November 1998

BY JOHN G. ALFIERI

Over the past 10 years or so, the computer-telephony integration (CTI) industry has moved steadily from a world of closed, proprietary applications toward an open systems model. And although the CTI industry is still not as open as the computer industry as a whole, the picture is quickly changing. In the near future, software will begin to rule the market as CTI solutions adhere to general standards, become easier to use, and give users the flexibility of buying software-only applications that run on their existing hardware platforms. In short, the CTI industry is finally settling into its niche in mainstream computing.

The current CTI market gives end users more or less integrated solutions to solve a myriad of business problems. I say these solutions are custom integrated because the companies delivering them not only develop the application software, but also spend considerable time tuning the solution to specific third-party hardware platforms they have selected -- from PCs, to operating systems, to CTI board-level technology.

These more open solutions have been quicker to market than more vertically integrated proprietary solutions from closed developers. This means major benefits for both end users and the market in general. On the other side of the coin, CTI market growth still remains inhibited by solutions that are not as open and software-based as they might be.

The CTI marketplace is now entering a new phase of growth. With this new phase will come tremendous new opportunities for developers. Software-only solutions are the next step, and they will be more open and widely available -- and therefore will solve even more customer problems. I call this phase "open-systems-based and end-user-aware." In this phase, new software may be integrated with existing hardware.

HISTORY REPEATS ITSELF
The precedents in business history are many. The local area networking (LAN) marketplace has exploded, and with it, the computer industry (once Novell got out of the business of developing LAN adapters and concentrated on developing great LAN software to solve end users' problems). The worldwide cellular marketplace has grown exponentially over the past 10 years, once standards and deregulation were introduced and prices dropped. And, of course, we all know the history of the computer marketplace itself.

There are many opportunities in the CTI market for applications developers and resellers. But to enable this market to grow to its full potential, we must all learn from the examples of the past.

IT'S ABOUT SOFTWARE
In the past, the CTI industry has been about applications developed on open platforms, but tightly integrated and optimized to a specific platform. The trouble is that not all end users -- especially not the big ones who buy lots of servers -- want to buy a solution that is tightly wedded to a particular platform. Look at examples outside CTI, like Oracle, Informix, Internet servers, e-mail, and MRP software. These are all open solutions that remain flexible in their required hardware platforms.

The key to opening up the CTI marketplace is to develop solutions that are at least as flexible as the above examples: truly open and able to be sold as software-only products. In every other corner of the computer industry -- Internet, database, CAD/CAM, sales force automation, customer service, manufacturing software, CASE tools -- application solutions are sold separately from the hardware. That's the way customers purchase. They buy only what they need, when they need it.

Suppose you were the head of your company's information technology department and needed to purchase a new piece of Internet software. If one option required that you purchase the entire server along with the software, would you purchase it? Only if you had to. Wouldn't you rather have the choice to integrate the software with your existing corporate hardware environment? Of course you would. The shift toward software-only solutions is happening right now, and the profound influence of the Internet is only going to quicken the pace of this trend and make applications easier to find and obtain.

Today there are already some very good software-only solutions -- for instance, LAN fax server software from companies like Alcom, Fennestrae, Omtool, Optus, and Rightfax. If you are a value-added reseller, you can simply call up the company and order the software. They will explain the recommended configuration. If you want, they can also sell you the fax server board, or you can buy the hardware from a distributor. Software-based messaging solutions are also becoming common, offering integration with e-mail, voicemail, and fax, plus tight integration with Outlook and Notes. There will be even more software-based solutions in the near future.

If the CTI industry continues toward the open systems model, the next two years will see explosive opportunity for developers. Also, end users will be able to choose from an unprecedented breadth of CTI applications to solve their business problems.

CTI GOES MAINSTREAM
Over the next two years, the CTI business will start to look and act more like the overall computer industry. Solutions will adhere to universal standards, become easy to use, and be offered as software-only packages sold through sales channels the way database software is today. In short, CTI will finally take its place in the mainstream of the computer industry. CTI component suppliers should invest in this new world by making their products more user friendly and developing programs to help CTI developers bring a breadth of open and exciting new solutions to market.

John G. Alfieri is president, American Sales and Service, of Dialogic Corporation. Dialogic Corporation is a leading manufacturer of high-performance, standards-based CTI and Internet protocol (IP) telephony components. The company is headquartered in Parsippany, New Jersey, with regional headquarters in Tokyo, Japan, and Brussels, Belgium, and sales offices worldwide. For more information, visit the Dialogic Web site at www.dialogic.com.

Solutions that are ready for the future - meaning that they are open-systems-based and end-user-aware - should:

• Be easy to use and provide the end user and reseller with an enjoyable experience.
• Be sold as just software and the computer platform - other associated hardware can be purchased separately.
• Use many of the features offered inherently by the manufacturer of the operating system, like aids for installation, diagnosis, and administration.
• Run on S.100 and/or TAPI.
• Be developed with both the end user and the reseller in mind. In other words, it should be simple to install the product and configure it to the end user's environment.
• Include diagnostics that can be run online.
• Be developed with the Internet in mind (online purchase, upgrade, maintenance, support).