www.itexpo.com

October 10-13, 2006• San Diego Convention Center, San Diego California

Learning to Embrace Hosted VoIP (SMB-03)

Friday, October 13th, 2006 1:15-2:00pm

Dan HoffmanPresident & CEO

M5 Networks

Contact: 877.88.GET.M5

president@m5net.comwww.m5net.com

October 10-13, 2006• San Diego Convention Center, San Diego California

Businesses Are Choosing IP Phone Systems

Hybrid Phone System IP Phones IP Connecting Locations IP Phone Calls for Termination

Traditional Phone System TDM Centrex

IP Phone System Premise-based Phone System Hosted IP Phone System

October 10-13, 2006• San Diego Convention Center, San Diego California

Over Half of US Enterprises Use IP Telephony

Source: InfoTech

Percentage of U.S. Enterprises Using IP Telephony

The “Second Chasm”

Between Initial Implementation &

Committed Migration

The “Second Chasm”

Between Initial Implementation &

Committed Migration

The “First Chasm” to Conduct Initial Trials of

IP Telephony Has Essentially Been

Crossed

The “First Chasm” to Conduct Initial Trials of

IP Telephony Has Essentially Been

Crossed More than 5 sites

At Least 1 Site

80%

0%

20%

40%

60%

67%67%

40%40%

3%3%

20%20%

54%54%

16%16%

8%8%

October 10-13, 2006• San Diego Convention Center, San Diego California

This, in Itself, is a Reason to Go IP

• Traditional phone systems supported less and less• No new investments in traditional phone systems• Great amount of new innovation and R&D in IP voice

services• Complexity of the hybrid approach could be more

trouble than its worth

October 10-13, 2006• San Diego Convention Center, San Diego California

Expectations are Usually Hard $avings

Client Profile# phones 100internet? yes# locations 3lease factor 0.025 Premise Premise M5

Low Cost High Cost OutsourcedAlternative Alternative IP Phone System

LocalLines $750 $1,680 includedCalling $1,665 $2,331 includedTypical Taxes & Surcharges $211 $351 $470

Long Distance

$764 $1,145 includedInternational $800 $800 $600Conference Services $50 $50 included

Internet AccessPrimary $450 $2,250 $1,000Back-up $0 $450 included

MONTHLY PHONE SYSTEM COST ESTIMATOR

US Domestic calling (incl tax & surcharge)

October 10-13, 2006• San Diego Convention Center, San Diego California

But It’s Not Always the Case…

Premise Premise M5Low Cost High Cost OutsourcedAlternative Alternative IP Phone System

Telephone System CostsEquipment lease $1,000 $2,500 $1,000Installation or move lease $250 $250 $375Maintenance $150 $375 includedAverage move & change cost $625 $1,250 includedNew Switch/Wiring req'd $125 $313 $313

Outsourced IP ServiceRedundant Lines n/a n/a $2,115Profile Cost n/a n/a $4,000

TOTAL $6,840 $13,745 $9,873% saved by outsourcing -31% 39%dollars saved by outsourcing -$3,033 $3,872

October 10-13, 2006• San Diego Convention Center, San Diego California

Moreover, IP systems carry new risks

• More expensive systems, handsets• New software• New protocol conversions• IP Termination in its infancy• New Security Challenges• Converged LANS/WANs – QoS, likely infrastructure

upgrade• New features = user behavior change• Expectations are high

October 10-13, 2006• San Diego Convention Center, San Diego California

Providers can exploit IP to eliminate risk

• True redundancy in local loop• Eliminating other single points of failure –building,

closet, box, CO• Carefully measured response times and uptimes• Pricing model that scales costs• True multiple location solutions• Detail management (directories, 411, 911, caller ID,

etc.)• Saving CFO and CTO time• Security

October 10-13, 2006• San Diego Convention Center, San Diego California

And bring real benefits

• Vertical industry applications• Business intelligence• Directory Management

SOFT BENEFITS M5Low Cost High Cost OutsourcedAlternative Alternative IP Phone System

Telecommuter Phones x

Multiple Locations x

Full Redundancy x

24x7 Monitoring x

Unified Messaging x x x

Single Partner/Bill x

No Scale Obstacles x

Informal Call Center x x

Outsourced Service x

Business Continuity x

October 10-13, 2006• San Diego Convention Center, San Diego California

But beware of hidden project costs

• Remote Call Forwarding (RCF) • LNP • LAN Wiring & Switching • Power Supply • Remote Phones • Directory Assistance (411) • Office-Wide Paging • Fax Solution • IP Addresses and renumbering

October 10-13, 2006• San Diego Convention Center, San Diego California

IP Enables Outsourcing

• Outsourcing can Save Time & Money– Higher Service Availability, SLAs, etc. – Improved Business Continuity– Simplified Vendor Management– Multiple locations networked– Leveraged Expertise

• Training • Installation • Feature Deployment• Security • QoS• Vertical applications

– Lower Initial & Ongoing Cost of Ownership• No need to purchase or maintain a phone system• Better line usage - ~30k/simultaneous stream• Better rates/minute without Telco dependencies• Efficient processes

October 10-13, 2006• San Diego Convention Center, San Diego California

Questions