Guest Column | May 5, 2014

What You Need To Know About Virtual Communications Networks

Virtual Communications Networks

By Jim Machi, Vice President of Product Management, Dialogic

Q: What do VARs and MSPs need to know about the demand for virtualization solutions?

Machi: Virtualization, cloud computing, hosting, and network functions virtualization (NFV) are all the rage in communications these days. Companies can run their communications networks and applications on data center hardware that doesn’t necessarily need to be in the same building as your business. There are three major reasons why this is becoming reality:

  1. Advances in computing power. First of all, the computing power of today’s COTS (commercial off-the-shelf) hardware continues to advance in lock step with Moore’s Law, and the need to use purpose-built discrete hardware is considerably less. 
  2. Advances in virtualization technology. The computing virtualization technology that ushered in the cloud era was geared more towards transactional computing. Today, the virtualization technology also incorporates scheduling requirements required for real-time communications.
  3. Migration to all-IP. As the networks themselves transition to IP, the need for physical connectors to TDM (Time-division multiplexing) networks dissipates. As such, network functions can be run in virtualized environments, taking advantage of virtualized network interfaces, and these IP-based networks are faster than they’ve ever been. 100 Gpbs speeds on the Internet backbone are here and Gbps speeds to the home are within reach, thereby enabling a cloud-based NFV model. Therefore, running network functions in locations that are not physically near the subscribers is possible, and having multiple data centers of this sort to enable redundancy is easier and more economical.

I would characterize two types of virtualized solutions: a hosted model, and better utilization of COTS hardware. For purposes of this Q&A, I’ll refer to virtualized solutions from the context of hosted solutions.

In a hosted model, communications business solutions are an extension of what has been happening in business already with remote hosting of some business services. For instance, many businesses already host their websites someplace other than their physical location. If you are utilizing a hosted CRM solution like or even your email server, you would be used to this. Moving your phone system, interactive voice response (IVR), or contact center solution to a hosted or cloud model is simply the next step. Another option is to better utilize the powerful COTS hardware you already have, and through virtual machines run different software packages on the same COTS hardware, thereby reducing your hardware expenses. 

Q: What pain points should VARs/MSPs look for that could lead to a virtualization solution?

Machi: There are a couple. A change should be considered if the current solution is old or outdated and needs to be updated, or if your client is growing and needs to add seats. Moving to a hosted virtualized solution would involve much less capital expenditure (CAPEX) because you don’t need to buy a physical unit to sit on the premises, but it would involve monthly operational expenditure (OPEX).  So it depends on the cost model.

Q: Are there certain virtualized solutions that are in particular demand?

Machi: I’ve seen businesses move less critical solutions to a virtualized or hosted model first. For instance, fax is a technology that many businesses still use but not to the extent of 10 years ago, so that may go first. When getting to real-time voice communications, whatever might be associated with a contact center could be hosted. For instance, most of us now are used to self-help web portals where we go first. But if we go there and then need to talk to someone, we might hit a “click to call” button. Since the website is likely hosted to begin with, adding in a cloud/hosted/virtualized IVR would be relatively easy to do. For a small business, hosting the entire communications system would be easy as well. 

Q: What advice would you give about bundling services and pricing and establishing a recurring revenue stream?

Machi: Listen to your customers and see what they want. But remember, because there isn’t a large up-front expenditure when you move to a hosted model, it probably makes sense to include some up-front set-up fees that would cover your costs should the customer change his or her mind for whatever reason. To get the solution going will require some effort and cost from your side — and, you’ll have spent the same amount of energy whether it runs for four years, two years or one day.