5/3/00 New Straits Times 27
2000 WL 5204451
The New Straits Times
Copyright 2000
Wednesday, May 3, 2000
Communications
Cost, the 'killer app' for IP telephony
Lee Ting Ting
(STF) - At this point, the convergence of telephony and data in the form of voice over Internet protocol is still very much driven by monetary- related factors.
THERE are usually several reasons that drive the uptake of any
new, revolutionary technology.
The same goes for growing adoption of IP telephony, which
basically encompasses the leverage of VoIP networks and Internet
telephony.
Projected to bring about market opportunities that total a
staggering US$89 billion (RM338.2 billion) by year 2004 (according to
a Gartner Group/Dataquest 2000 research report), IP telephony is
touted to emerge as the largest stream of business revenue within the
telecommunications industry.
This prediction, together with many spectacular IP telephony
forecasts, is promp- ting a market obsession with the question - What
is the 'killer application' behind an IP telephony uptake?
No doubt that the convergence of telephony and data networks have
contributed to the emergence of new, revolutionary IP applications
such as unified messaging systems (UMS), call centres and common
directory services. Thus, the general, initial speculation of the
existence of a single "killer" application.
Yet, instead of an application, the boost for IP telephony is
currently more monetary-centric than anything else.
The outcome of discussions between top IP vendors and analysts at
the IP Telephony and Converged Services Press event in Los Angeles
recently indicated the greatest mover and shaker of IP-based networks
is cost- related.
MONEY FACTOR
An example of this "money" factor that drives the IP telephony
trend, is the profits that the converged techno- logy (between
telephony and data networks) is bringing to carrier services
providers within the enterprise sector.
"For the first time, there is such a thing as a profitable
business model for a competitive local exchange carrier (CLEC).
"The joining of telephony and data networks allows the brand new
CLECs to sell voice and data services to churn earnings - something
the CLEC market has never seen before," says Andrew Bale, chief
executive officer and founder of Flexion Systems. Bale adds that in
addition to churning real, profitable opportunities for new-
generation communication providers, a convergence of voice and data
allows small businesses to experience substantial competitiveness.
"Small businesses will be able to buy a professional
communications infrastructure for less than US$30,000. Convergence
provides the opportunity for this sector of businesses to more easily
acquire some sort of high-quality communications infrastructure,"
says Bale.
Although these are good reasons for new-generation communication
providers to roll out new, value-added services for their customers,
and for small businesses to leverage on integrated voice-data
network; the value drive for the enterprise sector makes up a totally
different proposition altogether.
'SOFT' COST VALUES The consensus of the high-level IP telephony
round-table discussion is that the emphasis on cost savings as the
"killer" driver in enterprises is decreasing.
"We saw less enthusiasm since last year for cost savings - from
integrated VoIP solutions than we had seen previously," says Ian
Keene, vice president and chief analyst at GartnerGroup.
Apparently, surveys of medium and large enterprises show that
there is a decreasing expectation that integrated voice and data will
drive down costs and expenses.
"They (the enterprises) have gotten through the disillusion and
hype of the moment.
"The expectation of massive cost savings from IP voice and data
network convergence, by IT network managers and enterprises, are
disappearing," adds Keene.
Instead of quantifiable figures, the value drive of IP telephony
to enterprises is increasingly seen in terms of "soft" value.
Apparently, IP telephony is driven by the fact that it brings
about a new way of business flexibility and efficiencies.
"New business ways are really the drivers for IP telephony," says
Marthin DeBeer, senior director for marketing in Cisco's enterprise
voice business unit.
He elaborates that businesses empowered with increased flexibility
- brought about by new converged applications, would be able to
respond more quickly to their market needs, in order to bring new
services and capabilities to their customers and employees.
"Soft cost savings are often in terms of better service to
customers, higher efficiencies, better and enhanced productivity for
employees," says DeBeer.
"This is key to drive (telephony and data) convergence in the long
term," he adds.
DeBeer stresses that the eventual adoption of IP telephony will
not depend on a single killer application.
Single Application Markets Will Disappear Dataquest predicts
* Vendors will differentiate by adding functionality to physical
layer systems, developing applications that operate across hardware
and software environments.
* Video-conferencing, audio-conferencing, voice and unified
messaging, and interactive voice response will become software-only
businesses or will be acquired by traditional telecom or data
vendors.
* Classical voice applications such as messaging and voice
response will continue to evolve into software-based businesses,
causing further disruption, mergers, and acquisitions.
* Vendors not in a coalition must join one.
---- INDEX REFERENCES ----
COMPANY (TICKER): Gartner Group Inc. (Class A); Gartner Group Inc. (Class B) (IT ITB)
NAMED PERSON: DEBEER, MARTHIN
NEWS SUBJECT: World Equity Index (WEI)
MARKET SECTOR: Technology (TEC)
INDUSTRY: Consulting Services; General Industrial & Commercial Services; All Industrial & Commercial Services; Internet: Telephony; Computer Peripherals; Computers (CLT ICS SVC INIT PRF CPR)
PRODUCT: Computer Hardware (DCO)
REGION: Malaysia; Pacific Rim; Far East (MY PRM FE)
EDITION: 2*
Word Count: 765
5/3/00 NEWST 27
END OF DOCUMENT |
