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Second Quarter 1998

Rich Tehrani Decisions, Decisions:Which Solution Is Right For You?


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A Brief History Of Internet Telephony

Acronyms Explained

The Internet telephony industry is being bombarded with new entrants and new products on a daily basis. Telcos are merging with ISPs, hardware vendors are striking deals with service providers, and computer-telephony integration (CTI) developers are rapidly designing new Internet telephony products so they are not left behind. PBX vendors are exploring ways to integrate Internet telephony directly to the switch, thus eliminating external gateways. Last, but certainly not least, most every networking company has announced Internet telephony products and mapped out a voice and data integration strategy revolving around Internet Protocol (IP) telephony for the future.

Never before in the history of computer technology have so many disparate industry vendors converged and aligned their strategic directions in the exact same direction so quickly. Telcos, ISPs, PBX vendors, WAN vendors, CTI vendors, resellers, distributors, developers, and entrepreneurs are all scrambling to get a piece of a market that promises tremendous returns on investment. Anyone who is interested in getting involved in this market must have an understanding of the tremendous variety of available products designed to facilitate Internet telephony.

The proliferation of choices available to Internet telephony implementers can act as more of a hindrance than a facilitator if it is not clear for which application each disparate product is best suited. I will investigate some of the different ways in which you can implement Internet telephony hardware and the strengths and weaknesses of each approach. It's really fascinating to see how many different alternatives exist, enabling anyone to use IP to transmit voice, fax, and video traffic. For those of you who did not read the Publisher's Outlook in the premiere issue of INTERNET TELEPHONY™, please take a moment to read the sidebar entitled A Brief History Of Internet Telephony before continuing further.

There are three different hardware solutions available for implementing multichannel Internet telephony. The oldest and most established solution is the PC-based gateway. In this example, a PC is configured with Digital Signal Processing (DSP) resource boards, which can be obtained from companies such as Dialogic, Natural Microsystems, Brooktrout, Linkon, Analogic, Voxware, Xantel, and Commetrex. (As both Dialogic and Linkon sell products on Solaris platforms as well, let's use the term PC-based gateway to include Solaris gateways as well.) See the box entitled Contact Information to obtain more information from these vendors. With this many vendors pushing developers to use their products, we might actually see over 100 Internet telephony gateway vendors offering solutions based on PCs in the not too distant future. Venture capitalists are practically throwing money at these companies without batting an eyelash. The various gateway companies I speak with tell me that their business plan enables them to be successful if they receive but a fraction of one percent of the total market share of Internet telephony products sold. I expect this market to expand for some time to come.

The second hardware solution for Internet telephony users is that of a router with an onboard voice module. As router vendors saw an incredible proliferation of equipment on the network used to facilitate the conversion of voice to IP packets that ultimately were transported by their routers, they saw a huge opportunity. This opportunity, of course, was to eliminate the need for standalone gateways altogether and have voice converted to IP packets in the router itself. Cisco made a huge splash last year with voice modules integrated into their 3600 series routers.

The third hardware solution is that of the IP module added on to the PBX. Just as the router vendors see a tremendous opportunity behind their products, the PBX vendors see a tremendous opportunity ahead of their switches. Lucent is the first major PBX company I am aware of that has committed itself to developing a product, which will allow native IP telephony trunk support in the PBX.

It's almost as if these developments have happened overnight. It is almost not plausible that these dissimilar companies would be considered competitors. I believe that the commitment made to this market by every vendor in the above market spaces underscores the fact that Internet telephony will eventually become the de facto standard for all telephony. Of course, this prediction will not be borne out overnight. I imagine it will take place over the next few decades. Never before have so many vendors decided at the same time that a tremendous paradigm shift must take place in telecommunications. The word revolution is horribly overused, but if ever there was a context within which I feel comfortable using it, it certainly fits as far as Internet telephony revolutionizing telecommunications.

Now that we are all comfortable with the variety of hardware products that can make Internet telephony possible, we must decide the pros and cons of each method.

Since the PC-based Internet telephony gateway started things off, it is a great starting point for us as well. (My thanks to Jack Chase of Natural MicroSystems for assisting me with this section of the Outlook.) Most initial IP telephony gateways have been deployed because gateway components have been available for some time. There is an abundance of vendors with PC-based gateway solutions. These PC-based servers have the advantage of being based on an open platform with readily available telephony interfaces such as T1 and E1, as well as various analog and BRI interfaces. These interfaces have been available for years and are bulletproof. Furthermore, a variety of vendors compete to supply these interfaces, so there is a built-in safeguard against overpricing. 

Secondly, the PBX or switch integration issues have already been worked out with a PC-based gateway solution. There are dozens of PBXs on the market and voice board vendors have already developed tools that allow developers to synchronize their gateway with whichever switch they like. This integration applies not only to customer premise equipment (CPE) but SS7 and the Advanced Intelligent Network (AIN) interfaces also readily available for PC-based gateways.

The open architecture of a PC-based gateway means that value added services can be easily added to the gateway. Industry standard TDM buses such as SCbus, MVIP, and H.100 allow users to plug in many board types to allow extra services like speech recognition, text to speech, protocol coprocessors, fax boards, and the like. Some multi-function boards can allow you to take advantage of IVR, fax, and Internet telephony on the same board — drastically reducing the cost of the gateway.

There is also the issue of scalability. Servers can be easily scaled from a few to hundreds of ports. Routers, which were initially limited to a handful of ports, have received T1 interfaces bringing the port number to 24. Server board density for computer telephony should reach 120 ports per board in the next few months and 240 ports within a year. Expect voice port densities to increase rapidly for PC servers and routers alike.

A single Internet telephony board that can be acquired from companies such as Nortel (through their Micom division) can plug into a 386 or better machine and have you up in running for under $2,000 (not including the PC). So, the entry cost to using a PC-based gateway is low.

Internet telephony board vendors supply their products with rich APIs that allow developers to truly make user-friendly applications. In turn, it may be possible for resellers and even end users to customize PC-based gateways with little programming experience. This opens up a world of flexibility for companies such as Internet telephony long-distance service providers that would like to offer enhanced services to their customers. Once customers are connected to a gateway, they can have their account balance read to them through a text-to-speech interface.They can also take advantage of dial-by-name functions and any other enhanced service that the service provider may provide.

In many cases, when using an Internet telephony gateway, some type of billing needs to take place. A corporate solution may bill each department. A service provider may need to keep track of various account numbers, which are accessed through calling cards. The complex billing process is best suited to a PC; having the gateway on the same PC simplifies the processing of tracking call times, and other details about the calls.

Traditional CTI application generator vendors have hinted to me that they will soon enter the Internet telephony space.It may soon be possible to use these products to graphically develop Internet telephony applications.

TAPI 3.0
Another strong argument for PC-based Internet telephony gateway deployment will be the ease in development time that these products will see when Microsoft releases TAPI 3.0 later this year. Microsoft's Telephony Application Programming Interface (TAPI) 3.0 is a set of telephony APIs conforming to the COM model and integrating seamlessly between regular telephony and Internet telephony. TAPI 3.0 applications can be written in any language, such as Java, C/C++, and the Microsoft Visual Basic programming system. COM is a component technology that provides a common object model for both local and network software integration and delivers a single, widely implemented standard allowing applications from multiple vendors to integrate seamlessly over the Internet and corporate networks.

The only drawback to using a PC-based gateway is the PC itself. PCs have not yet reached the reliability level of the central office (CO) or even a PBX. Similar to a PBX, a router has a closed architecture and an absence of moving parts. It is safe to say that a router is definitely more reliable than a PC at the moment. Since Internet telephony traffic will ultimately pass through the router anyway, the addition of a PC-based gateway preceding the router adds an additional failure point in the network.

INDUSTRIAL COMPUTERS If you are routing mission-critical Internet telephony traffic through a PC that is not from an industrial computer manufacturer, you should have your telecommunications license revoked.Many industrial computer vendors specialize in telephony. It is imperative that you do not use a clone vendor or even a name-brand vendor. Issues of redundancy are usually not addressed by mainstream PC vendors, since it is tolerable to have your desktop PC fail from time to time. It is simply not permissible for your Internet telephony gateway to crash at all.

Additionally, CompactPCI boards are now becoming available for computer telephony applications. This rugged industrial computer backplane, coupled with future hot swap capability, should allow these industrial computers to become as robust as the central office equipment used by Internet Service Providers (ISPs) as well as the telco's own CO. We will soon receive all the reliability of an embedded system with the flexibility of a PC server.

The IP telephony enabled router has some interesting pros and cons of its own. The router offers an embedded solution with bulletproof operation.Little, if any, maintenance (such as disk defragmentation and virus checking) is required. These systems are relatively easy to configure and get running as well.

Router vendors bring along with them a vast sales force and name recognition. PC-based gateway vendors may have a head start, but networking vendors are huge PR and marketing machines and they may end up dominating the scene if and when they decide to do an all-out media blitz. An important point to note is that the networking vendors will further legitimize Internet telephony as they promote their products. This, in turn, helps expand the whole market to the benefit of everyone.

If networking vendors feel that they need external resellers to help them dis tribute more products to their customers, they have a tremendous head start over PC-based gateway vendors that have little experience in this area. A few exceptions to this would be the PC gateway vendors Inter-Tel, Siemens, and Lucent.

The proprietary nature of router configuration languages means that you need a networking manager who is familiar with the type of router language you are using. Each router has its own language that must be understood in order to change router configurations. Cisco uses a fairly simple language called IOS, which uses an interface consisting of a command followed by a parameter or number of parameters. An example of this would be: say you were interested in setting the bandwidth value for an interface, you would simply specify "band-width x," where x is the value in kilobits per second .Communication with the router takes place through a serial port using a dumb terminal interface, a GUI, or more recently, a Web interface.

PBX vendors are in the most competitive environment they have ever seen. With the potential to lose business to PC PBX vendors as well as router vendors, they are scrambling to stay on the leading edge. There has been a tremendous amount of announcements made recently by PBX vendors who know that the market is changing, so it's safe to say they are taking the competitive threats very seriously.

Lucent Technologies already has a strong presence in the PC-based Internet telephony market. They have recently announced that they will provide IP telephony trunk interfaces directly to their Definity Enterprise Communications Server as well.

By introducing IP telephony trunk interfaces directly to the switch/server, the need for an independent gateway is eliminated. Some of the most useful features of a PBX are least cost routing and class of service differentiation.

These various features can now be used for calls made over packet networks as well. The PBX can be configured to route calls through the Internet when traffic is usually light and can conversely route calls through an intranet when traffic on the Internet is usually heavy.

The variety of call accounting products on the market should now be able to keep track of your Internet telephony calls as if they were traveling over the PSTN. So, the advantage here is rock-solid PBX reliability and minimal training (assuming you have a switch that supports Internet telephony trunks).

A recent conversation in my office revolved around the fact that someone suggested that PBX vendors might yet get the last laugh over networking vendors by connecting router boards directly to the PBX. This is feasible and actually pretty logical. The PBX already has a well-deserved reputation for reliability, and the vendors already have an established distribution channel. The only missing link is training the thousands of PBX resellers (Interconnects) to understand data networking. Many interconnects are currently busy learning the networking market or are merging with network VARs so that they are positioned correctly to sell Internet telephony and CTI products. In fact, we are seeing the emergence of more and more of these hybrid (data + telephony) resellers with each passing day.

As with most things in life, no two Internet telephony hardware buyers are alike. It is for this reason that the proliferation of new ways to harness IP telephony should emerge quickly. As a service provider, the PC-based gateway makes a great deal of sense, since the ability to enhance the core functionality of the gateway by adding IVR capability to allow debit accounts, etc., is crucial. Billing systems can also be implemented easily on a PC-based platform.

The corporate or remote office hardware solution gets a bit more involved. Do you have competent networking people that you can rely on? If so, the router is a great way to go for a couple of lines. Conversely, if your telecom reseller or department is well versed in new technology, it may be wiser to side with the PBX approach. Is scalability an issue? Will you need other services such as fax? Gateways look pretty attractive in these cases.

When applied to corporate long-distance bills, Internet telephony hardware has the potential to pay for itself in well under a year depending on call volume and traffic patterns. As a service provider or reseller, the financial opportunities are immense: There are just so many ways to get involved in Internet telephony. There are unlimited opportunities worldwide for this technology. When trying to choose between the three different types of hardware platforms discussed here, the question to ask is not which to choose, as much as why didn't I implement or resell Internet telephony products sooner.


Time Division Multiplexing, a type of multiplexing that combines data streams by assigning each stream a different time slot in a set. TDM repeatedly transmits a fixed sequence of time slots over a single transmission channel. Within T-Carrier systems, such as T1 and T3, TDM combines Pulse Code Modulated (PCM) streams created for each conversation or data stream.

A third-generation TDM bus. In addition to offering developers up to 2,048 time slots using an 8 MHz clock, the SCbus pioneered a distributed switching model that simplified the way applications access devices and made it easier to scale systems from small to very high densities.

The Multi Vendor Integration Protocol focuses on interoperation of components from different vendors and upon software portability between hardware components and between platforms.

MVIP provides a flexible, sophisticated, and uniform way of moving telephony service components into standard computer chassis, under control of open software development environments based on UNIX, OS/2, DOS, or Windows.

The H.100 specification defines a next-generation computer telephony bus for the PCI platform, overcoming the problems of incompatible SCbus and MVIP bus standards faced by ISA product developers today. The new CTbus defined in H.100 provides higher capacity (4,096 timeslots) and the means for interoperability with legacy bus standards such as SCbus, MVIP, and H-MVIP to allow products developed to these standards to interoperate in a system.


This brief history of Internet telephony should help some of our new readers catch up to those of you who are already on your second issue. 

The birth of this industry as we know it was signaled by the development of Internet telephony software that allowed a multimedia PC to communicate with another multimedia PC over the Internet. At the time the software was developed, microprocessors were slower than today and the software in question was in its first generation. With today's faster processors and more imaginative ways of utilizing IP to transport voice, we are seeing the deployment of full-fledged phone-to-phone Internet telephony networks. Gone are the days where Internet telephony was simply a hobbyist's toy.

Now, the Internet was never designed to carry voice traffic. Packet networks were typically used to carry data and data only. The main reason is that a single second delay in an e-mail or file transfer is acceptable, whereas a single second delay in a voice conversation is not. A Quality of Service (QoS) guarantee must be introduced, so users can know what kind of quality to expect on their Internet telephony service. This QoS mechanism allows a packet network to carry real-time traffic such as voice, video, and real-time fax.

So, the first wave of Internet telephony products (loosely termed client software) yielded rudimentary quality but enabled users to call other Internet telephony users world-wide for relatively little cost beyond their connection to their ISP. These software products are constantly improving and if used over an intranet, where QoS is guaranteed, they can yield excellent results. They can also yield excellent results on the Internet, provided the bandwidth is available in both directions at the time of the call.

The second wave of Internet telephony products is classified as Internet telephony gateways. An Internet telephony gateway is typically a device that converts a call from the Public Switched Telephone Network (PSTN) into data packets, which are transmitted over an IP network. A sister gateway on the network situated close to the receiving caller reconverts the data packets into traditional telephony. A less expensive call is made on the PSTN, allowing both parties to speak.

Although the above may seem a convoluted way to send voice traffic to those of you that are new to telephony, those of us that have been at this for years are aware that telephony traffic on the PSTN already travels over a digital network, albeit not in packet form. This packetization, coupled with silence suppression and compression, increases the efficiency of the telephone network by an order of magnitude. In plain English, a phone company that used a circuit to transmit 1 telephone call can now use the same circuit to transmit 10 or more. When you realize that the alternative way to increase bandwidth this dramatically is to buy land all over the world, dig it up and lay down fiber, you can see why every industry is striving for a piece of this incredible opportunity.

It is safe to say that worldwide telecommunications revenue is in the trillions of dollars. The ability to reduce this telecommunications cost by even 10 percent yields almost unfathomable savings. These savings are not only passed on to users of Internet telephony; service providers such as telcos have the most to gain. A telephone call originating in the United States and ending up in another country benefits not only the long-distance provider but also the telephone company on foreign soil. The per minute costs that our local phone company pays the foreign phone company can be quite high and are aggregated as the length of each telephone call increases.

Subsequently, telephone companies worldwide are scrambling to set up gateways in every country they can. In many cases, alliances are formed, allowing many service providers to share the same network. A good analogy is that these gateway networks are like the early days of the Automated Teller Machines (ATMs). At first, these machines could only access information on a per bank basis. Banks eventually banded together to set up regional networks. Today, ATM cards can work in just about any ATM machine worldwide. 

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