March, 1998
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Strategic Networks On...
Volume 3, Issue 2 (March 1998)
Voice and Data Worlds Collide
by Susan Almeida, Vice President of Consulting Services
As we hurdle through the information age, we're at the
beginning of a once-in-a-century tectonic shift. For the
first time, data is about to eclipse traditional voice
traffic. As the data snowball barrels forward, voice calls
will become a minuscule piece of the information traffic
streams coursing around the world. Simply put: networks will
be designed for data, and traditional voice calls will
piggyback along the cheapest path. Also for the first time,
voice is taking on a strategic role-clever voice/IP
applications that will radically transform business, much
like call centers, Web sites, and e-mail already have. What
is the enabling technology? Packetized voice, i.e.,
techniques that chop voice up into bite-sized pieces for
network transport, including Voice over IP (VoIP), Voice over
Frame Relay (VoFR), and Voice over ATM (VoATM).
These two trends-explosive data growth and strategic voice/IP
applications-are nothing short of monumental: they are
fundamentally altering the global telecom infrastructure.
The shift from traditional circuit-switched networks to data-
centric networks is more fundamental than the last great
transition in the global telecom infrastructure: the move
from analog to digital. That shift created economic activity
measuring billions of dollars through new central office
switches and transport services. Today's sea change from
circuit-switched to packet-switched nets will make that
transition look like child's play. In the wake of this great
re-buildout, some very big players too slow to move will be
shunted to walking-dead status; others with the innovation
and courage to act will be catapulted to the head of the
race.
Let's explore the impact on infrastructure and operational
efficiencies first, then the role of strategic voice/IP
applications.
Follow the Dollars
For the last century, circuit-based voice traffic loomed
monolithic; data always the second cousin trying to elbow its
way through infrastructures optimized for carrying phone
conversations: skinny, rigid telephony pipes. But if we zoom
forward, traditional phone calls will be but a tiny sliver of
the pie. By various accounts, the swing will be between the
year 2000 and 2010. In some U.S. regions, like Silicon
Valley, the pendulum has already swung.
As the center of gravity shifts to data (specifically, IP),
there's a huge sucking sound as investment dollars follow the
traffic. Until now, the lion's share of funding has
funneled into a telephony-centric infrastructure. This is
why most Internet traffic today, including voice over the
Internet, actually runs over telephony nets.
But the days of telephony-centric circuit switching are
numbered. Why? Because service providers and enterprises
alike are now pouring their investments into the high-growth
area: data. Why waste precious dollars funding
infrastructure optimized for the slow-growth phone call
market? With the bulk of capital dollars and senior
management attention flowing to packet-switching nets
optimized for data, it becomes ever more expensive and
cumbersome to maintain a separate voice infrastructure.
Network planners don't like to run multiple nets when fewer
will do. It is massively expensive and inefficient to
maintain over the long run. The natural proclivity is to
consolidate infrastructures wherever feasible. And
integrating voice and data is a time-honored recipe for
saving costs-higher volume and complimentary traffic patterns
means better dollar-for-dollar use of the fixed
infrastructure investment. The new wave of innovation in
packetized voice has service providers and end users alike
itching to once again integrate data and voice. But unlike
the 1980s integration over TDB networks, this time it will be
over data-centric infrastructures.
The itch to integrate is not lost on the equipment vendors.
If you take the pulse of the equipment vendors you'll find
massive brainpower and engineering dollars being pumped into
packetized voice. It is inevitable that technical barriers
will drop-and voice will be an integrated stream flowing
through the global packet-switched infrastructure. Service
providers and enterprise users will be able to collapse their
half-dozen separate data and voice infrastructures into a
souped-up, IP-centric, packet-switched infrastructure.
Separate telephony-centric, circuit-switched infrastructures
will eventually shrivel up and die.
Why Packet Switching?
Simple: it's the architecture that works best for data and
it's also the technology that squeezes the most out of
underlying bandwidth. Some argue that with fiber build-out,
Wave Division Multiplexing (WDM) and switching advances,
bandwidth will soon be free and bandwidth optimization mute.
The reality: demand will continue to outstrip supply in many
parts of both public and enterprise nets. For most net
planners, then, bandwidth remains a scarce and expensive
resource to be optimized, at least for portions of their
nets. While traditional circuit-switched nets designed with
telephony in mind rely on fixed, nailed-up connections;
packet-switched nets-whether cell (ATM), frame relay, or IP-
offer fluid, elastic connectivity that squeezes the most out
of expensive pipes. And with the data market innovating at
"Internet speed," packet-switching costs are driving down
faster than was ever conceivable in the traditional telephony
switch world. Packet-switching equipment has nose-dived from
$60/packet/sec in the '80s to one tenth of a cent per
packet/sec with today's high-end routers and ATM switches.
The blazing innovation from the data world is not only
driving down equipment costs, it's also making packet-
switching acceptable for carrying voice. Further, it's
pushing bandwidth efficiencies to new heights via advanced
voice compression and silence suppression (silence is up to
60% of the average phone conversation). Perhaps one of the
most powerful arguments for why packet-switching will be the
next infrastructure is that the cost of carrying a voice call
is about to drop an order of magnitude.
Let's take a look at what's pumping into the marketplace for
packetized voice. The key technologies are: digitization and
packetization of analog voice traffic, voice compression and
tight control over delay and loss. To get good voice quality
you need minimal delay, predictable delay and consistent
performance. Natural sounding speech needs more: echo
cancellation, background noise regeneration and low loss.
Loss is even more critical with packetized voice because a
dropped compressed packet is far more noticeable than noise
on a traditional phone call.
We've already seen quantum leaps in all of these areas-and
the advances show no signs of abating. Take voice
compression: while used for 20 years to squeeze the most
voice into fixed leased lines, now the dramatic gains are
being made in packetized voice. Today's voice compression
algorithms already achieve up to 10:1 gains versus
traditional 64kbps voice circuits. With 2kbps voice
compression now on the drawing boards we will soon achieve
near 30:1 gains over a traditional circuit-switched net!
Voice quality is subjective so delay benchmarks are tricky,
but on the low-end of the traditional telephony delay scale,
a satellite phone call takes about 250ms to transmit.
Let's look at how packetized voice performs within the major
data-centric networking models: ATM, frame relay, and IP
packet switching. You can think of these packetized voice
technologies as falling into two categories: packetized
Voice Over Transport Services (VOTS), which includes VoFR and
VoATM; and VoIP.
VOTS
The VoFR and VoATM approaches are similar: analog voice calls
from a CO switch, PBX, key-system, or handset are passed to a
frame or ATM switch. The voice traffic is then digitized,
packetized (into frames or ATM cells), compressed, and
otherwise conditioned; then switched over a frame relay or
ATM transport net to the destination switch, where the
process is then reversed.
Voice over ATM. There are two main applications for VoATM:
enterprise nets and as transport within service provider
nets. For enterprise nets, you connect traditional telephony
equipment (i.e., PBX) to your ATM switch, which then converts
and packetizes the voice stream. The packetized voice stream
is then carried over a private or public ATM network. Many
service providers are already using ATM as a multi-service
platform to provide frame, ATM, and IP services to users;
carrying voice streams moves infrastructure convergence one
step closer.
ATM was designed from the start to handle voice as well as
data and video streams. VoATM has been available in ATM
switches since last year, pioneered by vendors like GDC
(Middlebury, CT) and Nortel (Brampton, Ontario). The ATM
solutions include compression, echo cancellation, and very
tight control over delay through built-in ATM Quality of
Service (QoS) mechanisms. Another important development:
applying a voice edge/core architecture similar to data nets.
The concept: move processing-intense voice routing functions
to the edge; and perform high-speed voice switching in the
ATM core. The advantage: it cuts delay and improves sound
quality by eliminating multiple conversions/compressions that
would normally occur if the traffic threaded its way through
intermediate tandem switches or PBXs. With key Voice and
Telephony over ATM (VTOA) standards now finalized, we'll be
able to make broader use of these approaches.
Voice over Frame. Frame relay has come a long way since its
data-only roots. VoFR works analogously to the ATM example.
But, in the case of frame, the main application is for the
enterprise. And since there are so few private enterprise
frame relay nets, the transport is a public frame relay net.
Leading frame relay access device (FRAD) vendors like
Hypercom (Phoenix, AZ), Nuera Communications (San Diego, CA),
and Motorola (Schaumburg, IL), have supported voice/frame for
the last two to three years. Most FRADs today provide some
level of VoFR support, again, including digitization and
packetization, compression, echo cancellation, and bandwidth
management/traffic optimization. Initially, these were all
proprietary, but the VoFR standard FRF.11, covering coding
and frame conversion, compression and silence suppression,
was ratified in May of 1997. The latest innovations include
voice switching in the frame switches themselves. This
provides similar quality and delay benefits as the ATM-based
voice switching discussed above; while expanding the FRAD's
voice calling capabilities beyond branch office-to-regional
office point-to-point calls. In terms of delay control,
frame relay is not as deterministic as ATM, but again, the
frame market has not stood still here. Simple prioritized
frame relay has been implemented and is now offered by
several major service providers like US West !NTERPRISE
(Englewood, CO), MCI (Atlanta, GA) and Sprint (Westwood, KS).
US West !NTERPRISE, for example, guarantees 50ms nationwide
for its prioritized frame relay service. And the recent
ratification of FRF.12 provides a standard way to segment
long frames into shorter frames so voice frames are not stuck
behind large data frames.
Voice over IP. Among the packetized voice choices, the
industry darling in terms of hype and investment is VoIP.
And with good reason: VoIP shares the cost advantages of its
VoFR and VoATM cousins, but, more strategically, adds
tremendous value via new voice/IP applications. Here, we're
not referring to audio streams or audio clips on Web sites.
Rather, we're referring to the new class of applications that
merge Internet capabilities with telephony functions. This
strategic value is what's going to tie the bow on V/IP. IP
has already won the protocol wars as the native data
networking protocol for enterprise and public data nets --
next on the agenda is packetized voice.
Again, focusing on the operational efficiencies side of the
equation first, let's look at VoIP. VoIP works similarly to
"VOTS" services, but instead of converting to frames or
cells, the voice traffic is converted to IP packets. One of
the key enablers of VoIP is the "VoIP gateway" which
digitizes, compresses and packetizes voice for transport over
IP nets, such as internets, intranets or extranets. Various
market researchers have pegged the VoIP gateway market in the
$1.8B range by 2001 while the dial equipment market is sized
at $7.5B in the same time frame. Nearly every major network
vendor has delivered or announced some form of VoIP product.
For VoIP gateways, VocalTec Communications (Herzliya, Israel)
and Nortel's Micom Communications (Simi Valley, CA) were
early leaders. Lucent Technologies (Murray Hill, NJ) offers
its Internet Telephony Server, Newbridge Networks funded
Vienna Systems Corporation (Kanata, Ontario), and Cisco
Systems (San Jose, CA) has its 3600 and 2600 series routers.
The momentum can also be seen in 100-plus companies that
participate in the Voice over IP Forum.
You may say, "Well, this is great, but the quality of voice
over the Internet is terrible." This may be true today, but
the quality is improving daily. In a VoIP system, delays are
introduced by the VoIP gateway (one on each end) as well as
by the end-to-end delay across the wide area network(s).
Today's gateways introduce delays as high as 400-600ms.
Multiply this by two (since there is a gateway at both
origination and destination) and you've got serious delay.
But Digital Signal Processing (DSP) advancements are slashing
this down to the 100ms level. Motorola is a leader in this
area-with claims of VoIP processing speeds estimated at the
40ms level.
At the wide-area IP network level, performance issues are
being addressed on several fronts. At the raw bandwidth
front, advances continue to be made in high-speed access and
backbone routing, switching, and transmission capabilities.
This is the year where high-speed access networks get real.
In the U.S., xDSL and cable modems are expected to move from
tens of thousands of subscriber lines to hundreds of
thousands; hitting the million mark in 1999. Faster dialup,
ISDN, T3 frame relay and ATM access continue to rollout. At
the physical and transmission level, WDM and SONET
deployments are bumping raw transport by orders of magnitude
without service providers having to bankroll time-consuming
fiber installations. The routing and switching fabrics are
cranking up with next generation ATM switches and a new range
of multiple-gigabit routers from companies such as Avici
Systems, Inc., (Chelmsford, MA), GigaPacket Networks Inc.
(Littleton, MA), NeoNet LLC (Westboro, MA), Torrent
Networking Technologies Inc. (Landover, MD), Berkeley
Networks Inc. (San Jose, CA), Juniper Networks (Santa Clara,
CA), Ascend Communications (Alameda, CA) and Cisco. All of
this is adding up to high-performing public IP nets. MCI,
for example, is guaranteeing less than 95ms delay across its
Internet backbone; Concentric Network Corp. (Cupertino, CA),
a new entrant, offers serious credits if it doesn't hit its
125ms guarantee. In practice, these IP nets are performing
at levels which are quickly closing the gap with the VOTS
nets (at 50-70ms). Layered on top of this raw forwarding
power in the IP nets is the rapid implementation of H.323
standards-protocols for transmission of video, voice and data
over an IP network-and more control over quality of service
via QoS, Class of Service (CoS), and Quality of Access (QoA)
techniques.
As gateway and network latencies continue to fall, VoIP
performance will soon surpass that of conventional satellite
phone calls. And, once voice is digitized, it can be
manipulated in many ways-for example, to produce CD-quality
voice. At some point, packetized voice will become the new
"toll-quality" standard that traditional telephony calls
aspire to reach.
So, What's the Delay?
Despite the clear march towards packetized voice, the switch
will not flip overnight. The worldwide data infrastructure
has quantum leaps to make in capacity, reliability, QoS,
billing and calling features like call routing. In essence,
the data world has a lot to learn from the telephony world,
and we expect a lot of leadership from the traditional
telephony/transmission vendors, like Lucent and Nortel,
masters of these techniques who are now very serious about IP
nets.
VoFR has the installed-base edge in the enterprise, but will
be increasingly encroached at the low end by VoIP and at the
high end by VoATM. Both VoIP and VoATM have critical
dependencies that could stall their adoption and boost the
life of frame (remember ATM to the desktop?). For IP, it
will be the expected leap in performance and latency
controls. And today's first generation VoIP products and
standards are far from complete. With some exceptions, most
of today's VoIP gateways are PC-based, with low port counts,
virtually no built-in reliability, large footprints, and are
voice-centric, with little in the way of advanced telephony
features. The next generation hitting the market is bringing
carrier-class scale and reliability, SS7 integration, and
integrated voice+fax+data support. There's virtually no
interoperability today, but standards bodies are furiously
tackling inter-gateway signaling, call control, address
translation between IP addresses and telephone numbers,
security and billing.
In the meantime, vendors from all corners of the
internetworking world, the telephony/transmission world, and
startups, are jockeying for position. Hold onto your hats as
we face architectural upheaval during yet another round of
piranha-like integration-this time, of VoIP capabilities into
every imaginable network product. VoIP gateways have already
made their way into FRADs from Hypercom, Nuera and Motorola.
Prime examples of integrated products in the pipeline are
integrated remote access servers, from vendors like Ascend,
Lucent, 3Com Corp. (Santa Clara, CA), and Cisco, adding VoIP
and SS7 capabilities; and VoIP modules being added to PBXs
and COs from companies like Lucent and Nortel.
For VoATM, possible stallers include technical issues around
converging on a scaleable approach to map IP QoS to ATM, as
well as market issues. For enterprise nets, public ATM
services have been caught in a chicken-and-egg mode:
enterprise users won't sign up unless the service is
ubiquitous, service providers have been waiting for
enterprise demand. Recently, this is starting to break open.
As for VoATM as a means to carry CO-switch voice traffic
inside of service provider nets, the question is whether this
will scale enough to move from trials to production.
The Real Power of Voice/IP
So far, we've discussed the operational efficiencies of using
packetized voice. But in the case of VoIP, don't miss the
real power. V/IP is not just a cheap way to run phone calls.
It is ushering in a whole new range of voice services that
add tremendous value to an enterprise. Many of the V/IP
start-ups are focusing on the application side of this market
-- this is the stuff that will drive a boom in all manner of
new business-transforming applications. There are endless
possibilities, but three very real, already-on-the-shelves
applications highlight the power of this nascent market.
The first is use of voice/IP applications to spur e-commerce.
The key example is voice-enabled Web pages. How it works: a
consumer browsing your web site is interested in buying your
product. Rather than disconnecting the PC connection; then
dialing your 800 number to get more info. The consumer
clicks on your customer service web icon ... a VoIP
connection is made to your agent who can talk directly with
the customer ... push more Web pages or order forms to the
customer ... and close the deal on the spot. Add a video
camera, and you're interacting near face-to-face as well.
Bottom line: more touch equals more sales. Lucent's
Internet Call Center is a prime example of this application.
The second class of applications address operational
efficiencies. Workgroup collaboration and unified messaging
are two already available that can completely transform
workplace productivity. These become as mainstream a part of
the business day as cell phones, e-mail, and audio-
conferences today. Microsoft's (Redmond, WA) Netmeeting and
Lucent's MMCX point the way to next-generation workgroup
collaboration. Here, you combine the power of phone calls,
video conferencing, electronic whiteboarding and
collaborative editing in one platform. With unified
messaging now a reality (like Lucent's INTUITY Internet
Messaging), a user gains full portability. Listen to
voicemail while surfing the web ... have e-mails read over
the phone while on the road ... have faxes automatically
routed to the hotel or email ... etc. These applications
address what's needed for a businessperson to successfully
work in today's hyper-speed business world: mobility and 7x24
convenience.
Cashing in on Convergence
So as we move to this new converged world where the Internet
meets telephony, what is the best way to navigate through the
next few years?
For the enterprise user, it boils down to finding the
cheapest way to carry fully-featured voice at near-toll-
quality while still tracking usage and costs and minimizing
management. And, more importantly, leveraging the next wave
in strategic business-transforming applications so your
company is not left in the dust. Service providers face
equally daunting decisions: which type of telephony and
converged V/IP services to offer and what is the best
internal infrastructure to run them over? Hello! It's your
wake-up call. Hundreds of billions of dollars are on the
line.
# # #
Note: Stay tuned for next month's Strategic Networks On...
to gain insights into what service providers and enterprise
users are doing in response to this new converged world, and
more importantly, what they should be doing.
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Layer 3 Switching Market Assessment Study Now Available
Strategic Networks announces the completion of The Layer 3
Switching Market Assessment, a comprehensive market research
study uncovering enterprise users' barriers to deploying
Layer 3 switching technology. Dr. Lynn DeNoia led the
research effort for the study, which was co-sponsored by 3Com
Corp., Cisco Systems, Bay Networks, Digital Equipment Corp.,
Extreme Networks and Torrent Networking Technologies.
Dr. DeNoia's research also uncovers evidence of misguided
vendor marketing messages versus enterprise concerns. Other
findings include enterprise network strategies; percentage of
enterprises implementing ATM or gigabit technology; rate of
network traffic growth; networking issues that are keeping
networking managers awake at night; and which technologies
and hardware enterprises are planning to implement in their
networks.
The Layer 3 Switching Market Assessment is available for
$12,500. To order contact Harriet Linskey at 617-912-8324
or 800-999-7624 (U.S. only).
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4th Annual NetSwitch '98 Coming to a City Near You!
NetSwitch '98 will show you how leading-edge technologies --
Layer 3 and Layer 4 switching, Gigabit Ethernet switching,
ATM switching and switched network management -- can provide
solutions to your key networking issues. NetSwitch '98
provides you with the opportunity to meet one-on-one with
leading vendors such as 3Com Corp., Cabletron Systems, Cisco
Systems, Olicom, XLNT and Xylan.
Starting in June, NetSwitch travels to Atlanta, Boston,
Chicago, Denver, Los Angeles, Minneapolis, New York City, San
Francisco, Toronto and Washington, D.C.
Watch your mail, stay tuned to www.snci.com and Strategic
Networks On... for more information about NetSwitch '98.
Limited sponsorship opportunities are available for
internetworking vendors. Call Harriet Linskey at 617-912-
8324 for information. |
