Going Wireless in the Workplace

The Plantronics CS50: The Small Business Productivity Solution

When the phone is critical to your small business, you're always looking for ways to simplify the situation. That's why Andreas, who runs a company called Bloofusion, chose the CS50 wireless headset for his home office. Andreas lives in the San Francisco Bay Area, but is in constant communication with Bloofusion employees and clients in Silicon Valley and Germany.

Bloofusion is an online marketing company that helps its clients get the most bang for their buck from their websites. His clients are mostly located in Silicon Valley, so after initial client meetings, his follow-up work is mainly on the phone. His job also involves a lot of daily analysis of web statistics.

A Multitasker's Dream Andreas spends at least five hours a day on the phone. He usually gets up early to have calls with Germany or sometimes India. He works mainly out of his home, where he has an office and a couple of rooms containing PCs and servers.

Since he's been using the CS50, Andreas' calls have become far more productive. The wireless mobility offered by the CS50 allows him to sketch on a white board, view a customer's website, check out a server or run stats on a PC while he's on a call. His customers appreciate his responsiveness and he loves the wireless flexibility the CS50 delivers. On his particularly long calls to Germany - sometimes two hours or more - he even goes outside to stretch his legs. He can hardly feel his headset, and wears it most of the day.

The Best of All Worlds Andreas was at first a little hesitant to switch to the CS50 because he was so pleased with his prior corded headset. "The problem with a lot of headsets," he says, "is that they're so hard to put on. I was pleasantly surprised by the CS50. Not only is it easy to put on, it feels good on your ear. It sits there and stays there." He was also concerned about potential interference with his WiFi set-up. However, the CS50 uses digital 900 MHz, so there's no interference with WiFi, and his calls are clear and secure. The CS50 has exceeded all of Andreas' expectations--he finds the voice and audio quality extremely clear, and has never experienced any static.

The ease of use and convenience of other CS50 features have also made life easier for Andreas. For example, he likes the fact that he doesn't need to answer calls from his office phone-he's a big proponent of the handset lifter that accompanies his wireless headset. The lifter allows him to be away from the base and office phone, and still answer calls at the touch of a button. He remarks, "The handset lifter is a cool tool! I love the fact that I can be anywhere and still answer a call right from my headset." He mentions that rapid charging is also a plus.

The Talk of the Town As a tech-savvy individual, Andreas enjoys the reaction he gets from others about his CS50. Most people, such as visitors from Germany, are impressed by it and always want to try it out. He says, "My kids think it's funny because a lot of times it looks like I'm talking to myself. It's so comfortable that you just get oblivious to the fact that you're on the phone with someone. It's the next best thing to having them right in front of you."

Now that he's using the CS50, Andreas can't imagine going back to a wired solution. "The convenience overall is just great! I can wear it anywhere in the office and then go back to this PC over here or that server over there without getting tangled in any wires. I think of it as a kind of combo office phone and cell phone. And I never have to worry about going out of range. I'm sold on the wireless experience!"

VoIP: Scalable, Flexible & Compatible

From the June 2006 issue of Communications News

Laurel Grocery IT manager John Hendrickson understood that the company needed to identify a way to use technology to streamline communications, preserve its resources, minimize travel and enhance the service it delivers to customers.

If you have ever bought a gallon of milk, a roll of film, a can of soup or a bag of nuts from an independent grocer in Kentucky, Tennessee, Georgia, West Virginia, Indiana or Ohio, chances are that product was supplied by the Laurel Grocery Co. of London, Ky. More than just a merchandise warehousing operation, Laurel Grocery provides end-to-end business resources to its more than 400 independent grocery store customers.

Since it was founded in 1922 by the Griffin and Chestnut families, who still retain full ownership of the company, Laurel’s focus on its customers’ success has enabled the company to grow, and continues to shape philosophy in providing responsive and comprehensive support to its grocery store customers.

Laurel’s customer-centric activities extend beyond simply providing an inventory of some 23,000 grocery and other products to its network of retailers. To help ensure its customers’ success, Laurel provides a level of expertise and sophistication in grocery store operations that is comparable to the support large chain stores receive from their central offices, such as accounting and payroll services.

Independent grocers can take advantage of Laurel’s insurance and financial services program to offer their employees health insurance, pension programs and other employee benefits. In addition, Laurel retail consultants help stores with marketing, promotions and merchandising, while Laurel engineering and design experts provide guidance to grocers regarding their physical facilities, such as store layout, refrigeration and freezers.

The provision of these services requires frequent and efficient communication between the company’s several sites and its customers. There are always promotions and price changes to review, operational issues that need to be discussed, and a host of other issues that can surface at any time. Handling these critical matters expediently affects the financial and operational performance of both Laurel and its customers.

“The very foundation of our success is fast and efficient communication with our customers,” explains Jim Buchanan, president and chief executive officer for Laurel Grocery Co. “On any given day, we could hold several conversations with a single retailer regarding pricing, order fulfillment, advertising and a number of other services we provide for our customers. And when you factor in the volume and intensity of these conversations and multiply it by some 400 customers, it is easy to understand how communications plays such a critical role in our company. It is imperative that we maintain a clear communications stream to keep pace with the changing dynamics of our business and to serve the needs of our customers.”

Keeping up that pace in the past was not an easy proposition for Laurel. Due to the limitations with its previous communications system, Laurel employees frequently had to travel to customer sites to train store personnel in such areas as promotions, redemptions and changes in pricing, in addition to retaining staff at the home office to handle incoming calls for placing orders, tracking shipments and managing accounts.

Due to the limitations with its previous communications system, Laurel employees frequently had to travel to customer sites to train store personnel.

It was a cumbersome, costly and inefficient means to conduct business, says John Hendrickson, IT manager for Laurel. He understood that in order to continue to properly serve the company’s retailers, it needed to identify a way to use technology to streamline communications, preserve resources, minimize travel and enhance the service it delivered to customers.

“I learned that our experience was not atypical from other companies that had outgrown their communications platform,” recalls Hendrickson. “We were becoming increasingly frustrated with the lack of efficient means to communicate with our customers.

“The grocery retail business is very complex and time-sensitive, full of multiple issues that must be addressed as quickly as possible. We felt that the right technology solution could not only enhance communications with our customers, but could also help negate the growing expense of traveling to customer sites. Our intention was to identify a flexible solution that would address our immediate needs, but also would provide a reliable, cost-effective and scalable platform that could continue to serve us well as our company continues to grow.”

After evaluating products from a number of vendors, Laurel Grocery chose Inter-Tel to supply its new communications solution–including advanced voice-over-IP (VoIP) and IP-powered applications. Another deciding factor was the scalability, flexibility and compatibility of Inter-Tel’s technologies. Hendrickson liked the fact that he could take advantage of emerging products and applications when business dictated, and not be forced into using undesirable or unnecessary technology because of technical constraints.

“We were impressed with the modularity of the Inter-Tel products,” says Hendrickson. “Their approach isn’t to deliver an ‘either-or’ deployment. They gave us a number of options to deploy technology as we need it without affecting the performance of our system. From an operational and budgetary standpoint, this is a benefit to know that our system has the ability to integrate emerging applications and solutions that can help our business maximize performance well into the future.”

To serve as the lynchpin in Laurel’s communications system, Inter-Tel installed its Inter-Tel Axxess converged communications system. The Axxess platform offers organizations a choice among transport options, including VoIP, digital, wireless and analog technologies, which can be implemented separately or in any combination to address their specific needs.

redundant systems

In addition, the Axxess system is designed to handle a robust array of applications that can be equally optimized in any infrastructure the customer chooses. As a result, Axxess enables customers to enjoy both the efficiencies of VoIP communications as well as the powerful applications they depend upon.

Initially, Laurel put in place three Axxess nodes that connect four locations, including the company’s executive offices and its major warehouses. According to Hendrickson, “The nodes behave as one, enabling any call to be seamlessly transferred to the appropriate extension or call group, regardless of location. Additionally, the systems are completely redundant, enabling our communications system to remain live in the event of weather-related outage, power failure or any other issue.”

Hendrickson relied on little more than guesswork to determine if he had enough staff to handle calls during both peak and off-peak hours.

While the Axxess system provides the backbone of the company’s communications system, the real power of the solution resides in several applications that the company uses, particularly Inter-Tel Remote Support and Inter-Tel Call Center Suite software. The former is an IP-powered customer-service and collaboration solution that is integrated into the communications platform, and allows customer service and others to collaborate with users in real time to correct technical and operational problems, direct customers to online resources, and enhance service. Agents and support personnel can remotely view and control a user’s desktop–with their permission–to conduct a number of tasks, such as installing and configuring software, transferring files, sharing documents and co-browsing the Web.

Remote Support plays a practical role for Laurel Grocery in its ongoing efforts to streamline communications with its customers. For example, to facilitate price changes among its customers, the company uses a proprietary software application that enables its retailers to download pricing information and install it on their respective premise-based databases. In years past, personnel at each customer site would have to manually install the software, a complicated, frustrating and time-consuming process that oftentimes resulted in Laurel personnel taking matters into their own hands by traveling to customer sites and correctly re-installing the software in person.

Using Remote Support, Laurel now works with customers on a one-to-one basis to remotely install the software and to train on the use of the application–all from company headquarters in Kentucky.

“In the past, installing the pricing application usually translated into a full day at the customer site to configure the software and train the staff. It was a very expensive and laborious process,” notes Hendrickson. “Now, we’re able to install the application, train the employees and answer any questions in a fraction of the time. From an efficiency and cost perspective, this application has paid for itself many times over.”

In addition, as a full-service resource, Laurel technicians are frequently asked to assist customers with addressing other computer-related problems, such as virus eradication and protection. Remote Support is the solution of choice to remotely resolve these and other technical issues.

software manages calls

Just like any other efficiently run business, Laurel Grocery tries hard to keep tabs on how well it processes calls from both customers and other suppliers. To ensure incoming calls are properly managed, the company relies on Inter-Tel’s Call Center Suite, a package of call-accounting, monitoring, routing and reporting tools.
Prior to the installation of the suite, Hendrickson relied on little more than guesswork to determine if he had enough staff to handle calls during both peak and off-peak hours. With the reporting tools available in Call Center Suite, however, the company now uses hard data to monitor call activity and more efficiently allocate resources to ensure that customer inquiries are answered quickly and completely. The product also provides real-time call recording for quality-assurance purposes, as well as for measuring agent productivity.

In addition, through Inter-Tel’s managed services program, Laurel receives a full communications solution–including hardware, software, business-specific applications, carrier services, data provisioning, and service and support–for a predetermined monthly fee.
According to Hendrickson, this relationship offers the best of both worlds. “As the IT manager, I am most concerned with the free software upgrades, continuous technical support and predictable, incremental system growth. What our executives like best is the predictable cost of the relationship. I can go to them at the beginning of each budget year with one set figure for our telecommunications needs, and they know I won’t be back asking for more. That makes all of us happy.”

As he looks to meet future needs, Hendrickson is already making plans to add more technology to the mix by integrating Inter-Tel Web Conferencing into Laurel’s communications solution. This IP-powered conferencing tool will permit the company to share documents, such as spreadsheets, fliers and other promotional materials, with its family of retailers. Coupled with Remote Support, Hendrickson anticipates that these tools will be invaluable in the company’s efforts to enhance customer service through IP communications.

Using VoIP technology and advanced collaboration applications, packaged through the managed services program, Laurel Grocery has been able to cut travel in half. In addition, the capability to accurately monitor and predict call volume has resulted in more adequate staffing to address customer inquiries, and Laurel’s ability to easily integrate new applications and seamlessly add locations allows the company to serve its customers more efficiently.

“This solution has made all of our jobs a lot easier,” concludes Hendrickson. “We are now able to leverage new technologies that have greatly improved the ways we can serve our customers, while, at the same time, reducing the time and money spent on travel to customer sites. And the program has allowed us to save a substantial amount of money.”

The Great Carrier MPLS Rip-Off

www.cmpnet.com
The Technology Network

The Great Carrier MPLS Rip-Off
By Jack Sadot 03/01/2006 12:00 AM ESTURL: http://www.itarchitect.com/shared/article/showArticle.jhtml?articleId=180201636

Back in the late 1990s, private networks made sense for connecting overseas offices. The Internet wasn't considered enterprise-class, and frame relay lines with a 25 percent Committed Information Rate (CIR) were sufficient for most offices. Times have changed. Today Multiprotocol Label Switching (MPLS) is "in" and frame relay "out." However, IT architects should still avoid private networking technologies and use Internet VPNs to interconnect offices--even remote offices running VoIP.

This fact hit home for me about a year ago when we began major offshore development in India. I wasn't ready to take risks at the time, so I fought to get the best possible deal on private lines for the development site, finally settling on a global provider with excellent references in India that offered us a private network with impressive SLAs for both availability and latency. My justification for ordering lines costing five times more than a local Internet connection was that we didn't know what we'd encounter, this being our first real attempt at decentralizing our development teams.

The vendor kept its word with all that was under its control. Performance met the SLA, but not availability. Unfortunately, the SLA didn't cover outages due to local loop problems, and in India there are plenty of those. India's substandard infrastructure is easily affected by construction, weather, and haphazard procedures.

Compared to our smaller Indian non-development office running an ADSL line, the only real differences were the attentive support and high price. Performance was amazingly similar between the two sites. The SLA called for 275ms door-to-door, and with the VPN overhead we measured 295ms. The ADSL-based VPN measured 305ms.

Even VoIP quality was fine over the ADSL link. As long as we give priority to a limited and specific set of services, such as VoIP and interactive data, and as long as we avoid complex rules that attempt to avoid prioritizing down to the specific application, we're able to accomplish what we need with an Internet connection. Our VoIP network, based on AudioCodes gateways attached to standard PBXs, requires just 18Kbps per session for voice, so we can plan for several of those even on an ADSL line with a 192Kbps upload speed.

While we do suffer performance problems throughout the Asia-Pacific region, particularly in difficult-to-connect countries such as India and Indonesia, these cases are usually due to limitations of the speed of light or poor local infrastructure, both of which also afflict frame relay and even MPLS networks. Our experience throughout the world is that Internet connections are stable and have surprisingly low jitter. VoIP connection works well, and where we decide to use a separate infrastructure for voice and data, we do so using additional ADSL lines.

Sticking with an ISP also means we control the vendor relationship. A month doesn't go by when we don't add or change a line somewhere. Where we see chronic problems not typical of the local infrastructure, we simply switch ISPs. Because we're not locked into any global agreements, we're consistently able to increase bandwidth while containing or cutting costs.

With the results of our initial VPN connections over the Internet so encouraging, we've expanded their use around the globe. As we work with local vendors to achieve the best terms in each location, we see all sorts of business models and levels of service. In the final analysis, however, we've found that Internet-based connections always win out over private networks. The connectivity that the Internet offers may not be perfect, but it's good enough, and for us architects on a tight budget that's exactly what we're after.

Jack Sadot is an IT architect at an S&P 500 company with 5,000 employees, several hundred subcontracts, and offices in over 50 locations worldwide.



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Copyright 2002 © CMP Media, LLC

SMBs more than small talk

SMBs more than small talk
by Craig M. Clausen
Mar 6, 2006 12:00 PM

SMBs represent some 5 million businesses with 40+ million employees and more than $100 billion in spending on communications services. Consider the demand dynamics of other segments: Consumers go with what's least expensive and still works. Large enterprise technological demands vary and are more sophisticated. Some 75% of this segment has IP deployed in their network, so they are comfortable with voice-over-IP (VoIP) services.
SMBs, which sit in between these segments, have the most to gain from a packet-based network. VoIP represents a way for SMBs to realize true cost efficiencies and take advantage of advanced services previously available only to enterprise users.

The most obvious benefit is a reduction in telecom costs. Initially, VoIP carriers overpriced their offerings. Since then, carriers have significantly reduced prices, and SMBs can now obtain VoIP service (flat-rate service with advanced features included) for $10 to $40 per station. Now, SMBs have begun to embrace VoIP offerings with roughly 3% to 5% of SMBs signing up for service by 2006.

On top of the essential out-of-pocket cost reductions are true operational efficiencies. Adding and dropping users (there are no more “moves”), deploying new features and monitoring the network become almost costless tasks for SMB managers. Also, through VoIP, one less hurdle exists for embracing remote working arrangements, as remote employees fitted with a VoIP phone are seamlessly integrated with the mother ship. No more 10-digit dialing, or worse, more costly Centrex services. Intercom and four-digit dialing render these obsolete.

Although tremendous progress has been made over the past year, service providers and equipment vendors can't rest on their laurels, hoping that fancy VoIP services are enough to snag new business. Providers must frame VoIP as a slice of a bigger set of services in the packetized, broadband world.

It's clear that there are other offerings that emerging providers can add to enhance their attractiveness to prospective SMB customers. Some providers, such as Geckotech and XO Communications, are offering VoIP bundled with other products in attractive packages that include dedicated Internet access, dynamic bandwidth allocation, unlimited local calling, unlimited inbound and outbound domestic long-distance calling, Web hosting and an administrative Web portal for making real-time changes to service. To some extent, creative services will dictate which service providers survive in the SMB market.

What should service providers be preparing to provide the SMBs? They need to start with the assumption that SMBs are always cost-conscious. Combining voice and data traffic on one pipe and reducing monthly recurring costs from previously separate public network and data connections is a boon.

The future lies in pushing other services over this pipe. In addition to VoIP and dedicated Internet access services, the new basket of services must include managed services (including hosting application servers), desktop maintenance (via online maintenance tools), Web hosting, Web design and mobile VoIP service. This last service promises to be a catalyst in realizing true integration. SMBs eventually will expect mobile phones to be integrated as another extension of the customer's VoIP system. All the features and benefits of an IP wired phone will have to be available on mobile phones. The key for service providers, of course, is to look at the bigger picture — communications service.

It will take a different mindset that truly embraces the integrated service provider concept. In the end, telecom carriers must become service providers to survive.

Craig M. Clausen is chief operating officer and senior vice president of New Paradigm Resources Group, Inc., a Chicago-based research and consulting firm. Clausen can be reached at cclausen@nprg.com or by phone at (312) 980-7848.

To VoIP or not to VoIP
By Falk Bleyl of THUS
23 February 2006

That's the question, comments THUS' senior product manager for VoIP.

The emergence of Voice over Internet Protocol (VoIP) in 2005 has seen more than 50 million people register for a service across the globe. With vendors like Skype gaining market momentum and mainstream consumer awareness, U.K. companies are starting to look at the benefits VoIP can have on their business.

For businesses VoIP offers a cheap and easy way to make calls and as a result its usage is on the rise in professional environments. Furthermore, businesses are starting to realise the potential VoIP can have on day-to-day communication and are putting measures in place to ensure it is used correctly within the business.

The business benefits of VoIP

It is well acknowledged that the use of VoIP in the workplace can prove beneficial to a company's productivity. From a business standpoint, VoIP can allow far better collaboration and communication amongst staff, particularly with those working remotely. VoIP provides the ability to route calls to a direct dial number, regardless of location; whether working off site, abroad or at home. This means employees can be contacted on the same number wherever they are. Instead of diverting calls to a mobile phone when working away from the office, VoIP lets employees log in via a broadband/wireless network. This results in fewer calls being made via mobiles, reducing the mobile call costs that can be a significant outlay for most businesses.

As VoIP combines voice and data traffic over one network, it makes unified communications easier, allowing for the integration of phone, email and instant messaging (IM) applications. This means users can look up a colleague in a PC contacts list, see whether that individual is at their desk or on a phone call, and then decide how best to reach them - via phone, email or IM. For businesses with more than one site, this is a particularly important application for improving communication.

Some VoIP services can also provide users with a rich array of features such as conference calling, video conferencing, call routing (to off-site workers and between offices), and unified communications. Together these can lead to a more mobile, collaborative and efficient workforce.

Acceptable usage policies

For any business intending to allow its employees to download and use a VoIP service, there are a few procedures that should be put in place to ensure it runs smoothly with office networking environment.

One of the first steps is to ensure that employees are aware of the issues and understand how to avoid the possible risks. It is advisable for a VoIP "acceptable usage policy" to be drawn up clearly stating those VoIP applications that are appropriate for employee use.

From a technical perspective, IT departments should take the following steps to ensure their network remains safe. These include:

• Installing up-to-date virus scanners on all desktops;
  
• Ensuring that all approved VoIP clients are managed properly and that patches are applied as and when they are released by vendors;
  
• Treating the VoIP service as a supported business application and, as with any other application, thoroughly testing it before including it on the list of products that are recognised by the employer;
  
• Making potential users aware of the limitations of such a service and what the company considers acceptable and appropriate usage;
  
• Running regular device and traffic flow audits to monitor usage and identify unknown or unexpected activity on the network. Where VoIP usage is excessive or inappropriate an organisation can restrict a user's ability to install applications by locking down desktops.

IT departments should also fully familiarise themselves with the few potential risks associated with using a VoIP service:

• Some VoIP products use a peer-to-peer model, resulting in bandwidth being used to carry other individual's voice and data traffic without the user's consent or knowledge;
  
• VoIP services are designed to circumvent firewall restrictions by emulating a Web browser. This can be troublesome on a corporate network as it makes the VoIP packets difficult to identify, audit and control;
  
• IT departments will find tracking and storing user communication difficult;
  
• VoIP applications may also include further services such as video conferencing; IM and peer-to-peer file transfer. While VoIP and IM may not use much bandwidth per user, video conferencing and file transfer applications can take up significant bandwidth on the corporate network and slow other network traffic, having a serious impact on work productivity;
• VoIP may limit the performance of applications on a user's desktop because it uses desktop resources. Having unauthorised and unknown/untested applications on a company desktop may decrease the stability of a device;
  
• There may be licensing restrictions for business use.

VoIP can deliver tangible benefits to companies of all sizes. However, to protect networks against any potential vulnerabilities associated with VoIP services, businesses need to put safeguards in place and ensure employees stick to these while exploiting the advantages of this new technology.

Falk Bleyl is THUS' senior product manager VoIP.

NOTE: Total Telecom would like to make clear that the views expressed and conclusions drawn within these viewpoint articles are not necessarily those of Total Telecom or any of its associated partners.

Once more into the breach By Carol Wilson Jan 23, 2006 12:00 AM

Industry veteran Royce Holland takes up his sword to save McLeod

In 2000, just before the telecom market plummeted from the dizzying heights of hyperbole, two pioneers in the competitive communications arena seriously discussed merging their efforts to create a single, nationwide competitive telephone company.

Clark McLeod and Royce Holland might well have succeeded in combining their two companies — McLeodUSA and Allegiance Telecom — into a single force and changing CLEC history in the process, but Holland's biggest investor — Morgan Stanley — vetoed the idea.

Six years later, Holland joins McLeodUSA as CEO under drastically different circumstances, but with the same respect he had earlier for the company founded by Clark McLeod and the network built by Roy Wilkens, original CEO of WilTel and later CEO of networks at McLeod.
“I've known Clark McLeod since 1990 and Roy Wilkens as well, and I always had the highest degree of respect for them,” Holland said in an interview at McLeodUSA's Cedar Rapids, Iowa, headquarters, four days after his appointment as CEO was announced. “The quality of their network operations and customer care has always been exceptional. Any network built by Roy Wilkens is going to be good.”

Respect for old friends and fellow competitive pioneers is not blinding the Texas native to the reality of McLeod's current situation, however. As it emerges from bankruptcy for the second time in four years, McLeod must undergo a significant shift in strategy to succeed in an increasingly treacherous competitive market.

Holland is convinced that all the pieces are in place for that shift to succeed, and it's the possibility of success that has brought him out of a comfortable retirement and placed him firmly back on the hot seat.

“McLeod has a shot at surviving, but it's not 50/50,” said Craig Claussen, industry analyst with New Paradigm Resources Group. “If anyone can rally the troops, it's Royce. He's a person who brings a depth of knowledge and leadership that is unique to this industry.”

Holland's history in the competitive telco industry dates back to 1988 and the founding of Metropolitan Fiber Systems, which, with Teleport Communications Group, was the earliest competitive player.

“We were known as bypassers,” he said with a laugh.
Holland is now best known for founding Allegiance, which built a national competitive network to serve small- and medium-sized businesses during the heyday of CLECs in the post-1996 Telecommunications Act period.

“It's hard to believe we are coming up on the 10th anniversary of the act,” he said.
Eighteen months ago, following Allegiance's own bout with bankruptcy, Holland sold the company to XO Communications and its major investor, Carl Icahn, after a brief bidding war between XO and Qwest Communications.

“The Allegiance situation was very different from the one here at McLeod,” he said. “We had $260 million in cash, but it was the covenants with our banks that killed us. The banks weren't cutting any slack at that time. Of course, when Qwest and Carl Icahn came along, we did our duties for our creditors and our senior lenders wound up getting 100% of their investment back with accrued interest. So maybe the banks were smart after all.”

Since the sale, Holland has been much more active hiking with his wife — including a stint in the Alps last summer — and tending to his personal investments than following telecom. When he got the call from executive search firm Heidrick & Struggles, which had been engaged by the bankruptcy court handling McLeod's case, Holland had to do his own due diligence on what had happened to the company with which he once wanted to merge.

“I remember coming here [to the McLeod corporate headquarters] with Dan Yost [then executive vice president of product and marketing for Allegiance] who was absolutely drooling over this facility,” he said. “We came very close to merging in the summer of 2000. Clark was interested in going national, and Allegiance had built a national footprint — it would have reoriented the company at that time, to be top end nationally and all things to all people.”
Ironically, as Holland joins McLeod now, the company has just sold that impressive facility, a 300,000-plus square foot building that is part of what is still called McLeod Technology Park, a commercial development that sits at the south edge of Cedar Rapids, just north of Iowa farmland. The service provider is in the process of moving into a smaller building that it already owns as part of the major cost-cutting that accompanied its prepackaged Chapter 11 filing.
What attracted the native Texan to the Midwestern heartland, however, was what McLeod retains — its network footprint.

Scattered across 24 states from the Canada to the Mexico border and from Washington state east to Ohio — leaving out California and Nevada — McLeod has 700 central office (CO) co-locations, 300 additional COs connected by remote switches, 2873 route-miles of metropolitan fiber and 12,304 route-miles of intercity fiber. It goes head-to-head against two of the four former Bell companies — SBC Communications, now AT&T, and Qwest.

In addition, with its re-emergence from bankruptcy the second time, McLeod shed $670 million in debt. “It's like reducing your mortgage by 90%,” Holland said. The company is now private, owned by the investment firms that originally held the debt.

What McLeod hasn't had enough of in the past is products aimed at businesses, and salespeople, and those two things lie at the heart of Holland's strategy for the company that will probably be his last turn as CEO.

“McLeod's network integrity is world class, and its customer care is also,” he said. “But its product set hasn't been that strong in the past. And they didn't have a lot of direct salespeople — in fact, they had less than 100. At Allegiance, we had 1000. I was surprised that, with the size of the McLeod network and the amount of capital they have out there, in routers, switches and DSLAMs, that they didn't have more people selling. We are definitely going to get more feet on the street, and we are going to have a more robust set of products.”

“We will also increase our agent programs — McLeod has never done much with agents, but we always did at Allegiance,” Holland said. That will include working with value-added resellers to reach smaller companies and larger partners at the upscale end of the market.

In building up the sales force, McLeod will target its hiring on sales experts that focus on the business customer. The company is no longer soliciting residential customers or low-end businesses, although it will sell service to those that ask for it. The closest Holland comes to criticizing past McLeod management is to say that the company only tweaked its strategy following the first bankruptcy, when maybe a greater overhaul was needed.

“Since the first restructuring, the focus of the company hasn't changed a lot,” he said. “Then the balance sheet became the albatross they couldn't slay without restructuring again — and that takes up a lot of management time, as I know well.”

So after first trying to be a national phone company and then a regional voice and data provider to the full range of customers, McLeod is now focused on business customers, particularly those with multiple locations and even more particularly on those that have a footprint matching McLeod's network.

“We have to be laser-focused on small- to medium-sized businesses, T-1 and up,” he said. “We're not talking about beauty shops or stores with a single line and a voice service. It's no longer, ‘Show me your phone bill, and I can save you some percentage of that.’ It's more, ‘Let me show you how to build a network that can enable your business to grow and compete.’ That's a different way to sell and a different mental framework.”

With that customer base, Holland said, the service provider can bring the strength of its network to bear on the competitive market and compete with AT&T, Qwest, XO Communications and just about anyone else.

“We can do it better at a little better cost than the ILEC,” he said. “And we can provide better customer care. Before, we were trying to save you money. Now we're going to offer you something that you'll have trouble getting from the competition.”

On the product side, McLeod will leverage its converged access platform, launched last March as the Preferred Advantage Dynamic Integrated Access product, to enable businesses to cost-effectively converge their voice and data services onto an IP platform. Dynamic Integrated Access packages local service up to T-1 or primary rate ISDN with high-speed Internet access of up to 6 Mb/s, long-distance service including free calling among internal sites and branded e-mail accounts. It also offers a wide range of business service options, including voice mail, calling cards, toll-free service and conference calling.

This winter, the company will roll out IP virtual private network service, hosted PBX service and security offerings that build on its IP integrated access. Many of those product offerings are being developed in the company's network planning center in Houston, which is run by Todd Wilkens, Roy's son, who joined McLeod when it acquired Split Rock Services.

While admitting that McLeod is hardly first-to-market with converged voice and data services, Holland believes the company still has time to make inroads, particularly with business customers who may be reluctant to jump into the new technology pool.

“This isn't revolutionary — but as I've always said, it comes down to a matter of execution,” he said. “We do have advantages. The broad footprint gives us an advantage over someone like Global Crossing, which doesn't have connections to the customer. Having the network there is important to us.”

The move to IP is critical to McLeod's success, said analyst Claussen.
“Fortunately for these guys, technology has marched forward, hosting IP services is a cost-effective route for them,” he said. “It's not painless, but compared to the old TDM, Class 5 world, where it was pretty near impossible to get resale customers onto your platform, the softswitch environment does permit them to get these guys onto their network and realize higher margins. They are going to have to buy access transport facilities from the incumbents — how much does that eat into their margin? I don't know, but it's not as much as buying everything, like they did in the UNE-P world.”

McLeod will continue to buy some last-mile facilities from the incumbents — it has a commercial agreement with Qwest and would like to have one with SBC, but hasn't to date. Holland expects to go head-to-head mostly with those two companies and also with XO, now home to his former Allegiance assets and customers. “XO arguably has the best reach — they've got a little better reach than we do,” he said. “It will be interesting to see if we see Verizon in places like Chicago. I don't know if AT&T and Verizon are going to compete against each other on a broad scale out of region right away.”

Holland doesn't think customers are overly concerned with the company's financial problems. “As long as it doesn't affect the network integrity or the quality of service, I don't think the customer relationships are affected,” he said. “I don't think the perception of McLeod is any worse for this. Consolidation has diminished the amount of competition, he pointed out. “We like not having to compete against both AT&T and SBC,” Holland said. “I really think we need to focus on our business and not on our competitors. I've always believed this is more like playing golf than playing tennis — it's you against the landscape. If AT&T or Qwest was our only opponent, it would be more like us against them. So I think we are better served focusing on our own game plan.”

Holland is likely to commute between Texas and Iowa, as he once commuted between Omaha, Neb., and Oakbrook Terrace, Ill., for MFS.

“We are spread out from Texas to Iowa now — we have our network planning in Houston, our network operations in Tulsa, where Roy built it, and our customer call center, back-office and production functions here in Cedar Rapids,” he said.

Having missed one opportunity to work with McLeod, Holland definitely seems to be relishing this chance. And it gave his old friend, Clark McLeod, a chance for a bit of humor.

“He e-mailed me to ask if I was going to change the company's name to HollandUSA,” Holland said.

While many within the industry expressed surprise that Holland would tackle this challenge now, Claussen thinks it makes sense.

“Royce can only be out of the game for so long,” he said. “He's a leadership guy — he's not a support player. This is a leadership challenge for him. If anyone can do it, I would suspect that Royce would be able to do it with leadership skills and his knowledge.”



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Forecast 2006: VoIP

Forecast 2006: VoIP
Quality is conquered, yet savings are still elusive.

News Story by Steve Alexander

JANUARY 02, 2006 (COMPUTERWORLD) - Although not as popular a technology as many predicted it would be, voice over IP isn't so much hyped as it is misunderstood.
So says Curtis Wolfe, CIO for the state of North Dakota. He says many IT managers expected that VoIP would save them money across the board. But it doesn't work that way, says Wolfe, whose IT department is running a VoIP pilot project for the North Dakota Department of Transportation in preparation for a much larger state-government rollout over the next four to five years.

"Our assessment is that VoIP benefits are driven by applications, not economics," Wolfe says. "If you can take an application where the integration of data and voice makes sense, such as a call center where an employee can get a screen pop of previous purchases by a customer who's calling, there's value in that. But it's being done for the benefit of sales or customer service, not because you're saving money with VoIP."

In fact, in a recent Computerworld survey, respondents ranked voice over IP third among technologies that didn't live up to their promise in 2005.

"Companies are not saving as much as they anticipated," says Keith Nissen, an analyst at research firm In-Stat in Scottsdale, Ariz. One reason is that the volume of phone traffic varies from one company to another. A company that makes a lot of long-distance phone calls among corporate locations can save money with VoIP because those calls can be rerouted over the company's lower-cost IP network, Nissen says. But if facilities make most of their long-distance calls outside the company instead of within it, there's little savings from an internal VoIP network, he says.

To make matters more complicated, it seems likely that the long-distance rationale for buying VoIP -- replacing expensive phone calls with cheap ones -- won't last long, Nissen says.

"In the future, long-distance charges will come down so much that you will be paying a flat rate for long distance, not a per-minute rate," Nissen says. "So, as a cost justification for VoIP, long distance will go away."

Long-distance rates are expected to decline because of competition from cell phones (which include long-distance in flat-rate monthly prices), low-cost prepaid phone cards and the growing number of VoIP providers that serve both consumers and businesspeople, Nissen says.


Equipment Backlog

But there's another barrier to VoIP adoption: Current phone equipment is too new to justify replacing it.

"We are going to switch to Gigabit Ethernet on our state network, and as a result, we'll have the equipment and routers we need for voice, video and data over the same network," Wolfe says. "But we won't switch the whole state network to VoIP now because we've got traditional phones and telephone equipment that we're still trying to amortize off the books. That's why it will take us four to five years to move to VoIP."

Some IT managers say the problem of poor service quality -- previously cited as a reason for slow VoIP adoption -- has disappeared.

"Quality of service is one of the myths of VoIP at this point," says Gregg White, network communications manager for Minnesota's Hennepin County. "It was an issue two years ago, when there were dropped data packets that would cause a gap or echo in the conversation. But we have no quality-of-service issues now, even when we're communicating to 13 remote sites from our downtown Minneapolis cluster of six buildings that are linked by fiber."

By the end of 2005, Hennepin County had converted 5,000 of its 8,100 users to VoIP over a period of two years; the other users will be shifted to VoIP in 2006.


Nagging Concern

But quality of service is still on the minds of some would-be VoIP buyers, Nissen says.

"To ensure quality of service, some enterprises have to re-engineer their data networks to accommodate voice traffic. That is fairly complex and costly," he explains.

Another barrier to VoIP adoption is political wrangling between the voice and data network staffs, White says.

"If the voice and data groups combine their traffic, they can get economies of scale," White says. "But sometimes members of both groups don't want to change the way they do business. That's the reason a lot of companies have not made the jump to VoIP."

Despite these problems, some say 2006 will be the year VoIP becomes widely adopted. "The big advance will come in corporations rather than the government sector," Wolfe predicts.

Others expect that many companies will go slowly with VoIP adoption in 2006. "A lot of large enterprises are not going to pure VoIP networks," Nissen says. "They are still using traditional phones with their IP networks because it costs a tremendous amount of money to replace all the phones at once."

But eventually most companies will opt for pure VoIP networks, because they have either outgrown or fully depreciated their non-VoIP equipment, Nissen says. As a result, VoIP's promise for the enterprise may simply have been delayed, not derailed.

Alexander is a freelance writer in Edina, Minn. Contact him at sjalexander00@aol.com.