The day is here where Microsoft is expected to announce pricing details of its new Office 365 Enterprise Suite, E5. The guts of E5 have been public since July. My co-worker, peer and friend, Kimberly Tunney, did a phenomenal job of dissecting the various components that make up E5.

Arguably, the most exciting thing about E5 is the hosted phone system as part of the new Skype for Business services. These services represent the power behind E5 and have been in public preview for months. CDW, as well as many of my customers, has used the services since the start of the trial.

First, let’s get a few acronyms out of the way:

  • PBX stands for Public Branch Exchange (a phone system)
  • PSTN stands for Public Switched Telephone Network (the global network that connects calls between PBXs)

PBXs and PSTN services are two stubborn areas of information technology that can give pause to even the most experienced IT professionals. Why? Because modern communications standards have progressed beyond these older technologies. Microsoft is offering to manage that complexity in the cloud, allowing you to leave all that old technology behind. In fact, one of the new services is called Cloud PBX with PSTN Calling.  Microsoft recently published a great video demonstration that shows how easy it is to get numbers and configure calling capabilities for your users with Cloud PBX.

That said, the steps to move your phone system to the cloud aren’t always clear. Customers sometimes ask, “What do I need for the full solution?” The answer involves four parts:

  • Licenses
  • Connectivity
  • Endpoints
  • Migration


Office 365 subscription plans are very straight forward. E5 is simply a bundle of licenses. You save money when buying the bundle instead of individual licenses. In contrast, Microsoft’s traditional Client Access License (CAL) model is quite complex. CDW can explain the options to transition from traditional licensing to cloud subscription plans, or how to upgrade existing E1, E3 or E4 plans to E5. The hardest thing about licensing is determining which path forward makes the most financial sense.


One of the biggest reasons some IT professionals have been hesitant to move telephone services to the cloud is the fear of poor call quality. I exposed this problem in an earlier post. The four segments of network connectivity to consider are:

  • Local Area Network (LAN)
  • Wide Area Network (WAN)
  • Public Switched Telephone Network (PSTN)
  • Managed Connectivity to Office 365 (ExpressRoute)


Do you have a VoIP (Voice over Internet Protocol) phone system today? If so, it’s highly likely that your existing LAN will work well with Skype for Business. If you have an old phone system—one in which the phone uses a separate set of wires instead of an Ethernet connection—then you should have your LAN assessed before deploying any VoIP system, including Skype for Business. However, Skype for Business Online PSTN connectivity puts extra emphasis on Quality of Services (QoS) settings. See the section below on ExpressRoute.

It’s worth mentioning Skype for Business calls are secure without a VPN. Sometimes, remote users use a VPN (Virtual Private Network) connection while working from home, a hotel or the coffee shop. Categorically, using a VPN adds overhead and degrades any VoIP communication, not just Skype for Business. If possible, remote users should limit the use of a VPN, enabling it temporarily only for internal corporate applications that require it.

Many users, remote or internal, also sometimes connect via Wi-Fi. Wi-Fi supports QoS but public Wi-Fi hotspots connect to the public Internet, so QoS advantages are lost. The internal corporate Wi-Fi network should be assessed at the same time as the LAN in order to ensure VoIP readiness, sufficient coverage and sufficient capacity.


If you have more than one location, it’s important to ensure the interconnections support QoS. Using Multiprotocol Label Switching (MPLS) is a reliable way to interconnect sites while providing the desired performance characteristics. Connections using the public Internet or other common types of connections such as point-to-point VPN don’t necessarily offer the ability to manage QoS. Connections without QoS may seem to work at first. Calls may sound good at certain times of the day but bad at others. Even if everything seems great initially, organizational growth and the resulting increase in usage may gradually exceed the WAN capacity. Quality problems will eventually emerge. The subtly increasing congestion introduces problems that may become severe before a proper analysis and remediation can be performed.


You have a choice. By deploying Skype for Business Server on-premises, you can continue to leverage your existing PSTN connections in place today. You can also use Microsoft’s PSTN services connected to the Office 365 data centers. Or, you can use both in a hybrid deployment. The cost of the PSTN calling service from Office 365 is in addition to the E5 license cost. The pricing of the PSTN calling service is expected to be announced December 1 and is anticipated to be sold as a subscription on a per-user, per-month basis to mirror the E5 subscription model.


Managed connectivity to Office 365 is especially important when using the Skype for Business Online PSTN calling service. The considerations for connectivity to Office 365 are similar to those for the WAN because your network essentially becomes a remote site connected to the Microsoft data center. Here too, using a public Internet connection to the Office 365 data center may work at first. However, using Microsoft ExpressRoute for Office 365 is highly recommended. In general, over allocating bandwidth can mask the negative effects of using a connection without QoS.

Bandwidth over allocation may work as a strategy for your LAN and WAN, especially for smaller organizations, but the PSTN calling service imposes extra demand on the connection to Microsoft’s data center. ExpressRoute is a tailored MPLS connection designed to ensure quality to the Microsoft data center. A service provider contract for the MPLS circuit, along with a Microsoft Azure subscription, are all that is required for ExpressRoute.

Using ExpressRoute means QoS is respected in the cloud. However, there is no benefit from ExpressRoute if the QoS settings are not applied in your LAN/WAN. A policy can be used on your LAN to apply the proper settings at each endpoint (phone). Or traffic across the WAN can be tagged using Account Control Lists (ACLs). Or both of these methods can be used together. The benefits of using ExpressRoute will be negated if QoS is not applied properly on the LAN and WAN. For QoS to work, it needs to be applied end-to-end. Not implementing QoS end-to-end will result in unpredictable call quality.


With few exceptions, the old phones connected to your old phone system won’t work. In addition to the rich softphone clients for PC and Mac, there are many endpoint devices approved for Skype for Business—from IP phones to conference phones. Don’t forget the exciting new Surface Hub available in January, and the full-on Skype Room System experience.

However, a subset of endpoints is supported for Skype for Business Online PSTN calling initially:

  • Rich clients for PC and Mac, included in the E5 subscription
  • Free mobile clients for iOS, Android and Windows Phone
  • Lync Phone Edition IP phones like the Polycom CX600 and similar models from HP and Mitel
  • Polycom VVX201-VVX600 series IP phones with UCS 5.4.0a firmware

Other endpoints will become supported as manufacturers begin shipping units with the required firmware.


Lastly, one of the most critical aspects of any technology transition is the migration process. There are three target end-states:

  • On-premises – the tried and true enterprise-grade architecture used to deploy Skype for Business Server 2015 including the older versions of the same product, called Lync and OCS (Office Communications Server)
  • Cloud – cloud infrastructure and cloud PSTN calling service from Office 365
  • Hybrid – a combination of cloud and on-premises

Why not migrate directly to 100 percent cloud? It may be necessary to keep the old PBX around for some older applications, such as analog phones and faxing. Both the on-premises and hybrid designs allow you to integrate with the existing PBX, allowing the transition to proceed as gradually as needed. Additionally, there are Skype for Business features that, for now, are only available with the on-premises server-based design, such as ACD (Automatic Call Distribution) features for hunting and queuing. The hybrid design includes a way to deploy a minimum amount of Skype for Business as a bridge for local connectivity while maximizing the cloud benefits, all without the burden of maintaining a full on-premises deployment.

It’s no surprise the complexity of the migration is proportional to the size of the organization. However, when migrating a phone system to Skype for Business Online, the most interesting part of Microsoft’s PSTN calling service is the support for number porting. When the service becomes generally available in December, Microsoft is expected to offer access to facilitate telephone number porting via a portal at the Office 365 tenant administration level. This means your IT staff controls “the when” and “the who.” Users can keep their existing DID (Direct Inward Dial) phone numbers—the number listed on their business cards, for example. From the perspective of a crusty old telecom guy like myself, control over number porting is nothing short of amazing.

Putting the control of number porting into the hands of you, the customer, completely resets the considerations that factor into your migration plan. With adequate planning, you can move users to the cloud as quickly or as slowly as your business needs dictate. It’s important to know E5 alone will not allow a user to leverage Microsoft’s new hosted PBX service in the cloud. For a pure cloud experience, just adding a PSTN calling service may be enough. But most business users who work in an existing corporate network and are accustomed to a traditional phone will likely also need an endpoint device (IP phone) and a network assessment or enhancement to ensure consistently great sounding calls.

Contact your account manager to learn how CDW can deliver the full solution or reach out below to share your opinion about Skype for Business Online PSTN Calling.

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