Sponsorship Message
Hundreds of Columns Sorted by Topic
The SMB VoIP Market Accelerates: Hosted vs. Premise
by Marek Kotelba, Marketing Director Communications Infrastructure and Voice Business
4/28/2008
By most accounts, small- and medium-sized businesses (SMBs) are ready to take advantage of advances in VoIP technology. As is typical of new technologies, concern over the unknown and limited information technology (IT) know-how may cause some SMBs to delay adoption.
To overcome this, traditional telecom and cable network operators, VoIP service providers, value-added resellers (VARs) and others are bundling together a wide range of services and products that not only address the SMB's voice communication needs but also increase their comfort level with this new VoIP technology.
The VoIP market is showing astonishing growth. Market research firms have been predicting accelerated growth of VoIP for SMBs for some time now. According to AMI, worldwide SMB IP telephony spending will exceed $4.5 billion during 2008, suggesting a 2003-2008 compound annual growth rate of 41.3%. Of particular interest to SMBs are cost savings, productivity enhancements and improved communication management promised by VoIP and converged voice and data services.
Providing Turnkey VoIP Services
Generally speaking, VoIP service offerings for SMBs fall into two major categories: hosted and premise-based.
Hosted VoIP services, which are currently offered by several different types of companies, implement the functions of the Internet protocol private branch exchange (IP PBX) in the service provider's network at a location remote from the SMB. The VoIP provider's IP PBX manages VoIP calls coming from and going to the SMB, most importantly connecting calls from the SMB to the public switched telephone network (PSTN). The SMB is equipped with IP phones that are connected to an on-site IP router with a firewall. This, in turn, is connected to the VoIP provider's location over a broadband Internet access line (Figure 1).
In some cases, the access line is owned by the VoIP provider. This arrangement improves VoIP quality because the provider has better control over the access line. In addition, VoIP traffic from the SMB's location to the service provider typically does not traverse the public Internet when the VoIP provider owns the broadband link. Alternatively, the broadband access line can be owned by an independent Internet service provider (ISP), in which case the VoIP provider is considered an Internet telephony service provider (ITSP).
In both of these cases, there is no connection between the IP phones at the SMB's premises and the PSTN. In addition to supplying basic connectivity to the PSTN, those providing hosted VoIP services typically offer supplementary calling services and various calling plans. Supplementary services often include caller identification, call waiting, call transfer, conferencing, voice mail and other features that have been offered by traditional telecom service providers for years. However, VoIP providers can also offer advanced features such as fax-to-e-mail and voicemail-to-e-mail conversion. VoIP calling plans for SMBs typically feature one flat rate for all local, long-distance and international calls.
In contrast to the hosted VoIP model, the premise-based model has the IP PBX located on the SMB premises (Figure 2). With this architecture, the provider typically offers a bundle of services, including VoIP trunking and data communications via Internet access. The local IP PBX at the SMB's site may support some or all of the supplementary services commonly offered by traditional telecom providers, as well as advanced services offered by VoIP providers. For some types of local calls, such as conferences or calls to and from extensions on the local IP PBX, there is no need to transport the VoIP traffic to the service provider over an external broadband access line. This is a major advantage of the premise-based service model over the hosted service model.
In both the hosted model and the premise-based model, connecting VoIP calls to the PSTN can be accomplished through the VoIP provider's network. With an IP PBX on-site, however, connection to the PSTN can also be established directly from the IP PBX.
Connecting through the VoIP provider network may result in cost savings -- especially for long-distance and international calls -- from call trunking performed by the service provider. With a direct connection between an SMB's IP PBX and the PSTN, the SMB can have backup analog connections to the PSTN that continue to provide voice communication to the outside world when the broadband access line is down.
This is critically important not only in an emergency but also from the perspective of business continuity. For many SMBs, missing a call or not being able to place calls can have a devastating effect on the performance of the business. Unfortunately, hosted VoIP services offer no such backup contingencies, except when using alternate broadband connections with battery backup equipment.
Conceptually, the premise-based service model has other configurations that vary according to the ownership of the local IP PBX and IP phones. One variant would involve the VoIP provider owning the IP PBX and all of the IP phones. The SMB would then lease this equipment from the provider or receive it as part of the service.
In another variation of this model, the service provider would own only the IP PBX and the SMB would own the IP phones. In a third, the service provider might only have management access to the broadband line up to and through the IP PBX. A fourth variation could feature the SMB owning and managing both the IP PBX and the IP phones, while purchasing VoIP trunking and, optionally, data services from the service provider. This last variant is more likely to be implemented in medium-size businesses rather than small businesses because the SMB would need its own staff to operate, manage and maintain its IP PBX and IP phones. This is usually beyond the means of many small SMBs.
Despite this, some SMBs could implement a premise-based arrangement without an on-site IP PBX. In this case, the SMB would deploy a VoIP gateway or an analog terminal adapter (ATA), with RJ11 ports that connect to traditional analog phones.
This solution is usually limited to just a few ports, however. Calls between analog phones on the SMB's premises may be switched locally in the gateway/ATA or through VoIP by equipment in the service provider's network. Likewise, connection to the PSTN can be accomplished locally or through the service provider's equipment.
Effective Management Ensures Quality
For all of these architectural scenarios, effective management of VoIP endpoints is critical to ensure a high level of service quality. The quality of the VoIP service has many aspects, including:
- Voice quality
- Service reliability
- Service cost
- Supplementary services
The bar for quality voice service has been set for quite some time by the traditional analog service on the PSTN. While VoIP typically provides cost savings over traditional analog PSTN-based voice services and can also match the breadth of the supplementary services of the PSTN, the voice quality and service reliability of VoIP still require close attention. This stems from the fact that VoIP calls can traverse several quite different IP networks carrying diverse packet traffic.
VoIP is just one type of packet carried on these networks. Depending on the service model chosen by the business, the VoIP provider, the business itself, or both must manage the VoIP endpoints as well as the underlying IP infrastructure. This management can be done remotely by the service provider or locally by the SMB and would apply to the IP PBX, IP phones, routers, firewalls, gateways, switches and other types of network equipment (Figure 3).
Effective management of VoIP endpoints requires support for the following:
Industry-standard protocols
Extensive configuration options
Advanced statistics
Interactive diagnostics
Self-adaptation
Security
Industry-standard protocols carry out sessions between a management server in the network and each VoIP endpoint. These sessions may include configuring the endpoint, exchanging advanced statistics and performing interactive diagnostics. During sessions between the management server and the endpoint, the management protocols must support the traversal of various pieces of network equipment, including firewalls and network address translation (NAT) devices.
During a VoIP call, endpoints typically exchange information about vital VoIP traffic statistics and the perceived voice quality. VoIP monitoring (service assurance) devices may use this information to capture the state of the call and correlate it with other statistics collected throughout the service provider's network. Conceivably, a management node could re-route calls away from problem areas on the network to network connections that would provide higher quality voice service.
To be compatible with a variety of VoIP monitoring equipment from different suppliers, this management communication must be based on open industry-standard protocols that allow for vendor-specific extensions. Industry-standard protocols are also needed for remote loopback tests in which the active test equipment places a synthetic (non-human) voice call to the endpoint and measures the resulting call quality.
After a VoIP endpoint has been configured, it can independently adapt to adverse network conditions or alert the management server if the desired adaptation is beyond the endpoint's pre-defined limits. For example, the endpoint may be set up to observe complex thresholds on specific statistics and automatically alert the management server whenever these thresholds are exceeded (triggered). When such an alert is triggered, the management server can automatically begin to capture data on transient network conditions to aid in VoIP troubleshooting. Moreover, the endpoint may be configured to send specific data on certain events as well as trace information to the management server. The endpoint can dynamically determine the amount of bandwidth available on the broadband access line, which will dictate how the endpoint prioritizes the various types of traffic streams it is managing to achieve optimal voice quality of a VoIP call.
The self-adaptation and triggering capabilities of endpoints provide a very scalable solution because the resources of the management servers in the network can be conserved. At the same time, both the service provider and the SMB are able to access an extensive pool of crucial VoIP performance statistics that are not readily obtainable from passive observation of control traffic between endpoints.
Finally, since reliable phone service is the lifeblood of practically every business large and small, it is of paramount importance that VoIP management communications be secure. Any management information exchanged between management servers and endpoints should at the least be authenticated, but ideally encrypted as well.
Simple Quality Service
SMBs certainly expect the same or better quality of phone service from VoIP as they have received for years from analog PSTN. In addition to service quality, the turnkey aspect of any VoIP service offering is a critical influence on the adoption rate of VoIP among SMBs.
In most cases, SMBs lack the resources or technical skills to manage VoIP services. Therefore, VoIP providers who wish to enter the rapidly growing SMB market must be fully equipped with comprehensive and adaptable remote management capabilities that will ensure the quality of voice and the availability of service. This implies much more than just passive monitoring of the statistics exchanged by self-adapting VoIP endpoints. Management servers in the network and endpoints must be capable of active and dynamically initiated diagnostic sessions over secure, industry-standard protocols.
About the Author
Marek Kotelba is Marketing Director for Texas Instruments' Communications Infrastructure and Voice Business. Marek has 23 years of experience in academic, engineering, marketing and management roles in the data acquisition, data communications and semiconductor industries.
He holds an MSEE from Warsaw University of Technology in Poland, and is currently an MBA candidate at The Wharton School, University of Pennsylvania.
About Texas Instruments
Texas Instruments Incorporated provides innovative DSP and analog technologies to meet our customers' real world signal processing requirements. In addition to Semiconductor, the company's businesses include Sensors & Controls, and Educational & Productivity Solutions. TI is headquartered in Dallas, Texas, and has manufacturing, design or sales operations in more than 25 countries.
Send us your response to this article.
Learn How to Get Your Column Published on this Site
