July/August 2001

The VoIP Marketplace Evolves

BY RICH TEHRANI

This shift was illustrated in a recent meeting at our editorial offices with GRIC Communications, a long-time player in the Internet telephony space. GRIC offers the GRIC Alliance Network -- an extensive network of points of presence (POPs) throughout the world which features more than 350 service providers. The network has been used to deliver IP services for many years, primarily to offer access and termination of VoIP calls. But as Hong Chen, the company's CEO, explained at our meeting, that focus has changed, and is a true reflection of the shift toward services in this marketplace.

GRIC is now using its Alliance Network to deliver IP-based mobile communications to service providers and enterprise customers, offering more than 12,000 dialup location worldwide. The switch in focus, according to Chen, was based on a shift in the market defined by their customer's needs. VoIP has presented interoperability problems for GRIC's various service provider customers, and has had low profit margins on the wholesale side. Focusing on mobile applications has provided a completely different revenue model for GRIC, and a large cost savings, as VoIP has become just one of many value-added services, and not a primary source of revenue.

THE STRENGTH OF PARTNERSHIPS
GRIC's new focus is being developed through various partnerships with companies like SkyNetGlobal, a broadband wireless service provider in Australia. SkyNetGlobal will deliver broadband wireless roaming access to global travelers through the GRIC Alliance Network, and Network ISPs will receive wireless Internet access through SkyNetGlobal's POPs. The service provider will also receive GRIC's dialup Internet access services, featuring version 3.0 of GRICdial, the company's remote Internet access software client. The client supports Windows 98, NT 4.0, and 2000, and the latest version integrates with virtual private network (VPN) solutions, and offers enhanced quality of service. In fact, GRIC boasts interoperability with many major VPN solutions including those from Cisco, Nortel, Lucent, and Check Point.

The company also announced a partnership with Appiant Technologies, a unified messaging company that acts as a value-added reseller (VAR) to the small and medium-sized enterprise marketplace for GRIC. Appiant offers the inUnison end-to-end solution for unified communications, enabling service providers to offer a single Web portal to voice mail, e-mail, faxes, contact files, and calendar schedules. The solution also features speech recognition for access to messages and management via voice.

One of the biggest complaints GRIC had about their pure VoIP model was that only a small percentage of their service provider partners' customers were using the services. But the mobile access and enhanced services offer a single point of authentication, a single point of access, and a single bill, making partnerships and interoperability much more convenient for GRIC and its customers.

THE GREAT E-COMMERCE ENABLER
In another example of the shift toward services in the network, ITXC Corporation, operator of ITXC.net, a global network for routing VoIP calls, acquired and integrated eFusion's Push to Talk technology into its network last year. The solution enables easy integration of PC-to-PC and PC-to-phone calling from a Web site, for enhanced call-center functionality, e-commerce, e-mail campaigns, and even voice-enabled advertising. The addition of the service has enabled partnerships with companies like DoubleClick, and the Venetian Resort Hotel Casino in Las Vegas. (See the feature article, "Bridging The Customer Service Gap With Voice" to find out how teeth-whitening company BriteSmile deployed ITXC's Push to Talk technology to enhance and aid their existing call center.

The addition of the service has lead to favorable results, according to ITXC, and GroupLotto, an online gaming company that regularly launches e-mail campaigns, boasted that the voice addition to its e-mails increased response rates by 500 percent. ITXC is still focusing on its core competency of routing VoIP traffic, but the addition of an enhanced service has given them an edge in a competitive marketplace. (In fact, the bulk of the company's first quarter revenue came from its traditional wholesale phone-to-phone service, WWeXchange, which transmitted 345 million minutes that quarter.)

Traditional VoIP player Net2Phone has also slowly expanded its portfolio of offerings over the years, adding services like Click2CallMe for voice-enabling Web sites, ClickTogether for collaborative Web browsing through a partnership with Webdialogs, and Y@p (Your Alternative Phone), a line of hardware for making VoIP calls through a PC.

The companies mentioned above are just a few examples of the industry shift toward utilizing VoIP as an enhanced service. Be sure to check out our new Service of the Month section, where we talk with Jeff Cortley from Lucent Technologies about exciting enhanced services in this space. Jeff will be writing this section in future issues so stay tuned for a continuing discussion of some of the most cutting-edge services in the communications industry.

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Industry leaders from ADIR Technologies and ICS Advent are scheduled to present keynotes at the show, and we will offer an impressive lineup of speakers for our conference tracks as well. David Greenblatt, president and chief operating officer at ADIR, was previously COO of Net2Phone, and has more than 20 years of experience in the IT and network industries. Christopher J. Rezendes, VP and General Manager of Marketing & Development for ICS Advent, handles product development, marketing communications, and business development.

Sign up to attend this one-of-a-kind event now! For more information, see our article, "Convergence On The Beach," or visit our Web site.

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I recently got the chance to talk to Jeff Cortley, director of cool services, marketing & strategy for Lucent Technologies. After hearing his fresh and innovative title, I thought that this was someone who could really lend some insight into the hot new services on the horizon for the hosted space. And he did not disappoint.

Jeff talked about a number of new services enabled by converged voice and data networks, such as presence-based applications, location services, and voice-enabled multimedia portals. He said that services like prepaid calling have a new life in the converged world because they enable carriers and service providers to target specific markets. On voice-enabled Web access, Jeff commented, "A service like that becomes an entire e-commerce platform that the service provider taps into as a portal to all these transactions."

Jeff stressed that even though Lucent is an equipment provider, the company understands that services are a key differentiator for service providers. "The box itself doesn't necessarily generate revenue," said Jeff. As network access becomes transparent and ubiquitous, enhanced services like those mentioned above are going to be the only way for service providers to stay competitive and offer added value to increasingly demanding customers.

Look for additional new services analysis from Jeff in the next issue of Communications ASP.

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