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Reprinted with permission from Voice 2000, a supplement to Business Communications
Review, January 1999, pp.12-15. BCR Enterprises -- www.bcr.com.
Over the past 12 months, there has been a spate of announcements of voice-over-you-name-it -- frame relay,
IP and ATM -- as well as the unveiling of new server architectures and related alliances. These events have
become the darlings of the trade press and have piqued the interest of the entire communications community.
Expectations are growing for converged, open networks and next-generation PBX systems.
But all the interest in new possibilities is accompanied by concerns and confusion. End users aren't as
sure as they once were about the wisdom of committing to large purchases of traditional voice technology,
nor are they entirely clear about where their incumbent PBX vendors are headed.
The concerns and confusion are justified. Voice over FR/IP/ATM and server architectures are hot, and
with good reason -- unified networks and packetized voice are on the brink of going mainstream.
But for PBX vendors, this migration is a mixed blessing. On the one hand, as discussed in detail below,
they are in the process of migrating offerings and architectures to the brave new world of packetized voice
communications. They are contributing to the standards-setting efforts for integrated networks (e.g.,
signaling, control and quality of service) while they wait for demand to rev up.
That said, it is also clear that they will not abandon their existing technologies. Indeed, critics of the
PBX industry charge that it isn't moving fast enough toward packet-based systems and integrated, converged
networking.
That criticism isn't entirely justifiable, but the PBX vendors have much broader considerations than
just technology. At the heart of the issue is that "voice-over-XX" and server architectures take the PBX
industry towards a completely different business model. Historically, the key elements in a PBX vendor's
strategy involved using time-division-multiplexing (TDM) technology to create proprietary systems, that
were then sold via carefully controlled distribution channels; most of the profits derived from applications
and terminals.
The emerging business model for "voice-over" and server architectures is distinctly different. Proprietary
hardware platforms are replaced by industry standard approaches - Windows NT, for example - and the
systems themselves consist of a mixture of PCs, standard 2500 telephone sets and proprietary sets. The
bulk of profitability shifts to applications and call-processing software.
Further, preferences for distribution change as well, as voice and data vendors find themselves competing
to deliver complete, converged, end-to-end solutions. The PBX vendors face tough decisions about which of
their existing distribution channels to retain, what the proper mix of VARs, VADs and systems integrators
needs to be and which open-sourcing outlets (e.g., Micro Ingram or VanStar) can deliver.
These issues cut across the full range of the PBX vendors' activities, from product planning and
manufacturing to sales, service and support. The timing for implementing any changes will be crucial,
and all of the PBX vendors want to move in a way that enables them to compete for new markets, not simply
to migrate existing customers into the next millennium.
Plans Abound
What follows is a summary of what the leading PBX vendors are doing to prepare themselves and their
customers for the migration to packetized voice communications. Even though there is not a consensus
about the timing, scope or technological choices associated with this migration, all of the vendors
listed below are taking active steps to create alternatives to traditional TDM-based systems.
Fujitsu Business Communications Systems:
Fujitsu is providing ATM and SONET solutions for voice and data, and is in the process of developing
more IP-based applications, particularly for call centers. It intends to deliver gateway functionality
and access switches, but has not announced a date for availability.
Although Fujitsu recognizes the broad market shift towards IP, it considers ATM to be the only mature
technical solution for achieving that migration today. Specifically, Fujitsu's chief technical officer,
Kiyoshi Kasahara, and Bill Miller, vice president of broadband technology, argue that voice-over-frame and
IP can only be effective in relatively small-scale, carefully controlled environments, and they emphasize
the need for standards to evolve in the areas of signaling, quality of service, directory service and
security.
Don't look for Fujitsu to come to the market anytime soon with a major new platform or "forklift"
replacement solution. The company believes that it will take at least three years for the "IP anywhere"
vision of converged communications to materialize, due to the infrastructure changes required to support
larger pipes and IP-based QOS.
As part of it's own migration, Kasahara and Miller intend to move the company more into network integration,
and it will be offering a more complete set of services to customers in the area of network design,
implementation and management. It is augmenting its staff with broader skill sets, investing in R&D and
participating in standards committees.
Intecom:
Will continue its focus on large, sophisticated, networked PBX and call-center installations. While it
remains bullish about the long-term prospects for voice-over-IP technology, Layman Harang, director of
project management believes that IP voice will not play a significant role in major corporations and/or
call centers until the voice quality improves.
Note, however, that Intecom was one of the early pioneers in voice-over-IP, having created a subsidiary
coorporation, Selsius Systems, that Cisco recently acquired for $145 million. And later this year, Intecom
will announce an IP bridge and IP trunk-type gateways to accommodate applications and converged Internet
access, integrated websites and applications for call centers.
Intecom already offers an Internet Call Center Push-to-Talk button capability with its partner eFusion's
eBridge Interactive Web Response system gateway. To enable this Internet Voice application, however, the
caller needs eFusion's Internet Call Assistant software with an Internet phone client (such as Netscape
Conference, Microsoft NetMeeting or Intel Internet Video Phone
Lucent Technologies:
While recognizing that voice-over-IP cannot currently match traditional telephony, it is moving
aggressively to provide an array of platform choices for integrating voice, fax and data solutions for
enterprises and service providers.
Lucent's main voice-over-IP offering for the enterprise is the new IP Exchange Systems (IPES) family,
which includes the IP ExchangeComm and IP ExchangeLink for business/enterprise markets, and the IP
ExchangeComm-SP system for service providers. IP Exchange Systems brings together all communications on a
single IP network
The IP ExchangeComm is a small system that supports PC, LAN phone, cordless and wireless phones over an
IP network. Analog phones, feature phones and fax machines are supported with an adjunct called the IP
ExchangeAdapter, which combines these communications streams onto the LAN. The IP ExchangeLink is an
alternative to traditional key systems, and consists of a phone system, router, hub, server and adapter.
Other Lucent offerings for voice-over-data include:
A "virtual phone" (IP Phone).
The Internet Telephony Server, which supports high-speed Internet access.
Definity ECS's IP trunk gateway, that supports IP conversion on dial out applications.
Definity ATM adds ATM switching to the PBX.
The Multimedia Communications eXchange (MMCX) server that extends PBX features to a departmental server.
Internet Call Center, unified and networked messaging, and Internet Messaging.
Mitel:
For some time now, Mitel's strategy has been to migrate it's PBX to an open, converged communications
environment. It's SX2000 call control software runs on an NT Server, and the company will soon announce
a universal messaging application, arising from its acquisition of Centigram. Mitel also introduced the
CallCenter Commander Advanced Call Center that integrates voice, fax and the Web.
But while the company has made these moves, Ken Dumont, vice president of marketing, also expects
spending on basic enterprise network infrastructure to slow down as a result of competing priorities-most
notably responding to Y2k. Dumont agrues that if there's a silver lining in the cloud of slowed
expenditures, it is that it will buy time to prove-in the new voice-over-XX systems in real production
network environments. In anticipation of this migration, Mitel is investing in training to prepare its
distribution channels for changes during the next two years.
NEC:
During the past year, NEC announced a major development initiative with Cisco for the NEC NEAX 2400 ICS
PBX, and it expects to announce a new voice system later this year. The 2400 ICS comes with a significant
level of built-in ATM connectivity, and it is expected that the Cisco initiative will add to its
capabilities. NEC's new Electra Elite Key System includes LAN integration and with its Coreline Voice/Data
Hub interface, both voice and data utilize the Ethernet cable in a converged network environment.
NEC also is currently working on a LAN-based PBX, IP phones and NT-based servers. NEC's assistant GM for the computer networks group, Dale Graver, anticipates that the traditional PBX will continue to play a role in large and centralized locations for a number of years, while IP systems will be deployed in small offices, branches and at the department level. NEC views the concerns about voice quality as being primarily a wide-area networking issue, and it will not offer a stand-alone voice-over-IP solution until it can deliver a full set of voice features on LAN PBXs, and adequate quality of service and resource availability across the WAN.
Nortel Networks:
Nortel will offer an "office-in-a-box" solution at the low end of the market later this year, porting call
processing and features to a Windows NT platform and combining voice, data, fax and infrastructure in one
package.
Nortel Networks also will add both trunk-side and line-side IP gateways to the Meridian early this year as a
step toward a Meridian-based converged network environment. It will offer a Meridian IP Telecommuter
hardware/software package to extend the features of the office phone via a dial-in connection, and a
Meridian Home Office II hardware/software package for work-at-home telecommuters.
Nortel has announced a unified messaging product, CallPilot, and plans to develop a unified directory offer
and text-to-speech technology within the next two years. The CallPilot product unifies voice mail, fax and
email messages on a user's PC and uses speech recognition as the interface to receive voice-mail messages
over the telephone.
One of the key questions facing Nortel is how to exploit its acquisition of Bay Networks as the industry
moves toward converged architectures. Jim Long, president of Nortel Networks' Enterprise Networks, expects
that over the long term, Bay will provide Nortel's customers with a unified switching infrastructure, while
the Enterprise networks group delivers "appliances", interactive applications and solutions for the new.
Siemens:
Siemens' senior manager for industry relations, Bob Lee, says that the company will continue to enhance its
PBX as it develops new technology, and he expects that PBXs and new technologies for voice to operate in
parallel for another five to six years. Siemens already offers both ATM backbone networking and an ATM PBX,
and is moving rapidly to offer IP-based products and capabilities. For example, the new HiNet RC 3000
system enables customers to use either Ethernet or Fast Ethernet as a single infrastructure for data, voice
and video applications, and Siemens has launched a major IP Telephony initiative with 3Com.
Siemens has also delivered the Hicom Xpress Telephony Server for its 300 E system that enables voice
and fax over a corporate IP network. Siemens' HiNet RC 3000 has proprietary IP capabilities which Siemens
expects to retain in order to deliver a higher quality of service.
Conclusion
So, when all this is boiled down, what do we have? First, by mid-year 2000, the PBX market will look
different than it does today. The traditional PBX vendors will have shifted away from monolithic, closed,
proprietary systems, and a transition toward a more pluralistic approach to voice networking will be in
full swing.
In short, there'll be multiple solutions-traditional PBXs aren't going to disappear, but customers will
be able to mix and match those solutions with a variety of server-based architectures and systems.
Solutions for IP Telephony-based quality-of-service, reliability and availability will become more
widespread, and they'll be sold by familiar names in telephony, and also from the likes of Cisco, Compaq
and Microsoft.
Not only will the PBX vendors be offering a different set of solutions, but their business model will
also change. Today, hardware dominates; tomorrow, they'll be licensing software, both directly to users
and to other system vendors, and to the extent that they remain in the hardware business, it will be as a
means to an end--to sell more software for applications, voice network management, etc.
There's an irony here-the voice companies will be unable to make it staying in the simple voice-processing
business, while companies with roots in the data networking business find that they can't grow without
moving into voice. I'm not sure anybody knows what the ultimate integrated voice/data network will look
like, but I don't know anybody who disputes that the industry is moving in that direction.
Fig.1 AN ESTIMATE OF THE GROWTH OF IP VOICE PBX SYSTEMS | 
