Hosted Telephony Services

To get our heads around the state of play in the				can build it. Typically at the moment the major
realm of hosted telephony services, we talked to				areas of interest are inbound ACD - the ability to
industry expert Paul Desbois.				handle inbound caller traffic and distribute it to the
Q. Hi Paul, I'd like you to imagine I am a novice in				right individuals/departments and to report on that
this marketplace. I could be running a call centre				and to understand the effect on the business of
for instance, but want to streamline my operation				your inbound traffic.
and learn a little about the how's and why's of				There's the outbound side which is the ability for
Hosted services. What can you tell me.				you to connect to the outside world and dialler
Paul: Let's go into some background first, and go				technologies like predictive dialling.
from there.				Q: What kinds of companies are going for Hosted
There are two primary technology environments				services?
inside any business that have to communicate:				Paul: Most companies have room for hosted
one is telephony and the other is the IT				services in their setups:
environment. For telephony we're looking at				You have the new company with the opportunity
telephones, modems, things that connect to the				to install completely new technology. For them
network but all in all people think of this as voice.				there is a serious decision as to whether they go
On the IT side you're talking about database				for the capital expenditure route of buying
applications specific to running a business. People				physical systems to install in the new office, or
tend to think of that as data. Today, using ISDN				whether they go for a hosted model where they
and VoIP the two are being combined under the				avoid those.
one umbrella. However, people still perceive them				You have the company with some old systems,
as different things - telecoms for voice and				some historical investment but a perception that
computers for data.				they need to move upward and gain access to
Today, every business goes out and buys a				new applications and services, or that they need
telephone system and in making that decision				to enhance their existing platforms but don't again
about what telephone system to purchase they				want to go through the capital expenditure of
have to look at their voice applications and what				upgrading or replacing their legacy systems and
they want to do with their inbound and outbound				again, they are able to go to a hosted supplier
voice calls. There are questions in people's minds				that has already made that investment, that is
today about what is the future of voice				moving with the latest technologies and can make
technology going to look like; historically it's been				these services available on a Pay As You Go
something called TDM* and the future looks like				basis that the business can now run as an
something called VoIP. There is the question of				operating expenditure.
which of these technologies to go for, what are				I could go on, but you can see that it can be a
the kind of applications that you're going to be				sound technological and financial decision to go
able to run on those technologies and what				hosted.
services as a business are going to needed in the				Q: So people can put off making technological
future.				choices that might not have an answer right now?
And then there is the issue of staying ahead of				Paul: Yes. With IVR systems, telephone systems,
the competition.				computer systems, CRM environments etc, a lot
There can be significant costs in setting up a				of work can go into understanding the technology.
business to be able to compete in a given				There are normally a number of different costs
environment, so we are looking at capital				attached to that; there are the upfront costs of
expenditure to buy in technologies, both IT				investment in consultancy, some upfront costs in
technologies and Telecom technologies necessary				buying systems. Then there's the actual cost of
to be able to compete.				ownership - training, maintenance etc. One of the
As a hosting company we move with the times,				most difficult things is actually what hardware
take on the burden of capital expenditure so our				technology to buy because it has to grow with
customers can just get on with what they do				you and allow you to fulfil the requirements of
best.				that technology. Hosting provides you with an
Q. Explain the value of VoIP to me..				existing environment that has already been
Paul: It seems that many people are lured by the				designed very effectively, so you avoid having to
perception that VoIP is free, however unless you				make a decision today that you can put off till
use a client like Skype it is just another method				tomorrow because with hosting you can go with
of voice transmission.				existing platforms in technology - but importantly
VoIP is still an immature technology. It was				you can choose the things that you want in the
originally designed for video conferencing. Video				form of a shopping list, and go through a learning
conferencing required a protocol to allow people				curve without having the initial investment of
to actually tie up video data with voice data and				buying the hardware.
synchronise the two.				Q: Give me a scenario?
However with traditional telephony you have				Paul: Let's take as an example a virtual call centre.
dedicated bandwidth, you have copper or an ISDN				A hosted service allows calls to be routed to
line between the connected points. With VoIP you				different agents, for customers to feel as if they
have to deal with something called contention				are in one environment whereas there is no need
ratios, which is where the amount of data that				for the company to operate this way at all.
you're sending has to compete for bandwidth with				Billing and statistics also come from one central
other data. This can give you latency issues.				source, so it ties up all of the loose ends. Our call
Latency is the lag in the time it takes for the				centre solutions involve all that hosted telephony
data to get from point A to point B. Over a				can offer in one place.
standard telephone the human ear can handle				Q: What are peoples fears about going for hosted
about 126 Milliseconds of latency before the				services?
conversation starts to sound really affected Over				Paul: It seems complicated at the outset because
standard telephone you have around about 40				there are so many possibilities on offer. That's
Milliseconds of latency, which is virtually real time				where we are here to help.
as far as the human ear is concerned.				Q: Where do people start?
The problem with VoIP, is that when you take				Paul: They would normally trial something like call
voice and turn it into data to travel down the				recording because it's not an intrusive application.
network, you have to go through a codec - you				It's something that happens in the background and
have to basically convert it from analogue, which				doesn't normally affect any of the existing
is what you hear in the real world, to digital. Every				processes. People can see benefits like access via
time you do that there is a certain amount of				the web to the recordings, stats as well as the
processing power required which takes about 30				reduced charges for their outbound telephony.
Milliseconds. So, if you have more than 2 or 3				Q: So people can save money?
codex in the network between caller A and caller				Paul: As a hosting company we generate lots of
B, you will have latency beyond that of which				traffic and as such we're able to negotiate very
people will be able to accept it as a valid service.				considerable discounting. We pass this on to our
You can also get a certain amount of data that				clients.
just disappears and so the voice can break-up.				Q: Are many people using hosted services right
Q: So how does this all relate to hosted services?				now?
Paul: Hosting actually sits and straddles both				Paul: Virtually everyone is using some form of
technologies, so a true hosting company should be				hosted service already. If you use a mobile phone
able to provide VoIP and TDM options, which				you're actually using a hosted service, because a
gives the customer the choice of which type of				lot of intelligence that runs on that phone is
service to go for.				actually held at a central office location, so if
Another benefit of being with a hosted company				you're with O2 or Vodafone they have systems
is that they would have installed systems within				that host your voicemail, they have IVR and
co-location facilities that are built specifically for				you're mobile is just an access device. Typically
housing data centres, so they are conditioned				the cost of the technology is supplemented by
units to control the ambient temperature. They				the contract you are on. So, you may have
have high speed, high capacity data network				bought your phone for a few pounds when in
switches that can carry VoIP traffic, and the				fact the retail price of that phone may be
whole environment is geared to high performance				hundreds of pounds and you are now paying for
and high availability. So, from a client's point of				that technology over a period of time, based on a
view a hosted service has already dealt with all of				contract with the spend value per month which
the technical issues with regards to what to buy,				goes to that provider. So everyone is actually
how to set it up and where to install it.				using hosting in some fashion or another.
Q: Typically what sort of telephony services can				Regarding market share, I estimate that 1% of
you get on a hosted basis?				the UK market would recognise themselves as
Paul: Telephony applications are all based on four				hosting some sort of the telecoms service today.
fundamental building blocks.				In North America it is much more. An example is
				that mail order companies can ship products with
1. Switching and routing which some people think				a service number attached to it, so if it arrives
of as ACD. The ability to route calls intelligently -				damaged there is a phone number on there that
switching and routing is a primary function and it's				people can ring which will take you through to
what telecoms is all about.				someone that can help you - in America 96%
2. Messaging, the ability to play people messages,				have this, in the UK it is more like 20%.
deliver messages or take messages. Messaging				Q: What would you ask your hosting company?
includes things like voicemail, fax, email, SNS.				Paul: The first thing to know is where have they
3. IVR (Interactive Voice Response). Everyone				co-located their equipment. You need a high
knows it as "press 1 for sales, press 2 for				capacity/high available environment with a lot of
accounts" it's the ability for someone to go				resilient architecture. What that means is that you
through a menu driven system, to choose options				want a co-location that has got environmental
and allow them to orientate themselves without				controls, is a manned facility with an engineer on
the assistance of a live person. Historically that's				site to deal with problems 24/7.
been done using D2F (press 1 press 2) but this is				Thanks Paul.
changing to speech recognition..				*TDM Time Division Multiplexing is a method
4. Conferencing, which gives you the ability for				where lots of signals are combined for
more than one person to talk to each other at				transmission on a single communications channel
the same time. So, with those four building blocks				or line. Each signal is broken up into lots of
we can then think of any telephony application,				segments, each having short duration.
any communication application imaginable and we

The Col

Hosted Telephony Services