Cloud Computing negates IP Centrex Services

Today I sat down with a friend, a telecom consultant like myself. The main difference between the two of us is that, while I’m purely focused on Open Source technologies, he’s focused on proprietary technologies. Well, I can’t really blame him, after all, he used to be the CTO of a Tier-1 long-distance carrier in Israel and his track record of building large scale systems can’t be negated or dispersed at ease.

In any case, we were discussing the financial validity of obtaining an IP centrex platform vs. building one of your own based on Asterisk. On one hand of the scale, we had companies such as Broadsoft and the like, proprietary technologies for building IP centrex environments. In addition, we’ve discussed the various FlatPlanetPhone type companies, rendering IP centrex type services via Asterisk, in a hosted model solution. It is obvious that if you are going into the “retail” business, then you simply sign up as a reseller of anyone that hosts their own platform and go on from there – however, this was not the case.

Our discussion was based on the following assumption: a projected customer wants to host IP centrex like services to a total of 15,000 business subscribers, each one consisting of anything from 5 users at the low end to 60 users at the high end. The average calculation was 33 users and multiplied that by 7500 (half of the project users case) – giving us a total 247,500 connected phones. Ok, a Broadsoft of that size is WAY WAY WAY more expensive than our projected budget, and building our own IP centrex platform based on Asterisk would take too much time.

Recently, advances on the implementation of Asterisk utilizing Amazon EC2 had resulted with the implementation of a full office PBX system can be implemented within an EC2 instance. While the PBX is based on Asterisk + FreePBX, it surely can provide any of the required IP Centrex type of services a normal PBX platform will provide – in addition to the hosting environment which is highly reliable.

Now, a normal office works anything between 9 to 11 hours per day. Doing some Amazon math shows that running a PBX system, 11 hours per day, 22 days a week, yields a total of 242 hours per month. Thus, based upon a medium C1 instance, we’re talking about 49$ per month for running your PBX. Bandwidth for a PBX that size would cost around the 5$ per month, and the elastic IP is another 3$, thus, a total of 57$ per month, cost to the operator. The IP centrex model dictates a price per phone, thus, an office of 5 people, with a minimum charge of 39$ per phone per month, leaves us 137$ of profit per month. Let’s imagine that you’re using phones like SNOM 300 as your base phone, these are 80$ value at large quantities. Thus, the customer ROI is around the 4-5 months, which is normal in the services world.

Now, the PBX system can go online and offline on a daily basis, while being offline having its inbound calls directed to a company voicemail. This will save all the off-hours messages people may leave on the system and will also lower operational costs on a per day basis. If a company requires to have it’s PBX system up and running at all times, simply charge a bit more, no big deal.

In other words, the utilization of Amazon EC2 instances with proper AWS management and control can introduce a new business model – the Clouded PBX service. No more need to own large portions of data center realestate, no need to maintain large teams of IT and network personnel – just setup you AWS account, build your management system – and start earning cash. Look out Broadsoft, Asterisk and Amazon are coming – and a hail storm follows them.

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