Vendors Look Back on 2009, Prognosticate on the Year Ahead

By: Paula Bernier

INTERNET TELEPHONY checked in with a handful of industry suppliers to ask what they considered to be the biggest developments and trends in 2009 and their expectations for the year ahead. Not surprisingly, many of these sources noted the growing importance and prevalence of mobile data and video, and the federal government’s broadband stimulus effort.

Other key themes noted were the proliferation of connected devices, the mainstream adoption of higher-capacity transport and access connections, the move from legacy to next-generation networks, and, of course, the impact of the economy in 2009.

Expectations for 2010 from this group include the adoption of HD voice, a heavier focus on storage, the move to IPv6 and more discussion on 100gigE.

“The big trend I see is the importance of mobile data and iPhones and all the different applications and uses,” says Fred Ellefson, senior director of business planning at Adva Optical Networking. “I think on a personal basis we’ve all got stories on how we use mobile data and how it’s kind of changed our lives.

“Bringing it back to the nuts and bolts of our industry, I think that we’ve got a little bit of catching up to do, obviously, to support this emerging data-centric view of the mobile market,” he continues. “I think Ethernet backhaul is going to become real real important. I think we’ve seen a little bit of it this year, but I think we’re going to really see it next year and beyond as these services really take off in a big way.”

Pointing to the Kindle and other eBook readers as well as the flurry of new smartphones, Thomas Barnett, senior manager for service provider marketing for Cisco (News - Alert)’s Service Provider Group, adds that we’ve also seen in 2009 a significant increase in the type and number of devices with which people are accessing the network.

Doug Webster, director, market management for Cisco’s service provider group, adds that as a result, the move to IPv6 that’s been talked about for years will move forward in earnest in 2010.

But while new mobile applications and video are getting a lot of the attention, Vince Lesch, vice president of product marketing at Tekelec (News - Alert), notes the one thing that stood out to him in 2009 was the continuing advancement of text messaging.

“Text message growth continues to astound,” he says. “The most recent examples are AT&T and Verizon (News - Alert) nearly doubling text message traffic from Q3 2008 to Q3 2009. The next major growth area is machine-to-machine SMS messages. Businesses are finding that for certain types of M2M communications – such as sending GPS coordinates for truck fleets – SMS is a far cheaper and more reliable alternative than IP. Small, ‘bursty’ traffic easily fits into an SMS message, and is almost always available as long as the device has connectivity.”

He notes that ABI Research (News - Alert) recently released data showing that M2M SMS and MMS message volume will have a compound annual growth rate of 40.06 percent from 2008 to 2014.

Although mobile was big, Scott Wilkinson, Hitachi (News - Alert)’s vice president of product management and system engineering, says that the biggest development in 2009 in terms of access technology was the broadband stimulus effort. (Of course, the broadband stimulus program applies to both wireless and wireline technologies.) In terms of metro and long-haul technology, he adds, in 2009 we saw 40gig become mainstream.

Noting that all the carriers are now on board with taking optical transport to the next step, Dave Mills (News - Alert), vice president of sales at Optelian, says 2009 also saw the uptake of 10gig technology from large rural operators such as CenturyTel and Windstream.

Pathmal Gunawardana, head of optical for NSN North America, said that next up in transport will be 100gig and convergence. He says service providers are looking for more converged platforms that can do Layer 1, Layer 2 and Layer 3 transport in one box. For example, he says, Verizon in August issued a request for information around a long-haul optical transport platform that combines the functionality of DWDM gear, a Layer 2 OTN switch and MPLS. A request for proposals on this same front is expected from Verizon in 2010, with likely deployment in 2011, he says.

Of course, both service providers and businesses are moving from legacy services and technologies on a number of fronts.

“In 2009 we saw continued interest from our customers in evolving networks

to IP and replacing legacy switches,” says Dawn Hogh, vice president of marketing at Veraz Networks (News - Alert). “While capex budgets were constrained, customers did continue to move forward in this area, and we expect continued interest in 2010.”

Adding to the VoIP discussion, Alan Percy, director of market development at AudioCodes (News - Alert), says: “We see the adoption of HD communications and our HDVoIP products as an opportunity to propel our industry from ‘as good as TDM’ to ‘far superior than TDM’.”

We heard a fair amount about HD voice this year as the first HD-enabled handsets came to market. As previously reported by INTERNET TELEPHONY, wideband voice proponents believe this is a feature that consumers will be asking for at this time next year.

“The improved sound quality allows callers to hear the subtle differences in consonants and numbers, which will improve accuracy and reduce costly errors,” says Percy. “Other benefits include reduced listener stress, which – from our experience – improves the effectiveness of conference calls and long duration discussions.

“From a business perspective, we see HD voice communications as giving service providers a competitive advantage over their peers and initially will create affinity with subscribers recommending their friends to join the HD revolution,” he adds.

Speaking of revolution, the health care industry has been poised for some big changes, including the digitization of personal health care records.

Adva’s Ellefson says the health care industry’s move to digitize records and corporate use of digital data is likely to create a boom in demand for data storage. Indeed, demand for storage also is growing due to the increased use of call recording, and the proliferation of video applications in consumer and business settings.

“We just kicked off this great big initiative as a country to go take the health records and digitize them and put them online, and that’s just going to require a ton of capacity,” Ellefson says.

Beyond the broadband stimulus and the federal government’s mandate to digitize medical records, the federal government’s move around smart grid also will send ripples through telecom in the years ahead, notes Ellefson.

But for all the excitement the federal government and the rest of these developments injected into our industry in 2009, the economy was obviously the story of the year.

“Two-thousand and nine was not a fun year for telecom,” says Laura Howard, CMO of ECI Telecom (News - Alert). “The financial uncertainty all around, including subscribers and investors alike, was definitely impacting decision making for operators over the last 12 months or so. But as global recovery appears to be on the horizon, 2010 should see increased infrastructure activity to make up for a more conservative pace in 2009.” IT

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