Centrex users aren’t rushing to IP

In-Stat/MDR senior analyst Daryl Schoolar says companies with aging or outgrown premises-based switches are the most likely IP Centrex converts. Traditional Centrex are “a totally different animal” and might be the last group to trust voice entirely to IP.

Vincent Montano, vice president of new business development and of applications, systems, and solutions for National Centrex Users Group (NCUG), doesn’t disagree. While IP Centrex has become a hot topic that is getting expanded coverage at the annual NCUG meeting next March in Houston, Montano and many other members say they think IP-based voice has a way to go before it achieves the five-nines reliability of circuit-switched voice.

“Centrex is the most reliable voice service you can get,” Montano says. “If you do start installing some IP Centrex, only put it in locations where you don’t absolutely need 24/7 service. Or make sure you have some [plain old telephone service] lines for backup.” Greenfield opportunities might be one exception, because of the potential savings on the wiring plant.

Universities are one traditional Centrex stronghold that might embrace IP Centrex more quickly. Unlike many other big Centrex users, they also tend to have a strong background in IP. However, that also means they are better able to deploy IP telephony internally if the service providers don’t price it right.

“We currently offer more than 40 services internally, including voice mail and [automatic call distributors], and we have a new IP telephony pilot with [Session Initiation Protocol]-enabled unified messaging,” says Michael Palladino, associate vice president of networking and telecommunications for the University of Pennsylvania in Philadelphia. “We also have a 40,000-node IP data network we manage internally. Cost would be the main reason to go with an outsourced solution, but the carriers haven’t put any pricing information on the table yet.”

The University of Pennsylvania has more than 27,000 traditional Centrex lines provisioned by Verizon and is eager to try Verizon’s IP Centrex as soon as it is available in Philadelphia. “That’s starting to look like January now,” says Palladino, who meanwhile has seen a major IP Centrex presentation from MCI.

Factors that might mitigate against outsouring IP telephony include flexibility and transition issues. “You tend to have more options if you can do things yourself,” Palladino says. The University of Pennsylvania has about a dozen small remote facilities, but the huge bulk of its operations are on one big campus in west Philadelphia. “The campus has fiber everywhere, and we are used to fixing things ourselves. That gives us a high level of independence,” he says.

Palladino expects the university to phase IP telephony in gradually, with old and new systems having to coexist for up to five years. The integration with all of the University of Pennsylvania’s internally provisioned services can be tricky, and Palladino says his staff probably is better qualified for this than any outsourcer.

However, the ILECs insist it will be easy for most Centrex customers to migrate incrementally. Eric Schwartz, vice president of IP communications for BellSouth, says all features will interoperate across the two Centrex environments. “It is technically possible to move people line by line, although no one has really asked to do it with that level of granularity,” he says. BellSouth is conducting customer trials with the hybrid Centrex IP platform, while network-based IP telephony is still on the drawing board.

A bigger block to migration is application integration with the back-end billing systems Centrex users have developed for automating the charge-back of Centrex costs to the right departments. “If you go in and change the phone system, you have to figure out how the new billing information is going to get back into the accounting system, so that all the charges get allocated to the appropriate departments,” Schwartz says. “It’s taken them a while to get it working right, and having to re-do it all is a daunting prospect.”

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