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The Opportunity

VIEWS: 13 PAGES: 13

									Value Propositions – Applications for Business Growth




Channel Sales Guide:
Sphericall™ – IP telephony without the hang-ups
Contents

1.0 The Opportunity                                                                     3
         1.1 Why Should I care?                                                         3
         1.2 Business Benefits                                                          3

2.0 The Solution                                                                        5
         2.1 IP PBX – Single Site                                                       5
         2.2 IP PBX – Multi Site                                                        5
         2.3 Sphericall Solution Components                                             6

3.0 The Customer                                                                        7
         3.1 Target Vertical Markets                                                    7

4.0 The Sales Process                                                                   7
         4.1 When to deploy Sphericall                                                  7
         4.2 Ways to implement an IP PBX                                                8
         4.3 Overcoming Objections                                                      8
         4.4 Industry Awards                                                            10
         4.5 Customer References                                                        10

5.0 Competitive Overview                                                                11




Key Contacts:

Jon Howes: Marketing & Strategy Director – Channel Markets, EMEA
Tel: +44 2476 565358          E Mail: jonathan.howes@marconi.com

Roberto Omozusi: Value Propositions Manager – Channel Markets, EMEA
Tel: +44 1923 296062         E Mail: mozusi.omozusi@marconi.com

Helen Parsley: Channel Marketing – Channel Markets, EMEA
Tel: +44 1923 296049           E Mail: helen.parsley@marconi.com



For more information about the „Sphericall – IP Telephony without the hang-ups‟ Value
Proposition, please visit the secure partner extranet:
http://secure.marconi.com/protected/EMEA/sales/valueproposition/valuepropositon.htm




The information contained in this document is confidential and the property of Marconi
plc, and is supplied without liability for errors or omissions. No part may be
reproduced, disclosed or used except as authorised by contract or other written
permission.



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1.0 The Opportunity

1.1 Why Should I care?

        According to Jeremy Duke, President of Synergy Research, the global enterprise
         VoIP market will grow as follows:

                                     1999 - $34.1 million
                                     2000 - $192.8 million
                                     2001 - $548 million (estimated)
                                     2005 - $3.9 billion (estimated)

        Gartner Dataquest (May 2001) report Sphericall by Marconi as the market leader, in
         the 401-1000 user segment, with 24.6% market share in terms of new lines shipped
         for a LAN-based PBX for the year 2000 with 13,001. The next closest vendor is
         Shoreline Communications with 9,687. Cisco is in third position with 6,380. 3Com
         does not even place. It is worth noting that when companies like Cisco claim ports
         shipped, they are talking about stations side, where their IP devices are attached.


1.2 Business Benefits

        Differentiate in an increasingly commoditised marketplace. Create a network that
         offers expanded services and applications that drive competitive advantage and a
         superior customer experience.
        Gain competitive advantage through increased business efficiency. By having
         productivity enhancing tools, employees can be more efficient through tele-working
         that results in quicker response times. A recent study conducted by Gartner
         Dataquest shows that 78% of people abandon e-shopping carts due to the fact that
         they do not know how to proceed to checkout.
        End-user empowerment – Marconi believes in a true distributed architecture where
         the end-stations or terminals have the power to control the environment. XML
         applications can be developed by non-programmers to allow for information and
         advertising to be relayed to end-user.

Revenue Creation AND Cost Reduction

        Desire to reduce overhead costs associated with separate telecom department and
         data department. An IT manager or telecom manager can administer bandwidth
         provisioning, configuring moves, adds, and changes, and maintain CPU cycles
        Integration – The market leader as far as a converged network goes with the ability to
         have voice, video, and data on one single network
        A converged network is about revenue creation, not just saving money through cost
         reduction. While most people talk about the cost savings of implementing VoIP, the
         real underlying benefit is a new avenue to add to a company‟s bottom line.
        Lower traditional PBX equipment margins, skill set requirements, and application
         complexity will force 80 percent of the vendor/suppliers to raise service pricing by 35
         percent and charge for previously “free” engineering as well as support for traditional
         voice functionality.
        Ease-of use and simplified management. The administration utility empowers an
         administrator to make changes, set permissions, and administer moves, adds, and
         changes intuitively.




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Evolution NOT Revolution

        Only Sphericall gives the end-user the choice of operating on ATM or Ethernet
         networks, protecting the customer‟s investment in either technology.
        Interoperability – Sphericall will work with anyone‟s network as long is as it is
                                                                                rd
         standards-based. In addition, being open standards-based means 3 party APIs to
         right application work.
        End-users can take advantage of VoIP right now, without upgrading the existing LAN.




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2.0 The Solution

Marconi has taken an approach very similar to that of the OSI 7-layer model. Meaning that
we operate from the physical layer to the application layer. Even at each layer, our
philosophy is to have products that adhere to open standards and are completely modular.
As with interchangeable parts, one can simply remove an application and replace it with an
alternative application.


2.1 IP PBX — Single Site




2.2 IP PBX — Multiple Site




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2.3 Sphericall Solution Components

SOFTWARE

         Sphericall Softswitch
         Softswitch software is the brains of the Sphericall system. The software distributes
         call-processing services over the broadband network, including the calling features
         expected in any modern phone system. It is responsible for set-up, call, admission,
         and control of phone calls. Housed on an NT server, the Sphericall Softswitch can
         handle up to 15,000 users per system.

         Sphericall Desktop Software
         Desktop software enables easy use of the telephone system‟s advanced features. It
         is basically a CTI application that enhances user productivity. An intuitive Graphical
         User Interface (GUI) enables users, among other things, to make calls by clicking on
         directory entries and establish conference calls quickly and easily. Desktop software
         works with most contact managers, diallers and other applications, such as Microsoft
         Outlook, with the industry-standard TAPI-compliant interfaces.

HARDWARE

         Sphericall Manager
         The Sphericall Manager communications server is an open-architecture device that
         houses the Sphericall Softswitch software. The Manager hardware and Softswitch
         software deliver telephone services across the broadband network. Configured for
         99.999% reliability, connecting two Sphericall Managers together yields the maximum
         uptime.

         COHub
         The COHub media gateway connects the broadband data network to the phone
         company network. Calls to and from outside numbers pass through a COHub. It
         connects directly to the phone company central office (CO) or to a legacy PBX phone
         system. A COHub can also connect two separate PBXs over the broadband network.
         The COHub is software configurable for both T1/E1 signalling via PRI, CAS, and
         Q.SIG signalling.

         PhoneHub
         The PhoneHub media gateway connects phones to the broadband data network. It
         handles both inbound and outbound calls. Calls to another phone on the network are
         handled within or between PhoneHubs; the PhoneHub directs calls to an outside
         number to a COHub and then to the PSTN network. In addition, the PhoneHub has
         automatic built-in resiliency to the PSTN in the event of network, power, or building
         failure.

    BranchHub
    The BranchHub is two gateways in one. Like a PhoneHub, it connects handsets to
    the broadband network. Like a COHub, it also connects to local phone company
    lines. It supports up to twelve phones and six analog phone lines, and is therefore the
    ideal solution for extending Sphericall to a small site or temporary location. The
    BranchHub also provides lifeline reliability for 6 out of the 12 lines.
Desktop
    VIM (Voice Internetworking Multiplexer)
    The VIM is an IAD that provides low-cost local voice and data access to an
    organization‟s broadband infrastructure. The VIM is ideal for remote, small branches
    via a single ATM T1/E1 or campus extensions via an ATM OC-3 MMF.




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3.0 The Customer

3.1 Target Vertical Markets

Research suggests that Sphericall can be sold to any industry/vertical market. However,
Sphericall has been most successful to date in the Government and Education sectors. Sales
of VoIP have proven to be precisely what has been forecast in respective verticals. In fact, in
a survey conducted by Philips Infotech, market demand by industry segment shows that
within education, 77% of sites are “Very Likely” to begin implementing IP telephony within the
next four years. Manufacturing was second with 49%, followed by government with 44%.

Example: Education
Deploying Sphericall throughout a school district. Each individual school will have a KTS,
Centrex, or PBX. Frequently, these are not interconnected. A Sphericall systems is ideal
because it provides them with one uniform technology from a central location, a single wiring
plan, and possibly voice mail requirements that are exceeded by unified messaging.

Look for: School districts that are seeking deployment because they get special government
grants. With regards to school districts that are building new schools, Sphericall gives them a
chance to reduce wiring and installation costs. Portable classrooms also serve as a good
candidate due to the security issue if being isolated.

4.0 The Sales Process

4.1 When to deploy Sphericall
Example situations where it would be appropriate to position a Sphericall Solution:-

        A company investigating upgrading the WAN
        A company that has a number of remote dial-in users and/or remote workers in
         multiple locations
        A company that needs to upgrade its existing, traditional PBX, especially if the
         equipment cannot be IP-enabled.
        A company whose Centrex contract is about to expire. The end-user could recognise
         the value of having control of their network and also be seeking features that are not
         currently available with their Centrex service.
        Administrators with NT experience. Sphericall is an NT-based systems, if the
         individual is already familiar with the interworkings of they operating system and
         comfortable running mission-critical applications on this platform, reluctance to
         change is less likely.
        A company that is thinking of retiring KTS or is need of expansion. Key telephone
         systems are slowing becoming obsolete and provide limited functionality.
        A company in need of multi-media applications. Some industry‟s such as medical
         imaging, rely heavily on images and would like to integrate that into their voice
         system.
        An existing Marconi account. These customers will already recognise the value of a
         converged network solution.
        A company with an existing ATM LAN or WAN. The customers are also likely to
         understand the value of a converged network, and appreciate the importance of QoS.
         Installing the only ATM-attached voice system would enable them to extend their
         ATM system to the desktop.
        A company using PictureTel, FVC or VTEL equipment. Video imaging is an example
         of an application that seamlessly integrates with Sphericall.
        A company with multiple branch offices. If a WAN already exists the customer is
         more likely to take advantage of toll-bypass.
        A company that is more MIS than telecom centric as MIS managers are more likely to
         be comfortable with VoIP.
        A company experiencing hyper-growth or consolidation. MAC addresses are costly
         (estimated at $100).


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4.2 Ways To Implement An IP-PBX

        New or replacement PBX

        Expansion of existing PBX

        Tandem PBX - With an existing PBX, there are a limited number of card slots. When
         the cabinet is full, it may be necessary to purchase a new system. It is possible to
         upgrade with the existing vendor and maintain some value, but a good opportunity to
         try an evolutionary technology that does not require the PBX to be upgraded. The
         advantages are no geographical constraints via data lines. In addition, this is to
         consolidate service provider connections.

        Deploying a Sphericall system on a large, multi-site campus. In most cases, a central
         PBX with backbone extensions from site to site handles the current voice
         requirements. Each building has a type of termination, which may range from a small
         module that handles lines and trunks, to a large remote processor that provides
         connectivity for a large number of users. Look for:
              Companies that are looking to add new sites in the near future but are still in
                 the planning stage. The opportunity lies in them saving on wiring costs
                 (single wiring plan) and to begin consolidating resources that support a
                 converged network.
              Companies that are looking at significant growth and/or movement between
                 buildings in the near term. They represent an opportunity to simplify and
                 save costs on administrative requirements with MAC. They can begin
                 consolidating resources required to support a converged network and begin
                 migrating other PBX users to the IP network at their own pace.


        Deploying a Sphericall solution at remote locations of an enterprise network. A WAN
         network using IP links currently connects these locations to each other and/or back to
         a central location. Each location is likely to have some type of “PBX” which may
         range from a small KTS to a large PBX that provides voice services for a large
         number of users. Look for:
              Companies that have geographically dispersed sales offices. Ideally, these
                 offices will have IP links (WAN) for connectivity back to a main HQ location.
                 The Sphericall system represents the chance to (a) reduce call costs
                 between locations (also known as toll-bypass or saving on inter-LATA
                 charges) and (b) enable HQ personnel to support remote locations easily and
                 cost-effectively.
              Companies that have just made acquisitions are good candidates if the
                 company being acquired has standardized on a PBX that is different from the
                 type that has been implemented by the acquiring company. PBX‟s can differ
                 considerably thus making support potentially fraught with issues. Typically,
                 organizations hire telecom resources that are familiar with “their” PBX. When
                 the acquisition is made, frequently, one of the first steps will be to put a plan
                 in place to convert the PBXs of the acquired company to those of acquiring
                 company. This represents an opportunity to (a) introduce them to IP
                 telephony (b) take advantage of reduces MAC costs (c) take advantage of
                 toll-bypass across the WAN (d) consolidate support resources.


4.3 Overcoming Objections

Whether visiting a customer or cold calling into an account, implementing a new technology is
likely to raise more questions than the purchase of older, well-established technologies. Here
are some ways to temper any objections:



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Concern: transporting voice over the Internet
Solution: Bear in mind that VoIP is Voice over (ATM, Ethernet, or Frame Relay) using the
Internet Protocol. The Internet itself is not used for transporting voice. Although, Sphericall
has been proven through its QoS schemes to work across the WAN and Internet.

Concern: capacity and scalability
Solution: Sphericall can support up to 15,000 users on a single system. Other vendors
claim that they can scale higher, but in reality this is on multiple systems inter-connected (also
referred to as clustering), with the appearance of one system. The traditional PBX vendors
themselves do not have systems that can scale much greater. Avaya can scale the greatest
to 25,000 users (G3r-PBX), but that is only when they are operating in a traditional
environment, with legacy, digital phones. With an IP-enabled approach, they cannot scale
higher than 5,000 IP stations/users.

Concern: high-availability, 99.999% uptime, single point of failure
Solution: The Sphericall system is designed for redundancy through a minimum of 2
Sphericall Managers. The basis of the Sphericall architecture is through a N+1 distribution of
Sphericall Managers. Marconi is a big proponent this configuration type. With this type of
design, there is no need to add costly redundant power supplies to the Sphericall Manager.
Time and time again, tests have demonstrated taking one Manager down for repair does not
affect the system, whilst calls in progress remain connected.

With a properly designed and provisioned network, UPS power supplies can be installed at
the location of the Sphericall Manager(s). In addition, with a network or power outage, the
power fail transfer (PFT) feature on both the PhoneHubs and BranchHubs provides a failover
“lifeline” for phone(s) calling out due to a cutover to the PSTN.

Concern: cost-savings and return on investment
Solution: Much is has been written in the IT trade press on the notion of VoIP being an
efficient way for companies to save money. Not only are they true, but there are also in ways
in which these cost savings can be measured. First, capital expenditures overall are less,
since a truly converged network allows for data, video, and voice to go over a single pipe. A
simple Move, Add or Change by the nature of wiring is approximately $100 per event, coupled
with the labour involved. Most importantly, “soft costs” are intangible, but are more closely
allied to improving user productivity. Through the use of unified messaging, users are
discovering that they can maximize their output. The Radicati Group found that through
unified messaging, an employee can generate an extra 25 to 40 minutes of productivity per
day. Case studies have been conducted where customers have found that the product will
have paid for itself in less than 24 months.

Concern: Security
Solution: Sphericall runs on the NT platform and associated security exists. Password-
protected log-ins are granted according to the Windows NT system domain controllers. In
addition, VLAN isolation can be applied.




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4.4 Industry Awards

MierCom, a premier testing authority to the datacom industry sponsors such events as
VoiceCon and is regularly featured in the publications Business Communications Review and
Network World. Awards include:

        IP-PBX Scorecard presented at VoiceCon, February 2001, Best Voice Overall IP-
         PBX

        Sphericall “NetWORKS as Advertised”, an award given to products that score 80% or
         higher on a comprehensive in-house testing session.

        Sphericall has been selected by Communications Solutions Products of the Year
         2000 in the category of LAN/WAN Telephony.

        COMNET 2001 in January, Sphericall was a finalist for the “New Product
         Achievement” Awards.


4.5 Customer References

Derwentside District Council, UK
One forward-thinking local authority has transformed its IT department from a cost centre into
a revenue generator, opening the door to a massive improvement in ICT infrastructure and
services - whose benefits have been felt not only within its own community but also by people
far beyond its own borders - creating jobs and employment skills throughout the North-East of
England. Crucial to the success of this transition has been the selection of ATM technology,
which has made it possible to achieve major cost savings and improve facilities even more.

The “Infonet” project has succeeded in raising IT awareness, enhanced the skill levels of the
local population and made the area more attractive for business investment.

Alan Hodgson is the Director of Corporate and Community Development: “I realised that
ATM technology was what we needed to create a wide area network - and in fact a LAN
within the council - because you can run voice, video and data across the network, without
any major problems, and guarantee the quality and delivery of service.”

The council has just started selling voice services to companies in council-run business
centres. Traditional PBX‟s would have been prohibitively expensive.

“We had a look at equipment from all the major suppliers, including Cisco and Alcatel, but
basically they all got very expensive and there were an awful lot of issues with them,” said
Alan Hodgson.

A trouble free deployment of Sphericall from Marconi however means that users are now
enjoying a high quality voice service over the unified network, and the council is seeing a nice
revenue stream for further investment.

Perfection Spring and Stamping Corp, USA
Perfection Spring, located in Mt. Prospect, Illinois, relies heavily on its telephone system for
customer interaction. “The majority of our orders are taken by phone, so it is imperative that
we have a powerful, yet cost-effective telephone system,” said David Kahn, President
Perfection Spring and Stamping Corp, whose company sales top $20 million per year.
Recently, when annual telephone systems maintenance costs reached nearly $10,000 and
their growing business highlighted a need for increased staff productivity, executives at the
company knew it was time to search for a newer, more flexible telephony solution.

“With our older phone system, we were at the mercy of the vendor,” continued Kahn. “Every
time the system needed to be updated, modified or repaired, we had to call for service.
Monthly on-site visits were necessary to replace failing telephones and at $800 for a new


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telephone and an average $300 per service call, our annual maintenance costs were
climbing. Needless to say, this trend had to change – and change quickly.”

Perfection Spring‟s search for new telephone system technology ultimately led them to
Sphericall. Sphericall users benefit from having a powerful, scaleable and highly
customisable telephone system that operates over their data network. By using the
client/server model and the distributed computing power of ATM networks, Sphericall‟s
feature-rich capabilities are available at a lower cost to install, operate and maintain than
traditional PBXs.

Sphericall offered Perfection Spring and Stamping Corp. a new technology that is easier to
upgrade than any conventional PBX. The system has the flexibility to grow with the company,
both in size and capability. “There is no doubt that our new telephone system is time- and
cost-effective,” said Kahn. “From our perspective, the only regret we have about Sphericall is
that the technology was not available sooner.”




5.0 Competitive Overview

Traditional PBXs “Old-World” Phone System
PBX- A very large capital investment is required to purchase on-premises equipment. Usually
the first year of maintenance is included; after that contracts must be negotiated for the life of
the PBX.

Strengths

   Feature offerings are rich and very in-depth; offers many more functions that IP-PBX
    vendors do not support.
   Deployment of features is at will since it is on-site premises equipment.
   Management of system is immediate on an as needed basis.
   Depth of system management is totally unrestricted to a level of minute system
    parameters: total control.
   Most features are paid for initially, once.
   Major equipment costs are incurred up front, once
   Conventional PBXs outsell converged networks 20:1; the converged voice/data market is
    less than 2 percent of the traditional voice marketplace.
   Products are widely installed; and have established track records for products and
    customer service.

Weakness

   Proprietary telephone sets are often deployed and selection limited. Analog provisioning
    is typically more expensive and avoided.
   One-year warranty is typical. Contracts must be negotiated for the PBX life.
   System upgrades and expansion require capital outlay when needed.
   It is very expensive to provide the same level of preparedness. Organizations often wait
    for repairs when problems occur.
   Expensive additional resources are required to manage the phone system in terms of
    hiring labour like a telecommunications manager or outside consultants.
   Proprietary digital phones purchased for low-end systems are often not supported as the
    end-user migrates to higher end systems. Hence, customers have to purchase new
    phones when they upgrade.
   Application integration is not easy and applications are not being developed and written
    for PBXs.
   PBX sales cannot keep up with the pace they originally had. In fact, for the first time PBX
    sales were down over 10% for the year 2000.


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   With a traditional PBX, you have call processors running only on the PBX, making it
    highly centralised.
   Distributed applications in a PBX often result in a branch office/remote location receiving
    less capable or feature limited applications in relation to the HQ or central site. The cost
    for implementing a full-featured PBX in each branch office is prohibitive.

Centrex
Minimal capital outlay is required since a large portion of the costs lie in the equipment.
Maintenance is covered automatically for as long as you subscribe to Centrex. Centrex
service is a standards-based business telephone service offered by the local telephone
company from a local central switching office. Usually provided to a customer from a single
CO. Features include: Call Forwarding (8 varieties), Key System Emulation, Call Hold, Call
Pick-Up, Call Park, Call Waiting, Voice Mail, Automatic Callback. Automatic Recall, Call
Transfer, Conference Calling, Music-on- Hold, Speed Calling, Intercom, Message Light

Strengths

   Telephone options are numerous and standards based, from basic to digital.
   Existing analogue instruments can be retained.
   Maintenance is covered 24 hours a day with no extra charge for system life.
   System upgrades and expansion is automatic with no extra charge.
   Phone companies are fully prepared for disasters and switch failures with standby
    emergency equipment.
   Reduces an organization's involvement in the telephone business.

Weaknesses

   Feature offerings are sometimes limited.
   Management of system may be delayed due to batch processing.
   Depth of system management may be restricted.
   Incremental costs for packages or individual features.
   Costs are monthly recurring for the life of the system.
   The end-user is locked into a long-term contract where there is a penalty for cancellation
    of services.




Modern-Day “New-World” Phone Systems

IP-Enabled PBX's – Allows legacy PBX's to have IP signalling by adding line-side or trunk-
side IP modules to support IP phones and IP WAN connections for toll-bypass. All of the
major legacy PBX vendors, Nortel Meridian, Avaya Definity, Siemens, NEC, Fujitsu, etc., are
taking this approach to protect their stronghold in the major accounts they have and create
investment protection.

Strengths

   Investment protection (hardware, applications, clients and end-user training)
   Numerous legacy features and applications are preserved
   Offers customers a slow migration path to converged IP solution
   Offers the promise of five 9's reliability
   According to Phillips Group, these vendors account for 90% of the market




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Weaknesses

   Not an end-to-end IP solution
   Switch still TDM-based (traffic-limited), calls must usually pass through PBX
   Slot-limited - may have scalability issues
   Proprietary architecture, applications and clients
   No migration path to new-world end-to-end IP architecture without forklift upgrade
   Not all PBXs can be IP-enabled




Distributed Voice/Data Systems
LAN/WAN-based systems built around fully distributed call processing servers, IP phones,
gateways, and application servers. Cisco AVVID, Nortel's Succession Communication Server
for Enterprise (CSE), Avaya's ECLIPS, Siemens' HiPath and Alcatel's OmniPCX, Shoreline
Communications, and Sphericall are examples of these.

Strengths

   Flexible and distributed architecture, easy geographic dispersal of applications
   Usually very scalable, permitting smooth growth to large system solutions
   High availability can be built into intelligent data network design
   Applications and clients can be geographically dispersed across LAN/WAN
   All development is being done for applications that run on data networks
   IP extensions enable geographically separated offices or remote users to be seen as one
   Only one wiring infrastructure needed; fits right into existing network

Weaknesses

   Not all vendors offer an end-to-end IP solution
   Perception of network failure = phone failure
   Redundancy is not an option from some vendors
   These products are early in their development cycle, and are less feature- and
    application-rich than traditional PBXs




For more information about the ‘Sphericall – IP Telephony without the hang-ups’ Value
Proposition, please visit the secure partner extranet:
http://secure.marconi.com/protected/EMEA/sales/valueproposition/valuepropositon.htm




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