January 1998

In this special feature, we’ve assembled a gallery of industry experts and given them free rein to discuss the future of CTI — its challenges and opportunities, its longterm prospects. We’re pleased to report that our crystal ball gazers come from a wide variety of backgrounds; hence, the feature should give you a fairly representative sampling of the ideas gaining currency in the industry. We’re also happy that the feature’s anchor, contributed by Jim Burton, gives us the opportunity to publish some of the thoughts of the man widely credited with coining the term computertelephony integration (CTI). (While it may be among the least of his accomplishments, it does make those of us at CTI magazine feel that we and Jim share a special kinship.) So, we invite our valued readers to take advantage of the insights presented in this feature, which we feel is suitably prospective given that this is the January issue. At this time of year, most people are in the mood to take stock of what’s been accomplished, and what remains to be done, in all things, and that includes CTI.

X-Fusion: The Death Of The PBX

BY JIM BURTON

X-FUSION — THE SINGLE PIPE THEORY
Communications and information technologies and network services are starting to fuse, and an X marks the future. Data, voice, video, audio, fax, imaging, and databases, plus the networks — Internet, Intranet, wireless, and PSTN (public switched telephone network) — are all part of XFusion. The PC of today and the PDA (personal digital assistant) of tomorrow will support, provide, deliver, interface, and connect to X-Fusion technologies and services. While X-Fusion promises to deliver cost-effective solutions to the enterprise and improved services for customers, it also poses great challenges for many vendors. This article will look at how X-Fusion will impact the PBX market and is intended to be a wakeup call for the telecom industry.

With critical developments underway in communications and information servers and platforms, together with the opportunities for wireless and Internetbased enhanced services, X-Fusion is on its way to morphing a $4 billion niche computer-telephone integrated business into a $100 billion information-communication industry.

HISTORY LESSON: EVOLVE OR DIE
Of the top 10 companies in 1900, only one is still around today. These giants of industry failed to compete as new technologies evolved, and they paid the ultimate price — they went out of business. Take the railroads. If they had the vision to see where transportation was going — automobiles and planes — and the will to change, they could still be barons today, rather than federally subsidized orphans. Today, it is the telecommunications industry that is gripped by seismic upheavals brought on by advancing technological quakes. The information technologies that have changed the ways we do business, entertain, and educate now threaten to overturn the century-old way we communicate. As the Internet grows ever more ubiquitous, becoming the backbone for our information-intensive society and bringing with it new and enhanced technologies, the telecom industry better learn the lesson of corporations past, or join them in the dustbin of history.

THE TELEPHONE STORY
The telecom industry has a dramatic history. It’s a success story that inspires pride in American genius and ingenuity. In the beginning, service was unreliable, even worse than the early days of the PC (and the phone had no Ctl, Alt, Del keys to reboot). When the phone went down, you were out of luck. To ensure better levels of service for the consumer, and in recognition of the growing importance of improved communications in the 20th century, the government stepped in. Public utility commissions required that rate increases be matched by higher levels of service. These regulations translated into advancements in phone service — instant dial tone and bulletproof Central Office (CO) reliability. These improvements were so successful that average down time plummeted, to less then 2 hours in 20 years. The PBX has benefited from the mindset of regulation. One reason for a PBX’s reliability (and a lesson for data vendors) is that more than half of the millions of lines of code in a PBX are for administration and selfdiagnostics. A downside of the evolution of mis-sioncritical, highly reliable PBX equip-ment is that development cycles are very slow — typically 2–3 years. This is because the PBX vendors conduct extensive regression testing. (Every time I add new software or hardware to my PC, I wish the PC industry did more regression testing.)

SWITCH VENDOR BUSINESS MODEL
So you may wonder, after hearing the ominous tones I sounded at the start of this article, why an industry as successful as telecom should feel threatened by change. Well, just as the railroad barons didn’t anticipate the interstate, there’s a new highway being constructed that is going to present as big as an obstacle to the telephone switch (PBX) vendors. That superhighway is the Internet.

A complex business model has evolved for PBX vendors that puts them at a critical disadvantage, and one that some may not be able to change in time to survive. Several factors simply make this business model too inflexible to succeed in the coming information century:

• There are only two versions of a switch or PBX system: one for general business purposes, the other to serve the hotel industry, which also works for hospitals.
• The feature wars of the 1980s forced switch vendors to compete solely on price and features. Vendors battled by adding more features, but for free. The telecom channel forgot how to sell applications, which is one of the reasons why computer-telephone integration still has not gotten off the ground as a high-growth market.
• PBX vendors chose closed proprietary architectures to differentiate their products from each other. This choice, which may prove fatal to PBX vendors, explains why porting costs for CTI applications are so high for applications developers. Compare this infrastructure to the breakthrough cross-platform connectivity of the Internet, and you can begin to see where this is all leading, especially when it comes to application development.
• With the stiff price competition, the long life of a PBX, and the fact that most PBXs nearly double in the number of stations in their life — the manufacturers and the channel started reducing the cost of the switch (central processing equipment) and looked at the margins from the telephone instruments as the long-term profit opportunity. This has led to an executive phone costing as much as a low-end PC.
• A key flaw in the PBX business model is that the switch vendors do not sell to the IS side of a corporation, which today receives the budget and the mission to plan the future communications and information strategy of the business world.

THE INTERNET VS. THE IRON HORSE
First, a prediction: The Internet Protocol (IP) will be the death of the PBX as we know it today. The Voice-overIP application effectively replaces the need for a PBX system, and it is more cost-effective, flexible, and fea-turerich. Built upon an Intranet infra-structure, the IP-based PBX replacement is based on open standards, markedly differentiating it from the PBX. This openness insures compatibility for applications, creating a vast platform for huge development activity, which will attract the mass migration of application developers, which failed to write to PBXs because of the enormous costs of porting an app, say, from a Lucent switch to a Nortel PBX.

Voice over IP to the desktop will be based on industry standards that will help reduce end user costs. This simply does not fit into the PBX vendors’ financial models. These standards will be developed and advocated by companies such as Cisco, Intel, and Microsoft, who, along with other computer-based companies, will deliver compatible and costeffective terminal, telephone, and voice I/O devices, which will connect the desktop with voice transmission over the sin-glepipe IP-based network. And X-Fusion will have taken place.

THE EVOLUTION OF THE XPHONE
Vendors of new communications/ information device — IP-based phones — will begin by replicating the featurerich telephones corporate users have come to love over the past 15 years. The old feature-set’s significance, though, will fade as users switch to visual telephony, leveraging the PC for call control and GUI. The XPhone’s combination of phone and visual telephony will eventually reduce demand for the full-function feature phone. As standards evolve to insure quality of service (QoS), vendors such as Cisco, Intel, and startup IP-PBX companies will offer standardscompliant IP-based telephones, signaling the birth of the X-Phone. The X-Phone will look and act like today’s PBX telecom phones, with the same feature set. There will also be a POTS (plain old telephone service) version, like the one found in your home or reception lobby. No longer will companies be locked to their switch vendor for outrageously priced propriety phones. Competition in the X-Phone market will deliver aggressive PC margin pricing. After all, there are more phones in the world then PCs or even TVs.

The X-Phone will evolve and become more cost-effective. It will leverage the functionality of the feature telephone set, but split the cost between the PC and the telephone. Resources in the PC, particularly MMX technology, will replace the expensive components found in a standalone XPhone.

Intel will eventually build-in XPhone capabilities into the industrystandard PC design. PCs will ship with an Ethernet interface on the motherboard. Along with Intel’s MMX technology, the PC will become an XPhone, eliminating the need for a standalone telephones. Intel will support several voice I/O options that leverage the multimedia capabilities of the new, telephony-enabled PC systems that may include wired or wireless headsets.

IP CALL CONTROL SOFTWARE
Microsoft will steal the PBX vendors’ crown jewels, and there’s nothing anyone can do about it. They will take call control from a closed proprietary component of an inflexible phone system to an open interface with APIs that will enable a new breed of XFusion application developer. And, for those PBX vendors who doubt Microsoft has the resources for such an undertaking, just look at their balance sheet. They won’t develop it — they will buy it — and they will buy the best.

THE SINGLE PIPE WINS
The users win big time with one pipe to the desktop. They get enhanced communications — data, voice, and video collaboration — with lower total cost of ownership. One estimate puts the savings at $20–40 per desktop (based on costs for staff, maintenance, wiring, adds/moves/ changes, one common directory and database, etc.). Users will save toll charges as well, in the short term, because of consolidation of data, voice, and video over one pipe on the enterprise Intranet. This is starting to happen with voice over frame relay. A move to frame relay, combined with voice and fax integration, can reduce remote communications costs by up to 60 percent.

Seamlessly integrated throughout the enterprise, the single X-Fusion pipe will be a more cost-effective and a richer environment for branch and remote offices. Robust single-pipe applications will tightly integrate data, voice, and video services to deliver rich solutions for customers and employees.

POINT-GAME-SET-MATCH: WINTEL (ALMOST)
The pieces of the puzzle are falling into place. First, you have Microsoft offering IP call control as a Windows NT option. Second, you have Cisco, Intel, and others providing standards-based IP telephone devices. What does that leave the switch vendors? Applications and systems integration. Switch vendors, however, can’t even take this scrap for granted. They’ll have to realize that the new puzzle is inevitable, and that they have to fit in as best they can. They’ll have to realize their future depends solely on their own vision and their ability to execute (and to execute quickly).

Do I really believe the PBX is going to die? Absolutely, but it will take some time. The first signs of decline will be in the branch and small office, along with vertical market solutions behind the enterprise PBX. The corporate PBX will be like the mainframe; it will linger for some time.

The PBX vendors have a great opportunity. If they work with Cisco, Intel, and Microsoft, they can become the agents of change and continue to provide their customers and shareholders with value. Or they can join 9 of the top 10 companies at the turn of the last century.

Jim Burton is founder and CEO of C-T Link, Inc., a consulting firm specializing in voice/data integration. He is a founding member and currently vice chairman of the board of directors of the CTI Division of the MultiMedia Telecommunications Association (MMTA) and serves on the Board of Governors of the MMTA. C-T Link consults with major vendors in both the computer and telephony industry regarding their CTI product development, distribution and partnership strategies. For more information, call 707-963-9966.

Alliance Systems

With 150 percent growth in the IP Telephony market this year, corporate applications will drive the demand for telephony components and systems integration. Corporation applications will make the most significant dollar impact with toll bypass for voice and fax over the Internet, Intranet, or virtual private networks. Specific opportunities include:

• Internet telephony gateways. These will save companies significant amounts on long-distance. Also, some companies may be so bold as to become their own long-distance providers.
• Web-enabled call centers. Web surfers and customers will be able to click on an icon and speak directly with customer service/ sales staff. (A “call me” application may be the most lucrative application you can create or sell this year.)
• Open-standards-based systems. Demand for such systems is rising, and will continue to rise. Customers want customized solutions, price allowing them to have a competitive advantage.
• Enhanced PC-based services for the central office. Demand will continue to rise for services surrounding legacy infrastructures and custom-configured switches for local telephone service. One final point: The future of CTI will take off on Wall Street and the financial arena this year. Organizations such as Cisco, Microsoft, and others will devote more time and dollars to CTI. They see the possibility of high demand for the convergence of telecom and data.

— Jonathan Shapiro, president of Alliance Systems, which sells computer-telephony hardware and software from a variety of vendors to systems integrators, developers, and other customers worldwide.

Brooktrout Technology, Inc.

Two key trends are 1) the continued consolidation of telecommunications (voice/fax) and data communications networks, and 2) the integration of networkbased applications.

IP/Voice and IP/Fax are hot today because users have already seen the reduction in operating costs and management. In addition, messaging and response applications are no longer being implemented as islands, they are being better integrated with the enterprise network applications. Voice mail won’t be a separate application, it will be part of the enterprise messaging application. Remote access won’t be just for data, but for all desktop functions: voice, fax, and data.

These trends are not just technology push. They are being pulled. They reduce the cost and improve the performance of every business that uses them. With CTI technology, applications that deliver these benefits can be delivered quickly and at low cost. That’s why Brooktrout is hard at work creating the next generation of universal port products that integrate voice, fax, and data communications, as well as the robust, open, and easy-to-use application development tools that will bring these high-value applications to market quickly.

— Eric Giler, president of Brooktrout Technology, a leading provider of advanced software and hardware products for system vendors and service providers in the electronic messaging market. For more information, call 617-433-9463 or visit www.brooktrout.com

Dataquest

Despite what most pundits believe, it’s not the CT industry, it’s the CTI industry. Systems integration is the most important aspect of every customer’s successful implementation and every vendor’s product portfolio. Vendors and customers who ignore this, do so at their own peril. Dataquest believes that the best CTI applications are those which augment a company’s competitive advantage.

Additionally, these applications do not necessarily reduce the cost of doing business; rather, they maximize the benefit of a particular transaction by changing both cost and benefit. If a solution does not both augment a company’s competitive advantage and increase net benefit, it will always fail. The real opportunity for customers and vendors is to think outside the box. CTI applications should enable companies to differentiate themselves from their competitors. Most important, they should be easier to use and provide more benefit than alternative systems. This said, Dataquest finds that the best applications are not those which replace traditional systems. The best applications augment traditional systems with new, value-added functionality.

— Christopher Thompson, principal analyst at Dataquest, a market intelligence organization focused on CTI. Dataquest, is a Gartner Group company. For more information, visit www.dataquest.com

Dialogic

After a decade of technical and commercial effort, the CTI industry is finally bringing the benefits of CTI to traditional PBXand ACD-based environments. Call management applications, using third-party call control technology, have proven their value, and users are pleased with the results. Now the challenge is to bring these same capabilities and benefits to emerging non-traditional calling environments such as voice-overTCP/IP, public intelligent networks, and the coming generation of open, unbundled premises switching products.

These new calling environments will shatter some well-established industry practices. For example, when communications come into a call center by traditional telephone, Internet phone, e-mail, fax, Web visits, and video kiosks, how do we sequence and manage our overall workflow? A traditional ACD with closed, proprietary telephone-only queuing mechanisms is obviously inadequate.

At this early stage, we can’t be sure what new models will emerge or which vendors will take advantage of the new opportunities. In this changing landscape, customers will need to demand open product designs, select vendors who have a vision for the future, and shop carefully and wisely.

— Carl R. Strathmeyer, marketing director of Dialogic’s ComputerTelephone Division.

The biggest challenge for CTI has been that magical last letter — it’s all been in the integration or lack thereof. Telecommunications equipment such as PBXs, ACDs, and IVR systems are dedicated systems that simply do not integrate with mission-critical applications running on a company’s IT network.

The future will look a lot different. Standard APIs such as Microsoft TAPI 3.0 and the ECTF S.100, as well as hardware standards such as the H.100 CT bus, will take a vertical industry of CT systems vendors and create a horizontal industry of software companies. PC users are spoiled by the fact that third-party spreadsheets, word processors, and database programs run on any PC. So why won’t messaging, IVR, and switching applications do the same thing to address a company’s communications needs? In the same way that a company has a database or file and print server on their network, they’ll have a CT server addressing the company’s communications needs.

The benefits will be lower cost of ownership, tighter integration with IT applications and ease of administration. To make this happen, CT vendors need to support these standards and aggressively embrace new business and channel models. Like the LAN market of the mid 1980’s, the payoff is to grow our industry to truly address the converging telecom and IT networks.

- Sam Liss, vice president of marketing for Dialogic Corporation. Dialogic is a leading supplier of open, standards-based computer telephone hardware and software components. For more information, visit www.dialogic.com

Hammer Technologies

We get to work with many of the companies driving our industry. After all, they need to test what they make. Consequently, we have a unique insight into the next round of industry issues. The most important issues include:

1. Internet Telephony. By far, the most dynamic area we are seeing is the use of Internet/Intranets for more than traditional HTML-class traffic. The number of companies developing and deploying creative IP telephony gateways and applications is absolutely astounding. We have been involved with everything from “call me” button call centers to the largest telecommunications systems in the world building the next generation of voice and fax IP gateways.
2. Advanced Intelligent Network/SS7Based Services. These have been talked about for years, but the level of activity and the number of people building platforms is huge. Everything from complex debit card to network-based ACD and routing systems are coming.
3. The UnPBX (also called PC-PBX or server-based PBX). There are a ton of very interesting products in the pipe that will begin to have some impact in 1998.

— Steve Gladstone, general manager of Hammer Technologies, a leading supplier of test equipment and services to the CTI industry. For more information, call 978-794-9959 or visit www.hammer.com

International Multimedia

Teleconferencing Consortium With exponentially growing Internet and intranet usage and the increasing deployment of bandwidth-intensive multimedia applications, observers sometimes worry that the network infrastructure won’t be able to adequately support all the traffic. But the long-term technology trends don’t really point in this direction; network capacity will not hinder the proliferation of multimedia applications. First, ISDN deployment, already well established in Europe, will accelerate worldwide and alleviate a great deal of the pressure. And as regards other network types, the computers, networks, and telephony technology will continue to converge — to the point where a single, integrated communications endpoint resides on the desktop. Any given application will be streamlined and will draw only as much bandwidth as it needs from a combined network resource.

— Matt Collier, president of the International Multimedia Teleconferencing Consortium (IMTC), a non-profit organization promoting the ongoing development and adoption of international standards for voice, data, and video conferencing. For more information, visit www.imtc.org.

Lucent

The worldwide market for voice messaging will grow from 55 percent to 71 percent, and the U.S market will grow to 28 percent in 1998. This huge voice messaging opportunity will be driven by the desire to “be connected and in touch.” In 1998, newly improved technologies and components will unite to grant IT VARs and systems integrators the ability to jump into CTI and build innovative messaging solutions for enterprises of all sizes. Three key technologies will deliver ease of development, installation, and performance to simplify CTI solutions. These include:

1. High performance buses — PCI for data and H.100 for voice and resource switching.
2. TAPI 3.0 — Microsoft has addressed the overall needs of CTI applications and has optimized telephony capabilities for Windows-centric programmers. Great for IT departments. 3. New lower cost PBX integrations — Digital telephone set emulation boards will allow applications to be integrated with huge installed bases of PBXs and Digital Key Systems, providing an even broader market for voice and unified messaging. A last prediction ... Messaging will be everywhere.

— Michael S. Seto, vice president of Marketing for Lucent Technologies, Computer Telephony Products, which develops, manufactures, and markets microcom-puterbased DSP hardware and software that will allow you to build high-performance systems with diversified features. For more information, call 408-874-4172 or visit www.lucent.com

Mitel Corporation

Everyone, with the possible exception of early adopters of his stock, seems to enjoy taking aim at Mr. Gates and his offspring now and again — with NT being no exception. Is NT secure? Is it really open? Is it scalable and reliable?

Much has been written lately which addresses NT’s unsuitability for telecom applications. Okay, from a carrier perspective, security is a concern, but with its 5.0 release early next year, Microsoft will address NT’s current security shortcomings. And let me ask you this: Can UNIX boast a lower cost — or speed — of deployment? Does UNIX easily support Web browser access? Does UNIX offer graphical systems management tools? And, with the battle over kernels, can you really call UNIX an open operating system? I think we all know what the answers are.

Personally, I view the NT Server platform as a launching pad for a wealth of telecom applications, with call control leading the pack. Voice will also be “converged” first into this environment, thanks to NT’s routing (TAPI) capabilities and its soon-to-beimplemented Resource ReSerVation Protocol (RSVP) to allocate bandwidth on demand. And to the reliability naysayers, I offer this: neither I, nor my CIO, have ever encountered reliability issues, on any of the more than 50 NT servers we have installed at more than 17 sites.

It’s a free world. But if I were an IS manager today, the letters “U-N-IX” wouldn’t even be in my vocabulary.

— Dave Curley, vice president of worldwide marketing for Mitel Corporation, an international communications product supplier. Mitel designs, manufactures and markets systems, sub-systems, and microelectronic components for sale to world markets in the telephony, computer-telephony integration (CTI), and communications industries. For more information, call 613-592-2122 or visit www.mitel.com

Natural MicroSystems

Communications fills a basic human need, and it aids commerce, helping people to raise their standard of living. Yet most of humanity lives in countries with fewer than three telephones per 100 people. And even developed countries lack widespread deployments of video, or anything beyond voice telephony. There’s plenty to do! For the immediate future:

• CTI servers will rapidly adopt PCI and CompactPCI with H.100/H.100. New designs for network CTI will use CompactPCI, with existing equipment phased out over 4–5 years.
• Windows NT will continue to gain on UNIX, but its biggest growth will come in 1999, after Microsoft’s (late) delivery of NT 5.0.
• Just when PBX vendors figure out PCPBXs (2–3 years hence), voice-over-theLAN will change their world (see my column in this issue).
• Despite consolidations, the total number of ISPs will continue to grow. Cable modem deployments will soar. In contrast, xDSL will remain earthbound, unless the RBOCs are forced to inexpensively lease bare copper to third parties.
• Fax traffic will move to the Internet within 4 years. Voice traffic will take longer, but no more than 15 years. Today’s telecom equipment market is over $150 billion per year in mostly closed, proprietary systems. By leveraging mass-market computer technology, CTI enables new applications and reduces costs. Our opportunity is to move all of this $150B equipment industry to open, programmable platforms. Then we can rapidly and cost-effectively deliver communications applications to a broader range of humanity.

— Brough Turner, senior vice president of technology for Natural MicroSystems, a leading provider of hardware and software technologies for developers of highvalue telecommunications solutions. For more information, call 508-620-9300 or visit www.nmss.com

NetPhone

IP Telephony: IP Telephony is any telephony application that makes use of an Intranet, Internet, or private data network to transmit a telephone call. This application area is so vast that it will encompass CTI within 2–3 years. Applications that were once bound by many dedicated, closed, and proprietary hardware platforms will be delivered in software and run on a singe commodity PC. Look for products that address the merging of IP telephony, CTI applications, and raw PBX functionality. New application areas will include toll bypass, LAN telephony, and Internetbased call centers.

Enterprise Telephony: Within the next two years, Microsoft will have a dominant effect on all enterprise-based telephony servers and applications by providing developers with the operating systems and applications that they will need to use. Look to organizations like the ECTF (Enterprise Computer Telephony Forum) and standards like JTAPI to embrace Microsoft’s strategy.

— Michael Katz, vice president of Marketing and Business Development for NetPhone, a leading provider of telephony servers and CTI applications for PC networks. For more information, call 508-7871000 or visit www.netphone.com

Nortel

The technology enabling voice and data convergence is packet voice, specifically, voice over ATM, over frame relay, and over IP. The business case is straightforward — lower the cost to a penny per minute and apply the savings to meet your data growth. ATM can deliver quality voice. Voice over frame relay will leverage emerging frame relay classes of service and SVCs. Voice on Intranets to remote sites and to road warriors is an option that will get better. Voice on the Internet in the form of fax is going to explode and will play in Internetenabled call centers. In the longer term, PC telephony in the office will become another option to access your PBX features.

— Tony Rybczynski, director of Strategic Marketing and Technologies for Nortel.

A CTI future is rapidly approaching when personal screen-based communicators, some compact and portable, and others occupying the traditional telephone spots on the kitchen wall, or family room end table, or office desk, will combine sight, sound, text, animation, video, graphics, voice activation and recognition functions to define a powerful new means of communication. And best of all, the CTI info-phone calls of the future will be as easy to make as a telephone call today.

— Dr. Rocco Fondacaro, senior manager of Market Research and Planning for Nortel.

First, we see wide-scale deployment of truly sophisticated skills-based routing scenarios in call centers where the paradigm of getting a call quickly to an available agent changes to getting the call to an agent that is in the best position to quickly service the caller. We also see that over the next few years, the majority of call centers will transition from having dedicated agents handling inbound traffic and other agents placing calls, to call centers where inbound and outbound traffic is blended.

But the biggest fundamental challenges will be felt from the ability of the Internet to support mixed media calls that will greatly magnify the value potential of new network solutions. Within a year, it will be as easy to make a multimedia H.323 call over an Intranet and the Internet as it is to make an ordinary telephone call today. This will have enormous ramifications for businesses that create the infrastructure to turn these capabilities into revenue-producing products and services.

— Dave Coleman, senior manager of CTI Symposium Toolkits for Nortel.

The demand for high-speed Internet access will be the “killer app” for broadband access technologies such as xDSL and cable modems in 1998. Because of this, residential and business customers will expect companies to offer Internet interfaces into their call centers. Industries such as financial services and hightech retailing (which have been early adopters of Internet and electronic commerce technology in the past) will be the first to deploy media-independent call centers. These call centers will be the focal point for all customer interaction regardless of the media type (text, voice, video) or the originating network (PSTN or Internet.) Other industries will quickly follow. Call centers will respond to text-based inquiries originating from Web forms and email. Agents will collaborate with customers in real-time using multiple media. They will be pushing custom Web pages to the customer’s browser while speaking with them on either a circuit-switched or packetswitched (H.323) voice call. NetMeeting will be everywhere.

— Zoltan A. Poleretzky, senior manager of Symposium Call Center Business Management for Nortel.

Nortel (Northern Telecom) is a leading global provider of digital network solutions. For more information, cakk 800-896-8944 or visit www.nortel.com

Rockwell Electronic Commerce Division

The unmet challenge of CTI has always been posed by the “I.” There have been relatively few suppliers who had both 1) real integration experience in both data communications and telecommunications, as well as 2) the ability to manage expectations of customers eager to believe the market hype about well-evolved standards and “plug and play” applications.

In the coming year, expect more blurring of the “C” and “T” components, with a greater focus on simplifying, if not eliminating, the “I” part. At the same time, as the industry continues to redefine the “call” (from a consumer initiating a voice connection via the public-switched network, to a concept embracing both PSTN and IP voice communications, e-mail, and the Internet), look for more emphasis on the integration of media inside the customer interaction environment. The greatest rewards will go to those who crack the integration challenge and to the users who understand the importance of integrating new access mediums into their customer acquisition and service strategies.

— Lorri Weston, director of Product Marketing of Call Center Systems for Rockwell Electronic Commerce Division, a leading supplier of mission-critical call center systems and personalized electronic commerce applications. For more information, call 800-416-8199 or visit www.ecd.rockwell.com

Selsius Systems, Inc.

CTI will explode as TCP/IP expands outward on the network and encompasses lowcost voice and video terminals. Voice-overIP products, introduced as playthings two years ago, have evolved to products serving the second-stage, toll-bypass market. This stage of market development will drive national and international toll rates toward commodity prices over the next 20 years. The evaporation of the toll-arbitrage opportunity will force the evolution of voice and video over IP products into their third, more fully integrated phase. Audio and video terminals, once connected exclusively to the circuit-switched network, will connect to the non-circuit-switched network. The trend of these devices will be toward low-cost, semi-intelligent devices providing a focused set of communications functions. The first Ethernet telephones and PCbased communications applications are harbingers of this evolution. Advanced telecommunications services will be extended to these devices from redundant communications management servers. These servers will manage more expensive devices as shared resources, providing resource access to dedicated devices according to priority schemes we’ve only begun to dream about.

And here will be the next stage of the evolution — CTI without the bugaboo that has hampered CTI for the last twenty years, the dominant circuit-switched to packet boundary. The path to the telephony API will not be through some proprietary physical interface — it will be direct through TCP/IP. Delivery of telephony API services from a server to terminal devices will not have to be bridged across a circuitswitched last mile. Instead, messaging will be delivered directly to a TCP/IP stack on a low-cost processor within the terminal. The tyranny of the circuit-switch to packetswitch signaling bridge from the API to the terminal will disappear as the common denominator of signaling and messaging transport, TCP/IP, is extended to all communications network devices.

— Dave Corley, director of Product Management at Selsius Systems, a developer of LAN-based PBX components and systems. For more information, call 972-8558586 or visit www.selsius.com

Siemens BusinessCommunication Systems, Inc.

Ten years ago, a company required a minimum of $750K and 12 to 18 months to implement a small CTI solution. Today, for $300 per agent, and in less than 60 days, a call center manager can have screens popping all over the place. This sets the stage for the next generation of CTI. With advances in data mining, distributed data networking, and push technology, CTI is positioned to move out of the call center and boldly go into other professional (vertical) markets where there will be no agents, no supervisors, and no call center, just professionals focused, directed, and informed through CTI. Positive ROIs for CTI will focus on changing the rules for competition, leveraging well-paid employees and targeting customers’ buying patterns. One-toone marketing will come to life as companies use the intelligence in their databanks to segment their markets, identify buying patterns, and increase revenue opportunities, on a real-time basis. Yes, IP Telephony will take off, and PBX’s will move faster to pure client/server architectures. But, it will be the emergence of so-called neural networks that will reshape the face of business over the next ten years.

— Alfred Baker, manager of computer telephony integration (CTI) products for Siemens Business Communication Systems, Inc, which provides private telecommunications solutions and CTI applications, as well as PBX-tohost and -LAN interfaces. For more infor-mation, visit www.siemenscom.com

Tadiran Telecommunications

Spurred on by the proliferation of desktop computing power, customers are asking for more information and more input on which to base their business decisions. Will this new demand for intelligence at the desktop increase to the point that the networks become dumber? Will this create the need for dumber switches? Will the intelligence migrate to the network and create changes there? Can the telephone companies accommodate the changes or will they just supply the pipes to the intelligence?

Will the network eventually conform to Peter Huber’s vision of a geodesic overlay infrastructure, something with high speed and high bandwidth, and local “drops” of bandwidth-on-demand services? What will happen to the switchedcircuit infrastructure? Will it be upgraded to accommodate the higher bandwidths required? How will it be billed? Can it be billed by content rather than width? Fascinating questions. But before we get carried away by all the possibilities, let’s ask ourselves a more basic question: What is all the technology supposed to accomplish? If we don’t face this question, we might create technologies that look great and feel great but don’t fulfill a need.

— John Dabnor, Tadiran Telecommunications, a leading provider of telecommunications equipment and systems. For more information, call 813-523-0000.

Technical Marketing Services The sentries are sounding the alert throughout the land of traditional telephony and Intelligent Networks (IN) — the infidels (IP telephony and CTI) are at the gates. The holy war between IP Telephony/CTI and IN is taking shape on many fronts: broadband vs. narrowband, packetswitched vs. circuit-switched, distributed vs. centralized, open vs. Proprietary, and next generation telcos vs. the incumbents.

At first glance, it appears that the infidels will slay the incumbent telcos and IN. IP telephony and CTI have several advantages over circuit-switched telephony and IN: economy, efficiency, and openness. As with most invasions, however, the conquerors will be assimilated into the vanquished culture. The resulting network architecture or blend of architectures (we’ll call it the new IN) will provide the required quality of service and deliver value-added services economically. Vendors and service providers who understand how to combine the best of both architectures will thrive in the new telecom world order. IN is dead — long live the new IN.

— Mona Johnson, president of Technical Marketing Services, which provides analysis and consulting on new markets in telecommunications and related industries, with a focus on network services. For more information, call 813-522-2116 or visit www.tech-marketing.com

Trillium Digital Systems, Inc. The rapid evolution of technology and the need to support legacy networks and systems will drive the need for interworking products. As data traffic overtakes voice traffic and increases bandwidth demand, improving product performance will become an urgent challenge. In the future, carriers and service providers will focus on offering services that transform bits, rather than just transport them, to provide services that are increasingly complex. High-availability solutions will become a business necessity. IP devices and appliances that connect to the network and use these new services will become commonplace. Universal access and mobility will become the norm as the distinctions between telephony and Internet, wireline and wireless blur and eventually disappear. Nations will leapfrog entire periods of industrial history by building infrastructures that would have been impossible decades ago. The global network will organize and adapt itself in new ways, defined by how people value and use information.

— Jeff Lawrence, president and CEO of Trillium Digital Systems, Inc., a leading provider of communications software solutions for the SS7, ATM, ISDN, Frame Relay, V5, Internet, and X.25/X.75 technologies to computer and communications equipment manufacturers. For more information, call 310-442-9222 or visit www.trillium.com

US WEST Communications

The virtualization of call center functions and the deployment of mixed-media networks will dovetail in 1998, resulting in more efficient workflow management, better customer service, and new channels for sales and distribution. It will be easier than ever for call center staff to disseminate customer service requests to appropriate agents in the back office and to virtual agents at home and abroad, guaranteeing expert customer service that is both faster and more personal.

A payment didn’t appear on your invoice? The newest CT solutions will route your concern to accounts receivable. Medical advice? Call center staff will be able to link you to a physician via satellite. Over the coming year, call centers will evolve into blended media centers using the Internet and video capability. Also look for the widespread acceptance of IP Telephony as more calls are placed from a PC using the Internet as the primary network. Effective use of Intranets, client server networks, and existing LANs will make servicing the “virtual customer” more efficient than ever.

Looking beyond to the year 2000, expect the vast majority of switches to be deployed on the LAN, and voice connections to be treated more and more like data connections as the line between these two media continues to blur.

— Jackie Neva, director of Solutions Development for Emerging Applications for U S WEST Communications, which provides a full range of telecommunications services to more than 25 million customers in 14 western and midwestern states.

Vanguard Communications Corporation

Ironically, the success of CTI depends on its demise as an independent “industry.” CTI capabilities need to be “baked into” operating systems to support common telephony objects. Applications will then be conceived using these functions, rather than being bolted on afterward, and built on lower cost, open architecture platforms. We’re seeing these platforms used now. And, among innovative users, CTI is now supporting front office desktop productivity and collaborative software in addition to classic call center applications. But, four observations:

• This will be a multi-vendor environment. Standards and interoperability agreements (such as those developed by the Enterprise Computer Telephony Forum) are essential.
• Functional managers (more than MIS/Telecom) in user companies must be driving the vision of how these capabilities will change business processes and achieve business objectives. But these managers lack both an understanding of the opportunity, and the necessity for their involvement.
• Results achieved are too often substantially below initial expectations. Applications don’t work as promoted. There are too few trained and experienced integrators and implementers. Users are in for a wild ride.
• We desperately need significantly more reliable CTI-enabled solutions. Regarding this last point: Users today expect “five 9’s” of reliability for important telephony applications, especially mission-critical call centers. Today, we have applications based on less-than-robust APIs running on less-than-bulletproof, less-than-fullyscalable, open architecture platforms. Until this is fixed, we cannot expect users to embrace this brave new world that suppliers, consultants, journalists, and others are trumpeting. This is the major challenge to widespread CTI adoption.

— Don Van Doren, president of Vanguard Communications Corporation, an independent consulting firm specializing in designing and implementing effective customer contact solutions in call center and workgroup environments. For more information, call 201605-8000 or visit www.vanguard.net.