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Voice and Data Convergence – a Vendor’s Perspective

April 27th, 2005

The first time I heard about VoIP (Voice over Internet Protocol) was in 1996. At that time, I was working for a telecommunications manufacturer who said the ability to make calls using the Internet was the next wave. Now, almost 10 years later, VoIP is finally here and is on the tip of everyone’s tongue.

Frost & Sullivan research predicts that VoIP will account for approximately 75% of world voice services by 2007. But, what does this mean to you, as reseller, and your customers?

The initial market positioning for VoIP telephone systems emphasized cost savings – reduced long distance expenses via toll bypass, and reduced cost for wiring and cabling. Ironically, VoIP’s most important enhanced features are the least ones advertised: Greater flexibility in system architecture configurations. Employees with VoIP telephones can work from their homes and it appears to the caller as if they are in the office. Sites can be connected via the Internet creating virtual telecommunication systems across multiple offices. Business calls can be made anywhere in the world and no one needs to know from where you are calling. For example, an employee can make calls via a soft VoIP phone on their PC. The PC transmits via a wireless network interface card to a cellular network. The call is then routed to the main office over a VoIP gateway. At the main office, the call is redirected out to a client. The time is right for VoIP. The technology is stable, the applications have real benefits and, most importantly, customers are asking for VoIP. This is an exciting time for telecommunications.

According to In-Stat, more than 30% of firms, even those with less than 100 employees, are interested in and planning to adopt VoIP telephony solutions by 2005. However, most people have forgotten something in this VoIP craze; many small businesses do not have the network infrastructure to support a VoIP telephone system.

With the advent of VoIP, the telephone system is no longer a strange piece of equipment where you have to punch a series of numbers at the “programming station” in order to get the telephone system to behave as desired. The telephone system now “hangs off” of an existing data network, just like a printer or server. Many times, the VoIP telephone system incorporates an intuitive web-based system administration interface. Thus, management of the telephone system can be done from anywhere in the world and by savvy networking engineers.

VoIP systems allow data networking vendors to move into a telecommunications field. The smart data networking vendors have already started looking at solutions to add to their product line. However, why hasn’t the market seen a greater movement of data networking providers offering telecommunications solutions?

The biggest hurdle for data networking companies to overcome is finding VoIP products that offer more than just telecommunications functionality. Most VoIP products offer just telephony functionality like voicemail, automated attendant, and unified messaging. They do not incorporate the networking aspects needed to make the VoIP product a truly converged solution.

There is hope. A few manufacturers have seen the light and have begun producing devices that are friendly to the data networking vendors while providing a complete VoIP telecommunications solution. In other words, the product combines the typical telephone system capabilities with firewalls, DHCP and DNS servers, web hosting, e-mail hosting and group collaboration tools (think Microsoft Outlook’s Calendar capability) all in a single device.

For a reseller, there are several advantages to providing a truly converged solution to a customer.

First, the customer calls one company for all of their needs. No other company can come in and second-guess the way that a network was constructed, especially if the customer wants to upgrade to VoIP. Second guessing a network’s design is one of the most effective ways of winning a customer away from their current data networking vendor. But if you offer both voice & data infrastructure support, you’ll maintain your current customers and even find new ones.

Second, it is more difficult for a customer to switch vendors. It will be harder for a customer to pull their business if they have their telephone system and data network with the same vendor. So, you can see why Comcast wants to be the cable, telephone and Internet service provider for businesses. It is harder for the customer to move three key services to an alternate provider than one.

Finally, the customer can build a lasting relationship with the vendor. This makes it harder for the competition to win your business. If you are in a customer’s business on a regular basis performing data networking or telecommunications services, the customer sees you more often and looks to you for advice on the next phase of the infrastructure for their business.

In conclusion, VoIP is here to stay…this time. So, now is the time to get ready. As a single solution provider, you will need to update your skills, depending on your current specialty (voice or data). VoIP will get you into both sides of the business if you are prepared. Also, I believe that if a company can offer one stop service to their customers, they will be in a better position to win a prospect’s business. But, you need to find the right product for your set of customers. A strong VoIP product needs at least these five key components:

1. Seamless integration with Internet providers that can carry voice calls (e.g. Internet Telephony Service Providers).

2. Ability to link systems together for site-to-site connectivity.

3. Easy setup and installation for remote phone users.

4. Built in networking capabilities, such as DHCP, DNS, email, file and VoIP gateways.

5. Web based interface for setup, installation, monitoring and maintenance.

A keynote: If a manufacturer can’t demonstrate these features to you, on site, and within one session, they probably won’t “cut the mustard” in the real world. So, be on the lookout for multi-function devices to add to your arsenal of products.

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