In Pursuit of SMBs, End Users and Service Providers

Leading-edge companies such as Grandstream, NETXUSA, Super Technologies and AudioCodes are making SIP-based IP communications ever more attractive to both consumers and providers.

Grandstream Networks Seeks Growth in SMB VoIP

The SMB VoIP market shows no sign of slowing down and so many companies are vying to get a piece of this market which is projected to grow for many years to come. One player in this area is Grandstream Networks, specializing in delivering easy-to-use products for SMBs (Small-to-Medium Businesses) and service providers.

The company says 50% of its revenue comes from selling devices into the business sector and based on this market’s growth they expect this percentage to grow.

Grandstream Chairman and CEO David Li tells me in a recent face-to-face meeting that his company’s products are affordable, have an uncompromised feature set, are of high quality and interoperate with many major players such as Sylantro, 3COM, Lucent & Avaya. Finally, Li says his company provides excellent support.

I asked where Li sees the company in the next five years and he told me they want to be a major player in voice and video devices for consumers and businesses.

When asked about competition, common names such as Polycom, Linksys (soon to be known simply as Cisco) and the more specialized Snom came up.

Interestingly, one secret Grandstream customer is a political candidate whose staff uses a thousand or so phones now and may ultimately scale up to over ten thousand. (Grandstream’s home state is Massachusetts so you can try deducing who it is.) It’s an interesting deployment because the phones are XML-enabled, data is pushed to phones, and agents can also enter data into the telephony devices. XML allows these devices to function as IM terminals.

The company’s GXP line of phones competes favorably with the major players, having a lower price point. Li tells me two new phones will be released at INTERNET TELEPHONY Conference & Expo this September in Los Angeles, CA. Both new devices will support XML, PoE, multiple lines and have a full suite of features.

The company sells primarily through resellers, unless of course you are a very large company or presidential candidate. If you are a reseller or SMB - or even an ITSP, drop by the company’s site (www.grandstream.com) for details or just be at ITEXPO in LA next month to see what’s new.

NETXUSA, Distributor Par Exellence

I recently had the opportunity to ask NETXUSA CEO Tom Boone about his business and the direction he is taking the company.

NETXUSA, Inc. is a distributor of Voice over Internet Protocol (VoIP) products and services and has a distribution channel of independent resellers throughout the United States and foreign countries that provide the local end-user installation and support services.

The company distributes products from companies such as Digium, Epygi, PBXnSIP and many others. As Boone says, “We provide industry-leading VoIP products to a dealer channel of individual entrepreneurs and the IP community. We provide solid, trustworthy, consistent and dependable service. We sell to dealers only and have 24/7 support with East and West Coast distribution centers.”

Tom is one of the more colorful figures in the IP communications space who has many insights regarding this industry. If you ever get a chance to meet him, you won’t be disappointed.

When asked about the current market, Boone replies, “The future is as bright as a Super Nova and as deep as a Black Hole. No slowdown in site. In some cases the U.S. is lagging behind other parts of the world, however, mostly because of end-user expectations and a demand for quality. Still, the profile of our industry has been raised considerably by companies such as Google, Apple and Microsoft entering the telecom market. It may add yet another layer of end-user confidence.”

“Open Source has made the market interesting,” says Boone. “Before Open Source the IT Industry was trending in the same direction of ISDN which did not catch on in the USA. Open Source applications gave the IT industry some traction and without the open source pioneers, I feel the industry would be stuck in the legacy telecom mode for quite some time. Thank you, Pioneers.”

I asked Boone how he saw communications evolving over the next five years. “As a German friend once said - ‘SIP - SIP - SIP’,” says Boone. “SIP provides cost-effective and dependable communications. Moreover, with SIP you’re limited only by your own imagination. I can see everything from tracking heart monitors to contacting your appliance repair guy when your freezer fails. And all of this via wireless and SIP technology. Aside from SIP, there will be a smooth transition between WiFi and cellular; an expanding number of home office workers with real-time private video; telephony security and feature activation with voiceprints, fingerprints and retina scans. These features are not only used in high security areas but in the commercial arena as well.”

Super Technologies Hits all the Bases

Super Technologies, Inc. (http://supertec.com) and Super Technologies, Inc. DIDX & VoIP Solutions, provide worldwide clients with next-gen VoIP technologies. The company’s DID over SIP clearinghouses for end-users and ITSPs have grown from 100 to 6200+ members in the past 2 years.

Super Technologies, a privately-held corporation headquartered near Pensacola, FL, started up in 1999 with just one product, Super Phone. Super Technologies now has multiple IP telecommunication products for end users, SMBs and wholesale IP communications companies. Their products include the Virtual Phone Line, IP PABX, Carrier X, DIDX, and of course the Super Phone.

I recently asked Super Technologies’ Vice President Suzanne Bowen about her business and the direction she is taking the company. She started off by quoting Tee Em: “We all know the Internet killed geography a long time ago.”

“The types of services we provide show how Internet Protocol-based communications have changed our company strategy,” says Bowen. “Our emphasis evolved from tunnel-vision to world vision. In 1999, as a new start-up, we shipped IP phone adapters to remote areas of the world so consumers and SMBs could dial up and make phone calls over the slow Internet. Wide use of broadband and requests for having local phone numbers from around the world led to our CTO Rehan Ahmed inventing the Virtual Phone Line concept, which won the Best of Show Client Device award at Spring Internet World 2001. Open Source technologies such as Asterisk provided a reason to collaborate with now 6500 IP communications providers via another of our CTO’s inventions, the DIDX global DID exchange.”

“Our DIDXchange and hosted VoIP solutions help ILECs and CLECs migrate to, or add VoIP to their portfolio of services and to put their DIDs [Direct Inward Dialing phone numbers] in front of a global wholesale buying audience instead of just a few resellers,” says Bowen. “Non-traditional entrepreneurial post Gen-X types get to mash-up to create new services that meet a market’s needs, throwing in the power of one the most important pieces of a person’s identity - the phone number. New opportunities for revenue, innovation, and collaboration abound in a world where telecom competition is fierce and exciting.”

When asked about the market, Bowen quotes an AMI Partners study: “It shows that the North America SMB segment for hosted business-VoIP is set to reach $416 million this year - from about $165 million in 2005. Between 2005 and 2010, the cumulative growth rate will cross 56.9 percent.”

Focusing on the U.S. growth rate, Bowen notes that “The U.S. isn’t listed in the top 100 nations for growth, according to the 2007 CIA World Fact Book. The top ten are Azerbaijan, Mauritania, Guinea, Maldives, Angola, Cambodia, Armenia, Turkmenistan, Trinidad and Tobago, and Liechtenstein. Even so, a report from the U.S. Commerce Department shows the country’s GDP increased at a 2.5 percent annual rate during the last quarter 2006, up from 2 percent in the third quarter. In our country, where pay raises accompany higher prices, everyone is looking for ways to improve their ROI.”

Bowen is impressed with what’s happening these days with the hosted solutions business.

“It’s hot,” she says. “What influences SMBs to adopt hosted business-VoIP solutions is the predictable and often flat rate of monthly voice expenses with no up-front capital expense and toll savings for intra- and inter-company long-distance and local calling. They create business value because there’s no need for on-site IT infrastructure or added capital expenses, and no need for additional IT staff. You can get flexible, scalable solutions that grow with a business, and so the ROI is faster than with traditional on-site deployments. Furthermore, a well-done service is impervious to disaster. For example, Hurricane Ivan, the strongest hurricane in 2004, turned our Florida offices into a milkshake. No roof, no door. But, everything we provide is on hosted servers in different areas of the world. Our customers never lost a day of service.”

“Thousands of companies such as Kayote Networks and IPsmarx offer hosted VoIP in/out, but Super Technologies offers the same, as well as call forward management/DID management system solutions with 8 years of ongoing in-house development experience, so customers do not have to re-invent the wheel,” says Bown.

Looking into her crystal ball, Bowen gave me her prognostications for how communications will evolve over the next five years. She’d like to see better ways of conveying the emotion context of messages (“mistaken conclusions occur on a regular basis.”) and even invoking scents. “Aside from that, the future as always will be a case of the survival of the fittest, a struggle to keep choice in front of the customer, and more collaboration such as exchanges and clearinghouses, in the ever-evolving ecosystem of IP communications.”

AudioCodes’ Traveling Man

Anyone in the IP communications business knows quite well that Alan Percy is one of the most well-connected and knowledgeable players in the space. Alan’s day job is Director of Business Development at AudioCodes and I swear his night and weekend job is to travel this great country of ours and the world at large and attend any and every communications event known to Man. I envy his frequent flyer account.

Percy’s years in the business have given him deep relationships at companies making networking equipment, PBXs, ACDs, call center software, softswitches and just about anything and everything in communications.

AudioCodes is a provider of communications enabling equipment, gateways, SBCs and so much more. As the market evolves; I thought it made great sense to pick Alan’s brain about his company and the future of communications.

“IP communications is in our DNA,” says Percy. “It has been our core focus for the last 14 years of being in business. We create the tools needed to re-build the telecommunications infrastructure and deliver on the promise of IP communications.”

Percy says that one of the biggest factors in IP communications is SIP. “SIP is totally changing the way applications are being built and developers, VARS and even end customers should understand how this will impact their IP Communications solutions. The biggest impact of SIP is that it delivers a common signaling and control platform. It bridges the gap between open source and commercial products, providing a common ground for interoperability. With SIP, developers can create resources and applications on their own, then integrate them together to create a service at a much later date. Earlier this year we launched a campaign to highlight our SIP strategy to a wider audience. We call this our ‘Break Free’ message, helping developers cast off the shackles of the legacy CTI architecture, restrictive device drivers and operating system dependence. To accomplish this, we leveraged the on-board SIP features available on virtually all of our products from gateways to media servers and our session border controller platforms. Application developers can now use SIP from end-to-end to create some pretty incredible applications. We’ve seen many cases where our SIP media gateways or media servers have been integrated to applications very quickly. Not in years or months, but days.”

AudioCodes’ customers are impressed with what can be done with SIP, but they still have a wish list for vendors. “We’re seeing greater demands for increasing intelligence in our platforms,” says Percy. “As real world IP communications solutions are being built, the complexities of integrating to existing equipment, outbound dialing, protocol compatibility, and reliability are hitting the integrators. That’s why we constantly work with application integrators and know their pain. For example, we recently helped a customer build a range of advanced contact center applications that needed to include high-performance outbound call progress and answering machine detection with our SIP media gateways and media servers. These new features required that the edge devices [media gateways] have the intelligence to dial a number and listen to the audible feedback to determine whether a live caller answered, it was busy or was answered by voicemail. To accomplish this in the timeframes required by the FCC, we had to push the intelligence into the media gateway - making it smart enough to detect all of the possible answer situations.”

As for the near future, Percy says, “We’ll start to depend more on ‘collaborative communications’ in the next five years. As we shift from an office-bound environment to more mobile and remote workers, there needs to be a better way that multiple people can work together on tasks and initiatives. Kind of a cross between Skype and Webex where we can have work areas where we can go to share ideas and content, but without picking up the phone. Think virtual conference rooms where we can join in and leave, but the room is where the common project resides. I’d like to see the equivalent of the Rural Electrifications Act of 1936 occur with broadband Internet. Much like bringing electricity to the masses, bringing the Internet to every household would raise the standard of living, close gaps in education and expand our market for IP communications equipment. Then again, I’d just be happy with a cell phone that works!”

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