23.2 C
Basseterre
Monday, January 24, 2022

Cisco’s Approach To The Evolving Telephony Marketplace

Must Read

In preparation for the Cisco, Microsoft, and Zoom comparison session at Enterprise Connect, Brent Kelly, president and principal analyst at KelCor, and I met with each of the companies for a detailed review of their current offers and future plans.

First up, we sat down with Cisco for several meetings, starting with a conversation on how they are approaching telephony in the UC era.

Clearly, Cisco is looking to set the stage for the comparison, as it has been very focused over the last year on technology innovations and new business models.

Cisco is demonstrating a range of new capabilities and features while significantly reducing overall Webex pricing and creating compelling value cases.

Taking a Look at Webex Cloud Calling

One area of the Cisco discussion confirmed a major point we have been forecasting for the last three years, the ongoing reduction in the cost of telephony services to the enterprise.

As far back as our Enterprise Connect 2017 session, we predicted that telephony costs would drop significantly because of two major factors: the adoption of UC (IP-based collaboration, video, and team workspaces) and a significant drop in the price of cloud-based services, as volume telephony migrated to the cloud.

The movement to UC both reduces the use and value of the telephone. Additionally, the acceleration of video and collaboration usage during the pandemic has moved many external PSTN calls and conferences to the UC domain, which further reduces the demand for PSTN access and PBX trunk-side functionality.

In other sessions, I have pointed out that the major cloud providers like RingCentral and 8×8 were spending over 50% of their revenue in customer acquisition while being profitable, a clear indicator of the efficiencies of the cloud telephony service.

An analysis at the time showed that the actual operating costs of a cloud telephony service, including the PSTN access but no customer hardware, is between $4-8 per month. Of that, at least half was the PSTN access charges.

RELATED: Critical Flaws Identified In Cisco SDN Hardware

Then, in 2019 and 2020, we began to predict the disaggregation of the extensive PBX telephony feature set from the PSTN access function (being able to receive and make PSTN audio calls plus mid-call controls like transfer, mute, hold, etc.).

We pointed out that many PBX features were for managing inbound trunk side communications, not for users. And as business processes moved to the new paradigm of the cloud and APIs, the need for those features would be dramatically reduced.

The outlook is that PSTN access will continue, but for many organizations the PBX telephony feature set usage will wane rapidly with UC adoption.

As we move to the end of 2021, the cost structure for telephony is clearly moving in the directions we suggested. In both general UCaaS cloud offers and in private cloud solutions, pricing of under $15 per seat for telephony, including PSTN access, is now readily available.

In volume and for longer term contracts, enterprise customers are often getting sub-$10 and even down to $5 monthly pricing for a cloud/managed telephony seat without PSTN charges.

One topic we discussed with Cisco was how users of the Webex Calling service get their PSTN access. Cisco discussed their partner and premises options and the new direct Cisco-provided PSTN access option.

As part of this discussion, Cisco highlighted a recently announced dual pricing strategy for users of the Webex Cloud Calling solution when a customer decides to use Cisco as its PSTN connectivity provider.

First, a DID phone number can be added to any Webex Calling license for $1 per month. This enables devices using that license to receive an unlimited number of inbound calls from the PSTN using that DID number Optionally, for an additional $4.50 per month, Webex Calling customers can add unlimited domestic outbound dialing to the PSTN from that DID.

This differentiation between phones that make and receive PSTN calls and the phones that only can receive them is critical for many organizations.

What Telephony Changes Mean for Your Enterprise

In the modern business environment, knowledge workers are rapidly embracing the collaboration, video, and team workspaces of the UC package.

This is both for internal interactions with other users on the same platform and as a way to interact with people outside the organization. These UC platforms are based on video and collaboration, but all can add PSTN access as an option.

As UC adoption continues and better methods are available in each platform for interactions outside an organization, the use of the PSTN will be further reduced. Of the 120 million telephones in business use in the U.S., up to 50% do not receive PSTN calls.

These are common areas phones, workspace phones, and phones for the large percentage frontline workers that only do internal communications.

In verticals such as manufacturing, transportation, retail, services, and healthcare, a majority of workers do not make outbound PSTN calls as part of their work process.

Further, most personal calls have moved to the personal mobile phone, further reducing the need for most business phones to provide an outbound PSTN capability.

It will be interesting to see the impact of this new pricing model on our analysis of total costs for each vendor.

Two things are clear from this one area of our analysis: The cost of business telephony is changing rapidly, and the change from the PBX feature set to a simpler PSTN access capability is emerging.

The disaggregation of PSTN access from the DID number allows enterprises to optimize their licenses to match their user needs effectively.

There will be much more information on this and a range of other topics during our EC21 session comparing Cisco Webex, Microsoft Teams, and Zoom.

It will definitely be a session you will not want to miss! We will be presenting our review of the major UC vendors at Enterprise Connect in Orlando on Tuesday, September 28, at 3:00 PM. The session will be 90 minutes in length, with a short break in the middle.

We will be examining topics such as hybrid work, AI in the platform and meetings, new tools for enhanced meetings, contact center integration and customer experience, industry and market adjacencies, security, PSTN, and telephony, and a pricing analysis comparison. We look forward to seeing you in Orlando.

- Advertisement -spot_img
- Advertisement -spot_img

Industry News

Amazon Web Services In Israel

Cloud computing services, along with data centers, have now become one of the most important industries in the world....
- Advertisement -spot_img

More Articles Like This

- Advertisement -spot_imgspot_img