Voip2.Biz the Company

INTRODUCTION (5 Points)

VoIP2.biz the ‘company' is based in the Indianapolis area, a startup supplier of Voice over Internet Protocol (VoIP). Their main focus is on the small and midsize companies where number of phone users is less than 400. The company developed several sophisticated and wise technology to address the telecommunications expenses in various companies such as call centers. VoIP2.biz actually spun out of Harley Services Corporation HSC, in beginning of October 2005 by some of the personnel who developed a promising technology through experimentation in early 2004.

HSC started it business venture in 1995 providing outsourced engineering, installation and marketing services to telecommunications companies. Milkowski and other intelligent personnel who understood the shortcoming of existing PBX based communications systems and then developed a cost competitive IP PBX solution for implementing VoIP via an open source solution. Beginning in October 2005, HSC retained 70% of the employees leaving a brand new company lead by Milkowski. They were wise enough to develop the product that suits everyone's needs. Some of them are VoIP2.biz V2B System 1 IP PBX to provide an enterprise level solution, VoIP2.biz V2B Network Services to connect the customers to telephone network for originating and termination of call and internet access, VoIP2.biz Hosted Voice Services which provides the customer a Centrex-like telephone system which is good for home applications.

VoIP2.biz seemed to be ambitious while departing from HSC, but unfortunately the company couldn't even make the profit at least at breakeven by June 30, 2006. Though several strategies and technical improvements are done, but finally the board of directors came up with the solution to either sell or shutdown the whole company itself. We will analyze several motivations to start the company and why the company went into such turmoil.

ISSUES/PROBLEMS (20 Points)*

The rational of VoIP2.biz emerging as a separate entity was clear, first a cheaper technology was developed and secondly the current market issues are studied. The personnel behind the market studies came up with the following problem.

? Separate Voice and Data Network:

VoIP2.biz's business opportunity came by understanding the fact there exist two separate networks for Voice and Data traffic in an enterprise, even though both are based on a common principle. By the time the company realized the potential of VoIP, most of the companies were running on legacy Private Branch Exchange PBX voice technology which has several shortcomings. The installation and then maintenance of such technology is expensive and these voice networks often underutilized. The same companies had to lay the backbone for the Data Network as well which increased overall budget for networking. Now maintaining two separate networks is simply too expensive.

? Expensive Feature Sets:

The above mentioned PBX systems were special purposed machines with both proprietary hardware and software making the scalability a difficult and expensive talk and not at all flexible. Interoperability between two different vendor provided phones was not possible. Many businesses couldn't afford to install several essential features such as Automated Call Distribution ACDs and Interactive Voice Response (IVR). We all know that such features are more than essential and in fact the ‘life' of business communication. Lack of such features would cost a company a lot, but several business owners were simply not convinced with the first expensive PBX technology and second the expensive feature sets.

? Lack of Skilled Labor:

The PBX technology requires special programming and other technical skills to maintain and administer while the outgoing calls are still routed through the Public Old Telephony Systems POTS. This way the voice solutions deployment would require seeking the help from the experts who are properly trained and have enough experience to address the need of the business. Most of the businesses were served by under-trained account managers with little technical knowledge.

? Need of Experienced Staff for voice processing:

Another big challenge for business owners was to hire appropriate and trained professional workers who will look after both of their Voice and Data Network if a decision is made to switch to VoIP from legacy PBX telephony. Their existing staff lacked data procession knowledge and simply could not lend a helping hand.

? Lack of Integrity in multi-location business:

Current business or most of them still rely on the traditional telephony systems when it comes about inter-office communication. Sometimes call are made to business partners residing in other countries and making the telecommunication an expensive assets.

? Other Issues:

Internet has not yet had a major impact on business voice communication that was expected; several studies had foreseen that business was at the beginning of the next phase of utilizing the internet to further to reduce cost.

In order to take advantage of IP networking cost savings and functional enhancements, customers have to replace their existing PBX.

? High Business competitions:

Organization such as Digium, the author of Asterisk and SingTel, developed application software that functions just like PBX, yet runs on commodity PC hardware under Linux. Incumbent local exchange carriers (ILEC's), principally AT &T and Verizon in Indiana, have long dominated the traditional market for voice communication. They sell network service through a variety of channels, based on business size. AOL, MSN, and other national ISPs should soon be rolling out residential VoIP services. Internet Service providers have long searched for an additional value-added service they could offer in addition to internet access. Management expects wireless ISPs would also be interested in adding VoIP services.

SOLUTIONS

Once the above market issues are understood it was easy for VoIP2.biz to come up with the solutions to the above issues.

? VoIP2.biz designed the products that can consolidate the existing voice and data network into one and thereby reducing the running and maintenance cost of both network. There architecture involved both new implementation as well as stepwise migration of from legacy technology into new generation VoIP.

? Other expensive features such as ACD, IVR, and E911 are also introduced and now the customers can benefit from these features starting from the first day of installation. As there wasn't any dependency on the legacy equipment's, the integrity of the systems was high to gain the confidence of the new customers.

? VoIP2.biz equipment's utilized open-sourced platform on commodity hardware. The software can be updated easily without the need of special permission giving the system a high level of flexibility. Also the softwares are installed on the commodity hardware. Thus the overall cost of the system was around 10 to 20 percent of the cost of competing technology.

? The installation and maintenance still required to be done by knowledgeable and experienced professional. VoIP2.biz equipment are sold by either company appointed seller or supported by company professionals only.

? In case of businesses with multi-locations, the remote offices would connect to the headquarter with T1 lines for data communication. By emergence of VoIP protocols, the voice traffic can be forwarded to the same headquarter making inter-office communication possible. This would significantly eliminate the operating cost and builds up the business integrity.