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Technology Stocks : The *NEW* Frank Coluccio Technology Forum -- Ignore unavailable to you. Want to Upgrade?

To: ftth who wrote (5162)	3/6/2002 12:27:12 PM
From: stephen wall	Read Replies (1) \| Respond to of 46821

From the BCR weekly newsletter: PBX Vendors Sing New Tune I'm coming off an intense--but great--week at BCR's VoiceCon2002 Conference voicecon.com. The crowd was large (2300+), active and involved, the sessions were well received and the exhibit floor was jammed--virtually all of the exhibitors have re-signed and are eager for VoiceCon2003. In the current economy, that kind of re-up rate has become rarer than a hot high-tech IPO. The buzz at VoiceCon, of course, was about IP telephony in general and IP-PBXs in particular. And what was new was that there are no longer any nay-sayers among the equipment vendors. None--and I mean none--of the PBX vendors have a next-gen, circuit-switched, TDM product in the pipeline. They are all betting their futures--and their customers'--on packetized voice. Now to be sure, if a customer either can't justify or adamantly resists migrating off circuit switching, the "legacy" vendors--Alcatel, Avaya, Intecom, Mitel, NEC, Nortel and Siemens--retain a circuit-switched option. But the paths to a circuit-switched future are fewer and narrower than ever before. Case in point: Avaya, which used VoiceCon to announce new IP telephony offerings--call control/processing software running on Linux-based servers, new media gateways, management software and a new IP softphone. In explaining the new products to me, Jorge Blanco, Avaya's director of strategy and planning, showed one slide that I found particularly fascinating--a "decision matrix," with various migration scenarios leading to Avaya's product offerings. What I found striking was that only one of the six or so paths led to a Definity (read: circuit switched) outcome; all the rest take the customer to an IP telephony solution. Similarly, Avaya recently released a White Paper entitled "IP LAN Telephony: The Technology Migration Imperative." Imperative! And it claims that with these new products, the company's goal is to "accelerate mass adoption of IP telephony." I usually try to ignore the marketing hype associated with new-product announcements, but this represents a huge shift in market positioning. Avaya, until recently, gave only the most grudging of acknowledgments to packetized voice. It would sell you an IP-based voice system, but you had to really want one. And Avaya's wasn't alone in this regard. At VoiceCon, however, the world changed; Nortel, Siemens, NEC, Mitel, Alcatel and the rest of the companies with roots in the PBX business all began singing a new tune: The time is right for IP telephony. The guys from Cisco may not be happy about the new level of competition, but they may find comfort in knowing that the legacy PBX vendors have validated its view of the future. Of course, there are still some tough, unanswered questions: Have the vendors changed their commission and bonus plans to emphasize the new IP-based voice systems? Will the technicians who show up to service the new systems have a clue? What about security, voice quality, traffic engineering and system reliability? And most important, how will customers respond? There's general agreement that IP telephony is the sole bright spot in an otherwise grim PBX market. Even so, IP shipments are expected to account for only around 5 percent of the total stations shipped in 2001-2002. And as a percentage of the total installed base, IP stations hardly register at all. But, the gauntlet has been thrown: All of the PBX vendors are intent on proving their commitment to convergence and to IP. Over coffee towards the end of the show, my colleague Sandy Borthick and I were discussing this new "reality," and Sandy came up with a historical analogy that seemed reasonable: She said "think token ring," which also had a huge and loyal installed base within the largest enterprises in the world. But token ring and its star topology was first surrounded, then encapsulated, and finally rendered irrelevant by Ethernet- and TCP-IP-based solutions. Sandy wondered whether circuit-switched voice was about to suffer the same fate. What do you think--drop me a line here in the BCR eForum. Fred S. Knight Editor/Publisher Business Communications Review bcr.com