The take-up of converged voice and data systems has been slow, but vendors insist that it remains a major opportunity for the channel. How far have we really come with convergence, and who is ready to exploit its potential?
vnunet.com's sister publication Computer Reseller News (CRN) brought together resellers active in the voice and data market to make an up-to-date assessment of the situation.
Hugo Kirby, managing director, TRAMS.
Johnny Rollett, technical director, Unified Networks.
Mark Darvill, director of technology, Logical Networks.
Simon Hollister, director, Citadel Group.
Chris Knowles, practice leader networking, Computacenter.
Darren Boyce, managing director, Applinet.
Jason Bass, technical director, ISC Computers.
Phillip Mitchell, managing director, IntraLAN.
Simon Meredith chaired the debate.
CRN: Where are we right now with converged solutions? What are customers responding to?
Rollett: The climate has changed since (last) September. The big buzzwords are ROI (return on investment) and resilience.
Darvill: We're seeing fairly good take-up now. Part of it is cost reduction but, if you go in purely on the speeds and feeds and the ROI on the tin, then I think you are going to struggle. A lot of it comes down to taking more of a holistic approach towards efficiency, and combining that with applications around the IP telephony framework.
Boyce: The market has been suppressed in some respects since 11 September, but a lot of it is down to resellers like ourselves taking the message to the customer and trying to educate the customer. The vendors have made a mistake in trying to attack VoIP (voice over IP) at the SME (small to medium sized enterprise) end.
Hollister: It was over-exposed too early. People are saying: 'Yes, it's great, but no one is adopting it.' We had a peak a couple of years back, and people are now starting to see it as a serious business. But we are the people driving it now.
Rollett: But we have not seen any evolution. The same issues are still being talked about and the same problems are being brought up by the same customers, or potential customers.
Darvill: If you look at it purely in terms of IP telephony, the customers do not see the benefit as easily. You have to start looking at convergence in a bigger way: as a mixture of applications, IP telephony, mobility, convergence, and public and private networks.
Hollister: If you think about it, the costs of calls have come down dramatically as well, so the high-cost issue has disappeared.
Knowles: That's right. A few years ago the ROI was much clearer and much easier to define than it is now, but the technology wasn't right. Now the technology is right and a lot of companies have already been through the pain of downsizing. Therefore a lot of the cost reductions that convergence was supposed to drive have been driven by other factors, so it is difficult to justify on those reasons alone.
Hollister: Let's be honest: everyone here has a client who is looking into VoIP. They have been to a seminar, they have read about it and it is on the horizon, but how many people are seriously committing to it? Out of 100 clients you've probably only got five or 10 who are making a commitment to it.
Boyce: Yes, but what we are seeing is the decisions being made, and it is the data guys that you are dealing with now. They are asking the questions.
Hollister: There are still the two camps: the telecoms and the networking guys.
Boyce: There is a cultural issue. You can get the data guys to look at embracing the voice that you talk about as an application and get your technical guys in there and involved. You can't get the voice guys involved quite so easily. They tend to be a bit more stand-offish.
CRN: So cost is coming down. There must be a lot of larger organisations saying: 'Come-on, this makes sense now.'
Hollister: But the large organisations are the ones that are slashing the budgets. The mid-tier companies are the ones that have a bit of cash.
Bass: Having just done the Cisco accreditation, it is quite interesting because telephony is the area everyone is interested in. We recently went to a distributor seminar on telephony and out of 16 people there were about four from comms companies; the rest were from data.
CRN: Do we need more buy-in from the comms side?
Boyce: We all want that wave of the early 1990s again. Back then it was pretty much as it is now: very, very slow, and it was a very tough market. But all of a sudden, in 1994-1995, we were on the crest of a wave. People were making a lot of money. But we are looking for that next wave. We have heard of FDDI, then ATM as being the next big things. Now we are on to VoIP as the next big wave that we have to get ourselves onto.
Kirby: But neither of those happened.
Boyce: That goes back to the vendors pushing it out too early.
Mitchell: I think what has happened is that, in the traditional voice camp, people have not had the skills set in data and are now having to do the hard work to move towards more complex environments, so they have stalled.
Meanwhile, on the data side, we have been so busy getting on with the data life that we haven't exactly wanted to drill down to the voice. Some of the momentum has been lost on the data side. I'm just wondering if it is not a technology reverse psychology that has stopped that from actually happening.
Kirby: The market is also structured in a completely different way. People don't go out and buy a new server once a year in the telephony market.
They buy a switch every seven to 10 years. It is a major capital outlay on a relatively rare basis. It is completely different to the way we're dealing with most of our customers, which upgrade their servers every one to two years. There is a fairly standard cycle that the finance and the IT director all completely understand.
Mess with my phone system - that's a big difference, and it is as much of a psychological gap for us as for the telephony guys and the customers. It is a very risk-averse area.
Boyce: You get conversations where people worry about emergency calls, collision in the division network and so on. The technology is changing those things and allowing us to build in resilience but, at the end of the day, a lot of fear still gets back into the marketplace.
No-one is going to make it in this business by selling PBXs or soft PBXs; we are going to make it by making applications work, and that is really where the integration skills come in. That is something that we are seeing more and more now. It is about the application.
Knowles: And I think that is where we, as data companies, are making inroads, because we have the ability to see that voice is an application running over a network infrastructure.
The voice people are still saying that voice is separate and not an application that can be transferred elsewhere. I think that is why we are seeing the lead coming from data companies and not from voice companies.
Boyce: It is still being aimed at the bigger companies, and they are still looking at the bigger carrier firms to bring it to market, when in fact those companies have had their peak and in some respects they have been hit harder than anybody. It is the smaller companies that are going to take innovation through, and that is something I think that all the manufacturers need to look at now.
Hollister: Realistically, what we are talking about is IP, and our customers in the City rely on IP to trade. If they are confident enough to do that then why can't they embrace telephony over IP? But it is such a difficult decision to make because you have a telephone, you pick it up and it works. How often does your telephone not work?
CRN: So it's just risk-aversion stopping them?
Hollister: It is lack of education, and the vendors pushing it too early. They did not allow the platform time to grow.
Darvill: We are talking about data vendors here though. Funnily enough, the telephony vendors didn't push it too early. Telephony vendors brought it in quietly.
Boyce: But I would say that they still do not freely want you to do it.
Kirby: And the data guys would tell you that all the traditional telephony vendors are not yet IP telephony-compliant and that they are all paying lip service to that.
Darvill: But that's not completely true because, if we look at Mitel and Alcatel, they are 100 per cent IP. They are both declaring themselves as application houses rather than pure telephony and soft PBX providers.
Boyce: Resellers are not the only ones that have to make those changes. The vendors have to change the way that they do business with people, and that's where I think the biggest challenge is going to be for those guys. Voice will become a part of the infrastructure, but some vendors are still reluctant to let you get at it.
Kirby: There's a third element to all this. We are designing a large metropolitan area network for a property company and we've put together 20 sites and thousands of handsets, and what do we have to do? We have to go back onto analogue, onto PSTN (public switched telephone network). No carrier will yet take an IP feed unless you're a fully certified System 7 telco.
Knowles: We've found certain companies offer IP VPN (virtual private network) services where they can give you guaranteed quality of service (QoS) between two sites. But they are not prepared to let you connect your two local area networks and offer an end-to-end service on the VPN, even though we can guarantee QoS to the same standards they use. They are not playing ball and, if you are not careful, they start talking to the customers about providing exactly that kind of service.
Hollister: The one thing that the carrier has got is the lines. When the carriers go in to talk about lines they don't focus on putting in a soft PBX, they say: 'What are you going to do with the lines?' and start to change the ball park because that's where they play well. We attack the business issues: the economies around efficiencies and applications.
Rollett: Anybody who is not looking at the market from a business point of view is making a mistake. If you go back 10 years, you could sell tin and it was easy. Now there has to be a strong justification. It is driven by business applications.
CRN: Is this a specialist market or is voice just another application on the network?
Darvill: It depends how you attack it. It is a very specialised market if you look at it in depth. If you look at the specialist applications around the IP telephony core, you have to work on business models and business processes and linking those applications into processes. If you look at those areas, yes it is quite complex.
You also have to remember in the early days IP telephony was sold as a wholesale swap-out. That's not how it's working. A lot of installations we are doing have to integrate with existing PBX infrastructures, and that's complex. I see new consolidation in the marketplace here.
Knowles: I can see more of the voice suppliers struggling to pick up skills in IP rather more than we will struggle to pick up skills in voice.
Hollister: The opportunity is huge but it has to be addressed in the right way. Everyone needs to be re-educated on the costs and the business benefits.
Knowles: Anybody who has invested in the last two to three years is still looking at a forklift upgrade of their complete network infrastructure. A lot of customers that bought their network equipment on a three- to five-year life-cycle basis won't be looking to upgrade until 2003 and 2004. That's when I think you will see the big explosion.
Mitchell: As time goes by and the cycle is coming around different people are beginning to look at it. I think it is unlikely that somebody who installed a PBX two years ago will strip it out and start again, but they would with a server.
Darvill: No, but what you will see is pockets of IP telephony building around the PBX.
Rollett: Most people don't realise that a lot of hardware they have invested in over the past two or three years can carry that mixed media traffic. We are starting to see a lot of technology enablers that allow people to upgrade to a new voice system and not get left behind. There are new technologies that we can take advantage of in the future that will handle VoIP exclusively.
Boyce: It is not data, and the vendors have to understand that. I think they are coming round to a cultural change and looking at the way they differentiate their channels for the end user. They have been asking customers the questions they should have been asking five years ago, and for us that is obviously helpful.
Applinet (01635) 848 900
Citadel Group (020) 7618 6418
Computacenter (020) 7620 2222
ISC Computers (01480) 420 000
IntraLAN (020) 8401 7000
Logical Networks (01753) 696 69
TRAMS (020) 7544 1200
Unified Networks (0118) 982 1700
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