Google, Avaya Aim at Enterprise

Avaya is supporting and joining the Google Enterprise Professional program to develop new capabilities for small businesses around Google's enterprise products. Under terms of the agreement, Avaya will develop, market and support offers that integrate Avaya's advanced communications solutions for small businesses with the new Google Apps Premier Edition, the subscription services solution for email, instant messaging, calendar and Web publishing services.

Examples of the open standards-based capabilities on which the solutions will focus include: enabling subscribers to easily share contact information, presence information and alerts; enabling a single in-box for voice mail, email, instant messages and fax messages; and enabling web calling over the Google Talk instant messaging service network. The companies' collaborative efforts will initially focus on Avaya IP Office, Avaya’s flagship IP telephony communications solution for small and mid-size businesses, with availability planned for fall 2007. Further solutions are expected to continue the emphasis on productivity-enhancing and cost-cutting capabilities for small and mid-sized companies.

The first integrated solution, which Avaya expects to deliver later this year, will be sold through Avaya's global network of resellers and distributors, providing customers with a single point of contact for sales, installation and support.

According to Google, Google Apps has been used until now by more than 100,000 small businesses and hundreds of universities. But not just small businesses.

“So much of business now relies on people being able to communicate and collaborate effectively,” says Gregory Simpson, CTO for General Electric Company. “GE is interested in evaluating Google Apps for the easy access it provides to a suite of web applications, and the way these applications can help people work together. Given its consumer experience, Google has a natural advantage in understanding how people interact together over the web.”

Serious Moolah

The typical Fortune 500 company spends 3.6 percent of revenues on network services, gear and assets. Last year, more than $327 billion. The largest recurring cost is wide area network transport costs. Any wonder why enterprises are looking to switch that function to Ethernet?

No More PBX: Bill Gates

Bill Gates, Microsoft chairman, in pointing out that software is becoming more advanced and capable every year for hosting multimedia content, notes that "every year we just move to more of a digital environment. We take away the older approaches." One of the changes Gates expects is the disappearance of the private branch exchange. "In voice telephony, you have a thing called a PBX. You won't have those anymore. You'll have a communications system that is using your Internet network and it's a far richer, more flexible software-drive system." That's not going to stop small businesses from buying them. But most haven't made firm choices so far, as this forecast from The Yankee Group might suggest.

Cbeyond, Geek Squad

In many ways, Cbeyond sells VoIP like cable companies sell digital voice. The focus is on drop dead simplicity and maximum ease of use, with all the messy technological details hidden. There's a deliberate effort to avoid introducing new technology into a customer's world in a visible way. Think "it just works." There are other businesses out there with similar approaches. Among the most customer-friendly technology support efforts one sees out there in the consumer world is the Geek Squad. Like the office superstores of the world, it just is something small businesses will turn to for predictable, approachable service. So don't be surprised when Geek Squad starts selling Cbeyond services.

Not All Calls are the Same

There are no market studies on how people use phones, says Manuel Wexler, CopperCom CTO. So one can argue that "not all calls are the same," he says. "You might want to be paid for taking a telemarketing call." In other cases, you just want to block some calls. Others are really important. "So maybe all phone calls aren't the same," Wexler says. "I haven't seen a study where people attach value to a minute of talking."

Skype calling arguably is used differently than mobile, inbound differently from outbound, IM differently from SMS, video differently from voice-only, voice-only differently from multimedia sessions. Users have different preferences for one mail box or multiple mailboxes, one device or several, soft client versus ATA-based calling.

Cable sells voice as part of a bundle. Vonage customers probably are different, he maintains. Vonage sells VoIP. Cable sells voice, but not VoIP. "Right now telcos sell two sizes of voice: consumer and enterprise," he says. There's "not much segmentation."

SIP Trunking Help for Independent ISPs?

We never cease to be amazed at the way lots of specialized providers are able to make a living in a telecom world dominated by giants. Consider ISPs, operating in a tough business by almost anybody's estimation. Broadband Internet access offers less margin than the dial-up business broadband is replacing. And while wireless access is an option for lots of rural ISPs, there's typically less opportunity in urbanized areas, simply because the telco and cable providers do a pretty good job of providing "commodity" access.

And then there's VoIP, which many ISPs really don't want to undertake. They often don't want to become voice providers in their own right. They typically don't want to become channels for sales and installation of premises phone systems. And they typically don't want to become LAN specialists. But they do know IP-based access services. And many serve at least some business customers, so they understand special access (T1) services.

So what might be interesting is for some provider of SIP trunking services, with a national footprint and the right back office systems, to create a service allowing ISPs to sell SIP trunks just like they sell T1 connections. That way, ISPs could insert themselves into the VoIP value and revenue chain, but without becoming voice providers in their own right, becoming interconnect companies or system integrators. Somebody will figure out a way to do this, and independent ISPs then will have a VoIP value chain play, and a much more lucrative way to play in broadband access, while making some money at it.

Why Security Always Tops Enterprise Objections...

to new IP-based services and platforms. Flaws in Web apps boosted bug counts for 2006 by more than a third over the previous year, according to data from four major databases tracking security and bugs: the Computer Emergency Response Team Coordination Center (CERT/CC), National Vulnerability Database, Open-Source Vulnerability Database and Symantec Vulnerability Database.

Counting both public sources and private submissions directly to the CERT Coordination Center, the group logged 8,064 vulnerabilities last year, an increase of 35 per cent over the number of flaws reported in 2005.

The three other major flaw databases, the National Vulnerability Database, the Open-Source Vulnerability Database, and the Symantec Vulnerability Database, recorded jumps anywhere from 20 to 35 per cent in 2006 compared to 2005. OSVDB estimates at least 20 per cent more vulnerabilities logged in 2006 compared to 2005.

U.S. Phone Penetration is Up

...after a dip after 2000. This survey by the FCC includes both wireless and wireline service, and corrects for buying of multiple wired or wireless accounts by any single household.

Cable Begins SME Voice Assault

If 2007 is the "Year of" anything, it will be the year the cable industry began its assault on SME voice revenues. But it might not be until 2008 that cable giant Comcast makes its own move. Charter Communications, Cablevision Systems Corp. and Videotron Telecom have added voice offerings to their commercial services packages. Cox Communications has been doing so for some time.

Cablevision Systems is pitching a new multi-line VOIP product targeted to firms with fewer than 25 employees. A four-line package costs $29.95 a month for each line in the first year of service. Notably, the commercial service initially costs no more per line than the company's popular VOIP product, Optimum Voice, for consumers.

“We’re trying to break that traditional [price] line between business and consumer” service, says Joseph Varello, Cablevision VP. Comcast, Time Warner Cable, and Bresnan Communications all say they will start selling voice optimized for SMEs. In the New York area alone, Cablevision estimates that businesses spend nearly $5.9 billion a year on phone services, with SMBs accounting for $3.5 billion of that total.

Comcast estimates that businesses spend about $20 billion a year on phone services in its territories. The company aims to start offering commercial VOIP next year.

Cable experts argue that it also makes sense to expand into business telephony because it's a way to hurt the phone companies in one of their prime markets and undercut their ability to subsidize low residential phone rates.

"The telco subsidy swamp can be drained to the extent that SMB spending is diverted to cable, and even more so once telcos respond to competitive pressure by reducing their rates to SMBs and investing more in SMB customer support," writes Peter Shapiro, a principal at PDS Consulting. "Thus cable will benefit twice from the growth of its commercial business: first, by increasing top-line revenue; second, by limiting resources otherwise used by telcos to compete for cable's core residential customers."

Speaking at the Society of Cable Telecommunications Engineers' (SCTE's) Business Services Symposium in Chicago last week, cable strategists said they're targeting smaller companies because these firms are usually located either within the reach of existing cable plant or not very far away. In contrast, big companies are usually located farther away from cable's residentially-oriented plant.

David Pistacchio, executive VP and general manager of Cablevision Optimum Lightpath EVP, has urged cable executives to "price disruptively."

Hosted PBX $2 Billion by 2010

Hosted PBX and hosted Centrex style services are resonating most with smaller businesses in the 20-to-50 seat range, says In-Stat. But there's still a very long ways to go, according to separate research by Savatar. As shown in this graphic, blue shows small business managers who aren't sure which IP phone approach to adopt. Yellow shows those in favor of hosted PBX services while red shows preference for a premises switch.

Hosted PBX and hosted Centrex services will exceed $2 billion in annual revenue by 2010, the company says. In-Stat projects U.S. hosted PBX seats in service will continue to grow steadily to top three million in 2010, up from 373,000 in 2006. Cost savings remains the primary attraction to hosted business phone solutions, but the value associated with business-grade solutions is resonating more strongly among businesses that are willing to pay for them. Multi-location businesses and those with mobile or distributed employees are most attracted to hosted VoIP solutions, In-Stat says.

Oddly Enough, Access Is Where QoS Really Helps

Brough Turner, NMS Communications CTO, argues that quality of service measures in the Internet backbone provide negligible benefits. It's in the access links where QoS really can make a difference, and that's the area where at&t's merger approval agreement with BellSouth prohibits it from doing so. Oddly enough, the inability to "discriminate" between packets prevents users from experience improvements they might like to have.

Once packets get beyond the access network, every link in the Internet is carrying multiplexed traffic that is statistically relatively predictable, Turner argues. "Traffic volumes vary by time of day, but these links don't saturate, except as a result of poor engineering or forecasting on the part of the ISP or failures in other parts of the network causing rerouted traffic," says Turner. "Either case generates a rapid response from any ISP that expects to remain in business."

"In short, except at the edges of the access network, Internet links may be heavily loaded but are not saturated," says Turner. "Best effort is good enough even for low latency applications like voice telephony" in the backbone, as a result. "Except during major failures, the effect of QoS in the Internet backbone is negligible."

That isn't the case for access links, Turner argues. "There is one place in the public Internet where limited, highly specific QoS measures make sense and are being deployed," and that is "at the consumer end of an asymmetric broadband access link."
Specifically, it is the upstream links that can saturate. The other issue is that it frequently is not possible to buy additional capacity in the upstream direction, at any price. And that makes routing policies very valuable.

His full comments can be viewed at http://blogs.nmss.com/communications/.

Email, Web, IM Top Enterprise Mobility Drivers

Email, Web and instant messaging access are the top three drivers for enterprises adding more mobility support for their workforces. Smart phones are the new black, it seems.

Both Substitution and Augmentation

The common sense expectation we all seem to have is that VoIP ultimately replaces POTS, and that's correct in a technological sense. Their respective business futures might be less certain. We mean "business" here in the sense of revenues that can be generated from services and features associated with POTS, even if the platform changes. Those of you who lived through the analog to digital switch transformation understand this. Revenues sometimes grow when a new platform displaces the old, because there are new things to sell, and costs sometimes drop at the same time, allowing a retail price to reap more margin, even on the legacy products.

And one of the things about POTS is that there are latent values beyond the switch and transport technology that might be the real reasons customers buy POTS service. If you think in terms of "user communities," the PSTN outstrips nearly anything else we've built so far, with the exception of wireless. But if wireless is seen as untethered access to the PSTN, then the PSTN community is where one wants to be.

In other words, the PSTN directory is far more developed than any directory you or I have built ourselves. A "buddy" list can be built for the small number of people you communicate with regularly. Beyond that, the PSTN still rules. That's valuable. One might argue, at least at this point, that POTS is more reliable, in just about every sense, compared to just about any VoIP alternative. That has value for end users, and might continue to, even when the infrastructure changes.

Also, the business value of the PSTN, which is voice-oriented, arguably is enhanced when integrated with instant messaging, text messaging, conferencing, Web access and other features. All of that might help explain why just half (49 percent) of residential customers who adopt VoIP say they discontinued a traditional phone service when they got their VoIP services, according to a recent survey by In-Stat. Put another way, VoIP displaces half of existing POTS line purchases, but also augments POTS half the time.

Also, in addition to "cord cutters" who rely exclusively on wireless for their personal voice communications, In-Stat finds that nearly 12 percent of respondents say their only VoIP service is based on the use of soft clients. That's further evidence of the growing importance of IM-based voice, presumably including "call out to the PSTN" capabilities.

And blurring the distinction between "business" and "consumer" uses, half of the VoIP users say they use their residential VoIP service either in part or in whole for business purposes. The trend is especially pronounced among VoIPers who are softphone-only users. More than 40 percent of such people use VoIP for business applications.

There are lots of suggestive niches here. Even in the consumer space, it appears there are augmenters, displacers, "no phone" users, "no phone" business users, IMers and maybe people who don't like "gizmos" of various sorts (probably the same people who dislike cable decoders and other CPE).

Mobility is Key for Business Unified Communications

There's a really simple reason why mobile devices are destined to play a key, perhaps the key role, as unified communications develops. At least 41 percent of the workforce already is mobile, and just about every employee is a mobile user in their personal roles. So to the extent unified communications almost always the ability to send and receive communications on mobile and desktop devices, mobility is a virtual requirement, even for workers who are not "mobile" in the normal course of their work day.

"There are lots of ways people communicate now," notes Sphere Communications SVP Todd Landry. "What does it mean to unify all that?" Some might say it means different media types can be more tightly integrated with other forms, Landry says. "At the lowest level, you want multiple forms of communications unified, plus mobile and desktop integration. "At another level, it might mean availability of presence state and text messaging, voice and video, so calls are handled differently depending on what you are doing," Landry says. "At a still higher level, it is communications integrated with business processes."

"Traversing between work and personal roles, your presence and control might move between domains," he says. "So the mobile phone is probably the most important device to support." First of all it is ubiquitous. And it will become a more important tool for business users, simply because device power is growing so fast. Mobile devices now allow users to do "the same sorts of things you do on your PC, and yet we call one a "phone" and the other a "PC," Landry notes.

SME Business VoIP Uptick

SMEs seem, at least according to one projection by Infotech, to be getting the message on hosted and premises-based business phone services. Adoption rates are tracking large enterprise deployments pretty closely, after initially trailing. There's growing evidence that prices also are getting more interesting as well, in large part because premises-based systems are becoming more affordable, thanks to Asterisk and other open source platforms, as well as suppliers such as Samsung staking out new price point terrain.

Late 2008 Consumer VoIP Mainstream

Telecom industry executives and analysts generally believe consumer VoIP will hit mainstream status by late 2008 or early 2009, according to stl. They also believe that sometime in 2010, voice revenue will represent 20 percent or less of wireline service provider revenue. Mobile operators will be in the same position by 2011. Some 90 percent of respondents say the global telecom industry is undergoing a fundamental structural change.

VoIP Mostly Works

Recent Mean Opinion Scores of VoIP traffic by Minacom show that VoIP audio quality pretty much works. Quality isn't uniformly high, because of the unmanaged nature of access bandwidth and the general state of networks some places in the world. But it works well enough to be useful. This obviously raises a question.

At some point, when the technology underpinning voice is nearly 100 percent IP, there may yet be ways to differentiate services based on levels of assured audio quality.

Managed networks probably still will be able to provide higher MOS scores on a consistent basis, compared to unmanaged networks, even though performance on unmanaged networks also will improve.

Of course, the other quality metrics should be capable of differentiation as well. Session integrity is the other current example of varying quality. Even when a VoIP call "sounds good," the integrity of the session might not be as good as a PSTN call. Voice VPNs will help, of course. So the issue is the degree to which unmanaged connections can be made more reliable by addition of VPN capabilities.

SME VoIP: Buyers Interested, But Hesitant

Some 60 percent or more of small and medium business owners say they are interested in VoIP, but they also say they have concerns about the quality and cost, say researchers at The Yankee Group. Fortunately, these are the sorts of problems that get sorted out over time. Those of you who were early Digital Subscriber Line adopters know what I mean.

The Coming Measurement Problem

Measuring the size of the voice market is a problem the industry will start to face in greater measure as "telephony" becomes "voice" and "IP communications." The fundamental issue is that as voice and IP communications become embedded in the business models of other applications, it becomes harder to quantify the actual financial and business impact. Up to this point, quanitifying the size of the telephony business has been pretty simple. One has public reports by governemental agencies on the amount of wireline volume and revenue, as well as mobile volume and revenue. You add them up and derive th first order, retail revenues. Then economists can start adding in the full economic impact by applying multipliers.

But what does one do when voice and communications features are a "no incremental cost" sort of item? Voice will arguably be more important in the future, as it is embedded into gaming, documents, collaboration, portals, desktop apps. But it won't be as easy to separate "voice" and "communications" revenues from "multimedia," "entertainment," "enterprise software," "advertising" and other potential revenue streams.

In other words, the killer app of the communications industry remains "communications". But the ways communication gets monetized are changing. And that's going to make harder the task of figuring out where we are, since much of the value and revenue generated by communications features will not be generated in ways that allow easy disection of volume. Sometimes a "killer app" is offered on a "no incremental cost" basis. This is one way email might be considered the killer app to drive Internet access. It doesn't cost the user anything beyond the basic subscription, but the value of the app initially is high enough to drive the access business.

In a similar way, the value of a BlackBerry or smart phone device might be driven by the ability to use email on a mobile device, even if there is no incremental charge for the messages themselves. In the developing context, one adds VoIP and then entertainment video as contributing "killer apps" for broadband access service. Sure, broadband becomes important first as a way of avoiding the "World Wide Wait," not because there are new apps possible only with broadband. But then those apps are discovered by end users. Things such as VoIP and streaming media, telepresence and rich media in general.

All of which is going to make measurement of adoption, revenues and impact much more challenging.

Easier Management, Cost Savings Top Hosted VoIP Drivers

Enterprises consider "simplicity" and "cost savings" the top two reasons to consider a hosted VoIP solution, according to Forrester Research. Which makes perfect sense: enterprises tend to have technical staffs, so "lack of in-house resources isn't so often the case. Enterprises do tend to operate out of multiple, scores or hundreds of locations, though, which makes support of consistent voice features difficult. Neither are enterprises too worried about protection from technology change. Apparently IT managers are used to change, and confident of their ability to manage it.