January 12, 1998, Issue: 664
Section: Networking
IP Telephony Lure -- Bay to buy Netspeak, plans products to
send voice and fax over IP networks
Beth Davis
Bay Networks Inc. is joining the rush into IP telephony, agreeing to buy
Netspeak Corp. in a move to develop gateways, routers, and access switches that
handle voice and fax traffic over Internet Protocol networks. The stock deal,
valued at $37.6 million, follows Cisco Systems' $160 million agreement last month
to buy IP telephony developer LightSpeed International Inc.
By integrating Netspeak's technology, Bay plans to roll out by mid-year a
Baystack gateway that sits behind a PBX and converts voice and fax traffic into
packets that travel over IP networks. In the first half of 1999, Bay will introduce
a carrier-class IP router for sending voice and fax traffic over telecom networks.
Bay and Netspeak executives outlined a number of multimedia applications, such
as call centers and voice-enabled Web sites, that can take advantage of the
forthcoming products. But initially, "the compelling value proposition is straight
cost savings, as companies move long-distance traffic from traditional services
onto IP networks," says Bay CEO Dave House.
Jim Kunzman, director of communications services for Bay customer Nielsen
Media Research in Dunedin, Fla., sees potential in piping voice and fax traffic
between offices. But as with any major infrastructure change, he says, "we're a
bit conservative, so we will wait and see."
Brendan Hannigan, an analyst with Forrester Research Inc. in Cambridge, Mass.,
sees the IP telephony market generating about $2 billion in service-provider
revenue alone by 2002. "While we're not so crazy about LAN telephone calls,
because calls within our offices work well, you can have gateways between
PBXs to interconnect branch offices," Hannigan says. "The application is for
wide-area connectivity, and you can save money on toll charges, for example." |
