By Dan Baldwin, Editor
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"The cloud is for telephones too!"
When I run into an IT professional at almost any business cocktail party we inevitably seem to fall into a conversation the nationwide cloud strategy they've designed and how they're virtualizing all their desktops or moving their business critical apps into their own private cloud.
At some point in the conversation I'll ask, "What about your phones?" and if they start telling me about all the problems they're having with all their PBX vendors I try to gently suggest,
"The cloud is for telephones too!"
I was reminded about this cocktail conversation this week when I received notice that Telesphere, one of the many telecommunication and broadband network service providers I represent recently hired two new mangers Josh Redick and Rob McCarthy out of New York City and San Francisco respectively.
I was glad to learn about this because it's these sorts of professionals that help telecom consultants like me explain to mid-sized businesses how "the cloud" can deliver all the same benefits to their unified communications or "UC" strategy as they're receiving by pushing their data applications into the cloud.
What Do These Industry Hires Signal About Changes in the Telecom Marketplace?
I've spoken with many of my peers over the past several months and we all seem to be thinking along the same lines when it comes to deciding which telecom carriers, equipment vendors or unified communications providers we're going to bring into one customer project or another.
Following are my thoughts.
1. Telesphere should be considered for mid-market UC deals.
Over the past year, whenever I've spoken to mid-market and multi-location agent partner peers about which carriers they pitch in larger UC deals when they're up against PBX box vendors like Avaya or NEC, many like Smoothstone/West IP if it's a large "rip & replace" deal or Vocal IP if the deal requires a customized voice integration with existing systems and equipment.
Telesphere has always branded itself as a "unified communications" company just as Smoothstone always has but because Telesphere rolled itself out city-by-city (much in the same way Cbeyond did) many agents have always seen Telesphere as a regional powerhouse in especially in the Southwest and Mountain states.
Telesphere's biggest agent over the past 8 years, Concierge Communications, is also based in Arizona. But just as Concierge is seen by many in the industry as an integrated solution provider that can service mid-sized, nationwide clients, so too is Telesphere beginning to be seen as a nationwide UC provider.
For the longest time the best mid-market and enterprise UC customers have been locked up by the PBX box vendors combined with AT&T, Verizon or Level3 networks. As credible UC/cloud integrators like Concierge bring Telesphere into bigger deals, mid-market PBX VARs are seeing they will either need to bring the likes of Telesphere and other hosted UC providers into their proposals or find themselves competing against the likes of Clark Atwood.
2. Telesphere should be considered for nationwide Broadsoft deals.
I've spent quite some time over the past couple years trying to divine the differences among all the hosted VoIP and "unified communications" service providers in the marketplace. The best way I've found to separate one from another seems to be by these four categories: underlying platform, network coverage, integrated applications and pricing.
Regarding underlying platform, Telesphere is in the Broadsoft camp which means all their "communications magic" comes out of a proprietary Broadsoft platform. (Broadsoft also powers Vocal IP, MegaPath, Alteva, SimpleSignal and other providers wanting to claim credibility in mid-market deals.) In my humble opinion, Broadsoft has established itself as the "carrier grade" universal standard against which all others VoIP switch manufacturers are measured.
By contrast, Smoothstone/WestIP and Broadview Networks, two other well known solution providers are "non-Broadsoft". The only real knock that I've heard repeated about non-Broadsoft switch technology is that "it doesn't scale past 10,000 seats" or "what happens if their programmers quit?" The top argument for non-Broadsoft switches are the fact that the code is highly customizable for mid-market customers that need specialized code written to integrate critical business applications.
Without trying to end the "Broadsoft vs. non-Broadsoft" argument, suffice it to say that Telesphere is in the Broadsoft camp and many mid-market customers and their telephony consultants will only consider Broadsoft solutions.
The second major UC/hosted VoIP differentiation category is network coverage and in this category Telesphere appears to be as big as they come in the Broadsoft category meaning "nationwide for all practical purposes".
In the old TDM/Class 5 "hard switch" days, phone carriers bragged about all their 5ESS or DMS500 switches like Jay Leno brags about all his cars. In today's "soft switch" world where carrier switches are defined by software, measuring "who's the biggest" is a bit more difficult. I've been told that Broadsoft switches actually come in "pairs" such that one switch can cover two separate cities.
For regional businesses this only matters if you're considering doing business with a company that appears to have their switches in a distant land. For instance, TelePacific is a classic business phone company in California that totally dominates the California marketplace. When they roll out a hosted VoIP solution later this year they will put a serious hurt on non-California based hosted VoIP carriers trying to compete in California.
But as great as Telepacific is in California, few businesses in New York would think to ask TelePacific for a phone system quote (but they would ask for one from Broadview Networks, a classic business phone company based in New York that has since rolled out a nationwide hosted VoIP phone solution.)
But what's a true nationwide multi-location business to do for nationwide business phone service? If most of your locations are in New York you'd start with Broadview and if most of your locations are in California you'd start with TelePacific. But if your locations are evenly spread over the whole country you need to call on a unified communications provider that can do the whole country. Telesphere is positioning itself for credible consideration in this category.
The other "nationwide voice carriers" are XO, PAETEC/Windstream, CenturyLink, Level3, AT&T and Verizon but they are not known for their expertise in integrating voice applications which is the foundation of "unified communications". This is where the big PBX box vendors dominate. They tell customers, "Buy lots of our voice boxes and then put them on your nationwide data network and you're done."
But what if a nationwide customer wants a single-vendor unified communications solution without having to buy dozens or hundreds of PBXs?" That's when I bring in Telesphere and Telesphere's mid-market "hosted UC" competitors.
How does Telesphere fair on the third and fourth differentiators of integrated applications and price? I'm not totally sure yet, one peer I talked to really liked Telesphere's CRM (customer relationship management - e.g. Salesforce, Microsoft Dynamics) and collaboration (chat, IM, conferencing) integrations but readily admitted he did not have a rich frame of reference with regard to Telesphere's competitors.
As Telesphere is Broadsoft based, it's reasonably safe to assume that their application integrations are bullet-proof (Broadsoft dosn't roll stuff out that doesn't work) and probably feel alot like what other Broadsoft based providers offer.
Regarding price, when carriers get into the mid-market they're going to price any deal based on both their hard and soft costs to get the deal. Broadsoft based providers are generally higher priced than non-Broadsoft providers due to the extra Broadsoft licensing they have to pay for. But since the dominant hosted UC player in the industry (Smoothstone/WestIP) is known for their high prices even though they're non-Broadsoft based, I'd look to Telesphere to be trading some margin for market share especially as they try to pick up deals in New York City and the California Bay Area.
Should You Trade in Your PBXs Today for Hosted Unified Communications?
It depends. My last PBX consulting client was a CPA firm who really wanted to integrate their billing and CRM applications into their next phone system but when it was decision time they opted to stick with a new PBX even after I explained all the unified communications options. They decided to do without the integrated applications after adding up all the extra costs.
But larger multi-location businesses have different cost models. I've talked to peers who've had mid-market customers who've spent $100,000 integrating complex applications into both hosted and PBX-based UC phone system solutions. They were abel to justify it because the $100,000 development cost was retired in less than two years by improved productivity of their employees.
Click here to download our 2013 "Should You Buy or Rent a Phone System?" Checklist. It's specifically designed to help end-users sort our the pros and cons of hosted VoIP for their particular business.
The best way to know is to give us a call and let us screen your unified communications needs.
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