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Traditional PBX & Hosted VOIP
Technology: The Key Differences &
What They Mean For Your Business
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CONTENTS
Summary .................................................................................... 3
Whats The Buzz About? ........................................................................................................ 3
What It Means For Businesses ............................................................................................. 3
What It Means For Employees .............................................................................................3
Introduction ............................................................................... 4
Hosted VOIP On-Premise PBX Comparison ................................................................4
Main Technological Differences ................................................. .................................................... ...... 4
Analog Signal vs. Data Packets ............................................................................................4
PBX Technology ....................................................................................................................... 5
Major PBX Components.................... ................................................... ................................................. 5
Specialized Applications ....................................................................................................... 5
PBX End-Of-Life (EOL) ........................................................................................................... 5
Hosted VOIP Technology .......... ........... .......... ........... ........... ..... 6
Cloud Computing ....................................................................................................................6
Broadband Networks .............................................................................................................. 6
Softswitch Technology .......................................................................................................... 7
Quality of Service (QoS) ......................................................................................................... 7
Cisco QoS Standards Evaluate: .................................................. .................................................... ...... 7
Private Network & Public Internet ...................................................................................... 7
Data Connectivity - Main Differences ................................................. ................................................. 8
Service Level Agreements & Private Network Connections ........................................................... 8
Maintenance & Obsolescence .............................................................................................. 8
Cost ComparisonPBX vs. Hosted VOIP .......... .......... ........... 9
Epiks Total Voice vs. Nortel PBX .........................................................................................9
Conclusion ................................................................................ 12
About Epik Networks...........................................................................................................................12
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SUMMARY
Summary
Whats The Buzz About?
Hosted Voice Over Internet Protocol (VOIP), also known as IP PBX, Virtual PBX or
Cloud VOIP, is the next big thing in business telecommunications. It is changing the
limitations o voice systems and bringing those changes to businesses o all sizes
and industries. In the last ew years alone, advanced VOIP systems have gone rom
an enterprise-only technology to an everyday reality or businesses across North
America. And, amazingly, o the millions o VOIP end-users, many are working on
comprehensive phone systems that arent even located in the same building as their
offices.
Afer decades o PBX systems, what has changed? The answer is at the root o the
technology, in the transition rom traditional telephony to cloud technology, and the
new possibilities that come with it.
What It Means For Businesses
The transition rom traditional PBX to Hosted VOIP is more than just a change in
provider, a new system model, or a new service. It is a new technology altogether,
capable o providing the voice services that people are amiliar with as well as more
than they ever considered. The advantages range rom cost savings and scalability to
enhanced eatures and mobile integration.
What It Means For Employees
Employees can experience an office phone network that meets their consumer
standards or ease-o-use, multiple device integration, and virtual collaboration.
Colleagues are able to track and communicate with each other, better manage
their interace and shortcuts, and, in a general sense, appreciate using a truly
contemporary system. Why should the office toolkit lag behind personal technology
or the average business?
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INTRODUCTION
Introduction
In less than 15 years, Inormation Technology has gone rom a costly, raw potential
to a widely accessible and refined toolkit. From sofware applications to mobile
devices to the sophisticated networks they inhabit, the private sector has undergone a
transormation driven by new technology.
This is perhaps nowhere more visible than in business telephony, where legacy
phone networks are quickly giving way to the IP and Cloud Revolution. As the
telecommunications industry introduces more mobile and multi-media capabilities
while streamlining operations and expenses, PBX networks become increasingly
outdated and limited.
Hosted VOIP On-Premise PBX Comparison
Main Technological Differences
Public Branch Exchange (PBX) Hosted Voice Over Internet Protocol (VOIP)
Uses traditional telephone receiver to convert voice into
analog or digital signalsUses VOIP sofware to convert voice into data packet s
Transmits analog signals via legacy landlinesTransmits data packets via an IP-enabled private
network or the Internet
Internally deployed & managed Hosted off-site / delivered via The Cloud
Minimal integration with computer applicationsAdvanced integration with computer and data
applications
Moves, Additions & Changes (MAC) require internal IT
developments
Moves, Additions & Changes (MAC) require request to
provider
Analog Signal vs. Data Packets
The undamental difference between VOIP and PBX technology is the method o
transmitting audio inormation. In both systems, the sounds entering the receiver
are converted into signals. A PBX uses either analog, transmitted in wave ormat or
digital signals, or digital phone equipment. VOIP uses data packets small pieces
o inormation encoded and transmitted via Internet Protocol (IP), the widely used
standard or encoding and transmitting data over the Internet or other IP-enabled
networks.
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PBX TECHNOLO GY
PBX Technology
A Private Branch Exchange (PBX) is designed to provide phone service to a group
o people without purchasing independent lines and eatures or each user rom a
telephone service provider. It acts like a Public Switched Phone Network (PSTN) on asmall scale, allowing organizations to use extensions and share a common connection
to the PSTN. When calls are made, they are interpreted and rerouted by the PBX to
another internal number via an extension or to an external number via the PSTN.
Many standard office phone eatures were developed on traditional PBX systems,
such as call routing, auto-attendants, user shortcuts, voicemail, ax-integration and
countless others. PBX are capable o connecting complex applications, like call centre
systems that enable large scale call management or Integrated Service or Digital
Network (ISDN) systems that enable digital data to travel over traditional landline
networks.
Major PBX Components
Telephone Trunk Line Multiple shared phone lines or each user
Computer Manages call switching, routing and other eatures
Maintenance Console
Specialized Applications (e.g. Call Center, ISDN, Conerence System,
Auto-Attendant)
Specialized Applications
In order to add new eatures to a PBX, additional hardware and sofware systems
have to be installed. A call centre application, or instance, has to be purchased rom
a vendor and integrated with the PBX by the office IT staff. Any specialized unction
requires a system addition, ollowed by ongoing updates and upgrades or
continual use.
PBX End-Of-Life (EOL)
PBX phone systems, like other on-premise networks, eventually reach their End-o-
Lie (EOL). This indicates when a particular model is no longer in production or when
support rom vendors and manuacturers has ended. In many cases, the system can
continue to operate as normal, becoming an issue only once repairs or updates are
required. While the EOL date is not always pressing, it marks the beginning o the
systems decline and the need to explore new options. EOL usually occurs between 5
and 10 years afer the products launch.
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HOSTED VOIP TECHNOLOGY
Hosted VOIP Technology
Voice Over Internet Protocol (VOIP) converts analog signals into data packets that can
be transmitted over the Internet or any other Internet Protocol (IP) enabled network.
Internet Protocol is the standardized method o communicating between locations
and structuring data over digital networks. Each packet is encoded with the receivers
address and instructions like other orms o data including emails or web pages. By
sending the voice data over the Internet or a dedicated network connection, the Public
Switch Telephone System (PSTN) and traditional phone carrier play a less significant
role in placing interoffice calls, inter-company calls or long distance calls.
Hosted VOIP uses the same principles o transmitting data, but combines other
breakthrough in communication technology Cloud Computer and Broadband
Networks to offer the services and applications in a very different way.
Cloud ComputingCloud Computing is a general term or a number o different services and applications
that can be delivered over the Internet instead o developed at the location o the user.
Many things today use cloud technology to offer sofware subscriptions, server space
or virtual networks. Cloud-based services rely on centralized servers that perorm a
particular set o unctions and then broadband network inrastructure that deliver it to
customer locations as a simplified service.
Broadband Networks
Broadband reers to high-speed and high-capacity data networks and data-handling
techniques. The development and prolieration o broadband has allowed residential
and commercial users to use increasingly complicated and data-laden services at
sustainable costs. Broadband connections, including cable, DSL and fiber optics,
allow Internet Service Providers to stream high-bandwidth voice data with ewer
quality issues. Hosted VOIP services combined with a fiber optic connection can offer
applications like video-conerencing or entire offices without sacrificing the quality o
service.
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SOFTSWITCH TECHNOLOGY
Softswitch Technology
An advanced sofware platorm, known as the sofswitch, unctions like a remote PBX
system. As the brains o the Hosted VOIP network, it handles call routing, switching,
advanced applications and enhanced eatures or the providers entire network.Through various built-in or add-on capabilities, the provider can offer on-demand and
customizable service.
The complexity o the sofswitch will largely determine the capabilities o the Hosted
VOIP service provider. Some providers opt or a basic sofswitch that provides
undamental phone services that a traditional PBX would, without the hassle o
managing it internally. Providers with advanced sofswitches have many more
eatures to offer clients, including upcoming technologies in the telecom market.
Quality of Service (QoS)
VOIP has struggled with quality issues since it first became commercially available inthe 1990s. It proved difficult to achieve the same audio quality and consistency with
data packets and IP-enabled packets, especially during peak traffic periods.
Since, VOIP developers and providers use VOIP-specific Quality o Service (QoS)
standards that measure the transmission o high-bandwidth applications in order to
better manage network perormance. QoS standards are used to shape and prioritize
data to increase, predict and guarantee network perormance.
Cisco QoS Standards Evaluate:
Bandwidth Requirements
Packet Classification
Queuing
Traffic Shaping
Data Compression
Frame Relay
Private Network & Public Internet
Connection quality directly influences Hosted VOIP voice quality. One reason is that
voice data is high-bandwidth, meaning that it can disrupt a standard connection
i it not managed properly or i there are too many users. Private connections also
influence service quality by providing voice data with a distinct pathway between calls
instead o traveling various pathways across the Internet.
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MAINTENANCE AND OBSOLESCENCE
Data Connectivity - Main Differences
VOIP over Private Network VOIP over Public Internet
Guaranteed Voice Quality Standard Voice Quality
Controlled Data Routes Data Travels Unpredictably
Uptime Guarantee Best Effort Service
Service Level Agreements & Private Network Connections
Voice quality and network uptime can only be guaranteed i the Hosted VOIP service is
deployed via a Private Network. The added control o the private connection makes it
possible to guarantee perormance standards that match the reliability o traditional
PBX phones. Hosted VOIP services offered over a generic best effort connection can
only be as reliable as that network. A best effort service increases the chances o
network and voice disruptions or organizations with many users, continual usage or
data-driven applications.
Maintenance & Obsolescence
Hosted VOIP providers can absorb maintenance and update expenses or all o their
customers without incurring major costs. Issues can be detected and resolved offsite
rom the cloud acility, just as updates and upgrades can be ocused on the sofswitch.
Changes made to the central network in turn effect client networks, providing
simplified network maintenance, continually updates and system-wide upgrades. This
is ofen an included part o the service, alleviating operational expenses and the risk o
system obsolescence.
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COST COMPARISON
Cost ComparisonPBX vs. Hosted VOIP
The savings associated with Hosted VOIP services come directly rom the advantages
o the technology; every aspect o an office network can be treated as a ser vice,
allowing the provider to absorb operational and maintenance costs by managing
a single cloud network or countless clients. The client can deploy up-to-date
unctionality without the risk and effort o investing in an advanced system.
The results are reduced capital expenditure and operational expenditure. Depending
on the businesses current system and particular needs, savings can fluctuate
between the two, but are ofen possible in both areas. PBX systems, by comparison,
ofen demand large upront investments as well as ongoing maintenance in the orm
o IT efforts or contracts with PBX vendors. In most cases this translates to more
investment and attention or less unctionality.
Epiks Total Voice vs. Nortel PBXA comparison o Epiks Hosted VOIP service and a clients current Nortel PBX. The
Hosted VOIP service creates 18% savings over 36 months, with the possibility to easily
adjust services and applications along the way.
Figure 1
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COST COMPARISON
In this case, the savings result rom bundling the phone service with enterprise
Internet services rom the same provider, and monthly VOIP long distance ees. There
would be a similar pattern with other voice applications, like conerencing or enhanced
eatures that would be more cost-effective and easier to manage with the Hosted VOIP
system (Figure 1.1).
Figure 1.1
The monthly savings would actually be significantly more as maintenance and update
costs are not always known in advance (an estimated 15-20%) but are includes in
Hosted VOIP services since the system is managed offsite (Figure 1.2).
Figure 1.2
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COST COMPARISON
As demonstrated below, businesses that preer to purchase the onsite equipment
routers, switches and IP phones can pay more upront instead o a monthly ee.
This means that businesses that take on the capital expense will still see significant
savings. Large capital expense is still compensated or by the monthly operational
savings o Hosted VOIP, saving the client 27% over 36 months (Figure 2).
Figure 2
In this example, it is clear how a specific voice applications (in this case conerencing),
long distance and maintenance add up to significant savings. Each o these isinherently more cost-effective than the PBX equivalent because o the underlying
technology.
Figure 3
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COST COMPARISON
Conclusion
Comparing traditional PBX systems to Hosted VOIP technology is becoming more
and more o an Old vs. New story. The core technological differences and the drop-
off in uture potential put them in practically different categories altogether. Heavily
invested in PBX systems and general office complacency make it difficult to transition
out o traditional telephony, even as employees continue to adopt and develop work
behaviours in relation to high-tech personal and consumer technologies.
The prolieration o VOIP, cloud computing and broadband networks have made
advanced IP telephony widely available and affordable, even more so than standard
PBX networks. Businesses looking or a new system should reconsider what comes to
mind when they think business phone system, because or many companies it is the
last barrier between their operation and todays telecommunications.
About Epik Networks
Epik Networks is the industry leader in advanced data and communication services,
offering turnkey solutions or almost a decade. Through centralized Broadsof
sofswitches and high-speed fiber-optic connections, Epik Networks provides
companies o all sizes with highly customized telecommunications solutions that are
both affordable and completely reliable.
We take care o everything rom the hardware and sofware, to ongoing maintenance.
You will never worry about your voice services again. In addition to all the equipment,
Epik Networks offers one easy-to-understand bill.
Let us show you why over 8000 users have made the choice to use Epik Networks as
their service provider.
Feel ree to call us at 1-866-353-9333. Epik sales consultants are standing by to help
guide you to make the best possible decisions or all your telecommunication needs.
Epik Networks Inc. Head Office
80 Bloor St West, Suite 503
Toronto, Ontario, M5S 2V1
Toll Free: 1-866-353-9333
Phone: 416-921-7000
Fax: 416-855-763
epiknetworks.com