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April 2000

Rich Tehrani

 

3Com: Making The Most Of LAN Telephony

BY RICH TEHRANI

Go Right To: Service Providers Converge For Interoperability

Last month I reviewed the fact that Internet telephony, a field that many said would never be a serious threat to traditional telephony, is taking Wall Street by storm. Internet telephony service providers are enjoying incredible valuations in the billions of dollars as it becomes evident that the reign of traditional telephony is rapidly coming to an end.

Of course, disruptive technologies are not unique to communications -- the media has been saying that mainframes are dead and PCs are the future for over a decade, but in reality, the mainframe market is still alive. In fact, it's growing. The analogy here-- and it is an accurate one -- is that the bulk of innovation and the future of computing lies in the PC platform, not the mainframe. So too with Internet telephony. Traditional telephony has a limited future but with trillions of dollars invested in infrastructure, it will take a while for the circuit-switched world to whither away.

ANALYZE THIS
While it may be obvious today that converged networks are the future, I recall being laughed at by more than one telecom company president when we announced Internet Telephony magazine a few short years ago. People thought that TMC had lost its mind in those days when we were preaching the convergence of voice and data over IP networks. This is probably why no one is more excited than our parent company -- TMC-- when analysts predict the future of telephony is Internet Protocol Telephony.

The most recent analyst forecast regarding IP telephony comes from Cahners In-Stat Group who predict that LAN telephony will be the dominant enterprise architecture by 2004. In fact In-Stat concludes:

  • The features, applications, and ultimately decreased pricing of LAN telephony will result in the demise of PBX systems.
  • IP packets will rise over Ethernet technology due to its openness and ubiquity.
  • Benefits will include: Complete handset and extension portability to remote locations, integration with contact management software, and worldwide IP-based contact centers.
  • Following interoperability among vendors, eventual retail of packet handsets to consumers will occur causing the industry to ignite.
  • The U.S. LAN telephony market will grow to nearly $1.5 billion by 2004.

TALKING THE TALK & WALKING THE WALK
But why talk about predictions and stock prices when these products are selling so well and we can cite actual sales figures? According to 3Com, they have already sold close to 2,500 NBX phone systems through their network of close to 500 independent resellers in 50 states! As you may recall, 3Com purchased NBX (one of the first IP-PBX vendors on the market) and has used the 3Com brand recognition to sell IP-PBXs into corporate America.

A recent conversation with 3Com was a real eye-opener; I feel 3Com has the potential to dominate the corporate IP telephony market if they play their cards right.

For years prior to being a publisher I was an MIS director, and during my tenure as such, I would regularly purchase 3Com hubs for our corporate LAN. 3Com was the hands-down leader in this area and although they cost more, you couldn't go wrong buying 3Com hubs and NICs. They now tell me that they are entitled to the lion's share of the LAN telephony market, and you know what? I agree.

There are so many small offices out there that recognize 3Com as a networking leader, especially in hubs and NICs. It is in these locations where 3Com IP-PBXs should be a no-brainer. This is especially true in light of the fact that 3Com will make sure that all your 3Com datacom and telecom equipment will work together seamlessly.

By leveraging their strength and good name in the SMB market they have been very successful in selling phone systems to modest size companies. 3Com now plans to expand into the large enterprise and call center markets where they will battle Nortel Networks and Lucent Technologies. Cisco of course is a dominant player in the large enterprise market with aspirations to dominate call centers as well.

However, 3Com is committed to becoming a major player in the IP telephony market and they will leverage their data networking products and Palm platforms to help them sell telephony products. The first step in this strategy is to voice enable all 3Com platforms. (This, by the way, is what all of their competitors will have to do as well. We can soon expect almost all datacom equipment to have the ability to seamlessly be telephony enabled.) And, not only does 3Com have a head start in selling IP-PBXs, they are beginning to release lists of satisfied customers and other important partnerships that will help keep them on the forefront of corporate IP telephony.

Home Shopping Network
3Com is not shy when it comes to sharing their customer wins. For example, one of their installs is at Home Shopping Network (HSN), where an NBX 100 Communications System is being used in their shipping and storage facility. The IP telephony phone system is deployed over the company's existing Ethernet LAN where the phones act as ordinary IP devices on the network. The phone system has saved HSN nearly 60 percent of the costs of a traditional phone system and in addition, allows them to manage the phone system remotely from their headquarters, which of course results in additional savings. The deployment was so successful that HSN plans to deploy 3Com NBX systems in other locations as well.

New Mexico State University
We could go on and on talking about customer installs for any number of IP telephony PBX vendors and each sale is one step closer to a packet-switched telephony world. Where we can expect exponential growth however, is where we train entire classrooms of students about the benefits of this burgeoning technology. That is why it is important to support educational initiatives in the convergence space. One such example is New Mexico State University (NMSU), the first I am aware of to offer a course where students get to deploy converged voice/data networks as part of their coursework. A grant from the FBI's national security technology program in conjunction with Sandia Labs makes it possible for NMSU to afford NBX systems.

By successfully deploying NBX phone systems at NMSU, 3Com has ensured generations of graduates will be comfortable deploying and working with NBX systems in the field. Having educated graduates who understand how to install PBXs will help grow our market even further by increasing awareness of converged platforms.

CONCLUSION
If you are trying to pick a long-term winner in this market, I don't envy you. The market is so vibrant with acquisitions that you are likely to always have product support and a migration path, regardless of which platform you choose. Certainly 3Com wants to be number one in LAN telephony, and they will be at war with Cisco, Nortel, and Lucent in doing so. Each of these companies will try to leverage their core strengths to grow their packet switched business. But 3Com has two arrows in its quiver that will help it fight:

  1. They are known for rock-solid LAN products in small to medium enterprises.
  2. They are the only vendor among their competitors to offer a handheld computing platform (Palm) and that platform is the defacto standard. If they can leverage the Palm as a seamless wireless access device in the enterprise and beyond, they will be difficult to compete with.

Of course the IP telephony market is moving so quickly that it is difficult to predict what will happen next week, much less in the long term. Besides the plethora of traditional datacom and telecom players, a host of independent companies are producing truly leading-edge LAN telephony products. One thing is for certain, the number of new technologies and acquisitions will only increase, meaning that we will be faced with even more choices as time progresses.

Rich Tehrani is President, Group Publisher, and Group Editor-in-Chief for TMC publications. He welcomes your comments at rtehrani@tmcnet.com


Service Providers Converge For Interoperability

Incredible! That is the best word to describe our upcoming Communications Solutions Expo in Washington, DC, April 26-28. We have already shattered every pre-registered attendance record for this show and last year we doubled our attendance from the prior year to over 16,000!

Aside from comparing all of the latest voice and data products and services under one roof, perhaps the most important reason to attend Communications Solutions EXPO is that it will feature ConvergeNET for the third show in a row, the industry's longest running multi-vendor VoIP interoperability event. The biggest problem facing the IP telephony market is interoperability, and if you are planning on making any purchases in this field that don't interoperate with others, you may as well not even bother purchasing from that vendor. IP is an incredible technology that opens telecom like never before. Unless of course the company you purchase from doesn't believe they need to interoperate. Look for the ConvergeNET interoperability logo at exhibitors' booths and in their ads and other literature, and ask them how they interoperate with others in the field.

ConvergeNET
To date, the following companies have participated in ConvergeNET: Active Voice, Cisco, Dialogic, dynamicsoft, elemedia, e-Voice, GTE, iFace.com, Inter-Tel, Motorola MCG, Nokia, Quicknet, Tundo, VocalTec, Vsys, White Pine.
At this upcoming event in D.C. we expect over 20 ConvergeNET participants including Nortel Networks, Tundo (a ConvergeNET sponsor), Quicknet, Cisco, Motorola, iFace.com, and e-Voice. Don't buy a dead-end solution. Come to Communications Solutions EXPO and make sure the products you are selecting interoperate with others.

The Best Show For Next-Gen Service Providers
Communications Solutions EXPO Spring 2000 promises to be a phenomenal show for service providers as well as the enterprise and reseller communities. Unique to the show will be a Next-Gen Telco In A Booth, a live demonstration of the technologies needed to provide next-generation converged services in your service provider network. Even if you aren't a service provider, come check out the innovative new services that will be available to you in the future. I for one am looking forward to the day when I can plug a phone into my cable modem and program distinctive rings for the different telephone numbers that call me. Another service I can't wait to see is being able to go online and disable my phone from calling internationally and eliminating lengthy long-distance calls. I think this feature would come in quite handy the next time you have a large party at your house or if your roommate isn't paying his/her share of the phone bill. I really could have used this service in college.

For those of you who are looking for a truly in-depth education that only the editors of TMC publications can provide you with, we have several excellent conference tracks that are targeted at service providers and developed by the editors of Internet Telephony and Communications Solutions magazines. For example:

Next-Gen Service Provider Solutions: Let's face it. Unless you become an ICP, you are dead in the water in the upcoming years. If you haven't started to diversify the services and products you provide your customers (and even if you have), this session will help you like no other in determining how to become the profitable ICP of your (and your shareholders') dreams.

Wireless Solutions: This special pre-conference track explores the hot new world of wireless data, including mobile IP-based applications and services, 3G (third-generation) wireless technology, wireless local loops, and Bluetooth and the wireless Personal Area Network (PAN).

But wait! There are even more reasons to attend Communications Solutions EXPO and best of all, they are free! For the fifth year in a row, you will be able to visit Learning Centers on the show floor. These are exhibit areas staffed by vendors proficient in specific technologies who will objectively educate you on the benefits of the latest technologies you need to know about. The editors of TMC publications and myself chose these attractions based on what we feel the industry needs to know about most, as well as extensive reader and vendor surveys.

I could go on for pages about all the unique events happening at Communications Solutions EXPO, April 26-28 in D.C., but alas, I don't want to give you too much to absorb at once. Besides, our editors have done a terrific job of supplying even more info on the Learning Centers and other unique events and opportunities afforded by Communications Solutions EXPO, on page 52 of this issue. Check it out.

Sign up today for free at and you will not only save the $50 on-site registration fee, you'll avoid the lines. See you at the show!







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