Launching a Managed VoIP Service: A case study

Managed VoIP service is not a particularly rare commodity at this point in 2005. It was, however, decidedly rarer in 2002 when Sterling Internet Solutions first began looking into the possibility of offering a managed VoIP service to it clients.

Sterling Internet, a Portland Oregon-based full-service Internet service provider, was founded in 1997. Its Sterling Voice service is a managed VoIP offer targeted at SMBs in the Pacific Northwest.

The service was first rolled out in April 2004. Since September of 2004, Sterling has performed maintenance upgrades and performance tuning and has augmented and enhanced its network.

Sterling’s president, Tom Gillihan, told that the most significant part of the work—laying the foundations—was actually done in the 15 months prior to the rollout.

Searching for the right stuff
In mid-2002 the primary player in the VoIP space, in Gillihan’s view, was Cisco, but he found Cisco’s product offering to be too expensive for his needs.

“We saw the market evolving and migrating in that direction, but the product offerings that were out there were just blisteringly expensive and did not cater to a multi-tenant environment where you’ve got multiple companies with different needs and desires all managed and hosted by a single vendor,” Gillihan said. “What they wanted you to do was cut a copy of each kit for each client, which drove the costs through the roof.”

“So we had to take a step back and wait till the market evolved a little bit and the product offerings were more in tune with where we wanted to go.”

Some 8 to 10 months after the initial investigation, new vendors entered the market including 3COM and in particular and ShoreTel.

“We picked up the project again in late 2003 and started bringing some of those products in, stepping through prototype design to see if it would work in a multi-tenanted environment,” Gillihan recalled.

No Asterisk here
A number of vendors including Fonality and SwitchVox that target the SMB segment have gone with the open source Asterisk IP PBX. The Asterisk IP PBX however wasn’t among the options chosen by Sterling Internet.

“We looked at Asterisk and it wasn’t a viable option for what we wanted to do,” Gillihan said. “It was a very cost effective alternative but we needed the backing of a company like ShoreTel or 3COM to roll out what we wanted to roll out.”

SIP wasn’t a major consideration either.

“The SIP standard at that point wasn’t even a standard, and all we had to do was make sure that SIP was in the design plans and in the migration path of where the products were going,” Gillihan explained. “You had different flavors of SIP and they wouldn’t interplay so there was no point in standardizing on a “SIP product” when it wouldn’t interplay with any of the other SIP products anyway.”

Vendors chosen
Among the products brought in by Sterling Internet to build its VoIP service were Juniper‘s NetScreen offering as well as the ShoreTel IP PBX.

On the IP PBX side, Gillihan says that Sterling carefully analyzed many other vendors’ offerings, and got quite far down the road with some of them, but ran into a number of snags prior to deploying to the marketplace. They prototyped the ShoreTel product in April 2004 ‘flawlessly’ and have been pleased with it ever since.

In order to keep up with customer demand, Sterling Internet is constantly adding equipment.

“The ShoreTel product line is very modular in terms of design. It’s very easy to grow the network as you add clients, and that’s one of the reasons we chose ShoreTel,” Gillihan said. “You could start off at an easy entry point and then just add components as you go.”

Among the features that are included in the ShoreTel product is a softphone, which Gillihan notes works well, though his clients don’t seem to be using much at all.

“Mobile users for some reason do not seem to be a primary component in the client base that we’re after,” Gillihan commented. “We’ve got about 2,000 subscribers at this point and I don’t think that there are five mobile users.”

Connectivity to Sterling Internet’s clients is done though Juniper Networks NetScreen-204 appliances in the back office. NetScreen-5GTs VPN/Firewall appliances are used on the customer premises as well to help secure voice access.

“We put Juniper’s NetScreen devices at every customer site,” Gillihan said. “In some cases we’re just using advance routing features to direct voice traffic in one direction and standard Internet data in another direction. In some cases we actually tie in a VPN into our location; it depends on the location and the size of the company. ”

As opposed to other network components Gillihan noted that the Juniper NetScreen appliances were never really RFP’d.

“We started off with NetScreen many years ago and have had consistent reliability from day one,” Gillihan said. “When we went through to design and deploy the VoIP portion of our network the NetScreen product line was just in there from the get go.”

Thanks to a number of critical factors about Sterling’s voice offering, Gillihan reported that Sterling Internet has had no security issues with its VoIP deployment. The fact that Sterling Internet connects to its clients (via the NetScreen VPN/Firewall) on a private network is no small factor.

“If you try and run VoIP over the public Internet you loose a lot of control because you can’t control packet delivery on the Internet,” Gillihan said. “So one of things that was inherent in the design from day one was to have a private network.”

The private network provides point-to-point connections with all of the end users and end-to-end control for packet delivery with full QoS support .

Biggest challenges?
Beyond the actual challenge of rolling out the managed service, one of the biggest challenges faced by Sterling Internet was addressing myths about VoIP.

Customer education is a huge component of sales, according to Gillihan. One example is the issue of 911 access. According to Gillihan, this major client concern was not an issue from Sterling Internet’s point of view, as the service provides full 911 access.

“Its issues like that [911], which you’ve got to address with the client right off the bat,” Gillihan said. “You’ve got to walk them through and educate them on how you’ve done it, why it’s secure and safe, why it’s reliable. Those are the biggest stumbling block to rapid deployment.”

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