Internet Telephony Conference Expo East The Business Case

Internet Telephony Conference & Expo East The Business Case for SMBs to Migrate to Hosted Vo. IP Bill Dermody Sales Director M 5 Networks www. m 5 net. com Contact: (312) 957 -8140 bill@m 5 net. com

Telecom is bewildering v. XML IAD On-Premise Network Monitoring ATM Fax Hosted PRI Unified Messaging CTI Conferencing Collaboration Video Call Center Presence DSL Trunk-side Centrex Channelized T 1 Integrated T 1 Central Office Interconnect CSU/DSU Qo. S Earwax Voice VPN Managed Mobility Wireless LNP Softphone Cat 3, 5, 6 Po. E Regulation Billing Outsourced CID E 911 ANI DID RCF Wi. Fi, Wi. Max Directory Services Toll-free Diversity Key System Redundancy SLA PBX T 1 Business Continuity Hybrid Systems Vo. IP Internet Telephony Digital Analog PC-based Open Source Media Servers SIP, MGCP, H. 323 Routers Switches Skinny Gateway Border Control Ethernet POTS ISDN

The discussion should be about business, not technology They come in roughly three sizes: SOHO § 1 -10 staff §Everyone in one room OR §Virtual teams & road warriors §Owner deals with phones SMB § 10 -500 staff §Few IT staff §Departments §LAN, maybe a few offices §CTO, CFO or Owner buys Phones ENTERPRISE § 500+ Staff §Campuses §WANs §IT & Telecom Departments

Most SMBs Will Outsource Their Phone System § Yankee Group believes 70% of SMBs prefer the idea of a hosted phone system today, but can’t find a competent provider § Info. Tech predicts 48% of SMB sites will use a hosted solution by 2010

IP Centrex Subscriber Forecast According to Gartner, In 2014 there will be 24 million IP Centrex Users § Existing 12 million users from legacy centrex upgrades § Additional 10 million users from SMB market (<100 seats) which they believe is conservative § Additional 2 million users from medium- large businesses Source: Gartner Data. Quest (Sept 2006)

Outsourcing can Save Time & Money § § § Higher Service Availability, SLAs, etc. Improved Business Continuity Simplified Vendor Management Multiple locations networked Leveraged Expertise • Training • Installation • Feature Deployment • Security • Qo. S • and more

Outsourcing Can Save Time & Money (continued) § Lower Initial & Ongoing Cost of Ownership • • No need to purchase or maintain a phone system Better line usage - ~30 k/simultaneous stream Better rates/minute without Telco dependencies Efficient processes

Total Cost of Ownership- 1 Direct cash outlay displacement: • Local and long distance lines and services. • Third-party conferencing services. • Capital investment/lease of a PBX • Maintenance and support fees • Software upgrade/implementation fees

Total Cost of Ownership- 2 Internal management costs: • Managing the PBX and vendors • Managing lines capacity and growth • Upgrade management • Moves, Add, and Changes • Answering users’ questions

Total Cost of Ownership- 3 Plus, what is the cost of not having: • Disaster recovery protection? • The ability to work from home or satellite office as if you were at the office? • The flexibility to add, shrink, change staffing and have immediate phone functionality? • Unlimited lines for burst call volumes? • Peace of mind of knowing you have the best solution available being maintained 7 x 24 by industry professionals? • State-of-the-art front/perception to market

How It Works: Sample Hosted Vo. IP Architecture Data LAN Router Hardened Telecom/Data Centers Inbound & Outbound Calls M 5 T 1 Gateways Access Router Multiple Telecom Providers to the PSTN Internet Redundant Phone Systems Benefits § § Customer avoids buying PBX Superior business continuity Scaleable to multiple locations Single, accountable, vendor M 5 T 1 M 5 DSL (backup) Multiple Service Providers to the Public Internet Broadband/DSL Connection § § Customer Main Location M 5 DSL (backup) Customer Secondary Location(s) Customer Home Office(s) Remote access (e. g. home, road) Focused application delivery expertise Operating cost savings Constant feature upgrades

What a Typical Hosted Solution Provides § § § § § Personalized auto-attendants Unique phone number and voicemail for each end-user Robust end-user feature set Multiple locations (e. g. , 1 phone system for corporate and branch offices) Satellite office (e. g. , same business phone number from work and home) Unlimited local and domestic long distance calling Internet service Redundant phone and Internet access Free support

Potential Business Benefits § Is telecommuters/off-net support worth it? • • Mi 8 distributes the call center Infinity Consulting Group works from home Platform Learning sets up work teams Trevor Stuart saves on real estate § Do I support road warriors? • Softphones • Webportals § Is better information valuable? • Coldwell Banker tracks ads • National Parts Depot tracks staff • Stadtmauer, Bailkin does timesheets

More Potential Business Benefits § Do productivity gains justify the investment? • • Off-net productivity/Gap-time Unified messaging Dial-from PIM Presence § Am I a big conference caller? • On-site bridges start at $15, 000 • Technology changing fast

Even More Potential Business Benefits § Is easy sub-tenant support worth money? • M 5 grows into its space • Office Suite Group outsources telecom • 424 W. 36 th St. attracts tenants § Is there value in a rapid deployment? • • Brooklyn Brewery’s PBX explodes Montfort Healy’s Telco closet is flooded Maxon’s Restoration gives up on a vendor KGTR attacked by terrorists

Now, let’s look at some Success Stories

Investment Bank 40 Seats; 1 Location The Challenge: § Needed to replace an outdated Nortel key system due to office relocation § Wanted an easily upgradeable, software-based phone system that could be managed remotely and provide additional functionality § Unsure they had time and resources available for implementing and managing the complexities of Vo. IP technology. The Solution: § Evaluated IP-PBX, hybrid, and hosted solutions from multiple providers, measuring installation and monthly recurring costs as well as costs for cabling installation § Rated vendors based on his minimum requirements for conference calling, call forwarding, redundancy, remote access, QOS guaranty, and client references. § Upgraded infrastructure and installed M 5’s Outsourced IP Phone System The Results: “M 5’s service is reliable and the advanced applications it provides allow us to meet clients’ needs at a higher level than before. ” James Berkery Chief Information Officer, Berkery, Noyes & Co. LLC

Cost Comparison Prices are for 1 location & 40 end-users; based on client’s analysis

Comparison of Key Criteria (Based on client’s analysis)

Craft Brewery 40 Seats; 1 Location The Challenge: § An electrical shortage caused the companies premises-based phone system to catch fire and shut down phone service for the entire complex. The Solution: § After assessing the situation, M 5 devised an emergency plan for restoring Brooklyn Brewery’s phone service. § Within one week, employees were up and running on a provisional solution. § A few weeks later, Brooklyn Brewery went fully live on M 5’s Outsourced IP Phone System with a dedicated T 1 circuit and backup DSL. The Results: “M 5 gives us all the flexibility of a large, in-house phone system without the associated overhead and maintenance headaches. M 5’s customized configuration abilities allow us to manage call flow and conduct business in a way that is more efficient for our organization. ” Eric Ottaway General Manager, The Brooklyn Brewery

Construction Management Firm 60 Seats; 2 Locations The Challenge: § Company inherited an onsite Nortel phone system after moving to a new office § Employees mainly work from field offices, and the limited features and expensive expansion costs associated with their premise-based phone system required them to share voicemail boxes and made communication with clients difficult. The Solution: § Impressed by its reliable network and competent service delivery team, Horizon signed on with M 5. § M 5’s virtual communication services made Horizon’s several offices appear as one physical location to their clients. The Results: “M 5 helps our company achieve a higher margin potential through increased business communication transactions, competitively priced calling plans, and the ability for employees to use their M 5 phones around the country without incurring additional fees. ” Kenneth Borruso Chief Operations Officer, Horizon Engineering Associates, LLP

Law Firm 50 Users; 1 Location The Challenge: Water damage in the telecommunications closet ruined the PBX. Finger-pointing between the phone system maintenance company, the phone service provider and the PBX manufacturer intensified the problem and prompted the firm to find an alternative phone system solution. The Solution: § M 5 brought in temporary IP phones and the Front. Desk receptionist application and plugged them into the company’s existing DSL line so that attorneys no longer had to rely on cell phones for communication with clients § M 5 project managers conducted a thorough planning session with the firm, devising a longterm phone system strategy and walking them through the entire implementation process The Results: As a law firm that works on dozens of client cases simultaneously, we could not risk this type of business disruption again. By switching to an outsourced phone system, we now have a more advanced and more reliable solution along with greater peace of mind knowing that M 5 assumes responsibility for all of our voice and data needs. ” Donald Neumann Managing Partner, Montfort, Healy, Mc. Guire, & Salley (Personal Injury Law Firm) Client since 2005

Questions? Bill Dermody Sales Director M 5 Networks (312) 957 -8140 bill@m 5 net. com www. m 5 net. com