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Cloud-Based, Hosted IP PBX, Huh?

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March 01, 2010
Telephony Solutions
Dan Phillips - dphillips@cni3.com

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In 1984 something called divestiture happened in the telephone world, and since then hotels have had PBXs (private branch exchanges) and CASs (call accounting systems).  Since 1984 a few things have happened in hotel telephony, like the implementation of voice mail and message waiting lights, two- line phones with a modem, hotel specific faceplates, and so on.  But really, nothing has occurred that would make a hotelier get all excited about installing a new phone system. Phone systems in hotels are simply a required piece of equipment, primarily for life-safety issues.

Most everyone has heard about VoIP services, or voice-over Internet protocol.  You probably know someone that uses a service like Vonage or Skype, if you don’t do so yourself.  And, over the last few years phone systems themselves have migrated to IP.  This migration path has evolved now into providing telephony applications from hosted sites and basically selling software as a service (SaaS) instead of lots of hardware. Whereas a few years back buying a PBX meant rolling in something as big as a refrigerator and needing technicians to come on site for most service, today you might purchase something the size of a pizza box or two and purchase most all of your telephone requirements (equipment, dial tone, trunks, local and long distance) as a flat-rated service.

What does this mean? 
Now, a hotel can replace an old PBX and keep the guestroom phones with a hosted solution. Some solution providers bundle their services together with the Internet connection, replacing the old T-1s or PRIs, with new, SIP (session initiation protocol) trunks. Bottom line: Where hotels used to buy equipment from one manufacturer, pay a vendor to support it, buy trunks from a local carrier, and pay long-distance charges to yet another company, all of this can now be included in one monthly check. What’s more, that bundled package comes with future upgrades for free.  And what is really more interesting, is that all of this can come with savings from 20 percent to 60 percent.

Is it too good to be true?  Well, there are several questions that one should ask before implementing this at a hotel. For the purposes of this article, we asked Defero3, Mitel Networks and Thing5 to respond to a survey including the key issues one should consider before moving forward to engage a hosted solution.

In the Cloud
Walt Dryfoos of Mitel said, “Cloud computing is one of the more prevalent themes being seen today, as IT administrators strive to minimize capital expenditures and reduce operating costs. By centralizing telephony in a private or public cloud, the customer is able to make significant savings in both up-front capital costs as well as ongoing operational expenses including both personnel and facilities. This is particularly true with hospitality vertical where it has become increasingly important to remove cost (both capex and opex) from the premises.

Centralization of non-voice-based applications has been a growing trend for some time now. Voice-based applications have been largely left out of this effort for several reasons. These include limitations in the network required to support this type of centralized network, as well as the lack of a compelling business case to support this. Issues such as proprietary hardware, lack of scalability or loss of functionality where scalability was provided, detracted from the obvious benefits of centralization. With the introduction of the multi-instance communications director (MICD) platform, now the benefits of cloud computing can be extended to IP telephony deployments, with the full hospitality feature-set customers have come to expect.” 

Features and Functionality
Basically, hosted systems will provide the same feature sets as do the traditional PBXs. However, there are some nuances. The path that calls take is different, which may require decisions to be made on fault proofing and redundancy.  E911 functionality needs to be addressed. Wake-up calls, especially if the Internet connection fails during the night, are another area that might require a change in procedures. Though handled differently, each of the vendors responded with answers that will meet the scrutiny your IT staff might have on these topics.

For example, Carol Guerra of Thing5 said this about her company’s solution to wake up calls. “Wake-up calls can be set using traditional phone prompt methods or via the Web (using a system like Web-based Thing5 Dashboard)," Guerra said. "(The) Web-based dashboard allows rights-based access for hotel staff from any PC with an Internet connection. The dashboard provides complete reporting, including disposition of placed wake-up calls, and the ability to audit wake-up calls(set/answer status) via the Web site or a hard-copy wake-up call report. A network failure would not impact the wake-up call service as long as the wake-up request has been entered to the system,” said Guerra.

With a traditional PBX the types of problems that some form of redundancy might require included: power outage, complete system failure, hard drive failure and carrier circuit failure.  In response to these conditions, hotels could have added battery back-up, purchased two, mirrored systems or two mirrored hard drives, and, subscribe to multiple carrier providers, perhaps bringing in their cabling via different paths into the hotel.

With hosted applications, there are still problems that could occur.  In the case of a power outage, battery back-up can still be used, as well as keeping some POTS (plain old telephone service) lines for emergency.  In regards to complete system failure, or equipment failure, these providers have multiple hosted sites where entire phone systems are installed. In the case of failure of any one system or location, failover procedures kick in automatically and the hotel may never know there was a problem. For Internet circuit connection failure, hotels can still opt for multiple circuits from different ISPs, or far more less expensively, retain some POTS lines to maintain the system until the circuit comes back up.

With regards to redundancy, Defero3 has an encompassing solution to this issue. Tom Guziak said, “As part of Defero3’s global reliability and disaster recovery plan, we have deployed multiple redundant data center co-locations currently in Toronto, Atlanta, New Jersey and Amsterdam with near future plans to roll out new co-locations in Denver, Dallas, Chicago, Australia and Malaysia. If there is any type of service-impacting issue at one data center, like a natural disaster or fiber-optic cut in that particular geographical location, all data centers are engineered as mirrored images of one another. Thus, insuring full operational capacity of the Defero3 hosted solution.”

What has to be replaced in the hotel?
When a hotel changes from one PBX manufacturer to another, all of the proprietary or digital phones had to be replaced.  The same goes for changing to one of these hosted vendor applications (with the exception of changing from some of the existing Mitel systems to the Mitel-hosted application). However, there is an advantage in that these new systems work with any SIP-compliant telephones, giving the hotel many options to choose from instead of just the existing PBX proprietary phones. Guestroom phones can remain the same.  However, special care should be taken to ensure that the new, hosted application is able to light message waiting lamps (some systems can’t).  In some cases, the cabling to some of the admin phones, where digital phones used to be, might need to be replaced.

These hosted solutions will contain their own voice mail, automated call distributor and call accounting systems. Each of these vendors stated that they could work with an existing call accounting system.  You will most likely be changing your circuits with your current carriers, moving from more traditional voice circuits to SIP trunks which will provide many advantages.  Fewer SIP trunks than voice trunks will probably do the job just as well, and free local and domestic long distance will be provided, saving money.

Even though every vendor will have its proprietary pricing models, there are some consistencies.  Of course, a hotel will have to pay for whatever hardware, including new phones, that is to be installed.  In comparison to traditional phone systems though, this cost is far less.  From this point, each vendor has a flat monthly recurring charge that covers licenses to every phone, 24/7 (or other contracted service level) of support, all upgrades, and the monthly recurring charge for the circuit(s) required to carry the traffic. Remember, local and domestic long distance is included. International traffic can generally be carried by these vendors and will be billed separately.

There are other providers of hosted solutions that have different pricing models.  One such model includes very little upfront cost, instead amortizing the capital expense over the term (generally 60 months) of the contract.

Multiple Sites
Unlike the traditional phone systems, whereby one system went into each hotel, hosted IP systems could be used to link multiple sites together.  For hotel companies with multiple locations, this might be quite advantageous. Hotel companies would be able to pool SIP trunks together at the hosted site, further reducing monthly recurring charges.  Another possible option would be to leverage existing corporate required bandwidth and provide telephony over the same pipes currently running PMS and corporate e-mail accounts.  This would also provide some consistency and standardization of feature sets, dialing patterns and more.

Test the water
One advantage of telephony as a service is that hotels could opt to employ individual segments of the overall hotel-voice applications. For example, a hotel might decide to install SIP trunks to a hotel or multiple sites, as described above, keeping the existing phone systems and realize savings on monthly recurring charges. Then, when the old phone system needs to be replaced, it becomes quite a simple process. Another option, after changing out to SIP trunking, would be to simply replace the voice mail system, typically with the automated attendant and wake-up call features, using the existing PBX to process the phone calls.  This puts these critical functions on an IP network where more features and management can take place.  Again, when the old PBX needs to be replaced, it is an easier migration.

And, since these systems are IP-based, future enhancements will be much easier to develop and employ. With the advent of mobile phone applications, this is a positive in the decision making column.

Hotels should strongly consider hosted IP PBX applications in the near future. The return on investment on these systems is relatively short and the purchase will ensure sustainability through the future.

Dan Phillips is a low-voltage systems consultant specializing in the hospitality industry.  He can be reached at dphillips@cni3.com for questions or comment.
The author would like to thank the following people for their assistance with this article: Defero3 Inc–Tom Guziak, Mitel Networks–Walt Dryfoos, Thing5, LLC–Carol Guerra.

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