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					                                                                                                                          Q1 2010


Quarterly Industry News
Volume 2: Issue 1

MESSAGE FROM THE CEO                                                                                                In this Issue
For years we have seen lists like “Top 10 Reasons to switch to a Hosted PBX” or “the Advantages                      P1 Message from the CEO
of a Hosted PBX.” More recently, though, we are seeing a serious push among 5 to 100 person
companies to consider a ‘hosted PBX’ as a viable option as they do periodic upgrades of various IT                    P2 Customer Corner
systems. According to the 2004 year filing of business census data in the US there are over 2.3 million
businesses in that category with total employees of over 35 million. This amounts to a large target mar-               P3-4 Industry News and Trends
ket— at $25 per user per month valued above $10B in annual telephone service billings, not to mention
IT Services and LAN management.
                                                                                                                       P5 Regulatory Corner
I’d like to offer a few general reasons why this is happening now rather than a few years ago or a few years
hence. Keep in mind that this is a short article, and much more detail can be found on these topics through             P6 Voice from the Industry
this newsletter and elsewhere on the Internet.
There are several reasons why this is a notable time for selling Hosted VoIP services and, in particular, for            P7 VoIP Logic: News & Notes
establishing a Hosted PBX customer footprint. I would be happy to elaborate or discuss any of these in much
more detail – drop a comment if you are reading this on our website.
It’s helpful to parse this discussion into two broad categories: General economic/business factors and VoIP-
specific technology factors.

General Factors
1. More robust data networks are available including the public Internet. Video has really pushed operators to
    expand their network capacity quite rapidly.
2. The growing dominance of IT Services and LAN services companies makes voice/VoIP a logical add-on.
3. There are strong market trends towards integrated applications. Voice integrates nicely with many different
    service models. Google Voice is probably the current leader in demonstrating this on a large scale.
4. The prevalence and acceptance of “Cloud” services, applications, etc., makes SIP/VoIP telephony sales more
    acceptable.
5. The rise of telecommuting and a perpetually shifting workforces have transformed Hosted PBXs and some
    of their advanced features from a ‘nice-to-have’ to a ‘must have’.
6. There is a trend to IT outsourcing – perhaps similar to point 2 above – that puts Hosted PBX as another
    core function you can outsource – a menu item, rather than a special of the day.
7. Economic conditions have led small businesses to look more closely for efficiencies, especially ones that help
    cut costs and improve operations.

VoIP-specific Technology Factors
1. There have been numerous successful scale deployments in the past few years, increasing the level of
     confidence of a positive outcome on any given deployment.
2. Coupled with factor 1 above, the trial and error period of VoIP deployments seems to be ending, mean-
     ing that most service providers are fully aware of vagaries of software and hardware systems required
     to keep systems operational.
3. There is a normal telecom purchasing cycle that takes place about every ten years, focused around the
     ‘0’ year. There is an uptick in purchasing also after delayed 2009 capex budgets.
4. Most PBXs, whether onsite or hosted, are rapidly becoming obsolete if they are not using VoIP tech-
     nology. This means fewer software patches and upgrades, and often an end-of-life announcement.
5. Smart Hosted PBX providers are doing a better job of selling their services. Coupling the telephony
     component with other IT Services such as Hosted Exchange or OCS, and data services such as
     MPLS, removes network problems and many of the inconsistencies from the service offering.
6. Better quality. This reason reiterates all of the other points to some degree. The fear of quality
     risk hindered growth of Hosted PBX in the enterprise in the past.
7. Great features and integrations are available using VoIP. Most people still only do basic work
     on their phone. With more remote workers and more points where integrated applications
     such as email, Salesforce, and mobile devices can improve efficiency, VoIP technology is now
     a homerun. Also, many non-VoIP systems are not even bothering to build the newest fea-
     tures, thus embracing the inevitability quotient.
It is an exciting time to watch VoIP technology grow in prominence and ubiquity. At VoIP
Logic we hear about, bid on, and/or deploy many different service applications for VoIP
and its sub-protocols–it’s a fascinating intersection of technology, communications, and
services, and hopefully our passion for the space comes through a bit in this newsletter.

Micah Singer, CEO
Customer Corner
A Conversation with Peter Langas, President, IPiphany                                      IPiphany is a next generation solutions inte-
                                                                                             grator focused on delivering managed
Please tell us a little bit about IPiphany - its market and industry.                          voice and data services to help stream-
IPiphany is a managed services provider targeting small and medium sized businesses             line business communications. Managed
on a national basis.                                                                              solutions use IP based connectivity
                                                                                                   to securely access services provided
Where are IPiphany headquarters?
                                                                                                    and maintained by highly specialized
Rolling Meadows, IL (outside Chicago)
                                                                                                     firms. Managed solutions are ideal
What is the v business offering?                                                                       for growing, evolving, and geo-
                                                                                                        graphically distributed organiza-
We provide businesses with managed voice and data solutions that deliver phone system fea-
                                                                                                         tions.
tures, email and other applications over an IP connection. Our clients outsource their phone,
email and other systems to us so they don’t have to buy and maintain expensive servers and                http://ipiphany.com
systems. In doing so, we shift the traditional on-premise, capital-intensive model to a hosted,
monthly operational expense.

Please explain how your business is unique. Our readers always enjoy any “out-of-the-
box” nuggets about your Company that you’d care to share.
We’re not just a “phone” company. IPiphany strives to create a trusted advisor relationship with
our clients; we offer a complete suite of managed services so that our clients can outsource many
or all of their IT needs to us. Or, as some of them like to say, “have one throat to choke.” We find
they want to focus on running their business, and consequently, they don’t want to be dragged down
with managing phone systems and system administration on their email server a few times a week.
We specialize in clients that are spread across multiple locations that want a reliable, homogenous
infrastructure they can manage easily with minimal in-house staff resources. The ability to consolidate
vendors and systems creates a powerful value proposition.
When we started IPiphany 9 years ago, our original concept / mantra was that an IP pipe could be
used to support multiple applications that live somewhere else. We were onto the whole concept
of applications being in the cloud…we just didn’t know it! It just took awhile for the technology to
catch up and the cost of bandwidth to drop. We even named the company as a play on words of
having an epiphany over what IP could do for you. Incidentally, the guy who thought up the name for
us went on to play major league baseball with the Cubs and Cardinals!

Can you prognosticate about the future and/or describe any current and key industry
trends to which you are responding.
Clearly, mobility is going to be huge. I don’t think we are too far off from the traditional handset
on the desk being replaced by a smart-phone device that serves as cell phone, office phone, home
phone, etc.
We are seeing a lot of demand also for presence as well. This can mean a lot of different things,
such as managing location and availability across all devices, i.e., if you have an appointment in
their calendar, and can you do some predefined routing of calls or messages. I think both these
concepts speak towards the importance of people wanting to be as efficient as possible and
as responsive as possible, too. For us, what’s really nice about our managed services model
is that these type of new applications and solutions are easy to deliver to our clients be-
cause they don’t have to buy new software or hardware.

How has VoIP Logic been of service to you?
VoIP Logic has been an excellent partner for us. Their commitment to a stable, reliable
network lets us concentrate on supporting our clients and adding new businesses to
our client base with confidence. They have allowed us to easily scale our business
with a predictable cost model and they continue to innovate as well. Lastly, they
have been extremely flexible, meeting our needs and responding quickly to issues
on the rare occasions they have occurred.
http://ipiphany.com
Industry News and Trends
OVER 1 BILLION GLOBAL BROADBAND SUB-                          A SUMMARY OF GARTNER
SCRIBERS BY 2013                                              PREDICTIONS:
Recent research by In-Stat found the following:               •	 Reduction in hardware requirements:
•	 As of December 2009, there were 578 million world-            By 2012, 20 percent of businesses will
   wide broadband subscribers, an increase of 99 million         own no IT assets.
   over the year-end 2008 subscriber total.                   •	 India as a major player in the IT Services
•	 DSL, mobile wireless, and cable modem service are             Industry: By 2012, India-centric IT servic-
   the leading access technologies, providing 89% of             es companies will represent 20 percent of
   worldwide broadband connections.                              the leading cloud aggregators in the market
•	 Mobile wireless broadband is the second largest ac-           (through cloud service offerings).
   cess technology (behind DSL) with 18% of total sub-        •	 Social Networking: By 2012, Facebook will be-
   scribers.                                                     come the hub for social network integration and
•	 Over the next few years, the number of households             Web socialization.
   with multiple broadband connections will increase sig-     •	 Sustainability & Carbon Accounting trend: By
   nificantly. These multiple connection households will         2014, most IT business cases will include carbon
   commonly have a wired broadband access technology,            remediation costs.
   like DSL or cable modem service, along with a mobile       •	 Sustainability & Greener PCs: In 2012, 60 percent
   wireless broadband connection.                                of a new PC’s total life greenhouse gas emissions will
[In-Stat Report Summary]                                         have occurred before the user first turns the machine
                                                                 on.
                                                              •	 Internet Marketing Regulation: Internet marketing
MOBILE VOIP—TRANSFORMING THE FUTURE                              will be regulated by 2015, controlling more than $250
OF WIRELESS VOICE                                                billion in Internet marketing spending worldwide.
InStat: Today, the predominate mobile VoIP offering is just   •	 Growth of the Mobile Internet: By 2014, over 3 bil-
another, less expensive mechanism for providing cheap            lion of the world’s adult population will be able to
international calls from mobile phones. However, the mo-         transact electronically via mobile or Internet technol-
bile industry is also beginning to use mobile VoIP as a          ogy.
component in new offerings. MVNOs and 3G operators            •	 Context Will Be Key To The Mobile Consumer’s Ex-
without legacy networks are using mobile VoIP to more            perience: By 2015, context will be as influential to
cost effectively add voice to data offerings and a few car-      mobile consumer services and relationships as search
riers are using a form of mobile VoIP, UMA, to support
                                                                 engines are to the Web.
better indoor coverage and off-load macro networks.
[In-Stat Mobile VoIP report abstract]
                                                              •	 Mobile Phones Will Dominate: By 2013, mobile
                                                                 phones will overtake PCs as the most common
                                                                 Web access device worldwide.

RESEARCH:
CiscoVisual Networking Index: Forecast and Methodology

RESEARCH:
Index: Gartner’s Top Predictions for IT Organizations and
Users, 2010 and Beyond: A New Balance.
(Requires u/p; See site for full report.)




                                                                                                                           P3
Industry News and Trends
CLOUD-BASED MOBILE APPLICATIONS TO                           WHAT ARE THE FUTURE APPLICA-
GROW, CLAIMS REPORT                                          TIONS FOR VOIP IN USE TODAY?
Revenues from cloud-based mobile applications are ex-        Has Voice Over Internet Protocol (VoIP)
pected to reach almost $9.5 billion (£5.89 billion) by       finally found its place with today’s smart
2014, a new report has claimed.                              phones and social networking? Until very
                                                             recently AT&T has not permitted VoIP appli-
A study carried out by Juniper Research told IT outsourc-
                                                             cations like Skype and Fring to use its cellular
ing users that widespread adoption of mobile broadband
                                                             data connection on the iPhone. However, the
services, the need for converged services and deploy-
                                                             change of policy now allows iPhone users to ac-
ment of technological enablers such as HTML5 will drive
                                                             cess these apps. This may have been a reaction to
the use of the applications.
                                                             increase demand particularly from those users that
[Ihotdesk Article]                                           have been tied to the international calling plans
                                                             [Read]
MORGAN STANLEY RESEARCH: THE MOBILE
INTERNET REPORT RE. VOIP
                                                             VOIP IN-DEPTH: AN INTRODUCTION TO THE
Mobile Ramping Faster than Desktop Internet Did and
                                                             SIP PROTOCOL, PART 1
Will Be Bigger Than Most Think – As five key trends
                                                             By Gilad Shaham
converge (3G, social networking, video, VOIP, and awe-
some mobile devices), the explosive Apple iPhone /           VoIP in-depth introduction to SIP Part 1
iTouch ramp shows why usage of mobile devices on IP-
based networks should surprise to the upside for years
to come. As 3G adoption hits inflection points in many       TELEPHONY UNFILTERED HD VOICE GAINS
markets, consumers are flocking to a broad range of IP-      MOMENTUM
based usage models over powerful mobile Internet-en-         The past few days have seen a spate of announcements
abled devices. We predict that smartphones will outship      of hosted high-definition (HD) voice services, illustrating
the global notebook + netbook market in 2010E and            the technology’s growing momentum.
out-ship the global PC market (notebook + netbook +          [Read]
desktop) by 2012E.
The Mobile Internet Report, Section 6
We are in the early innings of the next major technol-
ogy cycle, the mobile Internet. The drivers are adoption
of 3G, social networking, video, VoIP, and awesome mo-
bile devices. Global 3G penetration should hit the 20%
sweet spot and go mainstream next year. Social network-
ing platforms like Facebook already are winning a rising
share of communications through mobile phones, while
video on mobile is likely to follow its surge on the desk-
top and stimulate explosive growth of mobile data us-
age. VoIP leader Skype already has more registered users
than any global carrier, while the network effects from
Apple’s iPhone / iTouch ecosystem have stimulated prob-
ably the fastest user growth in the history of consumer
technology.
The Mobile Internet Report, Section 10




                                                                                                                           P4
VoIP Regulatory Issues

                                                                                           Founded in 1991, Miller Isar, Inc. concen-
ANDREW ISAR, PRESIDENT OF MILLER ISAR, INC.
                                                                                            trates on the telecommunications indus-
What is “Hosted VoIP”? From a regulatory perspective, the answer is critical                  try. Headquarted near Seattle, WA,
toward establishing how, or if, VoIP is regulated. VoIP characteristics are amply              with offices in Philadelphia, PA, Miller
described in the United States through a host of FCC documents including the                     Isar focuses its practice on Regula-
Commission’s 2004 VoIP Notice of Proposed Rulemaking and the seminal Vonage                        tory Compliance, Public Policy, and
Memorandum Opinion and [State regulatory preemption] Order. Yet only one                            Business Practices, as they relate
federal regulatory definition currently exists. In its 2005 First Report and Order and               to Regulatory obligations.
Notice of Proposed Rulemaking establishing emergency 911 access requirements for
VoIP providers, the FCC promulgated the current definition of “interconnected (to
Public Switched Telephone Network ) VoIP,” This definition relied in part on discussion              www.millerisar.com
contained in the Vonage preemption order. Codified in Section 9.3 of the FCC’s rules,
47 C.F.R. §9.3., the service definition rests four criteria:
1.   Enables real-time, two-way voice communications;
2.   Requires a broadband connection from the user’s location;
3.   Requires Internet protocol-compatible customer premises equipment; and
4.   Permits users generally to receive calls that originate on the public switched telephone.
Through this definition, if a service meets all four criteria, it is subject to specific FCC-
imposed obligations. More recently an increasing number of state regulatory utility commis-
sions have differentiated between “nomadic” VoIP--the Vonage-esque type VoIP service that
is not location-dependent, and “static” VoIP—the cable company digital voice services that
require dedicated, location-dependent service access equipment. Static VoIP is not deemed
subject to federal preemption from state regulation. State legislators and municipalities are
now establishing their own VoIP definitions to allow collection of state regulatory program
assessments and taxes from VoIP providers. Seattle and Baltimore recently prevailed in legal
appeals of telecommunications tax assessments on VoIP providers, despite significant differ-
ences in city and FCC definitions. Regulatory definitions are in flux. The closer a service
approximates a regulatory jurisdiction’s definition, the more likely it will be interpreted to
apply. Ultimately, VoIP providers should verify regulatory applicability with the jurisdiction.


Andrew Isar is President of Miller Isar, Inc.
253.851.6700 aisar@millerisar.com
Voice from the Industry
One way to gain insight on the future evolution of Host-          your devices. VoIP-based technology
ed PBX is to take a look at where industry leaders are            really facilitates this goal by providing
deploying working capital toward new innovations. In this         an end-user with a service profile in the
brief article, we take a look at Broadsoft’s perspective,         network.
a company with large market-share of the Hosted PBX            •	 High-definition voice will be the new stan-
feature server software licenses deployed, and a long             dard for voice communications
track record of smart innovation in IP communications.         •	 Enterprises are demanding comprehensive
Broadsoft believes that these services and applications           business continuity capabilities
will drive uptake by more and more enterprises of Host-        •	 Enterprise workforces will become increasingly
ed PBX technology and services.                                   mobile
First, a little background on Broadsoft. Broadsoft, espe-      In my opinion, with the growing demand for broad-
cially with the combination of Sylantro and the former         band and wireless broadband, trends will emerge—
VocalData M6 platform, is the de facto leader in Hosted        and converge—primarily around user autonomy
PBX feature server technology. The company has been            (choice, flexibility), mobility, and media consumption,
around for over 10 years and has hundreds of success-          in that order, and to a lesser degree around media
ful carrier deployments under its belt. [Disclaimer: VoIP      creation/production. Voice calling in general and en-
Logic began offering Broadworks as a managed service in        terprise Hosted PBX systems in particular are adapting
2009]. They have industry perspective tempered by ex-          to meet these emerging trends. The suite of services
perience. It’s worth noting that Broadsoft powers some         and applications you offer to your target customer base
of the biggest telco service deployments in the VoIP com-      today can be a very important strategic decision as you
munications industry. While they, of course, have their        anticipate these trends’ effects on tomorrow.
own corporate agenda, it is also safe to say that it largely
runs in parallel to the expectations in the Hosted PBX
communications marketplace.                                    Thoughts or questions? We’d love to hear.

So, what is Broadsoft’s technology evolution plan? Us-         See BroadbandIGNITE (www.broadbandignite.com ) for
ing information from Broadsoft Connections, conversation,      more in-depth information on these topics. And http://
and Broadsoft’s company blog, I have tied together some        bit.ly/8tWyuz for Broadsoft CTO Scott Hoffpauir posts
of the general trends below.                                   and content.
•	 The expansion of VoIP consumption is predicated
   largely on an projected increase of broadband de-
   mand. The fixed broadband subscriber base is expect-
   ed to grow from around 600 million subscribers today        Richard Scullin, Founder, MobileEd.org
   to 1 billion by 2013 (Scott Hoffpauir, Broadsoft CTO).      richard@mobileed.org
•	 Smart Devices and their application will proliferate:,
   the iPad, Kindle, iPod, home monitoring systems, map-
   ping and GPS-enabled technologies, Augmented Re-
   ality platforms (www.Layer.com, www.mobilizy.com,
   etc.). Always-connected devices will become much
   more relevant.
•	 The ability for users to personalize communication
   services for their devices and preferences. Personal-
   ization in the sense of designing a ‘space’ (ring tones,
   backgrounds), but much more so, regarding setting up
   and managing availability. (Scott Hoffpauir, Broadsoft
   CTO).
•	 Ease of sharing more bandwidth-intensive ‘rich’ media.
   Services that use video and content sharing. (Scott
   Hoffpauir, Broadsoft CTO).
•	 The mobility to be able to access your communica-
   tion service provider anywhere, anytime and on any of                                                                 P6
VoIP Logic: News & Notes
NEWS:

VoIP Logic now has its Q4 2009 Industry newsletter posted in Spanish. Please
look for our VoIP Industry Newsletter Q1 2010 (Spanish version) in the near
future.

On January 1, 2010 VoIP Logic became a Master Reseller for the Genband S-series
technology including the popular S3.



EVENTS:

VoIP Logic will be attending the following industry gatherings in the coming quarter.
Please feel free to contact us in case you’ll be there and would like to meet:
michael@voiplogic.com

March:                                          May:
Channel Partners Conference & Expo              ITW 2010
March 1-3, 2010                                 International Telecoms Week
Las Vegas, NV                                   May 24 -26, 2010
www.channelpartnersconference.com               Washington, DC
                                                www.internationaltelecomsweek.com
CompTel PLUS
March 14-17, 2010
Gaylord Opryland
Nashville, TN
www.comptel.org/content.
asp?contentid=2153

                                                                                               Key Contacts
                                                                                              Sales:
                                                                                              sales@voiplogic.com
                                                                                              Technical support:
                                                                                             support@voiplogic.com
                                                                                            Careers:
                                                                                           jobs@voiplogic.com
                                                                                          Partnerships:
                                                                                         partners@voiplogic.com
                                                                                         Press inquiries:
                                                                                        press@voiplogic.com




                                                                                              sales@voiplogic.com
529 Main Street, Williamstown, MA 01267 Phone: 310-279-4700                              www.voiplogic.com

				
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