Centrex baggage drags down the appeal of its IP offspring

Given a name like CompuBlox Inc., you’d think this biometric security software firm in Toronto would be good at piecing things together. Ironically, the company’s recent attempt to update its telecommunications infrastructure fell apart.

CompuBlox employs people who spend plenty of time at their computers, according to Soren Frederiksen, the company’s president. It would be nice if they could access their voice mail messages from the screen, he said.

“The other thing is we’re a rapidly growing company that would like to be able to expand our phone system,” Frederiksen said. “We always have network cables running everywhere, so how can we run extra phone lines? Plus, we all log onto our computers from home, so we would like to be able to re-route our phones with our computers.”

IP Centrex seemed to be just the technology CompuBlox required. It promised hosted network management, single-wire architecture for both phone and computer connectivity and those unified messaging features Frederiksen talked about.

But ultimately IP Centrex was not to be for CompuBlox. “We decided not to go ahead,” Frederiksen said. He would not elaborate on the “political” circumstances that drove the IP Centrex project off the rails.

Judging by the words of industry analysts, CompuBlox is not the only company to walk away from IP Centrex. They say the technology engenders scepticism, thanks to its association with an earlier platform, Centrex. Although an established telecommunication technology, Centrex has a chequered past – a history of poor service that IP Centrex might be destined to share, indicating just how far the technology has to go before it becomes a viable communication alternative.

IP Centrex differs from its predecessor in one important manner: whereas Centrex employs the public switched telephone network to transport calls, IP Centrex uses data lines to connect correspondents. But the two technologies are similar in that service providers such as carriers handle the call routing from a central office, so companies like CompuBlox need not keep a telecom expert in house.

That’s what Frederiksen liked about the technology. With IP Centrex, someone other than CompuBlox would handle telephone switching and integration with the company’s current data network. That spells easy network management.

IP Centrex would give CompuBlox access to unified messaging and single-wire architecture, with one wire serving both the phone and the computer; no new wires to trip over.

As well, IP Centrex carries IP telephony, so employees could move their phones and maintain their extension numbers. They could work from home and, given an IP phone, also answer their corporate calls at the home office.

But analysts say IP Centrex cannot overcome the follies of Centrex. The high-tech siblings may differ in some respects, but their similarities brew trouble.

Laurie Gooding, a Boston-based analyst with Pioneer Consulting LLC, said regular Centrex service providers treat it like a second-class technology. Providers are slow to respond to service requests, putting some users “at the bottom of the list because they’ve got Sears to take care of.”

Lisa Pierce, senior analyst with Giga Information Group Inc. in Cambridge, Mass., said carriers are lacklustre about Centrex because regulation hinders profits. In both Canada and the U.S., governments set price caps on the technology so service providers cannot charge as much as they’d like for Centrex service.

Such government scrutiny gets in the way of Centrex deployment, according to Barb Potts, associate director, Centrex product management with Bell Canada. “We can’t change anything. We can’t turn around without the CRTC (Canadian Radio-television Telecommunications Commission) questioning it.”

These factors – carrier reluctance and inherently slow responses for fixes – make Centrex less ideal. The analysts said similar trouble would keep IP Centrex from becoming the next big thing in telephony.

Gooding said carriers might treat IP Centrex customers with the same disdain as Centrex users, adding that the title of “service provider” is a misnomer. “Carriers have never been very good at that, historically. You tell me (as a carrier) what you want, I deliver you a pipe and there you go.” But when it comes to such things as call routing changes, adds, moves and deletes, carriers miss the mark, she added.

But Potts from Bell said Centrex is not so bad these days. Bell has enacted a telemanagement system whereby Centrex users can amend their options without having to get in line.

Besides, IP Centrex is a whole different game, Potts said. The government does not regulate this technology the way it does Centrex and Bell can charge as it sees fit for profit. The carrier is hopeful that IP Centrex will win fans for its easy management.

“We’re trialling a component thereof (IP Centrex) called the Nortel IMS (Interactive Multimedia Server),” she said. “It has some of the 250 Centrex features that our customers have today,” and offers greater integration between customers’ computers and telephones, just like those unified messaging features CompuBlox wanted.

Still, Potts said the government might decide to regulate IP Centrex in the future. But that’s not the only problem. Pierce predicted that IP Centrex would lose the competition with another Internet-based telephony option: the IP PBX.

Like IP Centrex, the IP PBX uses data conduits to send and receive information. But the IP PBX usually sits at the user’s office and requires in-house management. Pierce said carriers would prefer to sell an IP PBX and offer management services – send a technician to deal with changes and fixes – rather than provide the all-in-one and potentially price-capped service of IP Centrex. “It’s (IP PBX) the same thing, it’s just not regulated.”

IP PBX also has an advantage over IP Centrex in terms of scalability, said Ray Burkholder from One Unified, the Kitchener, Ont.-based IP Centrex service provider that was supposed to connect CompuBlox’s system before the latter backed out. When a company reaches 200 phone users, renting IP Centrex lines becomes “a cost issue,” Burkholder said. Frankly it’s less expensive for large firms to purchase and manage an IP PBX than pay for IP Centrex service, he said.

Potts disagreed, saying IP Centrex is perfectly scalable. Bell’s IMS trial is only for the firm’s largest Centrex customers, those with 1,000 lines.

Gooding from Pioneer said the advent of IP telephony and boutique IP shops like One Unified means users might discover alternatives to the large, historically cold Centrex service providers. That spells greater choice, which is important to someone like Frederiksen.

“The model we really liked and we talked to [One Unified] about in the beginning was that [they] would host all of the servers,” he said. “It was a monthly charge rather than having the phone system here. We didn’t have any equipment costs; we didn’t have any capital expenditures.”

But since CompuBlox put an end to the IP Centrex project, Frederiksen said the company’s next choice for connectivity is decidedly less avant-garde: “Regular Bell phone system, probably.”