Enlarging the IP Centrex Marketplace

Even though the host hardware, software, and support for IP-Centrex can be more easily scaled to match demand than that for legacy Centrex, the system still represents a significant investment for the service provider. There is, therefore, a good incentive to use the following strategies to enlarge the market and so optimize the return on this front-end expenditure.

Reselling
Because of the availability of discounts (for quantity of lines and contract duration) in Centrex's tariff structure, resellers can take advantage of the margin at the retail level.

Over the last two decades some of the telcos have actively encouraged these aggressive, sales-oriented companies to sell Centrex-based local and long-distance packages. Some resellers grew to have tens of thousands of Centrex lines rented by their customers. Unfortunately, in recent years, the rapidly falling rates for toll calls and the costs of serving many small customer sites have pushed many CLECs into bankruptcy, and forced others to dilute their ownership as a way of reducing their excessive debts.

In closely related telecom markets, such as selling key telephone systems or retailing cellular/mobile phones, independent companies continue to handle most of the business, and these are obvious candidates to sell IP-Centrex successfully.

Application Service Providers
According to market research published by Nortel Networks, "over 40% of medium and large enterprises want to outsource the implementation of IP telephony solutions and lease the technology from a service provider." The service provider that can package complex applications, such as contact center operations or unified messaging, with the multimedia services of IP-Centrex, should be able to make a powerful sales proposition to at least half of the businesses in its area.

Experienced system integrators who understand LAN-based traffic are in a good position to implement an effective IP telephony system with an excellent QoS.

IP-Centrex is not always easy to install on an enterprise LAN, as it is essential to ensure that no switch ports are generating jitter, to determine which IP phone's NIC is sending out unwanted bursts of data, and to design a VLAN to segregate priority traffic correctly. Companies that have built up a team of systems engineers with current IP-networking expertise will be in high demand as the pace of IP-Centrex implementation accelerates.