News
Is Star2Star Right 4U?
By: Eric Krapf
From: nojitter.com
An upstart hosted provider goes against the grain with its architecture and business model.
Vendors don't usually throw the word "proprietary" around when they're talking about their own products and services; it's generally considered proper form to loudly proclaim just the opposite--that you're "open" and "interoperable." For the most part, nobody believes your proclamations, but claims of "openness" are kind of the American-flag-lapel-pin of vendor self-presentation: It may be purely for show, but you'd best not be caught without it.
But when I talked with Michelle Accardi-Petersen, Chief Marketing Officer for hosted communications provider Star2Star, she repeatedly referred to the company's technology and distinctive architecture as "proprietary," and she meant it as a good thing. Rather than using a platform from a BroadSoft or Cisco, Star2Star built all of its technology in-house; they can connect with legacy gear, but they really push the idea of using Star2Star as your end-to-end provider.
To understand how this makes sense in their world, you have to start by looking at the architecture they've built, which they call their Blended Architecture, and which is basically a service that comes pre-configured as a hybrid cloud model. The architecture consists of two major elements: A premises appliance called StarBox, and a platform based in Star2Star's cloud, on which reside all the Unified Communications applications a user might choose to deploy when crafting a complete enterprise communications solution.
The StarBox has all of the IP-PBX functionality, and one StarBox sits at each remote site served, for survivability in case of WAN failure. In addition to the PBX functionality, the appliance also boasts QoS management for packet-marking. The Star2Star cloud offers all the major UC features--presence, unified messaging, contact center, etc., which the subscriber can purchase a la carte according to their needs. The Star2Star cloud consists of 2 datacenters and 7 points of presence in North America, with the company's first overseas node having just cut over in Amsterdam.
Star2Star customers can incorporate legacy/third party vendor installations into their hosted service via SIP Trunks, according to Michelle Accardi-Petersen. But her attitude toward integration with Microsoft Lync gives you an idea of how dedicated Star2Star is to pushing their own end-to-end story ahead of a multivendor migration model. She conceded that, at a time when Microsoft Lync is the UC technology of the moment, she's ambivalent about how much to play up this integration capability: "Quite frankly," she said, "we think our solution is a superior solution." As a result, she's reluctant to promote their Lync integration when "that's not the way we want to drive our customers."
One reason why Star2Star believes it has a compelling story as a replacement for existing systems is its pricing model. Star2Star goes to market through partners that include VARs, interconnects, and sales agents, and it allows these partners to piece together a solution that works for their customers. But Star2Star's pricing model is one I can't think of another vendor using: While many SIP trunking providers offer pooled-line models, Star2Star not only does this, but goes a step farther with pricing for local users.
At the SIP Trunk level, Star2Star lets users pool lines across multiple remote sites--so that you can pay for a total of, say 20 lines across sites, and flexibly use capacity at individual sites, to optimize according to peak usage trends. Furthermore, you can burst above your maximum contracted line amount (20 in the hypothetical here) and pay only for the usage of that additional capacity.
In addition to this WAN-side flexibility, Star2Star also offers customers a choice of pricing models for local sites. You can choose either a "seat model," paying for every desktop deployed at a location; or a "line model," where you pay only for peak usage levels, and the lines are pooled among end stations.
Michelle Accardi-Petersen explained: "Each location needs a StarBox that will support the number of users at that location. A StarBox CCM [Cloud Connection Manager] Lite for instance is needed for a 20-user location, a StarBox CCM 2250 can handle up to 250 and a StarBox CCM 5500 roughly 600. In our line model you would need as many licenses as peak connections, in our seat model it would be as many as the user count."
According to Accardi-Petersen, Star2Star's ability to offer this kind of pricing comes from the fact that its technology was developed from the ground up--that "proprietary" thing--and since they started out providing hosted services based on this home-grown software, they were unburdened by the need that legacy players have to make the transition from upfront to recurring revenue. "We don't have the legacy and pain of making that transition," she said.
For now, Star2Star is pretty much an SMB play--as suggested in Accardi-Petersen's explanation above, the biggest StarBox appliance tops out at around 600 seats. But like many hosted providers, they're targeting retail and other larger enterprises that are mostly made up of many small sites; all of the Dollar General chain's 13,000 users are on Star2Star, she said. She also says, "We're moving up market fast," as many other hosted providers are also attempting.
Star2Star's got a story that seems to differentiate it from a very crowded pack of hosted service providers. Michelle Accardi-Petersen says the next steps are to add security-focused features, and APIs so that enterprises can integrate their applications with the service.
If hosted is going to succeed beyond the Centrex model, it's going to have to be different from Centrex, and it'll have to present better TCO than services have to date. The devil's always in the details with any service provider's pricing and value proposition, and your mileage is always going to vary. But Star2Star seems determined to drive a different kind of conversation around some of the key value propositions in hosted.
