Verizon Business Releases Shared Trunking and Teleworking Features for Hosted IP Centrex

| Apr 2, 2009 | Business Network Services - U.S. | Competitive Intelligence Report

| Analyst: Brian Washburn

Current Perspective: Positive
Vendor Importance: Moderate/High
Market Impact: Moderate/High

Event Summary

April 1, 2009 -- Verizon Business has added several features for Hosted IP Centrex, its network-hosted VoIP service. First, the carrier has extended its Burstable Enterprise Shared Trunks (BEST) service, which lets customers share VoIP capacity across multiple locations, from IP trunking to include Hosted IP Centrex service as well. Second, Hosted IP Centrex now offers a softphone option that includes online E911 registration, and it lets customers provision in-region local numbers for their remote workers using softphones.

Analytical Summary

• Current Perspective: Positive on Verizon Business adding teleworking features and shared trunking for its Hosted IP Centrex (HIPC) service, because the carrier is extending Burstable Enterprise Shared Trunks (BEST), which offers trunking customers a way to reduce their bills, to its flagship network-hosted VoIP service. Verizon Business' softphone development also includes supporting features for numbering and E911 that some enterprises will find acceptable, though wireless services and Skype may have eclipsed the opportunity.

• Vendor Importance: Moderate to high to Verizon Business, because BEST can reduce the number of subscribed lines by one-third for large distributed enterprises – a major potential cost-savings and therefore a big competitive differentiator. Verizon Business now supports BEST across both SIP trunking and network-hosted VoIP, so it can serve sites with both types of deployments. The teleworking functionality adds features that are old hat to consumer and small business VoIP, but have not had as much attention for enterprise VoIP.

• Market Impact: Moderate to high on the business voice market, particularly competitors offering enterprise voice services, because Verizon can use BEST to lower the overall number of trunks that distributed enterprise customers need and, therefore, lower its service price before applying promotions or discounts. Neither Verizon nor its competitors are new to teleworking features such as network-originated calling, virtual telephone numbers, and softphones with E911 requirements.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

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Recommended Competitor Actions

• Enterprise VoIP competitors generally should not see Verizon Business' teleworking enhancements as a call to invest in softphone development. Competitors should have an explanation ready to explain their softphone client with E911 capabilities, and they should be prepared to add in-network call origination and virtual telephone number support for those customers that require it.

• Voice competitors can stick to the message that BEST is a billing gimmick, not a more efficient way of providing services. They can state that Verizon Business targets BEST at large, distributed enterprise customers as a different way of bidding for the business in lieu of just offering steeper discounts. Competitors should ask these customers to compare prices and functionality, and then decide.

• Enterprise VoIP competitors can also say that Verizon Business BEST is mainly applicable to highly distributed large domestic enterprises. This would be a good message to use for any other type of business – small to mid-sized enterprise, largely international businesses, or more centralized organizations – to say that Verizon's line pooling scheme probably would not result in cost savings for their type of business, and it may end up costing more.

• Meanwhile, enterprise VoIP competitors do need to understand that VoIP platforms have changed the game, as also shown by the low-cost entry into the business by competitors such as Skype. They need to look for their own angles on how they might use the separation of transport/network from application (in this case, voice) to devise new ways of packaging VoIP services for customers.

Recommended End User / Customer Actions

• Large, distributed domestic enterprise customers can see what BEST can do in terms of providing an alternative billing structure to meet their needs. They can get a proposal from Verizon Business and compare the numbers for themselves – now across facilities served either by SIP trunks or network-hosted VoIP – to see whether BEST really could reduce their costs.

• Other types of enterprises (i.e., regional small to mid-sized enterprises, centralized organizations, largely international organizations, and so forth) might still be curious about BEST, but the final amount of savings may not be as compelling. Businesses without multiple locations (or at least a large contingent of remote workers) would not benefit from BEST.

• Any enterprise discussion of teleworking should probably include a wireless component, which Verizon Business should be able to supply by bringing Verizon Wireless into the discussion. Some enterprises will have specific challenges that are best addressed by features such as softphones, virtual telephone numbering, and network-originated calling. Verizon Business offers these features, but major enterprise VoIP competitors offer at least some of these features as well.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

| Client access - Full report in Business Network Services - U.S. | More information

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