When Enterprises Become Carriers

globochem/Flickr

Communication is a critical function for any business. Listening to customers. Negotiating with suppliers. Collaborating with teams and partners. Without it, no business can thrive or survive. In the past, businesses of all sizes were dependent on carriers for all of these services. According to Standard & Poor’s 2013 Global Sales Report, 46 percent of the S&P 500 business occurs outside of the United States, which is up from 42 percent ten years earlier. Accordingly, telecommunications requirements are more global than ever before.

Connecting these international and disparate company footholds has required a complicated and often expensive combination of voice and data carrier expertise. But the long promised convergence of voice and data networks has enabled savings as IT and Telecom requirements and functions merged into an increasingly common set of products, services and skills. Today, the end of the PSTN and obsolescence of the Hardware PBX is clearly on the horizon, and it’s a reality that must be addressed.

People in their work lives, much like in their consumer ways, have gravitated toward a cloud and mobile-first strategy. Unified communications (UC) software and cloud communications have effectively represented a fork in the road for business communications, with smaller organizations outsourcing and larger enterprises insourcing.

Hence, multi-national enterprises today are able to operate more like Telcos. For example, UC software platforms allow them to replace hardware PBX with software that they manage in their own servers or from cloud based resources.

Outsource, Insource or Federate?

Outsource

For smaller organizations, the trend seems to be going in the other direction. Instead of owning their own PBX and email systems and relying on a carrier for the connectivity, their software goes out into the network as well, and is leased on a low operational expenditure monthly basis.

Insource

Larger global multi-national organizations typically choose to own the software and manage it on a Cloud basis. But they no longer have to order local loop services from an incumbent or CLEC country by country; global carriers can help them consolidate into higher volume arrangement. In doing so, they can also choose to further optimize their costs by thinking like carriers themselves. They are able to create their own Least-Cost-Routing tables with multiple SIP trunking termination providers to reduce the cost of long-distance, off-net calling. They can source local telephone numbers in dozens of countries for contact center, conferencing and office phones via Global SIP DID providers.

UC Platforms like Microsoft Lync and others have put the tools into enterprise hands with the promise of fully integrated systems for email, messaging, voice, fax and conferencing via one platform, but enabled by wholesale priced origination and termination partners for voice, fax, and SMS.

The business case and technical feasibility for unplugging local PRIs and replacing them with globally aggregated data networks, coupled with inbound DIDs and outbound calling, is one that many multi-national corporations are now exploring. Instead of procuring local PRIs, the corporate can order telephone numbers via a Cloud provider and map them to the devices as needed. They can then aggregate their global numbers and outbound termination and secure better wholesale pricing, just like the carriers themselves do.

On an engineering level, the organization will be able to centrally manage and control telecom as inbound calls arrive via SIP, rather than from all over the world via local loop into a regional office. Inbound calls to the telephone number are forwarded via IP enabled carrier networks to Session Border Controllers, and then on to UC systems, call center ACDs or conference bridges for further routing within the organization. Calls can be rerouted as needed; if an employee relocates they need only plug in their SIP phone to reconnect and get back to work. If the business requires a new local number for a new hire, or needs to support a project in a different country, IT can order one and map it instantly to that employees SIP address. The employee could even do it themselves using an API enabled portal.

In this scenario, organizations also benefit from disaster recovery, as global carriers can reroute inbound calls via redundant networks. This saves the IT manager valuable time and frees up personnel and other human resources to focus on bringing the organization back online after a crisis.

Federate

Other trends show that enterprises are also banding together into federations to enable industry-wide communication. Federating voice and video across enterprises, based on a shared and interoperable UC platform vendor, will allow more on-net calling. This can eliminate long-distance charges as well as enable more sophisticated services, such as HD voice codecs and video telephony.

Security Implications

When choosing how to handle their communications – especially if they opt for insourcing – enterprises must consider the security implications. Scandals ranging from hacker-data theft, security holes in carrier communications services to perceived government overreach have created an environment of anxiety about the privacy of telecom. One widely-touted advantage of Microsoft Lync Unified Communication systems that many enterprises find attractive is the encryption of all communication between servers using TLS and SRTP.

Security concerns are particularly acute in the banking and finance segment of enterprise communication, resulting in an increasing premium on self-reliance for carrier services and software. In fact, in October 2014 a consortium of banks – led by Goldman Sachs – announced it had invested in a small Silicon Valley messaging start-up called Perzo, focused on encrypted IP communications, to develop a secure communications platform for their own internal and industry-wide use.

Fork in the Road

Cloud computing, virtualization and UC software have enabled enterprises to benefit from Telco-like economics of scale and efficiencies, and they can now purchase their voice and data services as if they were large carriers. Enterprises are looking at the fork in the road, with one path leading to increased outsourcing, the other to insourcing. Carriers are increasingly focusing on APIs, security, developer outreach and SaaS models to make sure they stay along for the ride for both strategic directions, rather than finding themselves left behind.

Hugh Goldstein is VP of Strategic Alliances at Voxbone.