Hosted Hospitality PBX White Paper

105 Kent Street, Iron Mountain, MI 49801

The Technical and Financial Impact

Associated with Hosted Hospitality PBX

Published: June 2012

Patrick J. Case Managing Director

IP Services Division CCI Systems, Inc.

-2- 855-337-9299 • www.ccisystems.com

Table of Contents

Executive Summary ................................................................................................... 3

Introduction ................................................................................................................. 4 Current Hospitality PBX Solutions ............................................................................... 4 The Alternative ........................................................................................................... 6

Features ...................................................................................................................... 6

Service Delivery .......................................................................................................... 8

Connectivity, Redundancy and Quality ..................................................................... 10

How Jazz Fusion Works with Your PMS ................................................................... 15

Cost Comparison ...................................................................................................... 17

Conclusion ................................................................................................................ 19

About CCI Systems ................................................................................................... 20

About SDD Systems ................................................................................................. 21


EXECUTIVE SUMMARY CCI Systems has developed a Hosted Hospitality PBX solution that allows hoteliers to incur dramatic costs savings and economies of scale created by the use of Voice over IP technology. Through the use of SDD’s JAZZ Fusion Hospitality Middleware Engine and CCI’s Broadsoft’s BroadWorks voice platform and network, CCI and SDD are able to provide hotel properties with high quality, reliable and secure voice communications with the latest hotel voice features and integrations. CCI’s Hosted PBX Solution provides the following benefits to your hotel: 1) Lowers costs- upfront and monthly 2) Simplifies management of the communication platform 3) Improves and sustains reliability (including life safety) 4) New and enhanced features Finally, hoteliers have the ability to utilize the benefits and costs savings of hosted voice services from a real Service Provider, not a nerd with a server. Below shows an example of estimated cost savings a 150 room hotel with four additional administrative and support phones would incur over a five year period. Five Year Cost Analysis Hardware and Services: Traditional Analog Solution: PBX and Voice Mail (from page 5) $222,050.00 5 years of monthly recurring services $ 71,430.00 Total Costs of Ownership – Analog $293,480.00 T-1 PRI Solution: PBX and Voice Mail (from page 5) $222,050.00 5 years of monthly recurring services $ 63,702.60 Total Costs of Ownership – Analog $285,752.60 CCI-SDD Hosted Hospitality PBX Solution: Equipment, Gateways and Routers (from page 8) $ 23,842.00 5 years of monthly recurring services $ 61,675.80 Total Costs of Ownership – CCI/SDD $ 84,675.80 CCI/SDD Real Dollar Savings $208,804.20 CCI/SDD Percent Less than T-1 PRI Solution: 72% CCI/SDD Real Dollar Savings $201,076.80 CCI/SDD Percent Less than Analog Solution: 71%

The following pages describe the features, benefits and costs associated with a traditional on-site PBX system (both TDM and IP Based) versus utilizing the benefits of a hosted, cloud based PBX solution in the hotel property.


INTRODUCTION

In the United States, there are over 51,000 properties with 15 guest rooms or more.1 Those properties house over 4.8 million guest rooms throughout the United States with an average occupancy rate of 60%.2 One of the major cost components associated with running and managing the hotel property is the hotel PBX. While a vast majority of guests utilize their personal wireless devices for their communications outside the hotel, the guest room phone continues to provide guests important services:

(1) Guest phones remain an important service allowing guests access to services to include communication with hotel staff, other guests and parties outside the hotel property.

(2) Life Safety Support. The phone continues to provide guests with reliable access to emergency services. (including basic E911 alerting to hotel staff).

(3) The phone services support the guest relationship. Guest voice service provisioning and personalization for all phones.

(4) A Personalized Guest Experience. Hotels change the services and information available on the phone endpoints based on the presence and nature of the guest in the room. Some of these include providing VIP’s Direct Inward Dialing telephone numbers during their stay, keeping their voice mails archived for up to 14 days if necessary, streaming the guest’s name on the phone if a display phone is present, etc.

(5) Personal Guest Messaging and Alerting – this includes scheduling, execution and monitoring of guest wake-up calls and visual notification of unheard voice messages. Hotel Staff Messaging and Alerting – through the use of control codes, keyed in at guest room endpoints, the hotel staff can automatically update the PMS regarding room status changes from maid activity, maintenance alerts and billing for consumables replenishments (the mini-bar).

(6) Guest Voice Monetization – any guest traffic that is chargeable is captured in real-time, rated and posted guest room folio. These functions require a significant amount of intelligence from the communications platform providing services at the hotel. Today, these functions are provided by on-site PBXs made by various manufacturers including NEC, Mitel, Avaya and others. Some hospitality properties have switched from traditional TDM based PBX environments to Voice over IP based telephone systems from various manufacturers including 3CX, Phone Suite, etc. CCI Systems has developed a more efficient method to handle your hospitality communications needs. Our cost effective solution will lower capital and operational expenditures compared with a new PBX while also decreasing ongoing costs for your current telecommunications service provider. CURRENT HOSPITALITY PBX SOLUTIONS

The communications environment in the hospitality industry has lagged behind the significant technological enhancements of the business enterprise environment. In the business enterprise environment Voice over IP is sweeping across all industries replacing the traditional TDM (Time Division Multiplexing) PBX deployments. Many of the reasons for this change include lower costs, lower maintenance requirements and enhanced features. Some of these deployments require that the actual IP based PBX (IP PBX) be onsite while other

1InformationprovidedbyAHLA.com.2“DowntownBaltimorehoteloccupancyratetopU.S.averagein“11”;BaltimoreBusinessJournal,JamesBriggs,March23,2012.


solutions include large, carrier grade service provider deployments with the telecommunications switching elements located in one or two data centers that provide backup power, HVAC and connections to multiple last mile Tier 1, 2 and 3 carriers to interconnect with and facilitate traffic sharing arrangements. For the purposes of this analysis, a hotel property with 150 rooms will be utilized. The traditional method for hoteliers to provide dial tone, voice mail and other features to guests’ rooms was to install a traditional PBX that received either analog lines or PRI Circuits from the local telephone company. The PBX provided analog end user stations to the guests’ rooms and digital stations to the front desk and administrative staffs. In this traditional environment, the traditional PBX also required a voice mail system to be deployed on-site so that guests would have access to voice mail and wake-up calls. The hotelier was required to purchase all of these components up-front from an integrator certified by the PBX manufacturer as well as yearly maintenance on these platforms. Further, the hotelier was required to pay fees associated with moves, adds, changes and deletions of users. The one-time costs for this solution were significant. On average, PBX systems (whether IP or traditional) cost between $750 and $1,250 per end user station (this would include administrative staff as well as guest rooms).3 The larger the hotel, the closer the costs would be to $750 and the smaller the hotel, the closer the costs would be to $1,250 per user station. In the example 150 room hotel in the example, we will assume there are 150 rooms, 1 phone in the kitchen, 1 phone in the laundry facility, 2 phones at the front desk, 1 phone in the manager’s office for a total of 152 analog end user stations and 3 digital phone stations. Costs associated with each user station including voice mail are estimated at being $850 per user station for a total of $131,750 for the traditional hotel PBX. However, those are not the only costs that the hotelier will pay. The below table provides a more accurate total cost of ownership for a hotelier over a 5 year period: Cost Component One-Time Costs Yearly Costs 5 Year Costs PBX and Voice Mail $131,750.00 Installation $ 5,250.00 Annual Maintenance $ $15,810.004 $79,050.00 Moves, Adds, etc. $ $ 1,200.005 $ 6,000.00 Totals $137,000.00 $17,010.00 $85,050.00 Total Cost of Ownership over 5 years: $222,050.00.

3InformationobtainedfromHotelPhoneSystemPricesinformationonCostOwl.com.4AnnualmaintenancecontractfromthePBXvendorestimatedatbeing12%oforiginalpurchaseprice.5Annualmoves,adds,changesanddeletesareestimatedat2instancespermonthpricedat$50perMACD.


Unfortunately for the hotelier, this does not include upgrades that will most likely be required at the end of year 5 on the traditional or IP PBX in order to stay in compliance with the manufacturers support guidelines. Those upgrades could cost up to $40,000 to $50,000 depending on the manufacturer. Additionally, this system is on-site. If the onsite system breaks down, the hotelier has no service until the PBX vendor arrives on-site to fix the PBX or Voice Mail systems. An additional drawback relates to technological obsolescence. Every time the PMS vendor for the hotelier changes its interface, the PBX vendor may have to make changes or upgrade the PBX to be compatible with the PMS requiring unforeseen costs and downtime. The traditional PBX or IP PBX system that was installed at the hotel property may or may not be able to deliver the latest features needed by the hotelier even after the upgrade. New features may have been developed that require different equipment or more computer processing power than the on-site solution is capable. In that event, the hotelier would be stuck with expensive equipment that doesn’t support its needs. The resulting situation for the hotelier is limited flexibility, functionality and increased costs over the ownership lifecycle of the on-site PBX. THE ALTERNATIVE For many years, Hosted IP PBX service providers have been searching for a solution to offer the hospitality industry. There were many hurdles with the most prominent one being integration with the hotel’s PMS and the costs associated with paying for features for rooms that may be vacant. Providing the hotelier with a solution that saves capital expenditures as well as provides an economical monthly recurring solution to reduce the hotels overall costs is a key factor in providing a hosted solution for the hospitality industry. CCI Systems leverage’s SDD System’s JAZZ Fusion Middleware engine to provide a cloud based, low cost, feature rich solution to these issues that integrate with the hotel properties PMS. This solution interfaces CCI’s Broadsoft Carrier Grade Service Provider voice platform with the SDD’s JAZZ Fusion PMS integration engine. The solution requires minimal onsite equipment and maintenance while providing hoteliers with greatly enhanced functionality, reliability and built in disaster recovery. FEATURES CCI licensed the JAZZ Fusion middleware engine to create the only reliable and carrier-grade Hosted Hospitality PBX product available. No other Service Provider in the United States is capable of providing a fully hosted solution to the hospitality industry. CCI utilizes its Broadsoft BroadWorks platform to provide dial tone and phone feature functionality to the hotel and its guests. This solution eliminates the need for all the costly PBX equipment and multiple carrier connections. CCI utilizes its JAZZ Fusion platform to provide customized features to the hotel, its guests and the hotel staff. Combined, CCI provides over 80 features and JAZZ Fusion provides full integration to the hotel property PMS. Key Benefits to the CCI/JAZZ Fusion/Broadworks Solution: Hosted solution-limited hardware required Cuts phone bills in half by using VoIP for outbound calls Reuse of analog phones in hotel rooms


Displays guest name on reception, room service, management phones Provides wake up calls, check-in/check-out, do not disturb services Maid Status allows housekeeping to set room status via phone Integrates with Property Management Systems via several interfaces Includes Web Interface for hotel staff Print log of calls made during Guest’s stay Deliver and manage services and features across one or multiple properties from a single point (or person). Solution evolves with minimal capital reinvestment. Large capital investments aren’t necessary, especially when the world of voice technologies changes so rapidly. Voice Features CCI’s voice services provide the hotel with a powerful unified communications platform. The front desk phones are provided with over 80 features, unlimited calling in the contiguous United States, Hawaii and Canada, web based tools that make it easy to transfer calls to guest rooms and determine if the guest is on the phone. Management staff will have the ability to have phone calls follow them to any other number or wireless device. Some of these features include the following: CCI’s Voice Feature services include these additional functions: Auto Attendants Unified Messaging (voice mail to email) Simultaneous Ring Automatic 911 Notification Intercom Call Forwarding by status Selective Call Acceptance Hunt Groups Selective Call Rejection BroadWorks Receptionist Enterprise Call Forwarding Selective Seamless Wireless Smart Phone Integration JAZZ Fusion Features JAZZ Fusion has implemented numerous features that enhance the existing hotel management system and provide the hotelier with increased functionality and reporting. These features include the following: Restrict guest room phone service based on guest arrival, departure and payment methods Wakeup call services to guests Price and post guest room mini bar charges Notify a guest about messages using room message light Provision private telephone numbers for guests with direct inward dialing capabilities Set do not disturb on guest room extensions Notify the front desk of guest room condition Set guest room phone name display Manage and archive guest voicemail messages Set services to guest’s native language Provide estimated call charges to the guest Post phone call charges to the guest folio Transfer guest service configurations to support a guest room extensions


SERVICE DELIVERY The delivery of these services from CCI and SDD includes connectivity to the site, the local area network at the hotel, the equipment needed to provide the solution at the hotel, the integration steps with the PMS and the support process. Equipment Needed Using the example described earlier including a 150 room hotel, the following equipment would be needed at this location: (7) 24 port analog gateways (1) Remotely survivable voice gateway (3) IP based phones (1) Managed Power over Ethernet Switch capable of VLANs (1) Ethernet Router capable of processing a T-1 as well as Ethernet and provide quality of service This solution includes a remotely survivable voice gateway. CCI generally installs one to two POTS (plain old telephone service) lines that are used for alarms or elevators and also uses these for emergency fail-over lines into the remote survivable voice gateway in the event the WAN connection fails as the result of a device failure, fiber or cable cut. The delivery of the service and the equipment needed is best described in the image on the next page.


The costs associated with this design including the equipment, configuration, installation and setup of the JAZZ Fusion PMS Integration is under $23,842.00 in most cases. That equates 72% less than the 5 year ownership costs of a traditional or IP PBX and 71% less than the first year expenditure for the traditional or IP PBX installation.

Telco POTSBackup Lines

CCI ServiceProvider Network

QoS EnabledRouter

Telco or CableConnection

POE Switch Guest Network

Guest Gateway

Front Desk Admin Computer

Manager ComputerAdmin network

VoIP to Analog Gateways

Guest WirelessInternet Network

Remote VoiceSurvivability

Device

Backup Lines


CONNECTIVITY, REDUNDANCY AND QUALITY CCI’s network is fully redundant with Broadsoft clusters in its SuperPOPs located in Chicago, Illinois and Los Angeles, California. Both of these locations have multiple (up to four) redundant feeds from interconnected carriers and peer with hundreds of other carriers at these locations. Additionally, these locations have two carrier redundant and geographical route redundant connections between the Super-POPs to ensure 99.999% uptime. Below, the image conveys the redundancy built into the network.


In addition to CCI’s voice core redundancy, CCI also has multiple feeds from each of the voice carriers where it originates and/or terminates traffic from its voice core. In fact, CCI requires each of its contributory carriers to sustain voice traffic going to and from CCI in three (3) geographically distinct switches for fail over purposes. Thus, when a particular carrier’s voice switching equipment fails, CCI will still be able to terminate traffic from one of the other voice switches. This is reflected in the below graphical depiction.

These uptime guarantees are reflected in CCI’s Service Level Agreement.


CCI’s nationwide network can be accessed from any one of the access points throughout the country.


CCI monitors and scores the call quality of every phone call traversing its network. CCI utilizes its IPTego packet sniffer to verify the voice quality that every customer receives and, if a voice quality problem occurs can quickly derive at what point in the network the problem exists and work with the customer and/or its Internet provider (in the case CCI is not the provider) to fix any problems associated with voice quality. Below is a live shot of our voice quality monitoring interface.

CCI also sets alarms to notify it automatically if calls from particular customer sites fall below specified quality levels. During CCI’s analysis, it determined that the following amount of bandwidth would be required to handle the voice traffic at a 150 room hotel. Industry standards call for 10% of these lines to be active at any given time. That results in the following table providing the number of simultaneous calls and the bandwidth required:

Codec Used Bandwidth Per Call Number of Calls Total Bandwidth G.711 (PCMU) 64 +32 OH=96Kbps 15 simultaneous 1.44 Mbps G.729 8 + 24 OH = 32Kbps 15 simultaneous 480 Kbps G.722 (Hi-Def) 64 +32 OH=96Kbps 15 simultaneous 1.44 Mbps

As you can see, there is a slight difference in voice quality between these three codecs for the Voice solution. If you use G.711, the average quality you will receive is a MOS score of 4.41. The next image illustrates the report produced by CCI showing the call details and Mean Opinion Score (MOS) for each call generated through CCI.


A MOS score or Mean Opinion Score is a test and standard that is used in telephony networks to obtain the human users experience during a call. It is derived by calculating the Network Latency, Jitter and Packet Loss during a call. The following table describes the user experience during a call. MOS Quality User Experience 5 Excellent Perfect Experience 4 to 5 Very Good Very good 3.5 to 4 Fair This is typically cell phone quality 2 to 3 Poor Usually scratchy and hard to hear 1 to 2 Bad Usually cannot hear the user, very bad quality As examples, the following are calls generated from CCI Systems corporate headquarters in Iron Mountain, Michigan with the MOS score displayed on the far right.


A MOS score of 4.41 is also expected when utilizing G.722 or High Definition voice services. This is near perfect quality. Calls employing G.729 will have a small reduction in voice quality to 4.14. This is shown below where you can see the codec and the MOS Score. In the United States, scores of 3.9 to 4.2 are typical from most carriers. CCI’s dedication to quality, has allowed it to exceed the typical experience into near perfect voice quality. HOW JAZZ FUSION WORKS WITH YOUR PMS SDD’s JAZZ Fusion is an approved or required standard for many, if not most, of the global hospitality industry’s leading brand names. JAZZ Fusion is today integrated with the hospitality industry’s major commercial and proprietary hotel management systems. SDD maintains direct relationships with hotel technology departments and industry technology providers to insure rapid ongoing adaptation to changes in systems and technology across the industry. During the setup process, CCI works with your hotel management staff to activate all of the required features and hotel pricing into the JAZZ Fusion portal to ensure charge accuracy to the guest folio. The integration between the hotel PMS, JAZZ Fusion and CCI’s Broadsoft is seamless and is depicted in the following diagram:


In addition, all JAZZ Fusion customers have access to the JAZZ Fusion portal which provides additional functionality to the front desk and managerial personnel at the hotel. An example image of this portal is shown on the following page.


The Hosted Hospitality PBX solution provided by CCI and SDD is a managed solution from end to end. The hotelier no longer has to deal with one vendor for its PMS, another telephone company for its lines, a PBX vendor or its phone system, yet another for voice mail or call accounting and yet another cable or telephone company for its Internet service. CCI provides all of these services for its customers. It is also counter intuitive to have anyone but the hotelier ISP provide guest Internet support. CCI provides this service for approximately 70,000 hotel rooms across the United States today 24x7x365. By simplifying the deployment and vendor structure of these systems, the CCI and SDD solution generates soft cost savings in time and attention by technical and management staff. COST COMPARISON CCI and SDD can provide the entire solution to the end user at costs that are generally 5% to 40% lower than what the hotelier is paying today from the incumbent local telephone or cable providers, depending on the Internet connectivity required. As an example, below are the current estimated costs associated with a 150 room hotel: Below depicts the estimated costs associated with voice and Internet services at a standard 150 room hotel: Analog Lines T-1/PRI 15 Analog Lines = $525.00 PRI Circuit = $396.21 Local Calling = unlimited Local Calling = unlimited Long Distance = $.035 per MOU Long Distance = $.035 per MOU


Assume 3750 MOUs = $112.50 Assume 3750 MOUs = $112.50 Toll-free Usage = $.04 per MOU Toll-free Usage = $.04 per MOU Assume 4200 MOUs = $168.00 Assume 4200 MOU’s = $168.00 Internet 50MbpsX5 Mbps CM = $385.00 Internet 50MbpsX5 Mbps CM = $385.00 Total Costs Analog: $1,190.50 Total Costs T-1/PRI: $1,061.71 (Neither of these includes local, state and federal taxes and fees) Total Monthly Recurring Costs with CCI: 15 IP Based Lines $209.85 Messaging Licenses $150.00 BroadWorks Receptionist $ 75.00 JAZZ Fusion License Fee $117.95 Auto Attendant $ 13.99 Virtual Fax $ 14.99 Front Desk Lines (2) $ 64.00 Manager Line $ 24.00 Connectivity and Internet (50Mbps down/10Mbps up) $189.95 Local Calling Unlimited Long Distance (11,500 MOUs included) $0.00 Toll-free (4200 MOUs at $.04 per) $168.00 Total price for CCI: $1,027.93 (Not including local, state and federal taxes and fees) Percentage less expensive than traditional analog solution: (1,027.93/1,190.50) = 14% Percentage less expensive than T-1 PRI solution: (1,027.93/1,061.71) = 5% 5 Year Cost Analysis Hardware and Services: Traditional Analog Solution: PBX and Voice Mail (from page 5) $222,050.00 5 years of monthly recurring services $ 71,430.00 Total Costs of Ownership – Analog $293,480.00 T-1 PRI Solution: PBX and Voice Mail (from page 5) $222,050.00 5 years of monthly recurring services $ 63,702.60 Total Costs of Ownership – Analog $285,752.60 CCI-SDD Hosted Hospitality PBX Solution: Equipment, Gateways and Routers (from page 8) $ 23,842.00 5 years of monthly recurring services $ 61,675.80 Total Costs of Ownership – CCI/SDD $ 84,675.80 CCI/SDD Real Dollar Savings $208,804.20 CCI/SDD Percent Less than T-1 PRI Solution: 72% CCI/SDD Real Dollar Savings $201,076.80 CCI/SDD Percent Less than Analog Solution: 71%


CONCLUSION You’ve worked hard to build your brand. A brand your customers have grown to know and trust. It is vital to select a service provider and partner that will enable you to provide your guests with outstanding comfort and convenience at an affordable cost. As a hotelier, you buy, integrate, operate and continuously refresh the technology that provides voice services for your guests. Don’t fall victim to all the technology complexity. In a time of rapid changes and technology advances, make decisions that will benefit your hotel right now as well as in the long run. Make your guest voice services a managed service that keeps you nimble and evolving in the voice features you want to offer. The hospitality industry has been left behind in the race to more economical and technological enhancements in the telecommunications industry. CCI and SDD have teamed up to bring those technological advances to the hospitality industry at a price that is not only affordable, but in most cases, less expensive than what they pay today over a five year period by up to 70%.


ABOUT CCI SYSTEMS, INC.

Discover the benefits of engineering plus. CCI Systems offers start-to-finish services for all kinds of communications networks and is one of the only firms to offer a truly integrated end-to-end service solution including engineering, construction, integration, voice services and maintenance and support.

Because we have engineers behind every solution, we can guide you to the right choices for today and make sure you’re prepared for tomorrow. You benefit from over 50 years of experience in network engineering, construction and integration; you can count on CCI to listen, then offer candid, practical recommendations.

History CCI launched in 1955 as a small community access television (CATV) system in Iron Mountain, Michigan. Over the next 30 years, the system expanded to include more than 39 cable systems, five broadcast stations, 50 radio stations and one of the nation’s largest terrestrial microwave systems.

As the communication industry grew, so did our expertise. CCI gained recognition as leaders in the design, construction and maintenance of communication systems as well as the rollout of new technologies and services.

Today, owned by our employees, we continue our tradition of high standards and execution excellence. CCI eagerly takes on the challenges of converging technologies as we deploy the latest network solutions to an ever-expanding client base providing services to hundreds of MSO and Cable Operators, Telco Operators, Government and Education Campuses, Medical Campuses and Corporate Campuses nationwide.


ABOUT JAZZ FUSION JAZZ Fusion is a global software and service solution provided by Systems Design and Development (SDD). SDD today serves many of the largest and most prominent commercial and hospitality properties in the world. SDD customers and clients span Europe, Asia Pacific, and the America's. SDD's technology and services are today integrated or integrate-able with virtually every large communications equipment solution in the global telecommunications industry. SDD is a privately held, integrated software and services company. SDD's owners and partners hold management responsibilities in the company. Ron Tarro is SDD's President and CEO. Colin Halford leads sales and business development. Bill Wharton leads managed services and support. Ron Grau leads software development and technology, and Dina Gallo Tarro leads accounting, finance, administration, HR, and legal. SDD is based in Delray Beach, Florida, USA with service operations based in Cedar Rapids, Iowa, USA, and sales and support services in London, England, UK. SDD's success is driven by its excellent people and their desire to serve our customers well. We believe that SDD has formed the strongest team of technologists, analysts, and business development people in the industry. Their collective efforts have earned and continue to earn SDD the trust of current and emerging customers, both large and small.

Hosted Hospitality PBX White Paper

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