Connection Telecom, the pioneering leader of enterprise voice over IP (VOIP) communications, celebrates a decade in business this month.
Growth with the market
From a standing start in 2004, the company took the lead in the key hosted segment of the South African enterprise telephony market in 2013, according to BMI-T's PBX and Emerging Voice Systems Market Study. Four short years before, it had launched its hosted IP PBX service, Telviva.
Over the entire 10 years of its existence, growth has been steady, with a period of very strong growth following the Telviva launch - from a zero base to approximately 35 000 extensions.
Founding director Rob Lith says the company's performance closely mirrors the evolution and growth of the local market itself. BMI-T's report indicates that, even as the overall PBX market began to decline in that year, the hosted segment was one of only two to show significant growth, validating the company's vision.
"We had bet on the technology of the future and got in on the ground floor, and we could tell it was paying off," says Lith.
The same can be said for the leap of faith its clients had made. Starting out as a niche favourite with tech-savvy IT companies, Connection Telecom's offering came to be embraced by a full spectrum of industries as an affordable, full-featured solution that matched traditional PBX brands like Avaya, Cisco, Mitel, Nortel and Siemens for quality and functionality, while beating them on price and extensibility.
Today, Connection Telecom serves a wide spread of household brands, including Intercape, BSG, Earth Child, FNB, Living Your Brand, Hire Resolve, Momentum Investment Managers, Old Mutual Finance, Takealot and Mr Delivery, Yuppiechef, Engen, Prudential and Servest.
Many of these organisations have been with the company for more than five years - quite an endorsement considering the one-month notice period hanging over the heads of most hosted PBX providers and the relative ease of disentangling from a cloud platform.
Customers big and small
While most companies start out small in a customer segmentation sense too, Connection Telecom did it the other way around, signing big PBX hosting contracts from the outset, notably Rand Merchant Bank Asset Managers (now Momentum Investment Managers) and FNB Connect, in November 2009 and April 2010 respectively.
Says CEO Dave Meintjes: "We've always been fixated on quality of access, and that puts an economic threshold on the offering, below which you cannot take on customers."
But with the evolution of quality of service (QOS) tools and techniques, combined with managed access, VOIP also became a viable option for ADSL-connected small, micro and medium-sized enterprises. (Recent fibre price wars will further revolutionise the VOIP proposition for SMEs.)
With the contended access market becoming increasingly attractive, Connection Telecom recently made the decision to acquire its SME-focused hosted PBX reseller partner, Fat Budgie. "They have the footprint and capacity to service this market effectively," Meintjes says.
Go-to-market
This relationship, which started out with Fat Budgie supporting the Connection Telecom offering as a white label service, gives an indication of Connection Telecom's favoured go-to-market strategy.
"We have always used network operators as carrier partners, notably the big-name ISPs and electronic communications network services (ECNS) licence holders," says Meintjes. "Often they re-sell our service into their enterprise customer base."
Naturally, this leveraged roll-out strategy has contributed to the company's good growth. Meintjes says partner roll-outs account for 20% of the company's extensions in the market.
Network redundancy
To offer greater network redundancy and strengthen its network-agnostic independence, Connection Telecom recently registered its own autonomous system number (ASN) from Afrinic, allowing it to peer with many local and international networks.
From techies to trusted partners
From the start, when VOIP was a technical sell, Connection Telecom was first and foremost a technical company with strong IP PBX application development skills.
Against this backdrop, technical wizards like co-founder Steve Davies - a global top-25 Asterisk developer, according to Asterisk-based communications solutions company Digium - became rock stars of the industry. "Everyone was talking about Asterisk [the software stack forming the basis of the Telviva software switch] and open source software," says Lith. "So naturally, we focused our marketing on the technical superiority of the service.
"Over time, features, quality, reliability and security came to dominate the discussion. These were not so much concerns as fear, uncertainty and doubt created by the incumbent proprietary vendors, and our narrative remained technical because it had to be. We had to get the message across that VOIP was entirely suitable for enterprise communications, hence the talk about OSS, soft switches, QOS tools and managed access."
Today, he says, offering a robust platform, service innovation and skilled personnel are a given as the backroom components of a trusted brand. In fact, the majority of incumbent telecommunication companies carry most of their voice on IP, says Meintjes.
All the same, it is reassuring to look under the hood and note that the poster child of South African VOIP still has the best propeller heads in the business. Connection Telecom boasts the following certifications:
* Enswitch (Telviva) platinum partner
* Digium-certified training partner
* Far South Runway installation partner
* Voipex ViBE software partner
* Counterpath Bria certified ITSP
* Phone-agnostic partnerships with Polycom, Snom, Mitel and Yealink
Delivery platform
Both the company's product offering and delivery platform evolved over time, Lith continues. Until 2009, it sold its IP PBX service as an on-site offering, as cloud virtualisation techniques were still immature and a range of new telecommunication operators had only recently been licensed (from February 2005).
"As the market opened up, we began to provide SIP [session initiation protocol] trunks to our customers, allowing them to connect their networks to external public IP networks. This led to hybrid enterprise communications environments, with VOIP offering a least-cost routing [LCR] alternative to the PSTN [public switched telephone network] from customers' PBXes," he says.
"As customers moved their PBX to the cloud, we evolved the locally manufactured Runway gateway to be a site failover device, giving the customer comfort that their PBX will work even if IP connectivity fails." Lith says Runway remains an integral component of the Connection Telecom offering, and the level of assured critical PBX functionality in the face of host unavailability is unmatched.
As the cloud platform became more common and accepted, the company's product roadmap gathered speed - in 2012 it launched its hosted contact centre, following on with a powerful cross-platform video conferencing service in 2013, along with virtual faxing.
In addition, the core solution became integrated with telephone management, business intelligence and CRM systems, giving customers the ability to extend their phone service to a business application and a discovery tool, to better understand system use, usage trends, relationships and costs.
Infrastructure
With cloud delivery, Connection Telecom knew it had to offer full service assurance. At the start, the company took up residence with a single redundant Telviva server cluster implementation in a data centre in Samrand, in 2010, with ISP XDSL as its first ISP reseller.
In 2011, it moved into the world-class Teraco data centre environment in Isando, Johannesburg, with Samrand providing disaster recovery redundancy for its primary site. And in October 2014, it took occupation of space in Teraco's Cape Town data centre, offering a live dual-redundant cluster.
In a sign of mutual trust, Teraco itself has outsourced its PBX to a hosted PBX solution with Connection Telecom.
First, proving a point
The company proudly lists a number of firsts and early-mover achievements:
* First to distribute Asterisk and Digium hardware into the South African market - 2004.
* Among the first open source on-premises commercial IP PBXes with an IAX2 VOIP trunk voice service.
* First enterprise cloud-based PBX deployment (Rand Merchant Bank, 450 extensions).
* First large open source managed IP PBX call centre roll-out (Government Medical Aid Scheme.
* Biggest private cloud deployment (FNB, more than 9 000 extensions).
* First private hosted contact centre - Old Mutual Finance Services with more than 400 agent seats.
* First large mission-critical hosted contact centre (Takealot.com), proving that Connection Telecom can scale with and enable rapid growth strategies.
The Connection community
From the outset, the selling point of VOIP was low or zero call costs, as an LCR offering, with the option of zero-rated calls between customers - notwithstanding the considerable infrastructural and technical investment for quality assurance.
"The percentage of zero-rated calls on our platform increases every year, as the Connection Telecom community gets bigger," says Meintjes. "Last year, it was 14% of all calls - that is a 14% saving on your bill right off the bat, on top of the normal price advantage."
Tale of parallels
In recounting the milestones, Meintjes and Lith tell a story that is as much about the company's evolution and growth as it is about the maturation and rise of VOIP in the enterprise and the VOIP market itself. There is every likelihood that the parallels may continue for years to come.
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