There's a really good article by Theo Ludwick on VoIPNews the other day about hosted VoIP Services. Views on hosted services, including VoIP, vary widely. I confess that I bring a legacy mindset based on some fairly detailed understanding of how Centrex services, a managed voice solution (think hosted PBX service) grew to become a cash cow for telecommunications carriers. I also know, from the inside, some of the efforts made to encumber customers with contractual verbage that tied many to over-priced, but highly proftiable, long-term arrangements. This all, to the benefit of the telco and to the detriment of the customer.

So it's safe to say, I'm not necessarily a fan of hosted services based on that model.

Why Customers May Prefer Hosted VoIP
If you are a service provider interested in providing VoIP to your customers, you essentially have two options: offer them premise-based equipment or provide them with a hosted service. It has been estimated by research group InfoTech that the hosted IP market will grow from $319 million in 2005 to $5.9 billion by 2010. Clearly the hosted market is growing, but why?

Hosted services in the VoIP model really fall into two different types. Telco hosted services may carry the legacy of Centrex into the future. I'm skeptical as to the real value. But VoIP, particularly with the advent of competitive solutions and open source tools, has a greatly reduced barrier to entry. When compared to TDM voice services, the barrier to entry is negligible. And capital investment is soemthign for the provider to justify, not your company.

As Theo points out, there are some real benefts to hosted or managed VoIP service if the fit is right for your company.

• Installation - Since the provider does all the work, the impact on your business operations can be greatly reduced. The requirement for network readiness assessment may be almost eliminated. They're easily implmented on a line-by-line basis, minimizing impact on employees and staff.
• Maintenance - Centralizing the service with a provider means centralized monitoring and management. The health of the network may be more closely watched by the provider, under SLA. Less human capital required on your end. Upgrades to the network, for whatever reason, aren't your headache. The provider will need to negotiate timing and coordinate, but that headache becomes their issue.
• Configuration Management - An experienced service provider may be less prone to make human errors in configuration. They often have tried and proven automated process tools at their disposal. Growth is something they plan for. You don't have to.

On the other hand, there are aspects of your operating environment that might drvie you do host your own VoIP services. If you do customized application development, it might make more sense to keep everything in-house for tighter integration.



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