XO Communications gets into cloud service game

XO (OTC BB: XOHO.OB) is making its formal move into the cloud services market with the launch of its Enterprise Cloud Communications solution.

Claiming that it can simplify the management of an enterprise customer's IP communications needs, XO says the new service can reduce the capital investments and operating costs of their enterprise-wide communications.

Delivered on a per-user pricing model, the new service integrates a number of IP telephony features, phones (Cisco and Polycom), local and long distance calling, enterprise-wide HD voice and video, network services, and IP phone sets in a communications as a service. Customers can also purchase additional network services such as Ethernet a la carte as well.

Eric Hyman, director of product management for XO Communications, said in an interview with FierceTelecom that there are two reasons why XO decided to move into the cloud services space: the overall size of the market and feedback from customers that are increasing moving their applications into the cloud so they can focus on their core businesses.

"Frost and Sullivan and others predicts the hosted PBX market will be $3 billion opportunity by 2015," Hyman said. "Then the other thing we are hearing directly from our customers is how they are moving applications to the cloud, extending their LAN to the WAN and how they are replacing their equipment and putting it into a virtualized environment."

Unlike traditional Centrex or on-premise PBX gear that often require upfront capital installation costs, XO's cloud-based voice services reside in the cloud so enterprises can take advantage of new IP-based communications services.

"From a target market perspective we're looking at customers with 50-100o seats per location," Hyman said, adding that "that this is not a hard and fast rule as we have a number of retail chain customers out there that may have 10 seats at a given location and 100-plus seats for their headquarters location."

One vertical market where Hyman believes the new cloud-based service could have a positive effect is in education where cash-strapped school districts could leverage an all-hosted voice solution they could replace their traditional Centrex or an on-premise PBX with a less expensive hosted solution.

"Education customers today rely on E-Rate in order to help fund their telecom activity, and PBXs and hardware are not covered under the E-Rate funding program, while TDM-based Centrex and our Enterprise Cloud Communications solution are covered under E-Rate so the economics are better for verticals like education," Hyman said.  

Likewise, Hyman added the healthcare, professional services and retail industries "are others that have distributed architectures and want a simplified architecture that ensures they are future proofed."  

For more:
- see the release
- here's FierceVoIP's take

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