March 2002

BY GREG GALITZINE

As far as prognostications go, let�s face it, no one can really predict the future. But given some experience with a particular subject, and a fair measure of expertise, it should be possible to extrapolate some short-term tendencies about a given topic. So it is with Internet telephony. Pundits and experts have been predicting that Internet telephony was going to revolutionize the traditional telecommunications industry for years. Many so-called specialists have been calling for the �big bang� announcement, the killer app, the end-all event, in vain. Funny thing is, IP telephony has been growing all along, and 2002 will see more deployments and more announcements of companies undertaking trials of the technology than ever before.

I believe in 2002, IP telephony will continue to see tremendous activity and make incredible gains in the enterprise space. Until the service providers work their way through all that excess inventory, and are once again ready to research new technology, you can rest assured that next-generation telephony will be busy gaining traction in the enterprise market. And if the broadband lobbyists have their way in Washington, which is looking more and more likely, you can just imagine all that dark fiber lying within reach of many small and medium businesses will light up like a child�s face on Christmas morning. And the United States will have won a truckload of medals at the Winter Olympics by the time you read this.

But rather than regale you with my ever-changing, never-ending list of what awaits us, I�ve decided to let several vendors give their opinions regarding what lies ahead. Just to be perfectly clear, many of these companies see their own area of expertise as the �next great hope� for next-generation telecom. Understandable. So take the �proprietary� nature of some of these responses with a grain of salt. Rather you should peel back the onion just a bit, and try to look at �the big picture� of all the responses to see what the future has in store for our industry.
� Greg Galitzine

Aravox
The most significant trend in IP telephony may, at long last, be its adoption! Several data points have emerged indicating that IP telephony is getting traction, both in the enterprise and with service providers. One such data point is the majority of large service providers who are planning (and yes, spending capital dollars) for deployment of managed VoIP services in the first half of 2002. Another data point is Microsoft, which has given VoIP a significant shot in the arm with the telephony feature rich Windows XP platform.

Service providers have acknowledged that to capitalize on their investment in IP networks, new IP-based services will need to be offered and VoIP is on the top of the list. However, service providers would be wise to realize that real-time communication is not just another data application and the control and management of these services will be a significant challenge.

Service providers should give careful consideration to the issues of management, control, and security, as they are key to the quality and profitability of new VoIP services.

Aravox�s VoIP network services platform provides network services, such as access control, dynamic NAT (bi-directional) and QoS to specifically address the management and control of real-time IP communication.
� Craig Warren, Co-founder, Aravox Technologies

ThinkEngine Networks
An ongoing trend in the IP telephony industry that is certain to expand in 2002 is the adoption of enhanced voice services by wireless consumers. As cellular telephones are now commonplace and carriers are saturating the market with competitive packages, service providers are being pressed to deliver fresh and contemporary options that will enable them to retain and even increase subscriber base. These new services include the implementation of advanced voice services with hands-free options such as voice-activated dialing and voice portals, as well as instant messaging and conferencing. These functions directly address the expected real-time performance and services that enable customers to gather information (news, stocks, weather, etc.)

To make these wireless options possible, service providers will more readily accept media servers within their networks, enabling them to manage and deliver concurrent media sessions from multiple network applications. Advanced media servers provide this in any network, PSTN, wireless, and IP. Upon the widespread integration of media servers, service providers will be able to offer numerous advanced services that may become mainstream offerings in future customer wireless communications packages. These advanced services include: Text-to-speech abilities, automated speech recognition, interactive voice response, and seamless voice and multi-modal support, which will increase e- and v-commerce interaction.
� Yogendra Jain, Chairman and CTO/Founder of ThinkEngine Networks

Avaya
Internet telephony, like any technology, must answer the demands of today�s enterprise � the ability to provide secure worldwide information access and reliable anywhere, anytime communications. As enterprises virtualize, global, interconnected communications becomes the cornerstone of business success. It�s critical for Internet telephony to ensure varied access across multiple modes and media � all the time and everywhere � for collaborative, converged communications.

VoIP brought the concept of convergence to the enterprise. By eliminating the physical distinction between voice and data, businesses have been able to improve relationships with customers, partners, and employees with seamless communications through unified communications, interactive call centers, and multichannel CRM. Of course, VoIP has only created a launching pad for other standards and technologies that provide infinite possibilities to take convergence to greater levels.

Avaya believes Session Initiated Protocol (SIP) is an IP technology with the potential to create revolutionary integrated communication services, providing lower cost of ownership and rapid application development. Users can easily redirect calls, instant message and conduct collaborative work sessions at the touch of a button. SIP is quickly gaining traction because it derives the most value from the converged network � providing a consistent, multimedia/multimode experience for the user � in order to offer true converged communications.
� Micky Tsui Vice President, converged enterprise solutions, Avaya.

Aventura Networks
One of the up and coming solutions and somewhat neglected areas of the VoIP arena has been the Local Access Solution for the SoHo market. Enterprise solutions can be quite costly to say the least and many small to mid-size businesses have been bypassed, as industry leaders continue to pursue the Fortune 500 type clientele with solutions that interface with Digital PBX systems, as opposed to basic analog and black phone systems.

D-Link out of Irvine, CA has created a two-port and four-port VoIP Station Gateway that links traditional telephony networks to IP networks with conventional telephony devices. The gateway is available with H.323, MGCP, and-soon-to-follow SIP stack. What makes it special is a suggested retail that is expected to see a $99 price point later this year.

The Local Access solution using D-Link has been commercially deployed by Aventura Networks, which acts as the ASP and offers service providers a �Telco-In-A-Box.� The gateway operates across most broadband environments and has had surprising initial success with satellite broadband such as Direcway, offered by Hughes.

Two-way satellite broadband has inherent latency issues, but with some adjustments to the jitter buffers on gateway devices, the future is bright. Achieving the ability to transmit by inexpensive satellite communications will catapult the IP telephony market, as the impediment of connectivity is resolved.
� Jack Cabassso, Aventura Networks

AG Communication Systems
In 2002 expect to see exciting news from the RBOCs, who will get behind one (or a small number of) IP telephony systems, especially IP Centrex. Since there are so many conflicting systems, a major RBOC announcement will serve to quell the proliferation of different, incompatible VoIP �islands� that to date has really impeded deployment. This will occur not only because of the influence that RBOCs have, but also because of the RBOCs� historic insistence on reliability, robustness, and feature-richness. Any announced services will likely be of a quality that makes them legitimate offers for broad enterprise deployment.

Also, the hype that surrounds SIP will dissolve into a more reasoned, rational understanding of its potential. SIP will be viewed as a tool that has uses within a multi-protocol world, but will no longer be viewed as the panacea it was promoted to be over the past year or two. Applications in which SIP would prove useful might be instant messaging or collaboration. On the other hand, SIP is likely to get rebuffed in the areas of unified messaging or e-mail.
� Mark Boundy, Manager, iMerge Product Marketing AG Communication Systems

Brooktrout, Inc.
One of leading trends that Brooktrout is addressing in the IP telephony industry is the need to measure and manage voice quality, or QoS, on packet networks. Solving QoS is a significant hurdle to converting mainstream carrier networks to voice over packet. Traditional bandwidth-management approaches only address the problem indirectly, measuring and managing surrogates for voice quality at the macro network level. Very few VoIP products today have a way of dynamically monitoring QoS, let alone intelligently adapting to changing real-world QoS conditions. To date, service providers offering VoIP services have been forced to invest in costly proprietary, stand-alone equipment to ensure network performance or to over-provision their networks, also at great cost, in order to achieve reliable voice quality. Recent technology advances have made possible a comprehensive framework for addressing QoS in voice-over-packet services. To solve the problem more directly, Brooktrout has partnered with Telchemy, Inc., to integrate new standards-based QoS monitoring, called VQmon, on our TR2020 VoIP gateway platform, VQmon measures and reports actual human-perceived voice quality on every call, without disrupting other network functions. With this capability, gateway developers will be able to support meaningful Service Level Agreements (SLAs), a key competitive differentiation in for the downstream service provider market.
� Josh Adelson, Director of Product Marketing for the New Public Networks Group, Brooktrout, Inc.

OpenVoB
Gradual migration � The changing economy forced the telecommunications industry to focus on its core business again. At the same time, the overwhelming strategy of service providers is to steadily migrate to IP, while leveraging existing infrastructure and maintaining the carrier class reliability and quality of service their customers have come to expect.

Reliability � Service providers, especially the ILECs, feel they have more �time� to wait on IP telephony to become more reliable, particularly softswitching technology, now that the failing economy has wiped out much of the competition by CLECs. As a result, they expect vendors to provide products that meet or exceed the reliability provided by their existing networks.

Standards � Service providers want the option to choose best of breed technology from a variety of vendors. Multi-vendor networks are only deployable in a standards based environment, so standards and interoperability testing will be a key trend in 2002.

End-to-end IP � The first wave of VoIP deployments flourished in the service provider�s core networks and enterprise environments. Service providers are now looking to connect those two islands over �last-mile� broadband connections. This gives rise to a number of issues (such as quality of service, bandwidth utilization, provisioning, lawful interception, and security), which the industry, including OpenVoB will be addressing during 2002.
� OpenVoB Board of Directors

Sonexis

• IP PBXs will take 50 percent of the PBX market by 2005.

If you have ever moved into a new office and had to wire all the offices and cubes with phone lines, you know that the cost of the wiring far exceeds the cost of the phone gear that�s connected to it. So even if IP PBXs and handsets are never any cheaper than traditional TDM equipment, eliminating the extra wiring has a huge cost savings. You simply run Ethernet around your office and use it for phone and data. However, IP PBXs will eventually be cheaper, too, especially when you can call your local phone company and get your telephone calls trunked in as IP calls, thereby saving the PBX from having to convert TDM to IP.

• International telephone calls will continue to move to IP, especially in the developing world.

Companies like iBasis and ITXC have shown that, with clever network management, the public Internet with no guaranteed QoS, can provide carrier grade phone service to the far ends of the earth. It�s not that IP transport is inherently less expensive than other formats such as ATM, but it�s more an issue of capacity and availability. If you need additional capacity in most countries outside of Europe and North America, you may have a very long wait � sometimes years � before new international phone lines are laid. On the other hand, excess IP bandwidth is available in most places in the world today and is constantly being upgraded, so IP carriers can bring up new circuits more quickly than the traditional international carriers. Nearly every major carrier today, including the tier one carriers, handles a portion of their traffic over the Internet. Because IP pipes have many other uses other than voice, and because voice carriers seem to be able to coax carrier quality voice from non-QoS IP networks, what�s the point in laying a lot more old-fashioned international phone lines?

• Conferencing and Collabortion will take the place of face-to-face meetings.

One of the only businesses that appears to have benefited from the Sept. 11 attack is conferencing. Audio conferencing, Web conferencing, and video conferencing are all up substantially and show no signs of backsliding. The social acceptability of the �virtual meeting� seems to be increasing. This benefits users greatly as many face-to-face meetings don�t really need to be face-to-face and in general they chew up a lot of time and travel and are very costly compared with a virtual meeting. The technology for virtual meetings is improving rapidly and companies like Sonexis are coming out with low cost appliances that are simple to install and give any company the ability to host virtual meetings at any time without paying a service bureau.
� David Friend, Chairman & CEO, sonexis

Intel
The common theme throughout these trends is the continued � and accelerated � proliferation of open, modular building blocks for packet voice communications networks. Benefits to the industry go beyond lower cost infrastructure. We will all benefit from a richer, more diverse ecosystem of companies providing voice-over-IP products and services.

Specialized voice over packet (VoP) silicon delivers significantly higher performance and lower per-channel power consumption than the general-purpose DSPs commonly used in today�s systems. For example, the Intel IXS1000 can achieve channel density an order of magnitude greater than a general-purpose DSP. Two factors account for this improved performance. First, these are true �systems on a chip.� Control processing, memory, high-speed bus, and multiple DSP cores are all implemented on a single chip. Traditionally, these functions have been implemented using discrete components. Second, the DSP cores are optimized for packet processing.

General-purpose network processors simplify system design and allow developers to more easily implement new standards, features, and services:

• General-purpose, programmable network processors such as the Intel IXP1200 will be a key component of VoIP system designs. By offloading host processors and DSPs from control- and memory-intensive tasks such as packetization, jitter buffering, and packet loss recovery, network processors enable greater channel density and simplified design. They also offer significant advantages in terms of flexibility: These chips are highly programmable, making it easier and more cost-effective to implement new standards, features, and services compared with ASICs or DSPs.
• The price/performance of general-purpose computing platforms continues to dramatically improve (Moore�s Law). This phenomenon, combined with media processing software optimized to run on these platforms, will significantly lower costs and deployment barriers for VoP applications.

It is now possible to develop low- and mid-density media processing solutions without the use of expensive DSP boards. Lab tests have shown that a single 1 GHz Pentium III processor can handle between 30 and 60 ports of unified messaging. At Intel, we are optimizing the same software features services that run on our DSP boards on host processors such as Pentium and, in the future, Itanium. At the same time, we are preserving the programming interfaces so the thousands of applications that current run on our boards will be able to run on �boardless� platforms. The result is reduced system cost and simplified development and deployment.

Two developments in the standards arena are also worth mentioning:

• The evolution of the PICMG standards, from 2.16 to 2.19 and beyond, will provide a standards-based hardware and software infrastructure that supports the density, reliability, and management requirements of carrier networks. Thus, high-end solutions based on open building blocks will increasingly replace closed, proprietary, more expensive systems.
• The availability of SIP in the Microsoft XP operating system will dramatically increase the number of SIP-enabled endpoints. This will lower entry barriers to deploying SIP applications. In parallel, it will create additional momentum behind the SIP protocol.

� Peter Gavalakis, Marketing Manager, public network products, Telecommunications & Embedded Group, Intel Corporation

Narus
In 2002 we continue to see accelerated deployment of VoIP, across both enterprise and consumer markets. For so-called next-generation service providers, all of whom have heavily invested in their IP backbone infrastructure, packetized voice is simply a more efficient use of that infrastructure than switched circuits. With the high-speed backbones such providers have deployed, they continue to have excess capacity. For these carriers, and their incumbent competitors, the issue is no longer hardware � they have enough of that � but software, from softswitches to advanced IP mediation.

The challenge is to offer the same assuring level and range of services and functionality that customers expect from their circuit switched networks. Cost advantages are still a factor, especially in international markets, where the tariff savings are significant. However, over time VoIP offers such an advantage in terms of service options, that this will become the differentiator between competing IP providers, as well as between VoIP and switched circuits offerings.

As providers build out their infrastructure they are incorporating mediation functionality that can not only handle complex billing requirements, but can also monitor and act on quality of service metrics and, most importantly, can allow them to capture the total value of each and every transaction over their network.
� Mark Stone, CEO Narus, Inc.

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