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Interview: Tough Economy Shines Light on Junction Networks' Hosted IP-PBX

TMCnews Featured Article


November 11, 2008

Interview: Tough Economy Shines Light on Junction Networks' Hosted IP-PBX

By Michael Dinan, TMCnet Editor


 
Like many industries navigating this slower economy, IT has had a disheartening week, with news of Cisco System Inc.’s disappointing quarterly report, Nortel’s decision to cut about 1,300 jobs and Circuit City’s bankruptcy filing.

 
Yet, as TMCnet has reported, even Cisco Chairman and Chief Executive Officer John Chambers (News - Alert) this week painted a sunnier outlook for the telecommunications space, saying that his company views now as a time to invest in emerging technologies, as the United States leads the world back into financial security.
 
While economists debate the how and when of that move, one thing that all IT experts apparently agree on is this: Now is a time that companies, large and small, are looking to leverage technology to cut costs and boost productivity.
 
For many, in the world of IP phone systems, that means turning to hosted voice services, which save on installation and maintenance costs and allow a business to grow or contract one employee at a time, without wasting money on a PBX (News - Alert).
 
According to Rob Wolpov, president of a Manhattan-based company that offers hosted IP-PBX services, this tougher economy shines the light a little brighter on the technology’s cost-saving potential.
 
Wolpov’s company, Junction Networks, was founded in 2004 and offers business VoIP services. Its flagship offering, OnSIP, is a completely managed hosted PBX service for businesses which want an outsourced communications platform. As its name suggests, the solution’s platform is SIP-based, and offers inbound, outbound and toll-free inbound calling.
 
The company says its services work best when integrated with other services and applications.
 
TMCnet had a chance recently to put some questions to Wolpov about how his company is faring in this slower economy and what Junction Networks’ (News - Alert) OnSIP offering is bringing to SMBs seeking cost-savings.
 
Our exchange follows.
 
TMCnet: TMCnet’s own Gary Kim (News - Alert) wrote here about the value that hosted providers of any kind may bring to SMBs in this slower economy. How is this economy affecting interest in Junction Networks’ OnSIP offering?
 
Rob Wolpov (pictured left): The tough economy has had a positive effect on the OnSIP offering, resulting in record new signups over the last few months.
 
There are many economic advantages to the OnSIP offering over competing hosted services and PBXs themselves. The tough economy just shines the light a little brighter on the potential savings.
 
A company shopping for a communications solution today is still faced with a high capital expense event when buying a PBX. Without decent financing options and tight cash positions today, this is even tougher to swallow. A hosted service typically eliminates a very large portion of the initial expense of a PBX solution.
 
Further, companies are sharpening their pencils on the total cost of ownership reality, which includes software and hardware maintenance costs, upgrade expenses and disruptions and consulting and/or staff expenses indefinitely. OnSIP is totally managed by our team, upgrades are free and completely non-intrusive to the user and there is no software or hardware to maintain.
 
OnSIP’s pricing takes things a step further, separating itself from other hosted services. There are no costs per user, no contracts, no commitments and the hosted service is free to try for 30 days. Companies with five to 50 users making the jump to a hosted voice solution typically have at least one other hosted solution whether it be Web hosting, e-mail, CRM, Web conferencing or Salesforce automation. They know that in order to save money using a hosted alternative, the service needs to be a fully managed, no commitment and pay as you go service. It needs to scale up or down on-demand with changing business needs. OnSIP delivers all of these.
 
TMCnet: We’re reading a lot these days about how companies must be flexible and creative in order to negotiate the recession. How do hosted IP-IPBX systems meet that need, in your view?
 
RW: In tough times, companies need to be nimble, focused and ready to pounce on sales. Having a staff or consulting contract to manage a phone system is costly and so is the office space needed to house the equipment and staff.
 
With a hosted IP-PBX system, companies can eliminate ongoing expenses related to managing and maintaining CPE. But the real benefit comes from the inherent flexibility of a hosted service. Employees can work from home, allowing the business owner to explore office space reductions while employees save on commuting. Some of our employees at Junction Networks have done this from day one 4 years ago. They are able to commit more time to work and less time to commuting and they are happier.
 
With OnSIP’s on-demand delivery model, customers can benefit further with the flexibility to eliminate or add users with little to no expense in just minutes. In tough times, businesses can scale down to just what they need. And when business turns up again, companies can immediately scale up the OnSIP service on-demand.
 
TMCnet: Does Junction Networks believe this economy will drive faster development and adoption of unified platforms?
 
RW: Yes and no. A lot of vendors are still trying to convince customers to forklift an entire unified communications platform. With credit as tight as it is and with a poor economic outlook, capital expenses have been slashed from budgets meaning complex and costly platform projects will be postponed or cancelled.
 
Instead of the “replace everything” projects, we are seeing interest in non-intrusive baby steps. Unified communications services that don’t cost a lot up front and aren’t a distraction to already stretched teams will be deployed in this environment.
 
For instance, OnSIP is easy to get up and running as a voice service and includes free video and voice-mail-to-e-mail notifications. Shortly, OnSIP will include presence and IM with no additional cost, software or hardware. These features are easy to use and easy to deploy. Asking a financially strapped company to shell out a lot up front and requiring them to take the time to install, learn and manage entirely new systems is not going to fly today.
 
TMCnet: How does Junction Networks gauge interest today in SIP features, such as those offered with OnSIP?
 
RW: As most users of e-mail don’t care that the protocol is SMTP, most users of VoIP don’t care if it is SIP. However, they do care that our service is delivered based on the industry standard, that the leading manufacturers of phones, routers and network components are focusing their product on the same standard and that it can save money on bandwidth. Imagine what it would be like if you went to a hosted e-mail provider and they told you their service doesn’t work with Microsoft (News - Alert) Outlook. Amazingly, some hosted providers still sell phones that only work using certain protocols that are not standards-based.

Customers also care that they can do things such as use their fring account to make and receive calls to their OnSIP extensions. They may not realize it but they can do this because both fring and OnSIP use SIP as the common standard to speak to one another.
 
A small but growing number of customers are interested in SIP because it allows them to place and receive calls using a SIP address rather than a phone number. Ultimately, everyone’s e-mail address will serve as their VoIP, IM and e-mail address. We are getting there, slowly.
 
TMCnet: Tell us why the OnSIP offering includes no per user or per seat licensing structures. How does that make the product more attractive to prospective businesses? What is the average cost per user per month with the system?
 
RW: Most of our competitors sell a service using an underlying proprietary platform purchased from one of a small number of carrier platform vendors. As a result, our competitors typically have a license to pay for each user they add and they pass the cost on to customers with “per seat” pricing. OnSIP has no per seat or per user license because we do not have an underlying platform vendor to pay.
 
Instead of throwing money at a carrier platform vendor, we built our solution from the ground up using the same industry standards leading vendors use. As a result, we are financially and technically flexible and independent. When our competitors add new features, they incur additional vendor cost and have to pass that on to users. When we add a new feature, we have no additional cost so our users get more for the same price. While our competitors are locked into the product roadmap of the platform vendor they choose, we have the flexibility to add features that make sense and when they make sense for our customers.
 
As a result of our independence and flexibility, our average user spends a total of $18 a month, and industry low. This includes our entire feature set and all pay-as-you go calls.
 

Don’t forget to check out TMCnet’s White Paper Library, which provides a selection of in-depth information on relevant topics affecting the IP Communications industry. The library offers white papers, case studies and other documents which are free to registered users.


Michael Dinan is a contributing editor for TMCnet, covering news in the IP communications, call center and customer relationship management industries. To read more of Michael’s articles, please visit his columnist page.

Edited by Michael Dinan







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