At all three levels voice traffic is being broken up into packets and turned into just another data stream, thereby converging voice and data networks. However, the frenetic activity in two of these levels, the carrier and mobile spaces, is being more than masked by a truly numbing lack of urgency, as yet, in the corporate arena.
IP (Internet protocol) telephony started out in the early days of the Internet as an enthusiast” toy. US users who paid no call charges installed Internet telephony on their PCs and had fun phoning long distance and internationally for free – but only to others with the same system installed on their PC.
Another major drawback was the “best efforts” delivery mechanism of IP. This meant that the stream of voice packets broke apart whenever other Internet traffic elbowed the connection aside, or whenever one or more routers along the way decided to route parts of the message differently. Voice traffic is time sensitive. Latency delays of more than 100 milliseconds deliver an intolerably poor call quality.
However, IP Internet phones made it pretty obvious that provided the quality of service issue could be solved, voice could be broken into packets just the same as data and could be run over the same network as data services. To some, this meant that corporates could collapse voice and data networks into one with efficiency savings.
Corporates already had Local Area Networks (LANs), 90% of which were Ethernet and IP based, so it would not be a big step to move to a single unified corporate network running Voice over IP (VoIP). What was required, or so the thinking went, was for the market to produce IP PBXs that would replace the traditional corporate PBX.
By the mid to late ’90s, some traditional PBX vendors and a number of new start up vendors were bringing IP telephony PBXs to market. Vendors like Nortel and Lucent also started adding IP cards to their traditional PBXs to create hybrid boxes capable of handling both ordinary voice traffic and VoIP traffic. However, the problem these vendors ran up against was that traditional PBXs are just about the most reliable devices any corporate has ever had dealings with. How do you get someone to change when what they’ve already got works perfectly?
As Hari Haran, vice president for technology and solutions at Lucent Technologies notes, IP telephony by itself does not present a particularly compelling proposition to corporates. Traditional voice services can’t be attacked on the reliability front. Cost used to be a factor and traditional telephony services were vulnerable on this. One of the major sales propositions for VoIP services is still that corporates can recoup their investment by having VoIP services “piggy back” for free on their private data networks, between branches and, more importantly, between offices on different continents. The point is still true, and there are savings to be made, but falling telephony charges have taken the steam out of this argument.
Robin Duke-Woolley, senior consultant at the telco consultancy Schema, in fact argues that far from an active drive towards VoIP converged networks, based on cost and efficiency savings, corporates are likely to drift into converged networks gradually as they end-of-life their traditional PBXs.
“What we are seeing is a massive effort to upgrade corporate communications infrastructures to move into e-business services. It is creating the conditions where it is simply logical for corporates to make their next PBX an IP VoIP box,” he says.
On this analysis, Duke-Woolley expects the move to convergence in the corporate space to take around six to eight years, assuming a life of around 10 years for the traditional PBX. This process could be drastically speeded up if some “killer application”, predicated on converged networks, emerges that really delivers massive productivity and efficiency gains. But he has a hard time conceiving what such an application could be.
However, events in the carrier space and in the mobile space are moving at a different pace and there is a good chance that very shortly the way we do all kinds of ordinary things will change. This, at least, is the view of Bruce Campbell, business development manager with responsibility for telco and media projects at Cap Gemini Ernst & Young, and Microsoft wireless services guru Dilip Mistry .
Campbell points to the way carriers, telcos and ISPs have been driven to move to converged networks, running IP services to corporates in the hopes of protecting their revenue streams from falling bandwidth prices. Where this will go, he suggests, is in the direction of ISPs offering converged voice and data communications infrastructures to enterprises as a managed service, on an outsourced, or ASP “per seat” model.
One of the powerful persuasive factors in the “per seat” rental pricing model is it does not involve any huge up front capital investment costs for the corporates. They can trial services and see if the IP converged model gives them more flexibility for certain kinds of services and applications. This of itself could start to add some momentum to the move by corporates to converged networks.
Campbell suggests that applications vendors could start to add value is by applying techniques to voice traffic that can provide some context and sense for the stream. When this becomes possible a whole raft of new applications opens up immediately, for good or ill. He suggests a scenario where a company uses an IP application to monitor the performance of its tele sales force. Context analysis of the conversations could highlight poor performance and recommend additional training, or help the agent to “self learn”.
Mistry makes the point that VoIP is an integral part of third generation wireless services, which are scheduled to happen in around two years, so the whole theme of convergence will get a huge boost when 3G wireless services finally roll out. However, well before this, GPRS, wireless services”the so called two and a half generation services, are going to have a major impact on the take up of IP converged services, he argues.
This will happen through a combination of factors. First, corporate executives are going to get used to the idea of using a single device for both data and voice. Second, wireless applications will come into being that rely on converged services. The most obvious instance of this is already happening, he suggests, in the form of voice portal services. “Vodafone has already announced a platform that will work with Internet e-mail to allow users to navigate their e-mail with voice commands from their mobile phone.”
A third factor will be that there is an obvious benefit to a corporate to be able to give an executive a single portable device that can roam seamlessly across mobile networks, fixed wireless networks and fixed wire networks. Used in conjunction with voice portals for data access, such devices could enable sales people to communicate directly with data held on the corporate LAN. In this way the devices would enable productivity by helping the sales team to get instant answers to revenue generating queries such as “can the customer have this order in blue by next Tuesday?”.
“The industry has a lot of work to do,” Mistry says, “to build the interfaces that are going to be necessary to enable people to roam easily between PANS (personal area networks), LANs and WANS, but we are getting there.” Today, there are still interoperability issues, for example between an emerging PAN technology like Bluetooth, and fixed wireless and mobile wireless services, and these issues need to be solved quickly.
Mistry”s point about text to voice e-mail services in the mobile space parallels the idea of unified messaging, where executives have a single in-box for e-mails, voice mails and faxes, in the fixed wire corporate space. This has sometimes been touted as a potential “killer application” for converged IP networks and over time, in the absence of any more compelling service, unified messaging does add a fair bit to the convergence proposition.
However, Lucent’s Hari Haran argues that the real killer application has been around for more than a decade. It is, in short, rich media services, or, to give it a more recognisable name, video conferencing. In Haran”s view, the problem with video conferencing in the past was its cost and its lack of scalability. Converged IP networks, particularly when delivered direct to the corporate premises by an SP with a large, optical Internet IP backbone service, will give instant scalability.
Nortel’s senior e-business solutions marketing manager, Daniella Astarte agrees. But she suggests that rich media and voice services, predicated on converged IP networks, will make an immediate impact in the call centre and e-business space first and foremost. By adding “click to call” buttons to websites, perhaps based on CRM analysis of a web customer”s movements on the site, companies will be able to dramatically reduce the percentage of customers who bail out of a site before completing the checkout process. Turning lost sales to actual sales will have a huge revenue earning potential and of itself could start to make companies take notice of the additional flexibility and power of converged applications, she suggests.
With so much happening in the VoIP and converged IP networks space, there is clearly a huge opportunity for consultancies to start generating some thought leadership in this market. Neglecting to develop a strategy in this area could turn out to be a squandered opportunity of some magnitude once the IP bandwagon really starts to roll!
The experts” view
Phil Dean, voice solutions marketing manager, Cisco Systems
“There is a great deal in converged voice and data networks that consultants need to get to grips with. We have already seen a number of new applications appearing, with the capacity to bring about some fairly radical changes in ordinary working practices.
These range from directory enabling services, which bring data processing capabilities direct to soft phone IP handsets, to full blown video conferencing and collaborative working applications. The whole idea is to use converged voice and data networks to make people more efficient, to allow them to work in more productive ways.
We see voice portals, for example, as a very exciting way of enabling travelling executives to have access, via their mobile phones, to a wide range of data access capabilities. Whether they want to check on stock levels or access a client’s records, the voice portal mediates between the corporate”s IT infrastructure and the end user”s mobile request. All the heavy duty voice to SQL query processing and text to voice processing for onward transmission to the executive, is done at the server side, so a voice portal need not make particularly heavy demands on the mobile access device.
One of the challenges with VoIP and convergence is that consultants need to be thoroughly abreast of what is possible”up to speed in the desktop, telephony and server side processing.
Two of the biggest applications areas we see are VoIP based website “call me” type applications, on the one hand, and the idea of a universal, or unified message box, on the other. One of the problems for consultants working in this area is that the underlying technologies are moving forward very rapidly and things are changing all the time. Last month”s future vision is already today”s deliverable product.”
Craig Duffie, head of customer business strategy at Cable and Wireless
“From C&W”s perspective converged networks come down to two key perspectives. The first concerns the development of core IP services, and has to do with transforming our global backbone WAN services to IP. We are well advanced now with this and it is already clear that the idea of IP services on the WAN is absolutely transforming the carrier backbone market.
The second involves the view of the edge, or the LAN infrastructure where IP services have long been the dominant technology as far as data is concerned. There are huge limitations on the economies of scale that the legacy telco WAN networks can deliver. IP services using Dense Wave Division Multiplexing (DWDM), on the other hand, are already scaling to Terabyte levels of service and higher orders of magnitude are within reach.
The cost of transforming carrier networks from legacy infrastructure to IP services is huge. Something of the scale of this is given by our partnership with Nortel, for example, which involves an investment on our part in IP related equipment of some $950m. The point here is to give us voice as just another data application, giving us a complete global integrated IP services core that can scale massively.
What this means for corporate customers is that we can offer a fully enclosed Service Level Agreement (SLA) for IP services. They get access to a number of websites that give them the ability to verify the latencies associated with different classes of service across our backbone between any two cities or points.
From our point of view though, it is now critical to get customers to start using IP converged services. To do this we need to understand the corporate LAN and LAN applications services and we have been acquiring tier one enterprise network integrators in the UK and around the world to help us do this. We are also working with Cisco to bring its IP LAN converged services offering to corporates as a complete managed service proposition which they can buy on a per seat price basis. If the business wants 50% of the seats to be VoIP- enabled, or 100% to be VoIP-enabled we can do this. If they want multi cast or video conferencing to the desktop, we can give them this. Our managed converged network services proposition allows companies to adopt IP services without any major capital investment up front.”
Hari Haran, vice president for technology and solutions at Lucent
“It is perfectly true that SPs now want to move up the value chain to offer converged services. But I disagree strongly with the idea that IP converged networks in the corporate space have no particular driver associated with them, or that IP converged services necessarily offer corporates just another version of a voice service they already have.
We are clearly in a bear market. The dotcoms are looking pretty bust and we now have a back to basics economy around the world. For the next six to 18 months, or however long the downturn lasts, corporates are not going to be keen on moving outside their core strengths. They are not going to pro-actively get into major IT or communications projects since that is inherently expansive. However we see this as a huge opportunity for SPs to look to offer outsourced infrastructure services based on converged IP networks, with multimedia services as the real killer application.
If you go to a corporate and offer it VoIP services, you are not going with a very compelling proposition. The corporation already has a very high standard voice service. You have to be bringing far more to the table if convergence is going to mean anything. We think that what “more” means here is true, low cost, multimedia services with strong Quality of Service guarantees. We have just launched a platform to SPs that will enable them to deliver precisely this to their corporate customers. When you add multimedia teaming, you add far more than IP telephony, and you do it at a fraction of the cost of the video conferencing technologies we have seen for the last 10 years.”
Dilip Mistry, Microsoft wireless product marketing manager
“Converged voice and data networks are a part of the IP converged network story, but another part of the jigsaw is provided by the interplay between fixed wireless services, based on the 802.11 standard, and GPRS mobile wireless services.
At present, fixed wireless services offer 11Mbps per second, which is massively faster than the 56Kbps promised by GPRS services. The fixed wireless services are located in large built up areas where the operator can build a subscriber base from high population densities. The GPRS wireless operators base their play around mobility and a nationwide coverage for mobile executives. Ideally, to get the best of both worlds, what a business wants is to allow its mobile employees to move from a mobile GPRS network to a fixed wireless network as soon as they come within range of the fixed wireless network.
Similarly, if the executive goes into a hotel or airport lounge that has a wireless LAN, or a series of Bluetooth pico-nets, the device they are using should be able to switch from the mobile operator”s service and access the corporate LAN using the faster access speeds associated with the higher bandwidth network infrastructure. Today this is hard to achieve. We are still some way off having a clever wrapper that we can put around the device to shield the user from these underlying technology complexities. Middleware for telephony and wireless connectivity is just beginning to emerge, and it is something that we at Microsoft are putting a lot of effort into. As a corporate, I would want my ISP to have the technology platform that will simply make this kind of roaming service available for my executives. VoIP is simply one component of this, in that converged voice and data networks are one of the pre-requisites for this kind of connectivity.”
Will Green, management consultant, Compass Management Consultancy
“We continually audit company systems as part of acquisition due diligence work, for example, and so far we have not come across a single instance of a VoIP implementation that we could regard as successful. There is a tremendous skills shortage, which perhaps points to the ASP route, or managed services route for this technology anyway.
We do see a desire for VoIP services by corporates, largely fuelled by the press. Yet it is hard to find examples of companies who as yet have achieved any real benefits. Indeed, one of the things we are seeing, which moves in a different direction, is companies decommissioning their fixed wire services and moving entirely to mobile.
However, I would never advise a green field company to go for a legacy PBX. Converged services make sense in a start up environment, but I struggle to see where organisations will get, say, a 10% improvement on their bottom line from IP convergence.”
Jim Hendrickson, chief operating officer, QoS Networks
“There is no doubt that when you compete with the PSTN, you are competing with something that is already rather good. The way we see it, having all their services on the one bill is about the only major driver that enterprises currently see in going to a converged IP network. From our perspective on the WAN network side, we are looking for greater efficiency and fewer interoperability issues.
The real excitement seems to be in the wireless space. We are seeing a serious drive for the provision of on-line Internet type services, delivering voice and data services on the same network. Our interest here is that different applications need to be recognised by the infrastructure and accorded different priorities. You don”t want to treat a voice call the same as you would data traffic aimed at a browser. There are a couple of Quality of Service (QoS) technologies that aim to make IP services manageable. We think that MPLS (multi label protocol switching) is the technology that is going to win out for delivering QoS across multiple networks. There are still interoperability issues between different vendors” implementations, but once QoS arrives it will give SPs the ability to give strong Service Level Agreements (SLAs) to corporates concerning converged services and that will boost the whole sector. As we saw with PCs, users will spend a while sorting out what is really useful, but it will happen.”
Robin Duke-Woolley, senior consultant at telco consultancy Schema
“The move to a single network is happening at two levels, in the network itself as the major operators build out substantial IP based backbone networks, and in the enterprise space, as corporates seek to link up their networks in extended networks with suppliers and customers.
What happens at the peering points where telcos hand off services to each other, is absolutely critical. You cannot peer at different qualities of service. The lowest common denominator prevails, which is why we are seeing large carriers trying to extend their networks globally so that they can keep the customer “on net” all the time. This way they can guarantee quality of service by maintaining control of all the equipment involved. However, as everyone chases in the IP direction, interoperability between vendor equipment and between telco networks will get easier and easier.
For corporates the drivers concern business reasons rather than costs. E-business and e-business processes are creating opportunities for voice to be layered on top, as a converged network, but there are no killer apps that I can see, certainly not video conferencing, which many companies would struggle to integrate into their existing business processes in a truly beneficial fashion.”
Pete Williams, 3Com senior network consultant
“There are still no huge corporate roll outs of VoIP, but what we are seeing is many smaller businesses starting to run their day to day operations on IP PBXs and soft phones or IP enabled handsets. We have enough proof of concept sites out there now to allay any fears over reliability or quality issues. We have been shipping technology in the US for at least the last two years and we started shipping in earnest in the UK about six months ago. We have a total of about 100,000 VoIP handsets out there now based on 3Com technology. That may not be much, by comparison with the total installed base of telephony handsets, but it is a substantial percentage of new shipments. Most corporates are still evaluating the technology in the UK and Europe, and when they do deploy it, they generally target some satellite area of their business. The analysts’ predictions and the statistics are looking very favourable. Research house Carniers Instat predicts that by 2004, LAN telephones in use will exceed the number of ordinary telephone lines in business exchanges. In 1999 about 5% of all handsets sold were LAN telephony sets. In 2000 it jumped to 10% and the figure will rise sharply over the next few years.We definitely see video conferencing as an important follow on step for corporates who have moved to a unified network.”
Anthony Harrington is a freelance journalistv