October 10-13, 2006 San Diego Convention Center, San Diego California Making the Case for Hosted IP-PBX It’s the economy…and it’s not stupid Walter Snell CEO

October 10-13, 2006 San Diego Convention Center, San Diego California What is a Hosted PBX? Misconception –A PBX sitting in a data center Reality –Virtualized PBX (one platform for many) –Web based Admin interfaces –User dashboards –QoS management tools –New provisioning methods –Complete telecom services –Unified Communications

October 10-13, 2006 San Diego Convention Center, San Diego California Example Architecture Key Concepts Redundancy QoS Management Data Security

October 10-13, 2006 San Diego Convention Center, San Diego California SMB is the Market SMBs invest where challenges dictate –Many PBX and key systems are near retirement –Cost is the number one consideration –Lack of IT resources restricts advanced premise solutions –“Best of Breed” is traded for “Ease of Use” –Ideal for the size business –According to Yankee over 30% of 2 million SMBs are in the market for hosted VoIP (aka the unfortunate 2 million)

October 10-13, 2006 San Diego Convention Center, San Diego California Resource/Commitment Less Onsite IT Costs Easier to Deploy/Change Services Low Capital Investment Reference: Yankee Group SMB State of the Market Report

October 10-13, 2006 San Diego Convention Center, San Diego California Hosted PBX Adoption Rates SMBs adopt rapidly when the needs are highest and the solution is clear – Hosted PBX is nearing that inflection point Reference: Yankee Group SMB State of the Market Report Only 20,000 business use Hosted PBX today Out of 2.4 million

October 10-13, 2006 San Diego Convention Center, San Diego California Benefit #1 - ROI Cost Comparison for 50 person business Startup Cost 50 phones $ 12,500 ($250 per phone) Setup $ 1,500 (30 per user) QoS Router $ 1,000 (Router) iQ Manage $ 1,000 (QoS Mgmt) Labor $ 2,000 ( hour) $18,000 Monthly Operations Cost 30 Employees $ 1,250 mo. 25,000 VoIP minutes$ 625 mo. 24/7 Support$ 0 IT On Site$ 0 Software Maint.$ 0 T1 Service$ 450 mo. $ 2,325 mo. Startup Cost 50 phones $18,000 ($350 per phone) IP-PBX $50,000 (Cisco Call Manager Express) Assessment $ 3,000 (Network Assessment) Labor $ 8,000 (80 $100 hour) $79,000 Monthly Operations Cost 30 Employees $ 0 25,000 minutes $ 1,250 mo. (.05 average) 24/7 Support $ n/a IT On Site $ 500 mo. (consulting fees) Software Maint. $ 1000 mo. (15% annualized) PRI Service $ 450 mo. $ 3,200 mo. Hosted Premise

October 10-13, 2006 San Diego Convention Center, San Diego California Benefits #2 - Freedom Work Anywere –Local and remote users –No WAN congestion problem that IP-PBX suffers –Mobile users – softphone, cellphone, etc. –Home users – completely connected On-net Extension Calling –Dial an extension whether its in San Diego or Japan –No cost calling

October 10-13, 2006 San Diego Convention Center, San Diego California Benefit #3 – Self Control MACD –Self manage Moves, Adds, Changes, Deletes (MACD) –No Consultants needed Add new numbers –Order new phone numbers online –Local, US, even international numbers Order new services –No truck rolls – provision instantly –E.g. -fax, video, collaboration, ACD

October 10-13, 2006 San Diego Convention Center, San Diego California Challenge #1 - Quality Quality is number one concern –If it doesn’t sound good, then it’s not good enough –It must never drop calls or jitter Reasons –Overloaded LAN – can’t handle VoIP –Poor ISP service provider network Solutions –QoS Managemenet Tools –Managed WAN circuits (for 20 or more users)

October 10-13, 2006 San Diego Convention Center, San Diego California Challenge #2 - Reliability It has to work all the time –Premise equipment aims for % –Not there yet for hosted but close 99.99% Reasons –Network Outages –Power Outages Solutions –Routing Masks (inbounds move to cell, legacy) –Local failover to PSTN in critical business apps –POE (power over ethernet) + battery backup

October 10-13, 2006 San Diego Convention Center, San Diego California Hosted PBX Power Tools Mobile Communications Mobile Communications Video/Web Conferencing Video/Web Conferencing Enterprise IM Services Enterprise IM Services Unified Messaging Collaboration Predictive Dialing Predictive Dialing Unified Communications Architecture Multimedia Communications Video Conferencing Mobile Services Unified Messaging Workflow API Workflow API Hosted PBX Telephony Easy to add new features as businesses move up the technology value chain

October 10-13, 2006 San Diego Convention Center, San Diego California Power Tool Example – Predictive Dialing Smartcast Node Location: Sales Team Location: Anywhere Size: 1 to 100 Salesforce Data Center Location: Upload call data to Smartcaster Smartcast begins predictive calling Leaves voic on no answer Pops live called party to agent screen Routes live calls to sales agent Starts/Stops based on Agent Activity 1 2 3a 3b 3c 4 Sales Team with Salesforce and Worksmart Upload data Outbound dials Send live callers Pop SF Record 1 2 3a 3b Save up to $2000 per month per sales person in labor costs

October 10-13, 2006 San Diego Convention Center, San Diego California Recap Hosted PBX services are ideal for SMBs Low CAPEX and OPEX are the primary drivers Flexibility, mobility, and ease of use are other major advantages Challenges are QoS and reliability Enhanced features enable businesses to reduce costs much further Hosted PBX is near the inflection point