The week of Oct. 4, 2004, at the Internet Telephony conference in Los Angeles, I saw lots of enterprise prospects eagerly boning up on what to buy first for their next generation of voice communications, alias the telephone, in a converged, multi-modal network. A reported 5,000 people registered to attend this show, representing small, medium and large enterprises. Although the labels said “VoIP,” make no mistake, Voice over IP networking is only the starting point for the new ways people will make contact and communicate with each other using both wired and wireless devices.
The same handwriting was being put on the wall by both the traditional telecommunications providers and the next-gen developers at the conference. These included old-time service provider AT&T, CPE suppliers Avaya, Nortel, Siemens, NEC, Lucent, Toshiba, etc., as well as the newcomers who started off with “integrated” telephony, like Cisco, Interactive Intelligence/Vonexus, 3Com, and Skype’s Niklas Zennstrom video-conferenced from the UK.
Ready for VoIP and IP Telephony and Selling the Sizzle
Everyone talked about the future of standards-based voice communication applications and IP Telephony converging with non-speech forms of communication and user interfaces, i.e., e-mail and instant text messaging. Keynoters representing both enterprise CPE and hosted solutions waxed eloquent about remote and mobile personnel communicating multi-modally across wired and wireless networks and exploiting the new power of “unified” presence. They also talked about VoIP quality of service and security finally becoming manageable to support the new “Public Voice Network” (PVN), which will replace the PSTN. At this point, it seems that all enterprise telephony system providers are also prepared to support both VoIP and TDM networks to insure flexible and graceful migrations.
Almost every speaker was in agreement that the migration to converged communications should not be simply replicating the old functionality of TDM phone systems. So, now that everyone is ready to deliver VoIP, what are the new end-user “applications” that will ride on top of the new world of VoIP and IP Telephony infrastructures? For the most part, everyone is offering the same stuff we have been talking about for years, including:
- Unified messaging, useful for message recipients
- “One-number” services that can simplify matters for contact initiators
- Integration of instant messaging with other form of contact
- “Instant” multi-party voice/video conferencing
- Simpler, cost-efficient computer telephony integration (CTI), which will support traditional customer contact center functions such as telephone self-service IVR applications, intelligent call routing, customer “screen pops,” and customer contact activity logging and recording for CRM purposes
- Integration of screen-based interfaces with voice communication activities
- Integration of information exchange and real-time communications
- “Unified” presence, availability, and modality management
In an interesting demo session, several providers were able to demonstrate the multi-modal capabilities of convergence available with IP Telephony. What was particularly notable was that the demonstrations, e.g., by Vonexus and 3 Com, highlighted the dynamic flexibility for changing from one modality to another without the users’ having to establish a new connection.
Now that everyone is singing the same “application” songs, the real challenge for end user adoption will depend upon effective design of these concepts in terms of practical user interfaces and communication devices. Most of the demonstrations at the show were focused on the wired desktop user’s PC or station set, but the real need for multi-modal flexibility is going to be with wireless, handheld communication mobility. We didn’t hear much about the enterprise responsibilities for such devices and seamless interoperability with wireless carrier services.
In talking to vendors of IP-PBX products, the enterprise markets have gotten comfortable with the idea that voice can cost-efficiently share data networks, a tribute to the excellent marketing job done by Cisco. However, many technology managers are still buying traditional desktop telephone systems, focusing on cost and not ready for the power of mobility and multi-modal communications. Although there is still no groundswell of end-user demand for converged applications within the enterprise markets, there was a noticeable increase of interest on the part of business unit management who are more concerned with the time productivity and communications efficiency of their people.
VoIP and Enterprise Contact Centers
VoIP and IP telephony won’t bring anything really “new” to the contact center application table, but it will make traditional computer telephony integration (CTI) functions like skills-based routing, “screen pops,” IVR applications, customer contact activity recording (event logging, call recording, etc.), and agent performance monitoring, much easier and less costly to implement. In addition, it facilitates use of remote groups, home agents, and third-party outsourcing of staffing resources. Finally, new, SIP-enabled presence management will support more efficient use of enterprise staff resources for “informal” contact center activities.
As pointed out in previous articles, the migration to an IP-based “virtual” contact center will logically be a key part of the overall enterprise migration to converged communications and should be planned accordingly. In particular, we believe that it will follow the first implementation step for an IP-PBX. For the small enterprise markets, the contact center and IP-PBX will be “”bundled” as a single package, reflecting the impact of software convergence upon contact center technology. (Vonexus (a subsidiary of Interactive Intelligence) was formed specifically to exploit the market need for such a product and demonstrated it at the show.)
Service Provider Roundtable
I had the privilege of challenging a panel of services experts about the enterprise market that could exploit the power of VoIP-based telephone services. The panelists represented service providers to the enterprise markets, as well as technology providers.
VoIP and IP telephony offer service providers a fresh opportunity to address the enterprise markets, especially at the small, branch office, and SOHO segments when it’s time to replace legacy equipment. “IP Centrex” is the next-generation label for such shared services and the panel addressed a number of issues that need to be resolved, including:
- Simplification of converged services to gain subscriber adoption
- “Verticalization” of services for different market segments
- Interoperability of new IP-based services with old services and inter-carrier exchange
- Migration from H.323 to SIP standards
- A need for device standards to support multi-modal communications
- Educating the market
- Increasing broadband availability
- Peering guidelines for providers
- Developing new business models
- Value proposition of new features
Although the service providers on this panel all expressed interest in the enterprise markets, they did not cover the new needs for supporting wireless mobility. As with the CPE market, the tipping point has been passed for acceptance of VoIP-based hosted services, but the above challenges still remain for increasing acceptance by enterprise organizations.
Notes From the Floor
- 40% of enterprise PBXs using IP Telephony
- Simple toll bypass not sufficient reason for enterprise migrations to VoIP – “VoIP is a journey not a destination!”
- Enterprise ROI from “instant” teleconferencing becoming more significant factor for VoIP adoption (Video gaining interest)
- Disaster recovery and business continuity becoming added ROI consideration for distributed enterprise operations
- Remote home office teleworking is also driving enterprise value for VoIP and presence management (Not the same as handheld device needs for wireless mobility)
- Japan showing significant migration of consumer subscribers from wired to wireless devices – a pattern expected to be followed elsewhere
- 50% of employees will be “mobile;” compared to being “road warriors”
- End user “productivity” ROI from converged communications (unified messaging) different for office enterprise user (7-10 mins/day), road warriors (70% greater), and “teams” (30 mins/day) (Doesn’t include ROI of faster task completion!)
- Individual user contact “status” will replace the telephone “busy signal”
- “Telephone area codes will becoming meaningless”
- All communication devices will have screens to support visual control interfaces as well as multi-modal exchanges
- Contact “number” will belong to individual subscribers/end users, not to network service providers
- The small business market is getting a lot of attention from both CPE and services providers because it is “big” and closest to being “ Greenfield” for migration considerations
- Proliferation of new features and functions enabled by IP telephony is creating complexity and confusion for end users and won’t necessarily generate additional revenue, but will still be key drivers for migration
- Self-installation and provisioning is key ROI factor for service providers and TCO factor for enterprises
- Broadband availability is key holdup for residence VoIP services market, but regulatory challenges also an issue
- Conflicts between wireless networks (cellular vs. Wi-Max) will be sidestepped with “dual-network” handheld devices (Motorola et al), intelligent Access Points, and IP-PBXs
- Skype plans penetration of enterprise markets with cheap phone services and their proprietary presence management technology, claims SIP “too difficult.”
What Do You Think?
Do you think that this year marks the major shift of enterprise telecommunications to IP Telephony and IP-PBXs? Will IP-PBXs sell lots of IP desktop phones or softphones? Will IP-Centrex services eat into the low-end enterprise CPE market? Who will be making the enterprise decision for service vs. CPE? How will the responsibility for new handheld devices for enterprise mobile users be resolved?
Let us know your opinions by sending them to [email protected]
New White Paper Report: Progress and Direction of Enterprise Migration to Converged Communications
The Unified-View has just completed a new white paper report on the state of the industry and the enterprise market for communications convergence. Entitled “Beyond VoIP: Enterprise Perspectives on Migrating to Multi-modal Communications and Wireless Mobility,” the report was sponsored by the non-profit Unified Communications Consortium and leading providers of enterprise voice telecommunications technologies, including Alcatel, Avaya, Mitel, Nortel Networks, and Siemens.
This objective report summarizes the current availability of key converged voice application technology from the provider industry, as well as a realistic assessment of the progress that enterprise organizations are making in migrating to communications convergence. The latter information is based on recent market studies of enterprise organizations from a converged usage perspective. The study provides practical feedback on the readiness of the market for the new IP-based voice technologies.
For a free copy of the new report, go to http://www.unified-view.com.
Art Rosenberg is a veteran of the computer and communications industry and formed The Unified-View to provide strategic consulting to technology and service providers, as well as to enterprise organizations, in migrating towards converged wired and wireless unified communications. He focuses on practical user requirements, implementation issues, and new benefits of multi-modal communication technologies for individual end users, both as a consumer and as a member of enterprise working groups. The latter includes identifying new responsibilities for enterprise communications management to support changing operational usage needs most cost-effectively.
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