QUESTIONS AND ANSWERS ABOUT NETERGY NETWORKS ADVANCED TELEPHONY SYSTEM
This Q&A seeks to answer some common questions about Netergy Networks recently announced Netergy Advanced Telephony System. This Q&A also contains a section with general questions about IP telephony.
| Q |
What is the Netergy Advanced Telephony
System (ATS)? |
| A |
The Netergy ATS is the first IP telephone
system designed to allow service providers to host iPBX services for individual
business customers. The ATS consists of four elements:
|
| Q |
What is an iPBX? |
| A |
It is perhaps easier to first define a PBX,
a private branch exchange. A PBX is essentially a private telephone system,
typically owned and used by a business. In many businesses, workers need
telephones to communicate among themselves and to communicate with customers
and suppliers. However, since only 10 to 20 percent (depending on the business)
are talking with people outside their company at any one time, it doesn't
make sense to give each a dedicated connection to the PSTN. A PBX allows
the workers to share the few incoming lines required to support their business
and to communicate on premise without using the PSTN. Like a traditional PBX, an iPBX is essentially a device that connects extensions in a single company to the PSTN. Traditional circuit-switched PBXs, connected as they are to their extensions by individual pairs of wires, must be located as close as possible to those extensions, otherwise the wiring job becomes too expensive. Because an iPBX is essentially connected to all of its extensions by only one wire, an IP network, it can be located almost anywhere, eliminating geography as a consideration in its deployment. The "i" of course, stands for Internet. This freedom from geography allows the iPBX to be located in a service providers data center or central office while still offering complete PBX functionality, including privacy. Thus, service providers can offer value-added PBX services to customers, and customers can avoid the expense and maintenance headaches of owning a PBX. |
| Q |
For which markets is the Netergy ATS
intended? |
| A |
Because an iPBX can be located far from
the extensions it controls, local telephone companies, called local exchange
carriers (LECs) in telecom speak, can host a large number of iPBX servers
in a central location and use them to offer iPBX telephone services to business
customers. Internet service providers (ISPs) and application service providers
(ASPs) could also offer such services. As it happens, there are two classes of LECs. Those local telephone companies that have been around for a long time, called incumbents or ILECs, and those that have gone into operation since the local telecommunication market was deregulated by Congress in 1996, the competitive LECs (CLECs). CLECs tend to be more open to new technologies and have short decision cycles, so 8x8 is focusing initially on CLECs. Many long distance carriers are also interested in offering local telephone services, and so may also be targets for the Netergy ATS. |
| Q |
What are the key benefits of the Netergy
ATS? |
| A |
There are two fundamental benefits provided
the Netergy ATS. The first is lower costs. Service providers who used the
Netergy ATS can offer PBX services at about 20 percent less than it would
cost to install a circuit-switched PBX. These lower costs are possible because
the ATS is based on IP technology, which uses network resources more efficiently
than a circuit switched telephone service. More importantly, however, our
use of IP connectivity lets the service provider choose the least expensive
pipe, whether its xDSL, T1/E1 or cable, to connect his customer to his central
office, and only one pipe is required to serve dozens of extensions. A final
economic benefit is reduced service costs. Because the customer can make his
own moves, adds and changes, service providers no longer have to roll a truck
to accomplish these now simple tasks. The second principle benefit is the ability to offer enhanced services to customer. Traditional Centrex offerings did not allow hunt and ring groups, online directories, integrated contact management, CTI, and so on. Because it is a true PBX, even though offered as a service, the Netergy ATS provides complete PBX functionality. Customers can build complete CTI (computer telephone integration) applications to automate call centers and contact management. The system also comes with three computer-based user interfaces, one for the attendant, one for the general user population and one for the system manager. These user applications increase user productivity and lower frustration with the system, which, of course improves customer satisfaction. |
| Q |
What's the difference between iPBX hosting
and Centrex? |
| A |
With Centrex, the service provider dedicates
a portion of his central office switch to a specific customer and configures
the ports dedicated to that customer as extensions to a main number. Since
Centrex service is offered using a monolithic central office switch, customization
is impossible. Centrex is Centrex. Also, for security reasons, the service
provider cannot give users the ability to control the switch with computers,
so CTI applications -- to automate a call center, for example -- are impossible. The Netergy iPBX, on the other hand, is a true PBX even though it is served from the service provider's central office. In the Netergy iPBX architecture, each customer is served by an individual iPBX instance (many instances run on one server), thus their PBX is truly private. Since any one customer's iPBX can be changed with out affecting other customer's iPBXs, CTI and customization are possible. One of the biggest problems with Centrex is that it is expensive. Since every extension is essentially a phone line on the central office switch, each line costs as much as the one before it. With such a linear pricing model, it quickly becomes less expensive for the customer to buy a PBX. However, the Netergy iPBX uses a single IP link to connect the central office to the customer premise. Additional extensions cost almost nothing to install because there are no new wires to connect. Thus service providers can employ tiered pricing: the first 20 extensions cost $30 each per month, the second 20 cost $20 each per month and so on. Using tiered pricing, the service provider can ensure that the customer is never motivated to purchase his own PBX, thus maintaining a value added revenue stream. |
| Q |
What does circuit-switched mean? |
| A |
In structure, a PBX is identical to the
PSTN: individual telephones (extensions) are connected to a central switch
by a pair of wires called a circuit. When making a call, the switch decodes
the number dialed to identify the target extension and temporarily connects
the two circuits together. When the callers hang up, the switch disconnects
the circuits. Such systems are called circuit-switched networks. |
| Q |
What are the unique features of Netergy
ATS? |
| A |
The Netergy ATS is the first iPBX developed
specifically to be used to offer hosted iPBX services. Other iPBX solutions
are designed to be installed on the customer premise on a dedicated server.
If a service provider were to attempt to use such a solution to deliver
hosted services would find that the solution would not scale. Why? Because
a dedicated hardware server is required for each customer. Not only is that
architecture prohibitively expensive, but maintaining hundreds or even thousands
of such servers would be a logistical nightmare. The Netergy ATS, on the other hand, is designed to be hosted from a server cluster that can support hundreds of customers. Instead of dedicating whole machines to serve each customer, the ATS dedicates a Java Virtual Machine (JVM) to each customer, and each server can run dozens of JVMs. This architecture is both cost-effective and easy to maintain. |
| Q |
How is the Netergy ATS positioned relative
to other Netergy Networks products? |
| A |
In many ways, the Netergy ATS is the sum
of all of the parts Netergy Networks builds because it is build on Netergy
Networks' iPBX Server Software, Media Hubs, embedded VoIP software and Audacity
Internet Telephony Processor. |
| Q |
How is Netergy ATS positioned relative
to other VoIP gateway products? |
| A |
The Netergy ATS is not a gateway product,
it is an iPBX. It does incorporate small scale gateways called Media Hubs
to adapt legacy phones and fax machines for VoIP use, and it relies on high
density PSTN (public switched telephone network) gateways for access to
the PSTN. |
| Q |
How many users does an Netergy ATS or
Netergy iPBX support? |
| A |
A standard clusters support approximately
100 iPBXs each with up to 100 extensions for a total of 10,000 extensions.
To serve customers with more than 100 extensions, two or more iPBXs can
be linked together. |
| Q |
What Netergy ATS models are available
and how are they configured? |
| A |
The Netergy ATS consists of a cluster of
five Netra t1s running the Netergy iPBX Server Software. Service providers
buy Netergy Media Hubs as needed to support extensions. The Media Hub 4
provides four analog ports. Both evaluation and expansion models of the
Netergy ATS are planned as are Media Hub models with two, sixteen and twenty-four
lines. |
| Q |
What kind of phones can be used with
the Netergy ATS? |
| A |
The Netergy ATS supports a wide range of
both analog and IP phones. Analog phone and fax machines -- including feature
phones with message waiting lights and caller ID capabilities -- are supported
using Netergy Media Hubs. The ATS currently supports digital PBX phones via
Cisco Telecaster IP phones and SIP phones from PingTel. Most service providers
find the combination of Media Hubs and off-the-shelf feature phones to be
the most cost-effective solution. |
| Q |
Does the Netergy ATS replace my existing
PBX or Key System? |
| A |
Yes. Although hybrid solutions are possible,
they do not provide any real advantages. |
| Q |
Does the Netergy ATS support telecommuters?
How? |
| A |
Yes, better than any other solution in the
market today. There are two options. One, using the forwarding option, a
user would simply forward his work phone to his home or cell phone. Since
the user can control his phone configuration from anywhere using the Web-based
Communication Center interface, he can change forwarding options anytime.
He can also control calls remotely. For example, should he receive a misdirected
call, he can use the Communication Center to put the caller on hold and
transfer the caller to another extension from home or a hotel room, even
though he'd taken the call on his cell phone. For workers who telecommute
frequently and need data access to the corporate network, a broadband VPN
line (cable, DSL or ISDN) would support a Netergy extension. The ATS could
be programmed to ring both extensions, the one in the office and at home,
whenever that employees extension or DID number is dialed. |
| Q |
I was told that the voice quality available
over the Internet is noticeably lower than that of the PSTN. Is this true?
And if not, why not? |
| A |
Because the public Internet is not optimized
for voice traffic, it cannot provide the same voice quality as the PSTN.
However, the Netergy ATS does not use the public Internet to carry voice
data. Instead, it uses private, dedicated IP connections between the customer
and the service provider that have been optimized to carry voice. Once a
voice signal is in the central office, it is routed over the PSTN if a voice-optimized
IP network is not available to carry that particular call. |
| Q |
How fast an IP connection do I need to
have to my business and my Netergy iPBX service provider? |
| A |
An always-on broadband IP connection is
mandatory, but extremely high data rates are not necessary. For most businesses,
a ratio of extensions to incoming/outgoing lines of about five to one is
appropriate, so a business with 20 extensions would need four incoming/outgoing
lines. With uncompressed audio, a 384 kbit per second DSL connection would
provide support four simultaneous phone calls with about 128 kbits left
over for data connectivity. Using audio compression would drop the data rate
requirement for four voice channels to about 64 kbits per second. |
| Q |
Which compression algorithms does the
Netergy ATS support? |
| A |
The Netergy ATS is fundamentally agnostic
about compression: system managers can specify the default codec, but terminals
can negotiate an alternative if one does not support the default. The current
Netergy Media Hubs support G.711, G.722, G.723.1 and G.728. Support for G.729
is planned for future Media Hubs. |
| Q |
Will the Netergy ATS work with voice
over IP equipment -- for example, IP phones and gateways -- from other equipment
providers? If so, which? Are there any other considerations? |
| A |
Because it is standards based, the Netergy
ATS will work with other components that support the same standards. Netergy
primarily supports the media gateway control protocol (MGCP) for phones,
the session initialization protocol (SIP) for softswitches and PSTN gateways,
and H.323 for PSTN gateways. Since some level of integration is required
to support any softswitch or gateway, Netergy expects to adapt to service
provider requirements in that regard. For IP phones and Media Hubs (terminal adapters), however, auto discovery is an extremely important feature, one that is not encompassed by current standards. For that reason, Netergy Networks strongly recommends using Netergy branded IP phones and Media Hubs. |
| Q |
What about T1/E1 or ISDN connectivity? |
| A |
Virtually any permanent broadband IP connection
can be used to support Netergy ATS deployments to an individual customer.
The amount of bandwidth required is a function of the number of extensions
to be supported and the type of business. Customer service oriented businesses
obviously require more virtual lines per extension than, say, engineering
firms. In general, a basic rate ISDN connection would work for companies
with less than 10 extensions and a T1 line could support a company with a
hundred extensions. |
| Q |
How does the customer manage the Netergy
ATS? |
| A |
The Netergy ATS includes a Java application
called the Netergy Administrator that allows customers to set up the system
(assign extension numbers, associate them with user names, configure voice
mail, etc) and perform moves, adds and changes. Because no re-wiring is required
to move extensions, Administrator makes such management very simple. |
| Q |
How does the service provider manage
the Netergy ATS? |
| A |
The service provider can also use a version
of Administrator to manage a particular customer's iPBX configuration. For
managing the Netergy iPBX, the ATS includes a web based interface. The Netra
t1 cluster is managed using the normal Solaris tools. |
| Q |
Why was Solaris chosen over NT-based
platforms for the Netergy ATS? |
| A |
Service providers were quite clear that
they wanted a carrier-grade solution for iPBX hosting. Both Sun hardware
and software have been certified NEBS Level 3 compliant and are generally
regarded as more reliable than NT-based solutions. In addition, Netra t1
servers offer price/performance that is comparable to NT-based solutions,
so there was not a compelling argument to use a potentially less reliable
solution. |
| Q |
What are the advantages of the Netergy
ATS over small PBXs and key systems? |
| A |
There are three primary advantages: the
Netergy ATS is cheaper, more reliable and future proof. The hosting model
frees small- and medium-sized businesses from the expense and management
headaches of buying and managing their own PBXs. Our solution is inherently
more reliable because it incorporates both hardware and software redundancy.
No business can afford to have two PBX systems, one as the backup for the
other, but because a service provider can spread the cost of redundancy over
many customers, Netergy systems include complete hardware and software backups.
Finally, the Netergy ATS can scale from a few lines to hundreds, and additional
feature can be added easily (without forcing the customer to buy new hardware). |
| Q |
What is Netergy Networks' channel sales
strategy for the Netergy ATS? |
| A |
Netergy Networks sells the ATS directly
to service providers. |
| Q |
How does Netergy Networks generate leads
for its service provider partners? |
| A |
Netergy Networks is conducting an extensive
PR campaign in cooperation with its service provider partners. In addition,
Netergy Networks plans to advertise in markets where service providers offer
Netergy ATS-based services. Leads will be referred to service providers. |
| Q |
How does Netergy Networks support its
service provider partners? |
| A |
To drive demand for hosted iPBX services,
Netergy Networks provides an extensive catalog of collateral that the service
provider can customize for his service offering. In addition, Netergy Networks
will offer coop advertising funds based on revenue from the service provider
and advertise in regions where Netergy-based solutions are available. |
| Q |
What is the history of the Netergy ATS? |
| A |
Development of what was to become the Netergy
ATS was begun by a French start up called Odisei in 1998. Frederic Artru
developed the iPBX concept as an outgrowth of his work on the Versit CTI
Encyclopedia, an attempt by Apple, IBM, Lucent and Siemens to define a consistent
operating and interface model for the PBX, one that would allow effective
control of a PBX by a computer. The iPBX was designed to provide complete
PBX functionality over an IP network using IP telephones. It reached the
proof of concept stage in mid 1999, but there proved to be no cost-effective
IP phones available to complete a system. During the same period, Netergy Networks (then called 8x8) had begun to adapt its digital signal processing and digital communication protocol technology for IP telephone applications. 8x8 used this technology to make an inexpensive terminal adapter for connecting standard analog phones and fax machines to IP networks. These Media Hubs provided a far less expensive solution than the terminal adapters and IP telephones then available, but there was no control software available to complete an IP telephone solution. Netergy Networks and Odisei were introduced to one another in the Spring of 1999. Recognizing that each had what the other lacked compelled Netergy Networks to acquire Odisei soon after and has allowed Netergy Networks to deliver the first complete iPBX hosting solution: the Netergy ATS. |
| Q |
What is VoIP? |
| A |
Voice over Internet Protocol (VoIP) is the
industry jargon for a new way of building telephone systems. Instead of
using today's analog, circuit-switched technology, VoIP uses digital, packet-switched
technology similar to that used by the Internet. On VoIP networks, IP telephones
or telephone adapters digitize (convert it to ones and zeros) and packetize
(divide into small data packets) the voice signal. The resulting packets are
transmitted over data networks using the same routers and switches that are
used for Internet traffic. Packet networks are much more efficient than circuit-switched
networks, and allow a richer set of telephony features. For example, once
voice is in the digital domain, computers can be used to control phone calls
and implement features like find me/follow me unified messaging, seamless
telecommuting and so on, improving individual and corporate productivity. |
| Q |
Why is VoIP technology important? |
| A |
Today's telephone system uses circuit-switched
technology, which literally dates from the late 1800s. During a circuit-switched
call, telephone company switches establish a dedicated connection (a circuit)
between the two callers. This circuit consumes a fixed amount of network
bandwidth, no matter how much or how little information is traveling on it.
When voice signals are digitized and transmitted over packet-switched networks, two advantages accrue. First, the voice signal can be compressed, lowering the amount of network bandwidth required to send it. Second, voice packets can share the network with other packets (either voice or data), increasing network efficiency dramatically. In addition, once telephone calls are on a packet network, they can be easily controlled by computers. This feature will allow productivity enhancing applications like find me/follow me, unified messaging and seamless telecommuting to be easily implemented. |
About Netergy Networks
Formerly known as 8x8, Netergy Networks is a leading provider of highly integrated IP telephony solutions to telephone service providers and telecommunication equipment manufacturers. Netergy Networks' IP telephony solutions include network software and systems as well as embedded technology. The company is based in Santa Clara, California. For more information, visit Netergy Networks' web site at www.netergynet.com.
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