Connection Telecom, South Africa’s foremost cloud-based communications provider (PBX and Call Centres), has appointed ConnectNet, the country’s leading payment communication provider, to take its offering to ConnectNet’s extensive retail client base of thousands of sites.

Market leaders

The deal sees both companies strengthening their lead significantly in their respective markets.

Connection Telecom became the leader in the key cloud-based segment of the enterprise telephony market in 2013 (BMI-Techknowledge). MD Dave Meintjes says a combination of direct sales, acquisitive growth and leveraged market expansion through white label resellers like ConnectNet has seen it grow by tenfold in annual revenues over the last 5 years.

For its part, ConnectNet, also founded in 2004, has grown its client base to equally impressive proportions, alluded to above. MD Andre Lessing says Internet Protocol-based (IP) communications is the main thrust of new services which includes several other network services offered by ConnectNet, namely Internet, VPNs, managed networks and cloud services.

IP keeps growing

The case for IP in retail is strong, says Meintjes.

The BMI-T report on the South African PBX and emerging voice technologies market reveals that Internet Protocol-enabled PBXs are now out-selling analogue PBXs 5 to 1. In fact, sales are declining in the latter category, while converged (on-premise) and hosted (cloud-based) enterprise telephony are both increasing. Of the latter two, cloud telephony is showing the most growth.

IP cuts retail costs

In retail, the market drivers for IP include continued retail margin pressure, as sales aren’t growing enough to offset inflationary pressure of operational expenditure. At the same time, credit sales are declining due to over-indebtedness.

“A converged IP-based voice service delivers significant savings over Telkom,” says Meintjes – our analysis of our last four large customers (those with over 400 sites per customer) shows savings in aggregate of 40%. This is due to various factors, such as removing legacy PSTN infrastructure, creating your own ‘free call’ community between offices/sites and suppliers, better private call management and lower call costs.

With ConnectNet there is an added benefit in that PCI compliant data (transaction verification) is also transferred over the same network.

IP is accommodating

In other ways too, converged communications provide more bang for buck, Meintjes says.

“Retailers buy various communication services from a fixed-line provider, Internet service provider, PBX company and payment communication network – and then there’s the need for a VPN and failover for some network components. With IP, retailers can buy one access circuit from one supplier, delivering all of the above as one managed service that gives them the peace of mind of reliability, stability and quality assurance.”

IP is flexible

As a converged protocol, IP is an agile solution that can flexibly scale up and out to more branches or higher-capacity networks by simply putting down additional circuits.

Should there be a power outage taking lines down or unforeseen damage at the exchange, calls can flexibly be rerouted via a different network.

Another aspect of this flexibility is IP’s ability to integrate with or spawn new services. It is an open standards architecture that can accommodate even unknown future services, says Meintjes. An example thereof is the inclusion of chat, video calling and e-mail in a unified call centre.

Birds of a feather flock together

The Connection Telecom backbone on which ConnectNet’s multi-layer service runs is co-located in fully redundant data centres owned by Teraco in Johannesburg and Cape Town. This gives ConnectNet customers a world-class managed network service hosted in a world-class facility with site and power redundancy and the option of database replication between sites.

In addition, the data centres are vendor-neutral, giving ConnectNet the fall-back choice of a wide range of communications networks, says Meintjes. “So if they wanted to subscribe to any or all of the other networks for guaranteed redundancy and quality of their network-based services, nothing stops them.”

In addition, he says, ConnectNet gets access to a teeming marketplace of other cloud-based service providers taking up tenancy within Teraco, allowing easy integration with a self-sufficient on-net community sharing resources (and enjoying zero-rated calls between themselves). “Vendor-specific data centres, such as those belonging to the network operators, make it tough to integrate easily and seamlessly with other providers,” says Meintjes.

The future

The future of communications is IP, and it has already begun, he concludes. As for network-based services, the future is cloud-based, he says. “Not just per-client virtualisation of server applications, but true multi-tenant virtualised services. Only in using that model can providers offer a quality, robust service.”

To come into their own, cloud services must benefit from the network redundancy, quality assurance and choice that only a successful vendor-neutral data centre can provide. If you can’t beat ‘em, join ‘em!