XO Communications' (OTC BB: XOHO.OB) 1 million VoIP user milestone shows the growing confidence that business users have in moving to Voice over IP. However, what's consistently resonated is not just the technology, but the overall simplicity of its offerings, explained Eric Hyman, Product Director for Application Services.
When XO launched its IP Flex T1-based integrated access service for SMBs in 2005, the notion was to help a predominantly TDM-based customer base migrate to VoIP.
"What we did in order to make it happen is we kept it simple," Hyman said. "We created simple pricing and made it an easy to use product with an administrative portal so they can manage their end users' call forwarding or their voice mail or whatever was necessary at the administrative level."
With the SMB market down pat, XO began targeting the multi-location customer that required private data networking. On one access circuit, XO can offer these customers VoIP, Internet and private data networking.
Similar to its SMB offering, the multi-site offering also had a simple pricing strategy and a customer portal. This simple pricing strategy included speed, long-distance services and VPN if that was required.
"It was just simple line items and it was not worried about voice grade equivalents," Hyman said. "You'd buy the pipe and use it as you see fit."
With its simple pricing packages in place, XO continued to evolve the product for its multi-site customers by adding incremental features including a mobile application called XO Anywhere that allowed customers to be able to access their office's dial tone from any location through an Internet Explorer connection.
Scale has been a major attribute for XO's VoIP service. As XO raked in more multi-site customers for its VoIP service, it decided to extend the service to all 50 U.S. states.
But XO's VoIP service isn't just about fancy end-user services. The integrated access service also includes disaster a recovery/business continuity solution. In the event that either the customer or XO's network was down, the system would automatically route to another number.
Hyman said that the disaster recovery service required no action by the customer because "it would automatically route to another number since it checks on signaling and if a signal did not pass it routed the call another way."
Albeit still a relatively nascent opportunity, larger enterprise customers are now starting to tune into its Enterprise SIP product. Ideal for large distributed business customers, Enterprise SIP allows XO to leverage the customer's private data network with their SIP services which allows them to have call control, reduce their equipment costs, reduce their trunking costs and allow them to access value-added services because they now have a centralized solution.
Although Hyman would not cite any specific customers, one segment that's keen on XO's integrated VoIP/data and its newer enterprise SIP-based offerings is the retail industry.
Given the fact that most retail chains could have hundreds or thousands of locations all with their own PBXs and related Internet and local PSTN access lines, and a WAN connecting all of the locations, an integrated solution from one carrier could simplify their communications infrastructure but also cut down maintenance costs.
In the retail market segment, a 1,700-location retail store chain could, for example, eliminate all of their local access lines and PBXs. Instead of having to manage multiple voice lines and PBX systems, a chain could then just run two large PBXs in their data center and run all of the voice traffic over the WAN to the stores and back to the data centers and terminate the local traffic.
"From what I have seen so far the kind of customers that are adopting Enterprise SIP are extremely large distributed architectures be it financial institutions, be it retail chains or distribution houses because what you're taking away is that incredible IT infrastructure expense that you needed to carry all along and now you have what really is a homogenous network," Hyman said. "Now at every one of those stores, a retailer might have had multiple manufacturers across multiple stores, but now they have the same phone at every store and call control in two data centers and managing the call control from those two data centers."
While VoIP service adoption will continue to be an evolutionary path for large enterprises, XO's movement could at least give other large businesses considering such a move a possible source to consider when making their own switch from TDM to IP.
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