Understanding How Users and Lines are Provisioned in Hosted PBX Deployments

Sep 30, 2016

Understanding How Users and Lines are Provisioned in Hosted PBX Deployments

Cloud communications are gaining popularity and businesses are increasingly evaluating hosted IP telephony (hosted/cloud PBX) solutions when ready to upgrade their communications capabilities. Multiple factors come under consideration in the process of deciding whether to move to the cloud and which solution to choose. Solution features and functionality; price; service quality, security and reliability; and provider portfolio, technology vision and financial stability are typically among the key cloud communications solution evaluation criteria. More specifically, reliability and price/ total cost of ownership (TCO) are critical for businesses of any size, industry and background.

While simplicity of pricing structure has been among the key selling points for cloud communications, certain details about how these services are priced are not always clear to business buyers and decision makers. One question that I often get is about how users relate to lines (i.e., concurrent call paths) in hosted IP telephony deployments. This question is not only related to price, but also concerns service quality and reliability, which can impact the business on multiple levels. Here follows a brief discussion of what my research has revealed about the ratio of users and lines in typical deployment scenarios.

  • Hosted IP telephony and UCC services represent bundles comprised of a broad set of features and capabilities. Many providers include Internet access and access-line charges in their monthly fees. Certain providers also rent out the phones, routers and switches required for hosted service implementation.
  • In the SMB segment, most providers offer all-inclusive solution bundles as, historically, that model has held a significant appeal among SMBs looking for simplicity and predictability in the way they purchase communications solutions and services. SMB bundles frequently include fully loaded user licenses, telephony lines (concurrent call paths), and unlimited local and long-distance calling.
  • In the smallest implementations (up to 10 users), lines are over-provisioned and each user is assigned at least one line/call path, yet may be assigned three or more lines, depending on the available bandwidth. This is also the deployment scenario for teleworkers/home office workers.
  • Typically, lines are "bundled" in such small-business packages and line prices are not itemized for billing purposes. Certain providers, such as Comcast, however, charge separate per-seat prices for functionality and per-line charges for the concurrent call paths required for any given business size. Comcast also includes the bandwidth free of charge.
  • The number of lines /concurrent call paths varies in larger hosted IP telephony implementations based on the size of the organization and the communications needs of the users. Line costs may or may not be itemized on the client bill, but the total price that the business pays is typically adjusted based on the number of lines provisioned.
  • Generally, in smaller businesses where the estimated probability for all workers to be on calls simultaneously is lower, the line per user ratio is typically not more than three to four users per line. In larger organizations, the ratio is typically reversed (i.e., the line is over-subscribed). In such organizations, the ratio goes up to 7 to 10 users per line due to the greater diversity of users (some rarely using the phone) and the lower probability of all users being on simultaneous calls. This estimate also serves the purpose of keeping costs down in larger implementations.
  • On average, the majority of current hosted IP telephony implementations use a ratio of 4 to 5 users per call path. In a contact center environments, however, the ratio is always 1:1.
  • The ratio of users per line can be negotiated, however the provider ensures that there is sufficient bandwidth to support the required number of lines. The rule of thumb (based on Erlang calculations) is that businesses can receive approximately 24 call paths per T1 line, yet the number of users may vary from a handful to 100 and more. Generally, most providers aim to ensure approximately 50-to-100 Kbps of available bandwidth for each call, although the range could be as broad as 30-to-150 Kbps/call.
  • Many hosted services (e.g., 8x8, Fuze) are non-blocking; the number of calls in and out of the business is limited only by the bandwidth. Also, when a specific number of concurrent call paths is allotted to a business, providers often allow bursting (e.g., Jive Communications) as a capacity buffer.

For any additional solution packaging and pricing information please refer to Frost & Sullivan’s published and/or upcoming research on North American hosted IP telephony and UCaaS markets.

Category : Cloud, Enterprise

Elka Popova


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