Of all the services out there that the cloud revolution may transform, voice is by far the one with the longest legacy history and widespread deployment. The VoIP revolution has taken a decade already, and still isn’t anywhere near complete and the PSTN is still with us. But with the arrival of new technologies like the cloud and NFV, the inherent advantages VoIP has always had the potential for are becoming much more accessible. Alianza is one of the companies driving forward on this front, and with us today to tell us what the company’s cloud voice platform is all about is CEO Brian Beutler.
TR: What is a cloud voice platform, and how do you think it will change how service providers do business?
BB: A cloud voice platform provides all of the components required to deliver voice delivered via the cloud backed by an NFV environment and using elastic core technology. We look at it as the next generation of how service providers are going to define, deliver, and monetize voice services, whether it be traditional residential services, SMB VoIP services, unified communications, or SIP trunking. It's a fundamental transformation of the underlying business model, taking something service providers are already moving to from a technology transformation perspective, and layering on a business model and economic transformation that changes it all dramatically.
TR: When we look at the industry, where will we see the effects of this transformation, in the end-user experience or deep within the service provider?
BB: There is some inherent speed-to-market functionality that cloud voice platforms bring to the table. In the traditional environment you put a solution in place that starts depreciating over time, and then you are stuck with that feature set until the next revision of that, when you rip and replace the hardware. With the cloud we deploy new features and functionality on a continuous basis; it's a living, breathing environment. End users are going to benefit from that perspective.
But I think this is really all about service provider transformation. Cloud voice platforms are very transformative to the service provider in how they carry out their business decisions. The traditional approach meant managing dozens of different point solutions and having an operational staff that stitches those together and figures out how to scale them and automate the interaction between all the components. Instead, with cloud voice platforms all of that functionality is hosted in an NFV environment in the cloud. And there is zero capex in the cloud model and much simpler operations, meaning lower opex and improved EBITDA.
TR: Why do you think the time is ripe for a cloud voice platform?
BB: At some point over the next few years, all service providers are going to go through a network rip and replace exercise with their traditional voice infrastructure. The traditional voice vendors are pitching softswitches and NFV voice solutions as the next gen solution. We believe that while that could cut costs, it doesn't go far enough. NFV solutions still require significant capex and add a lot of complexity. We think service providers -- especially CLECs and traditional telcos -- can deploy a cloud-based platform quickly and get the latest in VoIP and UC features on an ongoing basis, and they can do it at a much lower overall cost than it takes to manage and operate status quo voice networks.
We launched with over 40 customers to date, and typically we save them 20-35% just on operating costs while eliminating capex altogether. Perhaps most important is the effect on an organization’s resources. If you think about an organization having to rip and replace the voice network every 5-7 years, there's a significant impact on finance, legal, product management, engineering, development, and IT operations. When they make the decision to cloud-source, the impact across all of those is much less. And they get to refocus the capex and people on big strategic investments.
TR: What does your underlying infrastructure look like?
BB: It's a distributed setup spread across multiple data centers that runs in a full active/active architecture. We took all the voice network functionality and wrapped it up and put it in the cloud, including the voice UC application server, session border controllers, robust management tools, QoS monitoring, fraud detection, carrier services management, and APIs for plugging into the service provider’s OSS/BSS
TR: How does a service provider generally connect to this platform?
BB: We're agnostic to the connection type, they can run private circuits, MPLS, Ethernet, or public connectivity. The preferred way so far has been public connectivity. The combination of resiliency, the cost, and the flexibility of public connectivity seem to be the most attractive to our customers.
TR: As an industry, where do you think we are in the shift toward VoIP and cloud voice?
BB: We're roughly 15 years into this move from TDM to VoIP, but we're really at the beginning of the move to the cloud. But I still think we have a long ways to go, and we need to move faster given the obsolete end-of-life TDM infrastructure that's still sitting out there today. In 2012, FCC Data showed that VoIP penetration was still just 28% of fixed voice lines and the NTCA has said that only 19% of its surveyed members have a VoIP offering at all. Many telcos have to move faster and get off of TDM infrastructure and get on with the IP-ification of their network. Nothing gets them there faster or more elegantly than the cloud. I would say we are off to a very good start, and at Alianza we have seen compelling success cases with all types and sizes of service providers.
TR: What kind of service provider customers have you been getting the most traction with? Who do you think stands to benefit the most?
BB: If you look at the customers we've signed up to date, it runs the gamut from Tier 1 operators to Tier 2 to small rural operators, from cable companies and wireless broadband operators to FTTH and satellite broadband. The success cases are all over the map, and now we're looking to go deep into those markets. I think right now there is specific traction among cable companies. They were some of the first ones to deploy VoIP services and weren't encumbered by the older TDM infrastructure. If you juxtapose them against some of the telco guys that are still on TDM infrastructure and never made the jump to VoIP, what we find is the cable companies are really open to VoIP 2.0 and the cloud. Culturally, there are fewer headwinds there. But telcos have the advantage of being able to leapfrog VoIP 1.0 and go straight from TDM into the cloud. I think they'll find the overall benefit is even greater.
TR: Where do you run into the most resistance when approaching a service provider?
BB: The reception depends on who we are talking to. If we're talking to a technologist like a director of voice operations, they might resist because the idea of moving to the cloud is new to them. But someone in the executive suite, including the CTO, gets it right away because they understand what it means to capex and opex. So we have to balance the two and help show the technologists why this is going to make their lives better in the long run, especially in the resources they will have to dedicate toward what's next.
TR: At what point does your platform reach critical mass?
BB: I think we're there now. We've spent the last 6 years building this platform and helping small and medium carriers with their VoIP needs, and every year we see more awareness across a broader set of operators. We're already architected for millions of lines, and with our NFV core it's easy to scale up.
TR: What is the next step forward for you?
BB: From a feature functionality perspective, we think it's there today. We think the next step is making the cloud voice platform a mainstream option for service providers across geographies and demographics. Some of the largest carriers are doing it, but this option really lacks exposure. Most technologists and operators are looking at transformation from VoIP 1.0 or TDM to NFV, but aren't aware of the value proposition that exists in the cloud. This is our own intellectual property, and we aren't dependent on third-party vendors, so it’s easy for us to deliver new features and functions
TR: Thank you for talking with Telecom Ramblings!
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