July/August 2001

BY JOHN PHILIPS

Despite last year's burst of the dot-com bubble and the resulting doom and gloom on Wall Street, there is no denying that the Internet is continuing to have a radical effect on the way companies communicate and do business.

Technology advances have allowed individuals to communicate in new ways, more quickly than ever before. This has largely been made possible by the Internet's reliance on standard interfaces such as HTTP, which interact with other standard programming languages such as HTML to allow virtually anyone to create a Web page that any individual across the globe can access. This feature caused an explosion of new applications and new services unrivaled by few other developments in recent history.

The emergence of the Web as a dominant communications tool has affected the telecommunications arena as well. To date, perhaps the most obvious influence has been the increasing adoption of Internet Protocol (IP) as the telecom network technology of choice. Based on a more distributed architecture than traditional telephony networks, IP-based networks are more cost-effective than legacy communications networks and today deliver one very tangible benefit to consumers across the world: Lower telephony prices. Unfortunately, these less developed networks don't necessarily offer the same features as today's established legacy networks.

That is about to change, mainly because telephony networks of the next generation do not rely on IP alone. In the future, instead of offering a smaller range of features for a lower cost, IP-based telephony networks will in fact support a large variety of enhanced applications -- many of which haven't even been envisioned yet.

Having already borrowed the IP concept from the Internet world, the telecom marketplace is ready to take the next step. Telephony players are now integrating standard protocols and a server-based architecture into their IP-based networks. This will result in the advent of a truly converged network architecture that combines the benefits of today's telephony world -- such as the reliance on dedicated architectures to ensure toll-quality, carrier-class voice communications -- with the benefits of the Internet world, such as the use of software and servers to support the dynamic growth of applications.

This new network architecture will support truly converged services, services that integrate traditional Internet applications such as Web surfing, e-mail, and video with traditional telephony applications such as voice mail and caller ID.

BEYOND THE STANDARD VIEW OF TELEPHONY
A converged, IP-based network architecture depends on many critical elements, and one of the most important is its reliance on standard protocols such as Session Initiation Protocol, or (SIP). Modeled heavily after the Internet's standard initiation protocol, HTTP, SIP initiates interactive communications sessions between users. SIP's key benefit is that it uses standard protocol and addressing methodology to support a number of innovative, integrated sessions.

Another key element of a next generation IP-based network is softswitch technology, which provides IP-based service providers with a cost-effective, flexible, and programmable alternative to the Class 5 switches traditionally used by telecom carriers. Softswitch technology allows telecom providers to replicate the functions of the public switched telephone network (PSTN) with a software-based system, making the switch more intelligent and scalable.

The great appeal of these developments is the large variety of new applications that they enable. Working together, SIP, software-based softswitch technology, and other Internet and software-inspired changes in telecom networks have resulted in the emergence of a number of new enhanced services that simply could not be supported in the circuit-switched telecom networks of the past.

Put simply, the telephony world is migrating to an application-based model, where phones become "voice appliances," upon which applications can be downloaded to support several different services.

For instance, individuals will be able to synchronize their Palm devices with their phones to dial numbers directly from their Palm databases. Better yet, individuals could beam their caller information from their Palms to any phone via infrared communication. That information would "tell" the phone who they are, and all of their calls would be directed to that phone -- allowing individuals to keep the same phone extension as they move from desk to desk, similar to how they can log into any computer connected to a server today.

But these applications pale in comparison to the benefits offered by true converged services, such as integrating e-mail or Web page access with voice systems. In a truly converged world, users could click to dial customer service to ask a question that was not answered on the company's Web page. Individuals could also create unique audible ring tones from any sound file based on caller ID. That ring tone would then tell them whether the call is an important customer or prospect, their boss, their family, or any other acquaintances they define. And all of this can be offered in addition to standard services such as call- forwarding, follow-me, and do-not-disturb.

An increased reliance on telephony application programming interfaces (APIs) -- similar to those currently used by Internet application programmers -- means that any company can now make a business of creating new telephony services. It also allows large enterprises to download new custom third-party telephony services from portals that host these applications or to even write their own office applications, similar to the way many businesses create intranets today.

For example, telemarketers could go to a portal and download a SIP code that allows them to search for prospects by geography -- or one that enhances caller ID to show them the actual city from which an individual is calling instead of just the area code, thus helping them target their sales pitches.

THE CLIENT/SERVER MODEL FOR HOSTING
In the hardware-based telecommunications world of yesterday, companies often had to install equipment on-site to get even basic services such as Centrex or auto-attendant capabilities. In the next-generation telephony world, the network is client/server-based, providing businesses with access to such services through a central server that could be located across the country or even halfway around the world.

Using this model, services can now be "hosted" by a third-party provider, meaning that the telephony world can also borrow another concept from the computing world: The concept of an application service provider, or (ASP).

In the computing world, instead of selling software, ASPs actually allow companies to rent access to popular applications ranging from customer relationship management (CRM) software to Microsoft Office-like applications, providing these through a link to the Internet.

Now companies are bringing the benefits of the ASP concept to the telephony marketplace. With the help of a next-generation telephony architecture, telephony ASPs provide toll-quality telephony services and applications to businesses through an IP-based link. This eliminates the need for businesses to install any equipment onsite, making the addition of new features and services as simple as downloading new software.

Telephony ASPs can also provide the end customer with unprecedented control over obtaining and managing their own services by enabling them to control call flow based on caller ID as well as set personal preferences for their phone services using a Web interface.

This new model of telephony also enables data-focused service providers to tap into an ASP's back-end architecture to provide telephony services to their existing customers. This means an ISP or other data service provider can now quickly add telephony services to their service portfolios without having to hire voice engineering expertise or having to build out additional network components to support voice services.

The result is an Internet-based model that enables innovative, cost-effective telephony applications to become the norm -- and opens a whole new frontier for voice communications.

John Philips is CEO, president, and co-founder of TalkingNets, a telephony ASP. TalkingNets provides wholesale telephony solutions that allow broadband service providers and telecom resellers to offer next-generation voice services to small and medium-sized businesses.

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