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The VoIP Developer Opportunity

BY RICH TEHRANI

 

Rich Tehrani

 


Lately I have been speaking with a number of research companies that tell me the VoIP market will see tremendous growth until around 2011 or even 2015. What I have learned from being in this business as long as I have is that when VoIP gets hot, it gets very hot. It doesn’t ever grow in small increments and that is the exciting part of being involved in this space.

An Open Letter To
President Bush

Dear President Bush,
I am writing to you today as I believe I have something worthy of your attention to share. As a representative of the voice over IP (VoIP) market, I would like to point out how important this relatively nascent technology has become in the world and especially the U.S. Voice over IP has helped your constituents by reducing prices on local and long-distance calls throughout the world.

In addition to lower prices, a primary reason VoIP is good for consumers is that it infuses the current telecom environment with choice. New providers like Vonage and a variety of cable companies are generating substantial competition for entrenched telecom companies.

Like any nascent technology, VoIP has flaws – well at least its implementation can have flaws. Perhaps the biggest challenge VoIP has is in its 911 support. Not all providers of VoIP service can provide support for 911 as well as the incumbents can. As you can imagine, an industry where the average VoIP provider has been providing service for less than 24 months needs some time to perfect how it operates.

As I am sure you are aware, the FCC, under Chairman Kevin Martin’s expert guidance is deciding on 911 issues as you read this. There are many points that need weighing, such as what sorts of regulations and restrictions should be placed on VoIP providers. How will we resolve the issue of a VoIP user that is mobile, etc.

The biggest concern the communications industry has is that a potentially large burden will be placed on new VoIP players and as such this will seriously impede competition in the U.S. telecom market. VoIP may be the most important technology market that this nation has at the moment. Many of the leading companies in this space such as Cisco Systems and Avaya are U.S. based. The VoIP market might even be considered to be strategic depending on how you perceive technologies that are growing at breakneck speeds and doing an immense amount of good for consumers and business at the same time.

In closing, I request respectfully that you at least keep an eye on this market, and you keep in mind the important role VoIP plays in the world stage and the nation’s economy.

Thank you in advance for your consideration. IT

Rich Tehrani, President, TMC

One of the areas where there is tremendous amountof money to be made is supplying VoIP users with applications and equipment. There are so many potential opportunities to exploit in VoIP from video conferencing devices to software to augment a PBX to consumer type devices.
We can expect all PBX vendors to have partner programs for example as it behooves these companies to find developers to differentiate their offerings in a crowded market. This means VoIP developers will soon be wooed by these PBX vendors to develop on their platforms. I can’t imagine consumer electronic devices of the future without WiFi telephony built into them. Everywhere we turn it seems, we will have access to VoIP calling. We can’t be in a better space.

To that end, I decided to contact some of the vendors in the VoIP development space — a wide cross-section of companies that are involved in many levels of the VoIP value chain. I interviewed these companies to get their take on the market and to ascertain their thoughts on the potential of VoIP. No one is closer to the market than these companies and they are the best people to tell you where the opportunities in communications lie.

Jack Chang, COO TelTel

What trends are you seeing in VoIP development?
JC: We see a continued trend toward IP convergence with SIP becoming the standard of choice in VoIP communications. We believe SIP is one of the major drivers of VoIP. Specifically designed for multimedia sessions (voice, video, and data), SIP is poised to become the standard of choice for VoIP developers and manufacturers. Any providers who speak SIP will stand a better chance to interoperate with other VoIP players and SIP-based communications platforms and realize multiple revenue opportunities.

What are the hottest areas in VoIP development?
JC: We see significant opportunities in many open source IP development platforms where developers can custom build many value-added applications which can be made available to end users and enterprises through a standard-based delivery platform.

Are there still opportunities that will generate revenue in the VoIP space?
JC: In addition to traditional revenue opportunities associated with replacing PSTN calls with cheaper VoIP calls, we see new revenue opportunities with call origination, unified communications, IVR, and an assorted suite of enterprise communication applications.


Baris Demir, Director of Marketing, VoiceAge Corporation

Is 2005 to be considered “the year” for VoIP? What about 2006, etc?
BD: From the exposure given to VoIP in the popular press and other mass media I think that it is obvious that the chasm has long been crossed for this technology and we are well beyond the inflection point and headed towards mainstream adoption. There is just so much investment in VoIP technology, marketing, service development and deployment, etc., that the initial inertia and natural hesitance of enterprises and consumers has finally been overcome and the next few years should see substantial growth in VoIP users — as long as the regulators don’t rock the boat too much. Is it “the year?” No, in my opinion this market has vast potential so these next few years promise to be great ones but I think that the best is yet to come. Now with widespread deployment of standards-based wideband speech codecs, next year could indeed be the best one yet.

What are the hottest areas in VoIP development?
BD: I’m not sure, we’re kind of in a specialized niche so my perspective is skewed somewhat ... putting aside my wideband codec bias I think that multimedia collaboration, video integrated telephony, and conferencing (which benefits greatly from wideband speech) are very exciting spaces. The whole wireline/wireless (WLAN/Cellular) integration angle is also very intriguing from a business development perspective.

So, what are your thoughts on hybrid cellular/WiFi devices?
BD: Such devices enable a necessary and useful step towards the truly converged networks needed to enable pervasive communications and help shrink time and distance in our global village. They will initially be very useful for enterprise users, especially helpful to increase productivity in businesses with many road warriors and/or also multi-site large campuses. As more homes deploy WLANs, such phones and innovative associated service plans could also help accelerate the displacement of fixed lines with wireless gear (acts like a cordless phone in the home) — as long as the E911 capability can provide robust indication of caller location. Cost and battery-charge time duration/expectancy might be issues that could be among the issues that slow down the adoption of this technology, though I’m afraid don’t know enough about these aspects to comment on them.

Amir Zmora, VP Marketing & Product Management, Surf Communication Solutions

What trends are you seeing in VoIP development?
AZ: VoIP is moving from the early adopter phase to mass deployment but currently still mainly as toll bypass on the CPE side. Most residential users still use an analog phone or their computer. On the other hand, in the enterprise space new features such as presence, IM, video telephony, data collaboration, and mobility are bringing more value to organizations.

What are the hottest areas in VoIP development?
AZ: Skype is for sure the hottest thing on the CPE side. Even though it is not using a standard protocol it might threaten SIP deployment if it will be capable of providing the features and services SIP can provide not only for direct point to point communication but also advanced routing and other services.
Video and mobility are going to change the way we communicate. The ability to communicate across different networks makes VoIP more accessible and easy to use.

Are there still opportunities that will generate revenue in the VoIP space?
AZ: Bridging between the different networks and providing cost effective video services across them is still a big opportunity. This includes not only 3G and IP networks but also wireless (WiFi and WiMAX) and PSTN (wireline) integration.

What are your thoughts on WiFi telephony vis a vis WiMAX or 3G?
AZ: WiFi will be seen more in the enterprise but will not be the solution for metropolitans where WiMAX will come in place. WiMAX might be a threat to 3G once mobile phones will support 3G/WiFI/WiMAX.

How do you see IMS changing the landscape of telecom?
AZ: IMS and the services it provides will bring a boost not only to the mobile market but also for VoIP in general since these services will need to be available on other networks that will all need to be integrated. Services will need to be provided across these networks.

Michael Ward, Director of Product Line Management, Trinity Convergence

What trends are you seeing in VoIP development?
MW: With the proliferation of consumer targeted VoIP services, one clear trend in VoIP development is the need for OEMs/ODMs to rapidly develop cost-effective VoIP endpoints. They need to also develop a family of VoIP enabled endpoints that allow them to target a range of cost points/feature sets. As such, these OEMs/ODMs are looking to leverage merchant technology — both in terms of VoIP merchant silicon as well as VoIP merchant software, to allow them to more rapidly develop product.

Is 2005 to be considered “the year” for VoIP? What about 2006, etc?
MW: While total VoIP subscribership pales in comparison to traditional service, VoIP subscriber growth rate is astounding. Weekly, tens and tens of thousands of subscribers are migrating from POTS to VoIP services. 2005 appears to be the year that VoIP has clearly arrived in the mainstream — we are encouraged and surprised with the consumer’s awareness of VoIP as a technology. All indicators suggest that in 2005 VoIP is on the precipice of substantial penetration into the household.

What are the hottest areas in VoIP development?
MW: Video-enabled VoIP terminals represent an exciting area in VoIP development. The technology has reached the stage where cost-effective endpoints can be developed that provide high-quality, full duplex personal video conferencing services to the consumer. VoWiFi and Cellular/VoWiFi development is another exciting area as the necessary enabling technologies are emerging (handoff, low-power WiFi devices, WiFI QoS) that allows these devices to move from early stage prototypes to real production systems.

Why do you think now is the time for developers to get into VoIP?
MW: Developers are now able to utilize off-the-shelf VoIP “building blocks” which allow them to rapidly develop VoIP enabled devices. With VoIP adoption growing there is recognition within the industry that VoIP must move beyond “free” calling and towards the delivery of enhanced services. As such, this is an ideal time for developers to leverage the enabling VoIP technology to develop new innovated services and applications for VoIP.

Are there still opportunities that will generate revenue in the VoIP space?
MW: Absolutely — in fact, Trinity believes that we’ve only scratched the surface in terms of the potential revenue generating services that will emerge. As VoIP technologies find their way into more and more applications, the ability to integrate voice as a value-added service into other applications will create opportunities for interesting combinations of services. As an industry, we have to begin to shift our thinking away from voice as the primary application of VoIP, but rather view voice as a supporting feature or some other type of application or service.

Eric Burger, VP, CTO Next-Generation Communications, Brooktrout Technology

Why do you think now is the time for developers to get into VoIP?
EB: There’s a tremendous opportunity for developers to take advantage of the standards-based development environment created by protocols such as SIP and VoiceXML along with open systems/platforms that can not only replace legacy applications but also serve as the vehicle for delivering new and innovative applications. In addition, VoIP presents an opportunity to integrate phone systems much more directly with the corporate data infrastructure to improve employee productivity and customer service. Again, standards like SIP and VoiceXML are at the heart of this, because they allow the telephone to become just another access method to the company’s web data and applications, leveraging the huge investment that’s already been made in that infrastructure.

Are there still opportunities that will generate revenue in the VoIP space?
EB: Absolutely. As previously mentioned, new IP multimedia services provide revenue generating service opportunities for both the consumer and corporate markets.

What trends are you seeing in VoIP development?
EB: We see a strong trend in the roll out of value added, multimedia applications built upon VoIP infrastructure. IP-based platforms are more flexible than traditional telecom platforms and can easily adapt to support different media types. In the carrier space, video messaging, gaming, pre-paid, and conferencing are among a number of applications that are being deployed. New IP-based applications are becoming the major driver for innovation, differentiation, and new revenue generating services.
What are your feelings on SIP?

EB: SIP is the driving force and standard for delivering “IP killer apps”. It’s a key component in the development of both multimedia and presence applications. SIP also increases a customer’s choice in buying products and solutions. Other factors include greater flexibility, scalability, and reduced capital and operating expenses.

How do you see IMS changing the landscape of telecom?
EB: Since IMS defines a service creation and delivery framework that is agnostic to the access and transport network, it is very compelling. By now most operators have bought into IMS as the architecture and are evaluating their options for deployment. However, what we’ve found working with our customers is that you don’t need to cut over to IMS all at once. Instead, you can take specific projects that are justified on their own ROI merits, and implement them in an IMS-compatible fashion. IMS is based on IP and SIP, and is therefore modular and scalable. Historically, wireless, wireline, and cable networks have adopted separate standards and methods for accomplishing very similar goals. The transition to IMS presents a great opportunity to increase commonality across these domains. This will pay off at many levels. Operators will be able to extend services to users regardless of how they access the network, so their decisions will be based on business opportunities, not on technology constraints. And users will get more value out of the networks because they will be able to use services in more environments, to connect with more people.

VoIP Developer Conference
I can’t imagine a more healthy space to be developing in than VoIP and the vendors in the space seem to agree with the analysts. If you are interested in learning more about VoIP development or talking with any of the companies in this article, I hope to see you at TMC’s VoIP Developer show August 2–4 in the South San Francisco Convention Center. We expect this show to sell out just as it did last year. For more information, please visit www.voipdeveloper.com.

Internet Telephony Conference & EXPO Grows And Grows
The exhibit hall at our last event (Miami, February 2005) was literally bursting at the seams. Not only did this show have the most attendees of any VoIP event in the world, it was in a sold out exhibit hall making the aisles impossible to walk down easily. We are now happily moving the show to a larger facility.

The Fall Internet Telephony Conference & EXPO will be moving to the Los Angeles Convention Center October 24–27, 2005.

This show has more leading-edge education and activities than any other show I am aware of. We spent many days assembling what has to be the most comprehensive conference and educational program around. As always conferees get a guarantee if they aren’t satisfied and as a reminder, not a single conferee has ever taken us up on this offer. Please see www.itexpo.com for details.

You can expect to see the second annual VoIP Service Provider Awards dinner at this event. New criteria have been implemented this year and the selection process will be exciting as the players in this market are multiplying very quickly indeed. A nomination form and other information can be found online at www.itexpo.com.

Another interesting byproduct of having the largest VoIP show in the world is that we had more service providers at this year’s event than any other show had and many of the service providers in attendance from around the world thanked me for all the objective education they received (credit goes entirely to my team for this). The point is that there seems to be such demand for objective education that we have launched a four-day Service Provider Summit at ITEXPO this fall that will focus on every critical issue service providers need to tackle when deploying VoIP in their networks. Please see www.serviceprovidersummit.com for details.

Yes, ITEXPO is the one place you need to come to learn about the entire VoIP market and we attract resellers, service providers, enterprise decision makers, and government buyers in large numbers. The exhibit hall is more like a mall where buying takes place on the show floor and there is a frenzy of learning and networking going on. The excitement level is unmatched and we are proud of this fact and thank many of you, our loyal attendees for making these shows possible.

The Future
We are seeing an increasing amount of convergence between wireless and VoIP and as a leader in both areas we have decided that a more appropriate home for ITEXPO on the west coast is San Diego. We are proud to announce that ITEXPO Fall will be held there October 10–13 in 2006. We can’t think of a better location and we are excited to be bringing the world's largest "VoIP shopping mall" into the wireless capital of the world. IT








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