WHITEPAPER

Flexible, cost-effective and always up to date

CLOUD TELEPHONE
SYSTEMS
 EXECUTIVE SUMMARY
The classic telephone system that businesses
operate themselves is becoming outdated.
The high installation and operation costs as
well as the limited scalability are now
outmoded. As these telephone systems have
been in operation for five to ten years, or
even longer, they are failing to keep pace
with the speed of technical innovations and
the changing demands of business. Modern
telecoms systems need to provide options for
the integration of telephony functionalities in IT
(E- mail, CRM, ERP) and take account of the
increasing mobility in business.
A public cloud telephone system fulfils these
requirements. In contrast to classic telephone
systems, no initial expenditure is required for
communication hardware for example, as a
service provider supplies the telecoms solution
via the internet, and bears full responsibility
for its operation and maintenance as well for
ongoing updates. With the cloud solution,
there are no long-term maintenance contracts,
instead fees are simply charged monthly per
user on a pay-as-you-go system. Customers
also only pay for the number of extensions
actually used. Cloud telecoms systems are
freely scalable and can be flexibly extended
for other uses thanks to open interfaces.
Furthermore, the operator can configure and
manage the telephone system conveniently
via a web-browser.
IT-INTEGRATION,
FLEXIBILITY, MOBILITY: THE
DEMANDS ON TELEPHONE
SYSTEMS ARE INCREASING
The role of telephony in business is changing.
Whilst the classic telephone system previously
operated mostly in isolation, it is becoming
more and more enmeshed with IT and
becoming an integrated part of business
processes and applications. , alongside this,
new technical demands are also arising:
therefore telecoms solutions must provide
options for telephony functionalities in IT (E-
Mail, CRM, ERP) and support mobile devices.
2
In addition to this, they must adapt quickly to
the specialist needs of the field as well as
being simple and straightforward to use. An
example of the combination of IT and
telephony is CTI (Computer Telephony
Integration). Here, the user makes the call via
the computer with a soft phone and has, at
the same time, access to the complete
customer history (contact details, contracts,
purchases etc.) on the data bank or the CRM
System on the monitor. He is able to do this
whether he is in the office, working from
home or en route with his Notebook.
STATUS QUO: TELECOMS
SYSTEMS ARE NOT
SUITABLE FOR IT
REQUIREMENTS
However, current telephone solutions in
German business are less and less able to
keep up with the pace of technical innovation
and the requirements of businesses. A classic
telephone system is, in principle, already out
of date almost from the outset. It is true that
many functions can be added later through
Firmware-Update, but the technical
possibilities have been more or less
exhausted. Furthermore, the telecoms systems
in the majority of businesses have already
been in operation for five or ten years, or
even longer. Therefore investment cycles in
the field of telecommunications are
considerably longer than in IT. In this
respect, the study 'Are we seeing a Radical
Change in Business Telephony?' in which
Pierre Audoin Consultants, on behalf of
NFON, interviewed the IT administrators of
153 small, medium-sized and large
businesses, is very revealing
According to this study, 60 to 70 percent of
German businesses are somewhat dissatisfied
with their current telephone solution and
acknowledge that it has not kept sufficient
pace with IT requirements in the following
respects:
CRM-System
3  Flexibility of administration
 IT INTEGRATION, MOBILITY AND FLEXIBILITY ARE OFTEN NOT SUFFICIENTLY
SUPPORTED BY TELECOMS SYSTEMS
Seruvey Results

Reliability and Availability 3 8 15 39 33

Payment only for Lines Actually Used 1 9 24 39 20

Self-Service in der Administration 2 9 7 23 34 19

Reasonable and Flexible Contract Periods 4 8 15 33 13

Integration With IT Applications e.g. CRM Systems 6 3 16 23 33 8

Flexibility and Simplicity of Administration (MAC) 2 6 12 34 31 9

Integration of Various Mobile Devices 8 7 9 22 30 9

Supporting Flexible Ways of Working 4 6 16 25 27 8

Unsatisfactory
Poor
Ability to Keep Pace with Technical Innovation 4 7 10 34 24 9 Sufficient
Satisfactory
Good
Straightforward Connection to New Locations 2 9 7 14 18 6
Very Good

In seven out of ten criteria, the majority of people responsible for IT rate their existing telephone systems at ­
most as satisfactory. Figures (weighted)
as a percentage
60-70% of German businesses are somewhat dissatisfied with their current telephone system with regard to: of all businesses,
➢Integration with IT applications e.g. CRM systems n = 153;
➢Flexibility of administration Figures
➢Integration of mobile devices have been
➢Supporting flexible ways of working rounded up
➢Ability to keep pace with technical innovation
This shows that current telecoms systems do not measure up adequately to current IT Demands.
Source:
PAC 2013 for NFON AG

systems - amongst these the larger firms in

particular. However, half of the German
businesses surveyed plan to invest in their
telecoms system in the next three years. Forty
INVESTMENT IN
percent of businesses, amongst these the
TELECOM SYSTEMS
smaller firms in particular, do not want to
IS IN UPSURGE
invest money in renewing their telephone
Those with responsibility for IT therefore have systems for another three years or more.
need of systems which can be adapted to Therefore a greater upsurge in investment is in
changing requirements and technical the offing over the next few years. .
innovations without high investment costs.
And yet recently, according to the PAC study, The most important reasons for new
only 14 percent of businesses surveyed are investment are technically outdated systems,
investing in modernising their telephone changing requirements from telephone
3
 ONLY FEW BUSINESSES HAVE DEDICATED RESOURCES FOR THE
MANAGEMENT OF THEIR TLELPHONE SYSTEMS
Skills and resources: telephone solution is managed by...

Total 2 74 8 17

20-99 EMPLOYEES 0 74 9 17

100-499 EMPLOYEES 5 73 6 16

500 or more EMPLOYEES 17 72 4 8

0 % 100 %

In spite of increasing strategic significance, dedicated resources are only seldom Dedicated full-time workers
provided for the management of telephone solutions: in three quarters of IT workers incidentally
businesses, the telephone system is managed incidentally by the IT department. In Other workers Incidentally
only one in six large businesses is there someone looking after the telephone External service providers
system full time. In 17% of all businesses, the telecoms systems are operated by NB: figures (weighted) as a
external service providers, especially in the case of small and medium-sized percentage of all businesses
businesses. n = 153 (53, 60, 40)

Source:
PAC 2013 for NFON AG

systems and high costs. IP migration (VoIP) SOLUTION: A PUBLIC

and new, cutting-edge functionalities such as
CTI or Unified Communications are central
themes that lead to investment in new
telecoms systems. Further background: almost
60 percent of those responsible for IT in large
companies reckon that the strategic
significance of telephony in their businesses
will increase in the future.
Only a few businesses have dedicated
resources for the maintenance of their
telephone systems. For this reason it is certain
that companies the one hand need
technically up-to-date telephone solutions in
order to support their business, but on the
other hand are subject to their limited
personnel and financial resources. Although
according to the NFON commissioned study,
the majority of businesses (91 percent)
operate their telecoms systems themselves,
they only rarely allocate dedicated funds for
their operation and maintenance. In three
quarters of businesses, the IT department
looks after the telephone systems as well.
Only one in six large companies has full time
CLOUD-BASED
TELEPHONE SYSTEM
Yet even with full time employees looking
after the telephone systems, administration is
more expensive, and costs increase in order
to keep the telecoms system up-to-date
technically and adapt to the ever-changing
needs of the business. Furthermore,
personnel have to constantly undergo
training. What happens when the IT expert is
on holiday? What is his availability? Also,
questions of back-up and insurance need to
be clarified. These demands increase with
the size of the business. Also, scalability is
limited by the growth of the business.
In these circumstances, public cloud-based
telephone systems offer an attractive
alternative to conventional company-run
telecoms systems. A cloud-based telephone
system is not installed and operated internally
within the business – instead, an external
service provider supplies all its functions over

4 staff looking after the telephone systems. the internet.

The telephone system is outsourced to a high-
performance data processing centre and is
accessible from anywhere via the World
Wide Web. In this way, more customers
can share a virtual telecoms infrastructure with
the so-called Multi-Tenant-Model.
ADVANTAGES OF A PUBLIC CLOUD TELECOMS SYSTEM
Connection to a public cloud telecoms system has many advantages for businesses:
In contrast to classic telephone systems,
with a cloud-based system, no initial outlay
is necessary for communications hardware,
as the service provider supplies the
telecoms solution over the internet and
bears full responsibility for operation and
maintenance as well as for ongoing
updates. Furthermore, the cloud telephone
system can be used with practically any
device that has internet connection,
whether it be a VoIP phone, a computer/
Notebook with Softclient or a Smartphone
with a mobile app.
The service provider regularly upgrades the
telecoms system's performance features
through free Software-Updates in order to
be able to react to new demands and the
latest trends in technology.
With the cloud solution, there are no long
term service contracts, instead monthly
costs are simply incurred on a pay-as-you-
go basis per user. So customers only pay
for the extensions that they actually use.
The length of contracts is usually short and
flexible. Cloud-based telephone systems
grow with the number of employees and
can be adapted to special requirements.
In this way, it is relatively inexpensive to
include (international) branch offices, or
colleagues working from home in
company communications. Calls can then
be more easily be taken or transferred. In
this way, costs can be split between
branches.
The service provider normally takes full
responsibility for operation, maintenance and
updates. Essential quality and performance
features are adhered to via Service Level
Agreements (SLA).
For the most part, cloud-based telecoms
systems provide open interfaces for
integration with other applications.
Probably the greatest stumbling block to
installing a cloud-based solution in
business is the question of data security,
not least after the Edward Snowden
revelations. Companies that give out their
data have to trust their cloud provider. For
this to happen, they need transparent
information concerning the general
technical, organisational and above all
legal terms and conditions, including
security of information. Cloud telephone
systems are located in data processing
centres where there is often better
protection against failure. This is because
the cloud providers provides extra backup
and are generally subject to high technical
and organisational safety standards, and
are ISO 27001 and SAS 70 Type II
certified. Regarding the costs of the cloud-
based solution, small and medium-sized
businesses in particular must therefore ask
themselves whether they are in a position
be able to guarantee the high availability
and security of data, including external
mobile access, within their own data
processing centres.
5
 FOR EVERY THIRD BUSINESS, A CLOUD-BASED TELEPHONE SOLUTION
IS A POSSIBILITY
Given equivalent quality, functionality and cost, would your business consider a cloud-based telephone
solution?

13

13

41
17

16

30% of businesses are already either definitely or probably Yes, definitely

considering the option of a cloud-based telephone solution. Probably
Probably not
Businesses are just as open to Cloud telephony as to other Cloud IT Definitely not
applications such as CRM or COLLABORATION. Undecided
With around 1% of businesses currently using a Cloud-based
telephone system, there is clear room for growth in the near future.

Source:
PAC 2013 for NFON AG

BUSINESSES ARE
OPEN TO CLOUD
TELEPHONY

How do businesses rate the future of cloud
telephony? Pierre Audoin Consultants also
put this question to the IT administrators on
behalf of NFON for the Study 'Are we seeing
a Radical Change in Business Telephony?'
The result was that in the long term, over 40
percent of German IT administrators believe
in the future of cloud telephony. Only a
minority of businesses (17 percent) do not
believe that cloud telephone solutions will
become established in the market in the long
term.
According to this, the cloud is developing into
an important alternative to conventional
captive systems, not only for IT applications
but also for communication use.
This applies to businesses of all sizes.
Against the background of around only one
percent of businesses today using cloud-
based telephone systems, we can count on a
clear increase in this area in the years to
come.
According to this, an important driver of
cloud-based solutions will be that they can be
continually adapted to technological progress
and the evolving needs of businesses through
updates at no extra cost. Other important
reasons are better integration with mobile
devices, lower overall costs (TCOs) including
maintenance, and simple administration, as
well as short and flexible contracts.

6
 CRITERIA FOR CHOOSING A PROVIDER
The choice of a suitable cloud provider depends on the individual
requirements of each company. The following questions should be
considered when making a decision:

How important is integration with mobile

Which IT systems should telecoms
functionalities be integrated with? Are
the interfaces supplied by the provider
adequate, or are individual
developments necessary?
Is straightforward online maintenance
sufficient, or do you require on-site support
from the provider or one of its partners?
devices and how well can this be
implemented by the service provider? Do
you want or need additional mobile
telephone systems contracts?
If the solution no longer suits your needs or
is discontinued, or the provider goes
under, it must be made clear in advance
how this scenario will be dealt with. How
will I receive my number with another
solution? How can I switch quickly to
another solution?

What Service Level Agreements (SLAs)

does the provider offer (availability of the
solution in the data centre, local
redundancy, defined response times etc.)?

7
 DIFFERENCES BETWEEN A CORPORATE TELECOMS SOLUTION AND
A PUBLIC CLOUD TELEPHONE SYSTEM
Classic Telephone System
High start-up costs
Costs dependent on requirements
Long contracts (generally five years)
Technical updates are associated with charges
and have to be implemented yourself
Poor flexibility and scalability
High administration costs
WHAT NFON OFFERS
NFON is currently the only provider in the
German market that serves every size of
business, from 1 to 100,000 extensions, with
its public cloud telephone systems. Along
with small and medium-sized businesses, this
also includes in particular large businesses
with more than 1,000 extensions to their
clientele. Large companies with international
business are also addressed through our
branches in eight European countries.
NFON's range of services include 24/7
support, on-site supervision by our own staff
or those of our partner companies, extensive
possibilities for integration with open
interfaces to leading IT systems such as
Salesforce.com and Microsoft Lync, as well
as a strong focus on security (against
breakdown and interception).
8
Cloud- Telephone System
High administration costs
Clear costs per user,
usually monthly
Short contracts
Automatic upgrades by the
provider at no extra cost
Flexible and optional scalability up
or down; costs rise and fall
according to the number of users
Simple Administration
As well as cloud-based telephone systems,
the sales portfolio includes international
broadband connections via SDSL and mobile
telephone contracts in association with O2.
In addition, in conjunction with O2, NFON
offers the integration of mobile
telecommunications with the cloud-based
telephone system via a VPN link, so that
mobile devices can be utilised as fully
functioning extensions of the network.
Furthermore, NFON has a large network of
qualified partners who can provide round the
clock support to its customers.
Here, services range from Cloud-Readiness-
Checks, through integration of the telephone
system to the customer's back-end, to support
services such as replacement of devices and
seamless migration to the Cloud. With
NFON, thanks to Pay-per-Use and the flexible
scalability of extensions, up to 50 percent of
the costs of a conventional telephone system
can be saved.
PREPARED FOR
NFON AG 
Leonrodstraße 68
80636 München
+49 89 453 00 0
www.nfon.com