrong place.

6. Consider softphones as an alternative to desktop phones for certain types of employees. Tech-savvy users, or those who regularly work from different locations -- such as branch offices, home offices or on-site with customers -- are good candidates. It's also a less-expensive proposition for supporting remote workers. Cisco IP softphone license costs about $100 or less when bought in larger quantities. IP handsets with similar features as the softphones typically cost $300 to $400.

7. Find out how remote management applies to your IP PBX. Can you run on your IP PBX or call server the same tools you use to remotely manage, reboot and configure your regular mail/file/print servers? IP PBXs can run on platforms varying from Windows to embedded Linux and Unix, and each server type supports different remote-access/control applications.

IP PBX deployments continue to rise

Cost, complexity still an issue

By Denise Dubie and Tim Greene

Reports show that companies in 2007 boosted their spending on IP PBXes, a trend that should continue for at least a couple more years, given that migrating to the technology typically doesn't happen overnight.

Forrester Research last summer surveyed 516 landline voice decision makers in North American and Europe to gauge their interest in IP telephony. Results show that more than half (54%) of those polled had plans to increase their budgets for IP PBX systems and services last year, with migrations most likely wrapping up in the next few years.

The research firm attributed this growth to diminishing concerns over reliability and resiliency, as well as declining costs, and credits an ever-increasing mobile workforce as forcing more companies to consider IP telephony.

"The market for IP telephony will continue to evolve beyond basic telephony upgrades, as enterprises demand increased flexibility and mobile solutions for their workers," the report said.

However, other studies show that while plans to deploy VoIP are expanding, enterprises still have a hard time justifying costs to upper management.

According to a survey conducted last spring by BT INS, 62% of respondents either have deployed or are in the process of deploying VoIP across their networks, up from 44% in 2005. Another 18% are designing or testing VoIP deployments for limited network segments.

In 2005, justifying costs to upper management ranked fifth among a list of 15 possible barriers to adoption. Last year, that worry rose to the top of the list, as 46% said it was a significant barrier.

Cost justification shared the top spot with technical integration issues, which 46% of respondents cited as a significant barrier. The cost of network upgrades to support QoS ranked third among the barriers to adoption, cited by 41%. Concern over lack of standards dropped slightly; just 28% listed it as a concern this year.

The survey also reflects a shift in how customers plan to deploy VoIP. In 2005, 57% said they would gradually replace traditional telephony gear with VoIP gear. That number has shrunk to 39%. Now 45% said they would either replace their traditional PBX with an IP PBX or other VoIP products.

BT INS asked respondents to rank a list of criteria for choosing VoIP on a scale from "not at all important" to "very important." The top five criteria, in order, are network reliability, voice quality, security, network manageability and service guarantees. All five were criteria cited as very important in 2005, as voice quality gained more importance in 2007.

Meanwhile, the biggest hurdle to overcome in replacing traditional phone services with a VoIP service is demonstrating cost savings; 32% of respondents cited that problem. Roughly 22% said the possibility of lower voice quality in combination with network availability was listed as a top obstacle.

How does an IP-PBX work?

By Joel Snyder, Network World Lab Alliance

If you're thinking about jumping into the world of VoIP, one option is an on-site IP-PBX. With products ranging from freeware open source to turn-key appliances, you'll find many alternatives for businesses of any size.

The term "IP-PBX" is commonly used, but it is slightly misleading because the roles the old PBX systems and new VoIP-enabled ones are not a one-to-one match.

In standard analog telephony, each phone is connected using pairs of wires to a central switch, called a PBX, which then connects to the local telephone company and long distance providers using more wires. Every call goes through the PBX and every telephony feature (such as automated attendant, call forwarding or voice mail) is a function of the PBX.

In the world of VoIP telephony, the function of the PBX is more distributed. For example, once a call is set up, the actual voice traffic can go directly from one IP telephone to another IP telephone without passing through the PBX.

Most IP-PBX systems are designed to work with IP-based telephones connected to an existing corporate LAN. While it's not strictly necessary, many network managers place the IP phones on a dedicated-and firewalled-VoIP LAN.

The IP-PBX itself is the only piece of the VoIP network which will need to talk to the Internet, either to deliver calls to a VoIP telephony provider or just to have access to necessary software updates. These Internet-based telephony service providers can accept calls from you using standardized protocols, such as SIP, and deliver those calls to local numbers, long distance, or international phone networks. The connection works both ways as well: an Internet-based telephony provider can take calls coming from the traditional phone network to your phone numbers and deliver them to you using VoIP protocols directly over the Internet.

Smaller companies with only a few analog phone lines can use analog gateways to make a connection to a regular public switched telephone network. If you're using digital trunk services, such as PRI ISDN or traditional T1 circuits, you'll need to have a PRI or T1 gateway. Some hardware IP-PBXes have analog, PRI and T1 gateways "on board," but it is just as common to have these gateways as separate, LAN-connected devices.

Smaller businesses may want to use hosted IP PBX services as an alternative to having their IP-PBX on site. Since the connection between IP telephones and the IP PBX is over, well, IP, there's no reason they all have to be co-located in the way a traditional PBX requires. Hosted IP PBX services offer the same advantage of many other outsourced products, including a more comprehensive feature set than is found in low-cost IP-PBXes and lower capital and operational costs. When a hosted IP PBX provider also sells local and long distance service, they may be able to cut those costs by aggregating business customers to gain a larger volume discount.

However, hosted IP PBX services have drawbacks that make them inappropriate for many businesses. The most common deployment model requires all calls, even those between people on the same LAN, to go through the IP PBX. This puts significant stress on Internet connections, requiring lower latency and greater attention to QoS controls. Small business Internet connections over asymmetric broadband connections such cable modems or DSL are rarely capable of providing acceptable service for more than a few users.

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