The Year in Review — the Year Ahead

By: Richard “Zippy” Grigonis

2008 brought us mergers, acquisitions, amazing mobile devices, the first glimmerings of WiMAX (News - Alert) and sophisticated mobile unified communications suites and Telecom Expense Management systems capable of streamlining and enhancing business processes. Small and Medium-Sized Businesses (SMBs) were a prime target for vendors, though many SMBs had discovered the bliss of hosted and managed services. Service-Oriented Architectures (SOA), Software as a Service (SaaS (News - Alert)) and Web Services in general helped to accelerate the development and deployment of exciting new applications, while the IP-based Multimedia Subsystem (IMS) continued its long slog toward adoption by carriers worldwide. As mobile multimedia, large-scale IPTV (News - Alert) deployments and teleconferencing systems began to gobble up bandwidth, operators scrambled to perform infrastructure changes to enhance wireless backhaul and boost demand for metro Ethernet. 2009 should bring us more of the same, depending on the economic scene.

About 38 percent of our readers are service providers and network operators. That shouldn’t be surprising, since smaller businesses now realize they no longer need maintain Customer Premise Equipment (CPE) nor trained IT staff to enjoy today’s feature-rich communications environment. The old stigma of “Centrex” in the circuit-switched days of “enhanced services” has given way to more reliable, less expensive and easy-to-use IP-based hosted and managed services.

Take Cbeyond (News - Alert), for example, a managed IP-based services provider of voice and broadband Internet services designed to serve the needs of small businesses. Its innovative service, called BeyondVoice, is a bundle of local, long distance, broadband Internet and mobile services. Cbeyond’s plans and bundled communications services are easy to understand and sell. Cbeyond can be promoted to a provider’s current customers as a standalone offering or as an add-on service to equipment or consulting proposals. Cbeyond’s BeyondVoice with SIPconnect service interoperates IP-PBXs from over 20 PBX (News - Alert) manufacturers.

Cbeyond’s Paul Gies, Senior Director of Products, says, “2008 was a good year for Cbeyond, and for small businesses in general. We saw the validation of many of our strategy that businesses want applications that help them run more efficiently. There really is an appetite out there for this. Our CEO said it best, ‘Small businesses will give you as much as you can handle with excellence.’ They’re anxious to outsource many of these services to a managed service provider such as ourselves. They don’t want to deal with the equipment themselves. They’re looking to give their business to companies that can meet their needs and do it well. That’s something that we at Cbeyond can do.”

“I think you’ll see a continuing trend in 2009 along those same lines,” says Gies. “Small businesses need more and more of these big business tools to help them operate, especially during these increasingly trying economic times. They really need the value that these applications can bring to help them run more streamlined and more efficiently, whether the apps happen to be hosted email solutions, mobile phones, web hosting plans, or whatever. That’s what these businesses are looking for. We saw that in 2008 and we see a continuation of that in 2009.”

Or course, those companies that wish to “roll their own” solutions (or developers who enjoy working with hardware/software “building blocks”) now have a nearly bewildering array of technological choices too.

One well-known company in this area is Aculab. Aculab’s Alan Pound (News - Alert), Managing Director, says, “Our biggest achievement in 2008 has been the success of Prosody X, established as the ‘technology of choice’ in four major sectors; conferencing, fax, contact center and military communications. Prosody X is now clearly the global market leader for communications enabling technology used in IP, hybrid and TDM converged communications solutions. Aculab (News - Alert)’s record breaking performance in fiscal year ending June 2008 reflects the outstanding success of Prosody X.”

“Moreover, the launch of the ApplianX range of products has also been extremely well received,” said Pound. “The ApplianX IP Gateway and ApplianX Gateway for Microsoft (News - Alert) Office Communications Server 2007 have both created much interest and demand in their respective target markets.”

As for 2009, says Pound, “We of course focus on our customers and we are willing to listen and invest in the technology they need to be successful. One of the key areas that sets Aculab apart is our ability to respond to customers’ near term requirements through our Request for Change [RFC] process. This process is designed to allow our customers to ask for product enhancements to target specific opportunities and is probably the key point that is brought out when our customers refer to Aculab as providing good support.

“In terms of new products and features on the horizon, here are a few things that you can look forward to seeing from Aculab during 2009: Video support on our Prosody media processing family; improvements to license management for Prosody S, our HMP [Host Media Processing] product; T.38 fax support; Prosody S with Linux support; and further variants within the ApplianX range.”

Asked how he sees the communications market evolving, Pound says, “The communications business model is now undoubtedly IP-centric. Carriers have moved to IP in their core networks and, in spite of doubts over the relative penetration of IP into the user base, over 70 percent of equipment lines shipped support IP. And, despite what the H.323 Forum might say, I’m convinced the majority of these are SIP.”

“Mobile penetration has increased, too, says Pound. “In Singapore, for example, it’s 125 percent and elsewhere in the world, it’s also over 100 percent as many users have more than one SIM. Worldwide penetration now exceeds 50 percent. At well over 3 billion, the number of mobile phones on the planet equates to over half the global population number. More than three out of every 10 Americans now rely solely on a mobile handset for their telephony needs. Significantly, more than 84 percent of Americans are apparently now wireless subscribers. And, since it looks like 2007 was the year when worldwide mobile shipments exceeded 1 billion for the first time, I predict an entirely mobile future.”

“Further evidence for this comes from mobile carriers as they determine how to move from GSM to LTE (News - Alert) and/or WiMAX for their 3.5/4G services,” says Pound. “Voice usage is shifting and it won’t be long before more than two-thirds of traffic is wireless. It’s not hard to deduce that there is a market for mobility and there is no question we are in a rising industry that is going to be increasingly powered by IP, broadband and some kind of mobile device.”

Supporting the Wireless Boom with Increased Backhaul

ADVA (News - Alert) designs, develops and manufactures broadband networking solutions, including WDM communication systems, high-speed fiber optic converters, and various forms of end-to-end Optical+Ethernet products and solutions from enterprise customer sites to core and regional telecommunications carriers. Their carrier-class portfolio — the Fiber Service Platform (FSP) family of products — is specifically designed to enhanced services, simplify networks and reduce the total cost of ownership.

ADVA’s Vice President of Global Marketing, Fred Ellefson, says, “We’re still very active in optical and over the last couple years we’ve picked up more and more of the Ethernet side of the equation. We’ve always felt that Ethernet and optical are a very natural combination of technologies and are in fact the wave of the future, particularly in the wireless backhaul space. Next-gen technologies such as 4G wireless, WiMAX and the upcoming LTE will need enormous pipes back to the core, much bigger than traditional T1s, especially when you talk about subscribers getting access to 10 Mbps and wireless pipes. A bunch of 10 meg subscribers would require 100 Mbps or more of backhaul data capability. Fortunately, optical Ethernet can handle it. Even so, bandwidth usage will continue to grow per user, and I think the limiting factor will actually be batteries. As each of these technologies gets faster and faster and uses up more and more power, at some point you’ve got to say, well, we can achieve 100 Mbps, but the battery in the mobile device will only last for about 15 minutes. You’ve got to find the sweet spot, the trade-off between reasonable battery life and download speeds that make sense. Someday we’ll get to 100 Mbps — laptops will be first — but in the meantime expect an upper bound of about 5-10 Mbps bandwidths, especially for the smaller portable, battery-powered devices.”

“The world is moving toward adopting various flavors of packet transport, particularly IP and its associated protocols,” says Ellefson, “and in general it will be on a foundation of optical + Ethernet transport. That’s a $2.4 to $2.6 billion market with about a 20 percent growth rate. We focus on several segments, such as the enterprise market, the carrier WDM and carrier Ethernet spaces. The carrier WDM market is the biggest one, at about 66 percent. It’s interesting to address the enterprise market, get direct feedback from the endusers, and then take that knowledge and use it to help us work with our carrier customers. On the enterprise side, it’s all about storage, its centralization and the different storage architectures that enterprises want. In general, again, it’s riding over an optical infrastructure of some type. In the infrastructure space, it’s all about video and the demands video is placing on existing networks and how that’s driving some fairly healthy growth rates. Then, in the Ethernet space, you’ve got a thriving business services market that’s grows at a rate of about 28 percent. Wireless backhaul falls into that space too.”

For wireless wholesale provider dealing with wireless backhaul applications, an intelligent demarcation device is critical for Ethernet service delivery in terms of supporting media conversion, loopbacks/testing and SLA monitoring. For the wireless carrier itself, a wireless demarc device at the cell site performs three key functions: Remote test/loopbacks, SLA monitoring and traffic shaping (MEF UNI).

“As bandwidth demands increase in the wireless world, traffic shaping capabilities become more important,” says Ellefson. “A 100 Mbps radio output drives a 10 Mbps service. When the traffic exceeds 10 Mbps, it can be dropped [policed], or buffered [shaped]. Traffic shaping in the wireless carrier demarc device stores the traffic in a buffer and feeds it upstream at a 10 Mbps rate to ensure that no traffic gets dropped. When dealing with multiple wholesale carrier vendors and equipment vendors, once can see that shaping/policing capabilities and buffer sizes will vary greatly.”

“With shared demarcation, using back-toback demarcation devices is not the right long term solution, even though they’re required today because of standards and business practice issues,” says Ellefson. “The MEF NID group is working on standards to allow demarcation device sharing.”

“Recently, we’ve carefully examined all of this and we’ve moved to deliver truly ubiquitous intelligent Ethernet by introducing our FSP 150CM, the world’s first modular Ethernet Network-to-Network Interface demarcation device,” says Ellefson. “The FSP 150CM enables carriers to terminate multiple Ethernet local loops in one unit; perform inter-carrier handoffs, vital to the wholesale market; aggregate management traffic from up to 16 remote sites; drastically reduces space, power and cost; significantly reduces CAPEX and OPEX (News - Alert) costs; and simplify provisioning across multiple network platforms, including VLAN, PBB-TE and MPLS. With its support of all ADVA FSP 150CC fiber demarcation and extension solutions from 1 Mbps to 10 Gbps, its simplified provisioning across multiple platforms, without the complexity of switches, and its full transparency to any proprietary frames, the FSP 150CM should become the preeminent NNI demarcation and aggregation solution for high-density networks. It will enable the evolution of Ethernet from a service into a transport infrastructure capable of replacing traditional transport technologies.”

From Access to Intelligence

Communications is no longer just transport – no longer just a dumb pipe. Just as computer telephony of the 1990s was “bringing computer intelligence to bear on telephone call control,” today’s value-add in an IP world is a combination of data mining, network visualization, telecom expense management and other forms of intelligence that can transform an organization’s business processes.

Openet (News - Alert) provides what they call Transactional Intelligence solutions for the world’s largest network service providers. The varied world of voice, data, and multimedia demands the ability to extract greater intelligence from network activity. This intelligence can turn everyday data into customer insight, can aid in the rapid introduction of new services and content, and can facilitate greater efficiencies, cost management, and system consolidation.

Openet recently introduced their updated FusionWorks Framework 5.0, the platform at the core of all of Openet’s offerings. FusionWorks Framework 5.0 brings operators improved unified logging capabilities, statistics system and operations administration and maintenance to ensure increased value of operators’ Transactional Intelligence of all services, across all networks. This announcement follows a recent series of new solutions, as well as new products for telecom and cable providers, demonstrating Openet’s commitment to helping customers increase revenue and service opportunities.

Niall Norton, CEO of Openet, says, “In the middle of 2007 there was a sort of earthquake in the industry when the iPhone (News - Alert) arrived. The full ramifications of that only became apparent to a lot of operators in 2008. For the first time leading operators began to see the full power of what wireless data services can do, both as a service in itself but also generically for how it can impact things such as financials, commerce, lifestyle, entertainment and so forth. There was years of talk, and now suddenly there was a device that was actually ‘walking the walk’. That became very apparent in 2008. The iPhone has spawned a number of initiatives that have kicked off in 2008 with the leading operators. The significant mindset change among cable operators, wireless operators, and the high-speed broadband providers has focused on how they can get away from being a ‘dumb pipe’, just conveying traffic, to being a ‘smart pipe’ in that they can utilize the latent assets that they’ve got concerning customer knowledge, preferences and activity, and to go ahead and monetize that. Indeed, we’re adept at helping operators move from a dumb pipe to being a smart pipe, heavily leveraging our concept of Transactional Intelligence. We have five core products they can use to do this.”

“Historically, in the wireless arena, after the appearance of voice and text, there was always the search for the Next Big Thing,” says Norton. “Guess what. There was no Next Big Thing. There was an element of despair for a few years, in particular 2005 to 2006. But now there’s a great deal of optimism. In 2008 there has arisen a realism among operators that they could conceivably be ‘googled’ to their customers by monetizing their latent assets. A number of operators — again, cable, wireless and high-speed broadband — are moving in that direction. They’re looking to not only be the provider of a communications service, but also to be able to facilitate other providers of services on their communications network, to the benefit of the end customer. The manifestation of that in high-level terms in wireless territory was the iPhone, and now there’s the second generation iPhone and all the lookalikes it spawned. That whole area has become a runaway train. It’s great because it demonstrates that, even in troubled financial times, there’s a still great deal of optimism that there’s a way forward for operators of all colors, and the smart guys are basically tuning up for that kind of future.”

“Of course, Apple (News - Alert) both tapped into a pent-up demand for an advanced mobile device and, most of all, they got the front-line marketing to the end customer totally correct,” says Norton. “I’m neither pro nor against Apple. For me, it was the first time I could see our customers’ data usage experience triple digit data usage growth on their networks and soar off the charts, because people were using the iPhone in WiFi mode as well as in more traditional wireless technology modes. And it actually brought things like iTunes and YouTube (News - Alert) to the fore for mobile devices. So it brought not just broadband services, but access to content. Some operators are very smart and know exactly where they need to be. The struggle for them is with their very big and complicated network. They must be sufficiently agile to reach their goals. And we at Openet can help them to do that with our products.”

2008 was quite a year. 2009 should be even more impressive. Perhaps because of global economic uncertainty, companies realize that they must purchase technology that boosts productivity and eliminates travel time and expenses. Whatever happens, it should be interesting. IT

Richard Grigonis (News - Alert) is Executive Editor of TMC’s IP Communications Group.

Aculab (www.aculab.com)

ADVA AG Optical Networking (www.advaoptical.com)

Cbeyond (www.cbeyond.net)

Openet (www.openet.com)

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