BY MARC ROBINS

I was joking around the other day with Robert Hashemian, Internet Telephony’s illustrious other columnist, that if we were to project into the not too far future based on current market trends, by the year 2005 there would be all of three or four companies left selling communications gear in the entire world. And rather than chuckle or snicker (or call me delusional), he looked me straight in the eye and said, “It wouldn’t surprise me at all!”

While I was merely making a “tongue-and-cheek” comment, arising out of yet another news item detailing the acquisition of yet another company (this time Periphonics) by one of telecom’s titans, Nortel Networks, his reaction got me thinking. The incredible, frenzied pace of acquisitions, joint ventures, associations, and product announcements by the communications industry’s big guns — such as Lucent Technologies, Cisco Systems, Nortel, 3Com, and Ericsson  — is creating an almost “warlike” business environment where each company is trying to outbid, out-acquire, out-strategize, out-produce (and some might say out-pre-announce) each other in an all-out battle to attain the mantle of THE PENULTIMATE SUPPLIER of convergence solutions. The speed and determination with which these titans have moved to embrace the IP-based communications revolution is simply breathtaking. They are behaving like the most nimble of startups rather than old-line, plodding incumbents.

What’s also fascinating about what’s happening is the breadth and depth of the battle — it extends all the way from the enterprise to the heart and guts of the network. The battle isn’t simply for a piece here or a piece there — it’s for the whole enchilada, for the entire end-to-end solution. Some of the companies are strong on strategy, weak on actual product. Some are weak on strategy, and strangely enough, strong on product. And a few are strong on both counts. To a greater or lesser extent, each company has the technology and products to deliver “early stage” solutions, and the deep pockets to continue development to perfect their offerings.

Of course, it’s impossible to predict the winners or losers this early in the game. There’s simply not enough to go on. We can, however, postulate and project — and review and rate their strategies, and compare the products making their way from the labs to the trade show floor, and soon into the communications networks around the world. The next few years will be crucial as the vendors start to move from market positioning to actual deployment of technology.

LUCENT TECHNOLOGIES
Lucent is in an enviable position. The company’s heritage carries enormous weight, and imparts numerous advantages to the battle at hand. As part of the old Bell system and architect of present-day POTS networks, Lucent is an undeniable leader in circuit-switched telecommunications technology. Take that knowledge, coupled with newly acquired packet-based switching expertise and technology, and I’d say the company has the solid technical underpinnings to sally forth deep into the brave new world of communications convergence.

Lucent’s strong financial position allows it to fund a growing array of IP-based products and solutions — from small enterprise IP-PBXs, wireless IP solutions, IP telephony-enabled legacy enterprise switches (Definity IP Solutions), standalone gateway and gatekeeper systems, to large, carrier-grade solutions (PacketStar). Its large market share in enterprise and network switches provides it with a customer base served up on a platinum platter. And the company is also a major force in enabling technologies — from DSPs to codecs to SS7/AIN solutions.

In terms of its sheer breadth of products and technology, I’d have to give Lucent an A+. In terms of a tightly knit strategy that ties the various pieces of the convergence puzzle together, I’d have to say that Lucent has some more work to do. While the company has a great, solid enterprise strategy, it has yet to deliver a compelling game plan for carriers looking to transition to a packet-based network infrastructure (perhaps it is holding off for fear of restraining its incredibly lucrative circuit switch business). It is here that Lucent’s arch-competitor, Nortel Networks, currently has the edge.

NORTEL NETWORKS
In terms of circuit switch know-how, Nortel shares the podium with Lucent. The two companies make every carrier’s short list. And Nortel and Lucent have had each other on their radar screens for decades — they have been so competitive with each other for so long that they have matched each other’s moves incredibly well. In many areas, it’s hard to find a product from one that doesn’t have a counterpart from the other.

As a result, Nortel also has a big footprint in the enterprise with PBXs and messaging systems, as well as in the networks with carrier-class central office switches and edge devices. Nortel, with savvy acquisitions of its own, has gained the expertise to IP-enable its legacy enterprise switches, enter the PC/IP-PBX market, and build up impressive Internet telephony gateway and gatekeeper product lines.

In terms of a strategy for helping incumbent circuit-switched carriers embrace the new packet-based world, I’d have to give Nortel the A+ — at least for the moment. Nortel’s Succession Network is defined as “a comprehensive strategy to transform service provider infrastructure to support packet telephony services, while protecting legacy investment, services, and revenues. It is a carrier-grade, multi-vendor-compatible solution optimized to deliver both legacy and emerging IP applications over a packet-based infrastructure.” It’s worth checking out at Nortel’s Web site.

The “Succession Network” story is compelling. Its goal is to provide the road map for transforming a centralized circuit-switched topology to a distributed access, distributed control architecture that uncouples connectivity from services. The Succession Network leverages a number of Nortel products, including call servers, network management systems, IP telephony gateways, and ATM switches. To date, a number of carriers have started to trial Succession, including SBC, Williams Communications, and Focal Communications in the United States, and France Telecom.

CISCO SYSTEMS
While Lucent and Nortel could each wear the mantle of circuit switch leader, Cisco is the undisputed leader in IP, packet-based routing technology. The company linked its fortunes early on to the Internet, and hasn’t looked back. As the dominant force in network routers for IP data, Cisco has locked up huge portions of the ISP and enterprise intranet markets. With the incorporation of VoIP capabilities into its router products, Cisco is in a position to win lots of business from ISPs looking to transform themselves into phone companies, and from so-called next-gen telcos. Cisco also has an “in” with campus and enterprise customers looking to bypass traditional telco networks for certain types of communications, and to migrate to packet-based enterprise switching (with its purchase of Selsius Systems). So while Cisco really isn’t in a position to target incumbent POTS carriers, it is uniquely positioned to grow with the alternative enterprise communications marketplace. This explicit attack on traditional PBX solutions has put Lucent and Nortel on the defensive.

In terms of strategy, Cisco previously announced a five-phase data, voice, and video integration plan for small, medium and campus-sized organizations. The latest update to the fourth phase of what Cisco calls its “Multiservice Networking” strategy entails combining campus and WAN multiservice capabilities to converge multiple data types across the data network. According to Cisco, “Multiservice networking provides private branch exchange (PBX) functionality and more using the local, campus, metropolitan, and WAN infrastructure rather than a PBX-based system. This drastically increases the value of telephony spending into overall infrastructure spending, reduces capital, facilities and operational costs, and opens the environment to new innovation in telephony applications.”

ERICSSON
Ericsson is a world leader in wireless communications technology, providing an end-to-end portfolio of solutions from infrastructure to handsets. Slowly and methodically, without much fanfare, Ericsson has been acquiring and developing technology and expertise in packet-based communications. Witness the company’s purchase of Touchwave, an IP-PBX vendor; Torrent Networking; and partnerships with the likes of Symbol Technologies, an IP-based wireless LAN provider. Ericsson has been leveraging its sizeable wireless customer base to win meaningful IP telephony deals.

According to my sources at Ericsson, the company has $100 million of IP telephony orders on its books. One significant deal is an $11 million contract from Interoute Telecommunications SA to provide a nationwide IP voice and data network in Spain. Ericsson will initially install a core network of POPs covering six main provincial centers including Madrid, Barcelona, Valencia, Bilbao, Seville, and La Coruna — with Madrid as the central hub. The main users of the network are expected to be residential and prepaid card customers.

The Interoute network will use Ericsson’s carrier class IPT system. Expandable to 780 ports with support for SS7 interconnection to the PSTN, the system is intended to support a wide variety of applications, including phone-to-phone, prepaid calling card, fax, and PC-to-phone, phone-to-PC, and Web-based dialing.

3COM CORPORATION
With its purchase of U.S. Robotics, 3Com gained service provider-class RAS technology to complement its more than adequate data switching product portfolio. With a “leg hold” in the ISP space, 3Com has an excellent customer base. The company also has great presence in the enterprise space, with networking products designed for small to medium-sized businesses. The purchase of NBX, an IP-telephony PBX vendor, is intended to leverage this strength.

Recently, 3Com announced the development of a carrier-grade IP telephony system based on a three-tier architecture. 3Com’s Total Control IP Telephony system includes gateways, gatekeepers, and back-end servers interconnected by open standard-based protocols. In addition, a modular architecture features standard APIs at all three levels to provide carriers the flexibility to easily customize the system for service differentiation.

Total Control enables interexchange carriers to route calls directly to an IP backbone, in effect bypassing the local telephone companies and eliminating expensive connection and termination access charges. c

Marc Robins is Associate Group Publisher for INTERNET TELEPHONY AND CTI magazines. His column, Mind Share, appears monthly in the pages of INTERNET TELEPHONY magazine. Marc looks forward to your feedback.