tmcnet.com
October 1999
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Making Convergence Work
BY ANDREW BALE
A few years ago, when Internet telephony was just beginning, the world saw a brand-new paradigm emerge: Data communications technology seemed to be evolving to the point at which we could recreate the telephone network around data-oriented protocols. Why was this significant? There were three main drivers that made the market sit up and take notice: Cost savings, increased competition, and new applications.
SAVING MONEY
In the early days of the market, we were somewhat na‹ve about all of these drivers. We thought cost savings would come because "the Internet is free," and believed that somehow carrying voice over the Internet would make voice free as well. That turned out to be a fallacy: Free networks by definition can?t carry voice effectively. Adding the ability to carry voice (making the network reliable, predictable, and practical) turned out to cost money ? and required the building of a new type of data network. Internet telephony is therefore a misnomer: It's not the Internet that's significant, so much as the ability to use networks developed for data services to carry low bandwidth voice traffic. Convergence ? using protocols, services, and equipment developed for the data market to carry voice calls ? is the name of the game today. And convergence works because data oriented networks are growing so rapidly today that there's capacity to spare for the small amount of traffic that a typical voice call occupies.
The data world recently celebrated two milestones: 30 years ago the first Internet node was born, as two computers exchanged a few bytes of information through a gateway the size of a refrigerator. And now those few bytes of information have grown to a flood that has just outgrown the size of the global telephone network ? until today the largest, most complex machine on the planet. That growth continues unabated. And yet voice is still far more important to most businesses than data. The telephone is how we keep in touch and where we spend our money. A typical small business spends approximately ten times as much on voice services as on data services, and surprisingly, the greater the usage of data services in a business, the greater the use of the telephone. We like to talk.
The impact of convergence will come in several ways:
Combining different traffic types is better than keeping them separate;
Data communications products and services are evolving far faster than voice; and
New service providers have business models that are radically more effective than the old telcos.
THE EVOLVING DATA NETWORK
Every business today needs to have a combination of voice and data services. Whether that means using a modem to dial up the Internet and a plain old telephone to make calls, or whether it involves using a T1 line for data and another to connect the phone switch, every business today has to buy separate services. And yet each network is poorly utilized: Much of the time the bandwidth is unused, particularly on the voice side, where an idle voice channel is completely unused. Converged services mean voice calls and high priority data traffic getting guaranteed access to the bandwidth they need, while spare bandwidth is used for background tasks. This is much more effective.
Since the explosive growth of the Internet started, innovations have come thick and fast in the data world, while the voice world has largely been starved of real fundamental developments. IP switching, fiber communications, xDSL, e-commerce, XML, extranets, and VRML have all come from the need to drive the Internet revolution. Service providers looking to build more effective networks for carrying voice are increasingly looking to Internet-derived technologies to provide the cost savings to allow them to compete with established voice providers.
Much of the benefit of convergence comes down to the service provider. Savings for the end user will come from savings passed on from next generation service providers - and these providers are poised to change what it takes to set up your communications services. Unlike the traditional telephone company, which is interested only in supplying local and long-distance voice and data access, newer entrants are focusing on meeting business needs. Such providers are looking to provide a small business with everything needed to set up and compete on a global stage, and are therefore looking to provide the "office in a box." Next-generation service providers look less like utilities and more like consultants, providing analysis, applications integration, and communications in a one-stop shop. The battle for the hearts and minds of corporate America has begun. AT&T and Sprint are investing billions in creating a complete portfolio of services for the small and medium business. And new entrants such as 2nd Century Communications, a second-generation competitive local exchange carrier (CLEC) based in Tampa, Fla., are evolving completely new business models to allow them to be the complete provider of solutions for fast growth businesses.
"Fully integrated solutions are the key to meeting the growing needs of the small- and mid-sized business market," said Charlotte Baker, 2nd Century?s chief marketing officer. "Next generation service providers utilize convergence to deliver more services and more value along with the best price/performance. Once a service provider is able to add the management capability, they will become a true partner to their customers."
NEW APPLICATIONS
A lesson that the Internet has taught us is that as public communications merge with powerful applications platforms, new business-enabling applications evolve rapidly. Widely available IP-based data communications, combined with simple-to-program HTML-based servers, fueled the growth in e-businesses. In the same way, combining the public phone network with data applications creates the real benefit of convergence, the ability to create powerful voice-enabled applications at a price point that is available to fast growth companies. You can build voice-enabled applications using traditional PBXs and interactive voice response (IVR) platforms, and some large companies have done so. But you could have programmed a mainframe to act as a Web server?
Next-generation service providers terminate their networks not on dumb channel banks, but on highly intelligent edge devices that tie directly into the applications environment on the customer?s premise, and that increasingly allow applications to control the very behavior of the public network. The impact of this will be immense. Let's look at three example areas, and remember that opening the network frees innovation to create applications that we've never dreamed of:
Customer Relationship Management. We use the phone to keep us in touch, and yet it often fails to do so. Call a supplier, and drop into voice-mail hell. Call a coworker for an update, and play phone tag for the rest of the day. Large call centers have deployed technology to direct calls to the most appropriate person, no matter where he or she is located. Call center technology, the ability for an application to keep control of the call path until the caller has reached an appropriate person, has been prohibitively expensive and complex for any small business to consider. Convergence will allow any business to turn the phone system back into a real tool for keeping in touch with customers.
Mobility. In today's world we're increasingly flexible about where we want to work. Whether the teleworker is commuting from the bedroom to the home office, or the sales executive is spending the working hours on the customer's premise, we need to be in touch and a real part of the office environment wherever we are. We want information to follow us rather than us have to chase it. A converged communications system will make sure that the information I need to run my business (phone calls, e-mails, voice mails, faxes, pages, chat, calendar updates) gets to me wherever I am.
Unified Communications. The tools many of us use today for managing communications are unhelpful in the extreme. Using the phone to scroll through multiple voice mails, keeping files of paper fax printouts, separate systems for e-mail, voice mail, pages, and faxes? these are neither efficient nor user-friendly. Unified messaging has been touted for some time as a panacea for all of this, and yet it's been costly, difficult to install and maintain, and often not very unified. Convergence brings all communications together into one managed system, allowing me to use the phone to pick up e-mails when I'm on the road, to use the PC's user interface to manage all my communications, and to phone in and schedule a new meeting with my digital personal assistant. Communications should be a tool, and not a daily grind. Convergence helps manage the flood of information in a more effective way.
We used to think that Internet telephony was a great idea. And so it is, but for rather different reasons than we originally thought. On the horizon is the new Internet: A public voice/data communications system that will create powerful opportunities for business-oriented applications. The revolution has only just begun.
Andrew Bale is CEO of Flexion Systems. Flexion is a young company developing a range of access devices designed to allow a small business to simply adopt the kind of high quality communications systems described in this article. Based in San Francisco, CA, and Corsham in the UK, Flexion takes a global perspective on what is needed to assist small businesses to compete increasingly effectively. For more information, visit Flexion's Web site at www.flexion.com. |
