May 2000

Faint Heart, Fair Prospect

BY BRIAN STRACHMAN

In the world of convergence -- or computer telephony or CTI or whatever you may choose to call it -- we resort to self-consolation. We tell ourselves that our turn is next. But is it?

Where might we find an indication that our time has come? Well, we won't find any such indication in the mainstream media. Try watching the business news on CNN. In a typical broadcast, you'll see at least a dozen references to companies such as Cisco, Sun Microsystems, Oracle, and Microsoft. But what about companies focused on convergence? These are rarely mentioned. A few, such as Lucent and Nortel, occasionally receive attention, but even these industry heavyweights had to buy data networking companies to attract coverage that even approached the levels taken for granted among datacom companies.

FINE INNER QUALITIES
Like many lovelorn, would-be suitors, convergence comforts itself by reflecting on its fine inner qualities. As well it might. However, it may err in nursing the fond hope that one day, at long last, someone will come along who actually cares.

But let's leave that question aside for the moment, and consider what it is that makes convergence so special. Basically, convergence is important in the grand scheme of things because it can handle voice. Voice applications are every bit as important as data. And, for most companies, it is much more important. The typical office can function for an afternoon without its data network, e-mail server, or Web presence. It would be irritating, but life would go on.

However, if any of the voice (or CTI or computer telephony) applications failed, there would be a veritable riot. Imagine life for a day without voice mail. Most people consider voice mail more time-sensitive and more mission-critical than e-mail. The inability to take or forward voice messages would cripple any business.

Even worse would be the lack of an auto-attendant or a dial-by-name directory. Many companies rely upon these sorts of voice applications for almost every call. Without these applications, everyone instantly becomes inaccessible. Finally, imagine a day in a call center without an automatic call distributor (ACD). Everyone may as well just go home.

FEELING INVISIBLE
These are important business applications, without which many businesses would cease to function. Why, then, do companies making products of less mission-critical importance receive more attention and higher priority? Don't misunderstand me, I send and receive over 100 e-mails per day, and use it as my file transfer protocol of choice. I've almost forgotten how to FTP something the old way, and I'm usually the first person banging on the door of our IT manager when I can't access the Internet. The point is, voice applications are at least as important as data applications.

The problem lies in customer perception. Prospective customers just don't get it. Strong words you say? Well, this conclusion, as harsh and extreme as it may sound, is backed by a recent survey conducted by Cahners In-Stat Group. In this survey, Cahners In-Stat interviewed current customers and resellers of computer telephony and CTI solutions. A fickle group, to be sure. However, its buying behaviors were characterized in the survey, with results ranging from the common-sensical to startling.

The Price Is Not Right
No surprise here. Many small businesses in particular were scared away by the entry point of computer telephony and CTI products. While a reasonably decent data network for a small office can be had for under $5,000, an advanced phone system with desktop call control and unified messaging will typically cost four times as much.

While one could argue that the benefits of a computer telephony or CTI system would ultimately be greater, the cost is still prohibitive. These prices are dropping steadily as more vendors utilize the data network for some of their infrastructure, thus sharing costs. However, convergence is still too pricey for most small offices today.

Buyers Want Basic Features
This result was something of a surprise, particularly since vendors often sell their products by hyping myriad (and little-used) features. Primarily, customers wanted to be able to route their calls in an intelligent manner. This usually means a simple auto-attendant, or in many cases a basic ACD.

Small businesses are very concerned with appearing bigger than they really are. In the Internet age, a 20-person operation can look like a multi-national conglomerate on the Web. Unfortunately, that image ends the minute the CEO answers the main line. Basic call routing and queuing products such as an ACD, or even an auto-attendant, are frequently mentioned.

Buyers Don't Recognize The Value In The Products
The business community has reached a point where people are embarrassed if they lack an e-mail address or a Web page. And such a lapse should be embarrassing. Who but a fool would forgo the incredible time-saving benefits of e-mail, especially since it is so inexpensive?

Similarly, people could find it embarrassing to lack interactive voice response (IVR) or unified messaging. But somehow they aren't, even though many case studies have demonstrated the value of IVR, the massive number of man-hours an IVR system can save by automating repetitive calls. Also, unified messaging has been demonstrated time and again to save upwards of an hour each day for every employee that uses it. Yet, these products don't have a fraction of the penetration of most data applications.

The only exception to the overall datacom bias is voice mail. The main reason voice mail succeeds? Simplicity. Customers understand voice mail. It has been around for decades, and it is widely recognized as a critical business tool. Last year, the voice mail market exceeded $3 billion market in the United States alone. However, the inherent lack of understanding of other computer telephony and CTI products prevents them from reaching the heights achieved by datacom products.

Buyers Don't Recognize The Products Or The Vendors
When data resellers contact most businesses with the offer of setting up a data network, the buyers almost always are familiar with the products and brands. Unfortunately, many computer telephony and CTI vendors have lived their lives relatively incognito when compared to the celebrity status of data products. Potential convergence customers often tell resellers they never heard of many of the vendors or their products.

HOW SOON IS NOW?
If convergence languishes, despite its fine qualities, what's wrong? The problem, we've learned, is one of perception, the failure to impress upon prospects the importance of convergence. The hard bottom line is this: If the prospects are ignorant, there is no one to blame but the marketers.

The marketing failure of computer telephony and CTI companies is especially conspicuous when contrasted with the marketing success of datacom. Companies such as Microsoft and Cisco are outstanding marketers. And it is hardly coincidental that they advertise frequently (and well).

Granted, these companies are enormously larger than most computer telephony and CTI vendors, and they can easily afford to place a television ad on every PGA tournament. All the same, convergence vendors would do well to take a lesson from their brethren in the data world. If potential customers understand the benefits of computer telephony and CTI products, they will ultimately realize that convergence is every bit as important as their data products. The key lies in customer awareness. Convergence vendors may have to understand that marketing budgets are often self-fulfilling prophecies. If convergence vendors advertise like the data giants, they will become as rich as the data giants.

Brian Strachman is industry analyst, Voice and Data Communications, Cahners In-Stat Group. To correspond with the author, please send your comments to [email protected].