Cisco CallManager Express

Versus
Covad VoIP vPBX and PBXi
Company and Product Background
Cisco is without question the worldwide leader in networking for the Internet. Cisco’s initial focus was on large enterprises and this
continues as its core strength. In recent years, Cisco has worked aggressively to expand its reach directly into the networks of
communications service providers, including Covad’s. Covad’s network is a certified Cisco Powered Network (CPN). Cisco is also
in the process of making its products more relevant for the SMB market by extending down from its strengths in the enterprise
market. In a move to acquire a more SMB centric product set, Cisco acquired Linksys. An additional key priority for Cisco as voice
becomes an application, is to become the networking company of choice for voice services as well as traditional data.

In its efforts to more effectively serve the SMB market, Cisco has introduced a variety of new products that are more applicable to
the SMB market. To address the voice needs of the SMB market Cisco is acting on two fronts. From a premise based perspective,
Cisco launched its CallManager Express product which brings many of the features and functionality of the CallManager product to
the SMB market. The company is also working aggressively with many of the world’s leading service providers to enable hosted
voice solutions. It is clear that Cisco is a proponent of both premise based and hosted solutions depending on the needs of the
customer.

Product Specifics
Cisco CallManager Express, Cisco’s newest IP communications product, is relative to typical Cisco equipment easier to deploy,
administer, and maintain. The solution provides small businesses with a low cost, reliable, feature rich solution for up to 120 users.
The solution is embedded directly into Cisco IOS software and Cisco CallManager Express then enables a number of Cisco access
routers to deliver call processing features similar to those of a key system or low end PBX. While Cisco typically states that the
solution can only support up to 100/120 users, if CallManager Express is embedded into the Cisco 3845 Integrated Services Router
a total of 240 users can be supported. Depending on the platform, CallManager Express can support phones as follows -

Platform Maximum Phones Platform Maximum Phones

Cisco IAD 2430 integrated 24 Cisco 2851 Integrated 96
access device* Services Router
Cisco 2801 Integrated 24 Cisco 3725 Access 144
Services Router Router
Cisco 2811 Integrated 36 Cisco 3745 Access 192
Services Router Router
Cisco 2821 Integrated 48 Cisco 3825 Integrated 168
Services Router Services Router
Cisco 2691 Access Router 72 Cisco 3845 Integrated 240
Services Router
*2400 series routers do NOT support Cisco Unity Express

CallManager Express will support IP Phone 7902G, 7905G, 791G, 7910, 7914 Expansion Module, Wireless IP phone 7920, IP
Conference Station 7935/36, 7940G, and 7960G. Analog phones (Cisco Analog Telephone Adapter (ATA) required) and fax
machines on FXS ports or ATA in H.323 mode are also supported.

CallManager Express can interoperate with a location running CallManager over the corporate WAN using the H.323 protocol. This
could enable a larger customer to deploy CallManager at the headquarters location and then CallManager Express at various
branch locations.

The most recent release of the CallManager Express feature set 3.2 enables many new features. The following list highlights some
of the key enhancements.
• Customization of softkeys on the IP phones
• Do not disturb, direct calls to voicemail
• IP Phone display of DND state
• Enable and disable call waiting per line
• Called named directly look up for DNIS
• Conference initiator drop off

To enable integrated voicemail and automated attendant features Cisco Unity Express must be purchased and can run on the same
Cisco access router as CallManager Express. Unity Express can only support up to only 100 users regardless of the capabilities of
the router. CallManager Express can alternatively be integrated with third party vendors such as Octel, Active Voice, Stonevoice or
Comverse.

Cisco does not make the number of CallManager Express implementations or sales public information.
 Service Element Description Covad Answer

IP Access Service Customer must procure its own IP Access Service An inherent part of all Covad packages

Calling plans are independent of Call Manager Express

Calling Plans and depend on the respective service provider. Can Covad's simply offers both metered and unlimited options.
provide site to site calling over corporate WAN.

Covad's portal is very intuitive and functional. Covad offers

Web based GUI for moves adds and changes and ingrate
Portal voicemail.
instant messaging and document collaboration features. Cisco
offers collaboration products but they are stand alone items
Find Me Provides call forwarding
Covad offers a very robust service that can be easily
Follow Me managed from the web.
Covad supports remote workers whether business travelers or
Remote Worker Remote workers supported
telecommuters
Covad provides a PDA WAP browser dashboard which enables
Mobile Office Not offered
users to click to call from contact lists or call logs.
Unity Express provides voicemail services which can be Covad includes visual voicemail in all packages and does not
Standard Voice Mail integrated with unified messaging. Provide general confuse the end user by offering the various options.
delivery mailbox for to a project team Voicemail can be accessed over the web or phone.
Covad provides this service in all its packages including email
Unity Express provides integrated voicemail/unified integration and Covad’s signature dashboard unless the client
Unified Messaging messaging needs a basic line for faxing or a lobby phone.

Basic auto attendant capabilities. 5 different greetings, dial

Covad provides auto attendant, account codes, ACD features
Call Center by name, dial by extension, one key dialing, return to
at an additional $5 dollars per month.
operator
Covad provides conferencing for 2 to 10 users and access
Conferencing 3 way conference calling though the web portal. Through scheduled conference calling
document collaboration is a major differentiator

Instant Messaging Covad offers both instant messaging and document

and Document Applications can be purchased separately collaboration software to its users. These two applications
have great productivity benefits.
Collaboration
Covad offers it as well but it currently requires a manual process to
Microsoft Outlook® Fully integrates with Outlook
copy contact information from Outlook to dashboard. However, we will
Plug-in have an upgrade that export contact information to the dashboard in
early 2005
Toll Free On Covad’s provides the ability to call out to all the participants instead of
having the callers call into an 800 #. If the customers have purchased
Demand Not offered
the 800 #, they can also use that for this feature
Conferencing
Covad Premium Web package provides for customer with unlimited
ISP Must be provided by service provider plan with web hosting, email and DNS hosting

The following prices out the equipment costs a business with 3 locations, headquarters and two branch offices, would
incur to set up a pure Cisco CallManager Express system for 75 users. It is assumed that
1. The corporate LAN is capable of supporting voice.
2. There are 49 users at the headquarters and 26 users distributed evenly across the two branches.

HeadQuarters - 49 seats 2 Branch Offices with 13 Seats per Branch

Description Extended Quantity Description Unit Cost Quantity Total
2821 Voice Bundle w/ PVDM2-32,FL-CCME- 2801 Voice Bundle w/ 24-user FL-CCME-
48,SP Serv,64F/256D $ 5,395 1 $ 5,395 SMALL,SP Serv,64F/256D $ 3,095 2 $ 6,190
Four-port Voice Interface Card - FXO
1-Port RJ-48 Multiflex Trunk - T1 $ 1,300 1 $ 1,300 (Universal) $ 800 2 $ 1,600
1-Port Serial WAN Interface Card $ 400 1 $ 400 1-Port Serial WAN Interface Card $ 400 2 $ 800
Unity Express AIM -price includes 12 Unity Express AIM -price includes 12
mailbox $ 1,795 1 $ 1,795 mailbox $ 1,795 2 $ 3,590
OS 24X7X4 + SAU PROMO to June 05
Cisco Unity Express base release $ - 1 $ - 2801 Voice Bndl $ 461 2 $ 922
Unity Express License 50 Voice Mailbox-
Auto Attendant-CCME $ 500 1 $ 500 SW APP SUPP + UPGR Unity Exp AIM $ 270 2 $ 540
OS 24X7X4 + SAU PROMO to June 05
2821 Voice Bndl $ 770 1 $ 770 Cisco IP Phone 7960G, Global $ 415 26 $ 10,790
Cisco CallManager Express License For
Cisco IP Phone 7960G, Global $ 415 49 $ 20,335 Single 7960 IP Phone $ 150 26 $ 3,900
Cisco CallManager Express License For
Single 7960 IP Phone $ 150 49 $ 7,350 Branch Offices Cost $ 28,332

HeadQuarters Cost $ 37,845 Total cost for 75 Seats Across HQ and Two Branch Offices $ 66,177
 Sales Method and Target Market
Cisco works closely with its channel partners as its key route to market. The Company is working to improve its channel programs
with respect to the SMB market. Cisco recently improved a number of its channel partner incentive programs to motivate partners
to more aggressively go after smaller businesses. On program in particular, the IP Freedom program was implemented to motivate
partners to sell products such as CallManager Express to business with a minimum of 25 phone sets.

While Cisco continues to make strides in moving down market it is clear that its SMB focus remains on the high end of the SMB
market. While CallManager Express can address the needs of a customer with as few as one to eight lines, Cisco appears to prefer
to enable the service provider channel to go after this portion of the market.

Cisco is working with many service providers around the world. Cisco seeks to leverage its strong brand and contacts in the service
provider community to be a key enabler of hosted voice solutions. To address the needs of the service provider community Cisco
has developed the Cisco Service Provider Business Voice Solution. Cisco sites in its own product literature that those business that
recognize the benefits of IP telephony products “have hesitated to migrate because of the high initial investment costs and technical
complexities.”

A Cisco survey of 500 businesses in the US and EMEA found that more than 50% planned to adopt IP telephony and 28 percent of
those customers indicated that they planned to outsource to a service provider. Enterprises cited the following reasons: free
resources to focus on core competencies, reduce capex, eliminate risk of obsolescence, reduce opex by avoiding hiring specialized
resources, trade variable costs for “pay as you grow” scalability, and simplifying and reducing risk in migration to IP telephony.

Given the small market orientation of the CallManager Express product Cisco could encounter channel conflict with the service
provider community.

CallManager Express Strengths, Weakness and Counter Strategies

Cisco Strengths Defensive Strategies

Cisco is recognized as the premier networking company
in the world. Cisco possesses a broad and best in class
product portfolio coupled with a strong sales channel.
Cisco has the financial might to be an aggressive player
in any market it chooses to compete.
If the business has already standardized on Cisco gear
throughout its network adoption of CallManager Express
would be an easy step
Cisco Weaknesses
Cisco’s channel is better suited to sell to the large portion
of the SMB market.
Many of the features within the CallManager Express
product are not intuitive and require a very strong
understanding of the product on the part of the end user.
Cisco CallManager Express must be managed and
maintained by an IT professional or someone with a
sound understanding of Cisco networking gear.
These are the exact reasons that Covad’s network is a
certified Cisco Powered Network. Covad can deliver our
hosted products via CPN and alleviate the need to
purchase and manage your own CPE.
Again, this is why Covad has partnered with Cisco because
it is certain that the company will always be a technology
leader
True, this can present a challenging situation but the
customer still must manage CallManager Express adding
an additional burden.
Attack Strategies
Covad is aligned with the needs of the broader SMB market
and has built its VoIP service expressly for the needs of
SMBs
A review of each company’s product makes it clear to an
end user that Covad’s offering is more intuitive and will
require much less training.
Covad provides an end to end solution that requires little to
no end user expertise in networking.

Selling Against Cisco’s CallManager Express

Covad is dedicated to the needs of the SMB market
Cisco continues to increase its focus on the SMB market; however, given the many markets it serves the company can not
demonstrate the same level of corporate SMB focus as Covad.

To implement CallManager Express a business must have the appropriate people on staff
To implement the CallManager express solution, the business will still need a staff member to deploy, manage and maintain the box.
Covad can alleviate this burden and allow IT staff members to focus on other strategic initiatives.

Cisco recognizes the value of hosted solutions

Cisco is marketing the value and importance of hosted and managed voice service. Covad agrees with Cisco statement on its web
site that the “many roadblocks to a ‘roll your own’ IP solution have created a significant opportunity for service providers to use their
core business strengths to meet the needs of motivated customers” and deliver voice as a hosted service.