November 2007 | Volume 10/ Number 11
The Year in Review…The Year Ahead
Yes, it’s that time of year again when we sit back in a big comfy chair and note incremental increases among the usual suspects (bandwidth and the popularity of SIP), wonder when IMS equipment interoperability testing will be finished, and speculate on what new combination of voice/video/data and what-not gets crammed into mobile devices. And oh yes, there are a few surprises, too.
For example, one area you’ll be hearing a lot about over the next few years will be TEM (Telecom Expense Management) for the enterprise. Tangoe (http://www.tangoe.com) is the TEM leader, with customers such as ADP, Comcast, Dell, Deloitte, HP, ITT, MBNA, McKesson, National City Bank, Perkin Elmer and many others. Tangoe provides technology-based software and service solutions that enable these global organizations to procure, manage, and control their voice, data, and wireless communications resources. They recently acquired Traq Wireless, a provider of Mobile Lifecycle Management Solutions.
Tangoe helped a marketing company with 17,000 phone lines slash their telecom expenses by 50% from $8 million to $4 million. For a large U.S. bank, Tangoe gave visibility to over 10,000 cost centers, creating $15 million in telecom savings, including $1.7 million in secured credits. A $3 billion clinical testing company with over 1,000 locations worldwide enjoyed a 35% reduction in their telecom spend, or a $7 million savings in just 12 months.
Tangoe’s President, CEO and Founder, Al Subbloie, says, “Big companies spend huge amounts of money on fixed and wireless communications. It’s in the millions and for some companies it’s $500 million a year and more. Moreover, it’s a disaster the way they manage it. I founded what has become the leading company in this space. We build a very robust technology platform that enables enterprises - not telecom providers - to manage their spend. We grow at about 40 percent a year and are adding 25 to 35 customers per quarter of the Global 5000.”
“Our technology engine consolidates the billing for over 150 carriers and normalizes it into one model for use by an enterprise to manage their telecom-related spending effectively,” says Subbloie. “We don’t write billing software, but we do map on the back end, for the benefit of customers, to all of the electronic output that the telecom billers provide. We have a single layer that collects that billing data from EDI, CD-based and web-based systems, and so forth, and normalizes it. We offer automated assurance, which is a fancy term for an audit, that checks bills against the contracts and wrings out any errors. As you can imagine, there are plenty of them in this space.”
Subbloie elaborates: “We automatically allocate all of that billing data to SAP and Oracle on behalf of the enterprise, so with a single push of a button they can take 10,000 bills a month and the data automatically hits the P&L and cost center breakdowns,” says Subbloie. “We handle all of the accrual processing, we do all of the provisioning for them. Even for companies with 30,000 devices we can manage all of the fulfillment, the ordering, the billing, the optimization of the rate plans, the inventory management and all of the accounting functions on the back end. That’s essentially what we do.”
“This field to me is like where CRM and the call center industry was around 1996,” says Subbloie. “It’s rocking and rolling right now. The Gartner Group has TEM pegged to be a billion dollar industry by 2010.”
Five Trends to Go
Covergence (http://www.covergence.com) makes the Eclipse, a session border controller specifically designed to operate at the VoIP access edge. Eclipse combines conventional border control functionality with comprehensive security and complete management and control capability, thus serving as a single point of security, control and management for VoIP user connections and other real-time services.
Covergence’s Rod Hodgman, Vice President of Marketing, says, “We’re experiencing at least five trends. First, the marketplace’s focus either has shifted or is in the midst of a shift from VoIP to Unified Communications [UC]. Microsoft’s announcement of their Office Communications Server 2007 will only add to the interest in UC and how it can streamline certain communications and collaboration processes. Related to UC is that, in the enterprise market, we see customers creating communications-enabled applications. They’re typically embedding VoIP into a customer-facing application, such as a customer relationship management system or a supply chain management system, to streamline that process and thus make the customer experience much richer and more productive. With communications-enabled apps, you’re streamlining a business process, so you get an even higher rate of return on those kinds of initiatives.”
“The second trend we see,” says Hodgman, “centers on the packaging and delivery of the solutions. There’s a move away from using custom hardware and to industry-standard platforms. We still sell an appliance, but we also sell software for blades that run in ATCA chassis and for blades running in the IBM Blade Center. With the Blade Center you can get our product as the resident SBC, along with BroadSoft’s BroadWorks applications server, and you can get Netcool and Tivoli from IBM. So you can assemble a really robust solution that runs on the IBM Blade architecture, and allows customers to more cost-effectively deploy VoIP and real-time communications throughout their organization. We’ve observed tremendous interest in the marketplace for this, because managing these chassis and integrating them into a customer’s system and network management environment is as important as the standards that revolve around software, such as IMS and things like that. If they’re able to have a common platform, and common parts across their ongoing enterprise, then the ongoing operating cost of managing these systems plummets dramatically. That will be a big piece of our business in 2008.”
“Third, we’re seeing a move to Web Services and Service-Oriented Architecture,” says Hodgman, “and the ability to integrate into service delivery platforms so that IMS or even enterprise developers who are creating these communications-enabled applications or IMS services can embed policies directly into the applications. By that I mean they can put call-outs into a session manager such as ours to ensure that, say, conversations from the CEO need to be encrypted, or recorded, or should follow a certain path for quality of service reasons. Web Services can be used to build dynamic control and shape sessions according to the individual needs of the application. The whole blurring of applications development and VoIP as a Web Service and the ability to use Web Services to dynamically control and shape those sessions is something we see emerging with strong interest.”
“Fourth, we’re seeing a macro transition,” says Hodgman. “Our traditional market was dominated by service providers. Now we’re seeing an enormous uptick in our enterprise business. We think that will propel us forward in 2008 and those enterprises are trying to create something we’ve been talking about for many years - a converged backbone of all of their IP traffic, including what was their TDM traffic but which is now their VoIP traffic on that backbone, and push the boundary of where they have to jump off to the service provider further and further back. It’s not so much a problem of getting the IP-PBX traffic onto the backbone, but it’s a problem of having the intelligent routing capability to ensure that you can maximize the time it stays on that IP network and minimize the time it takes to jump off to the PSTN connection. This is happening not just in call centers, where you’d expect to see it, but just when connecting up these large multinational geographically dispersed organizations. In many ways it looks like peering in the service provider arena, but it’s not a point-to-point relationship; rather, it’s a complex mesh network that you must be able to intelligently route through.”
“This phenomenon is basically the enterprise market saying: ‘Hey, we think we can finally now do this’,” says Hodgman. “We’ve been talking about it for years. Let’s put all of our real-time traffic onto our IP backbone, and push out the domain of the service provider and the jump-off points to the PSTN. By doing this the enterprises can save a lot of money. It’s the ‘first wave’ of putting the real-time infrastructure in place: a product like ours along with products like Tivoli and Netcool. Enterprises have had those products in place from IBM previously, but now using them in conjunction with a product like ours helps them manage the quality of these real-time networks.”
“The fifth trend we see,” says Hodgman, “is the transformation in the enterprise endpoints and a transformation in the enterprise traffic from proprietary traffic to SIP-based traffic. That’s also being driven by Microsoft, not just because they’re moving to the newest version of their OCS system, but because they’re also pushing hard to get that capability into the hands of developers within the enterprises, to build the communications-enabled applications.
WiMAX - Wild Card or Joker?
DragonWave (http://www.dragonwave.com) designs, develops, markets and sells carrier-grade, high capacity, microwave broadband equipment, for network operators and service providers.
Erik Boch, DragonWave’s CTO, says, “Over the last 12 to 18 months, people have asked whether WiMAX will ‘happen’ or not. They want to know whether WiMAX fits in with the mobile carriers, and if all the operators are going to do WiMAX as a sort of 4G technology, or will there be other competitive, perhaps even prevailing technology elements that deliver the holy grail of high bandwidth data services to mobile handsets and computers. The so-called ‘killer app’ simply appears to be everything getting vacuumed up into your little handset: MP3 music downloads, video, watching the news on your way home on the train using a phone, PDA or laptop, and so forth. We don’t know if WiMAX will prevail, but we do believe that it will be one of the big vehicles for deploying the ‘coverage layer’ onto those types of networks. We also think that there’s a lot of good high bandwidth solutions for CDMA, GSM, HSDPA and USDPA, which will come about somehow in many GSM networks.”
“I think WiMAX is having a positive influence on moving mobile data technology forward,” says Boch. “For years it was sort of stuck as questions of ‘When is 3G coming, when is 4G coming? What’s going on?’ kept repeating. Everybody was talking about WiMAX but it lost its momentum to some extent. Finally other WiMAX supporters popped up and its people said, ‘If you don’t want to do it, we’re going to do it’. So I think the adoption of WiMAX by the likes of Sprint and Clearwire and the public nature of those announcements, has generated a lot of forward momentum for WiMAX.”
Time for a New Testing Paradigm?
Ixia (http://www.ixia.com) provides performance test systems for IP-based infrastructure and services. Their test systems are used by network and Telephony Equipment Manufacturers (TEMs), semiconductor makers, service providers, governments, and enterprises to validate the functionality and reliability of complex IP networks, devices, and applications. Ixia also offers Triple-Play test systems capable of simulating real-world conditions.
Victor Alston, Senior Vice President of Product Development and Marketing at Ixia, says, “Over the last few years we’ve been building out our customer base. We primary used to focus on NEMs [Network Equipment Manufacturers] and we sold them a large variety of Ethernet/IP and co-routing technology. We were just starting to get into applications servers. Over the last few years, we’ve focused much more on service provider accounts in addition to equipment manufacturers. We’ve also moved from selling in the U.S. to establishing a global presence - a majority of our SP accounts are now in the Asia/Pacific region and Europe. Because of this global focus, we’re picking up on a couple of trends.”
“One wave moving us forward is Carrier Ethernet and the rollout of Metro Ethernet services as a whole. These new Carrier Ethernet technologies are really at reduced cost and there’s less complexity of deployment. The other trend is just the exponential increase in bandwidth experienced by many of our service provider accounts, which serves as a key driver of new equipment purchases and new IP backbone infrastructure. Mobile network expansion is causing exponential growth for bandwidth on the IP core, and standard VoIP and video-over-IP technologies are causing growth too.”
“Finally, we see the need for a new model of testing on the subscriber network,” says Alston. “This is because a variety of service providers have rolled out many different packet-based IP services, from VoIP to data to Video-on-Demand [VoD]. Certain service providers are rolling out peer-to-peer technology to leverage file sharing services at their enterprise accounts. Because many of these services are converging, we see the need for a new type of testing and qualification in these accounts.” IT
That’s it for this year!
Richard “Zippy” Grigonis is Executive Editor of TMC’s IP Communications Group
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