IP telephony without the infrastructure

For businesses that haven’t switched to voice over IP, the potential benefits in cost savings, maintenance and flexibility are often overshadowed by the cost of the rip-and-replace PBX project that it will entail.

Jajah Inc., a Mountain View, Calif.-based VoIP backbone provider, is proposing to virtually eliminate those upfront costs with its SMB Solution Suite, a hosted VoIP offering that offers enterprise productivity tools and support for a staff of up to 500.

The company – co-founded in Austria, then financed and moved to Silicon Valley by Sequoia Venture Capital – announced enhancements to its business services this week, the centerpiece of the package being a full software PBX.

Paul Naphtali, vice-president of marketing for Jajah, said the company’s first product was Web-activated telephony. From a computer, the user would enter the number of the person he or she wanted to call and his or her own number. Momentarily, both phones would ring.

Jajah’s current consumer offering, Jajah Direct, allows users to call a local number, then make an IP-based call to an international number in any of 200 countries. Before the enhancements, Jajah’s business offering worked in much the same way, but with centralized billing for all the business’s users.

Now, businesses attach directly to Jajah’s IP backbone. Yahoo was one of Jajah’s first managed services clients; its voice services run on the Jajah backbone, according to Naphtali.

Daniel Mattes, an engineer and co-founder of the company, cites the example of a fictional company with offices in San Francisco, New York and London. To switch to VoIP, the company can either rip and replace three PBXs, lease lines from San Fran to New York and New York to London, making a huge investment in hardware. With Jajah’s hosted service, the existing PBX is plugged into an adapter connected to the Internet. “This downgrades the PBX” to simple switching; the rest of the PBX functionality is handled by a software PBX at one of Jajah’s five data centres. Configuration is done in a Web browser.

With the software PBX, Jajah now supports any landline or mobile device, with plug-ins for BlackBerry and Windows Mobile handsets, presence, SMS, conference calling and universal messaging. “Our solution is not just a hosted PBX … its backend termination and applications,” Mattes said.

The PBX itself was developed at the company’s lab in Israel, rather than developed from an existing software PBX like Asterisk. “The problem is that those aren’t carrier-grade,” Mattes said.

Alejandro Pares, research analyst with IDC Canada’s network equipment group, said while there are different brands of software PBXs with different approaches, they do have in general some common advantages and disadvantages when compared with their hardware brethren.

Software PBXs are less expensive, and there are open source options, Pares said.

“I think personally, they are easier to integrate into your infrastructure,” Pares said. On the flipside, they’re viewed as being less reliable – they run on a computer server, and servers crash. Also, they require staff with more expertise.

In terms of managed services, Pares said, the advantages include lower implementation costs, a lower total cost of ownership, less demand on tech staff and lower-cost scalability. On the downside, the customer doesn't have direct control of the infrastructure and more dependent on the service provider, and it's more complicated to switch providers.

There are also total cost of ownership issues – infrastructure savings, staffing savings and the cost of calls – that make a hosted offering more attractive, Pares said.

But Jajah’s particular challenge is the market itself.

“They have thousands of competitors worldwide” with similar low-cost approaches, Pares said.