Telecoms - CT phone home

Computer telephony has never been a great success, but with the latest technology making it feasible as well as practical, we should see it become the growth market for the future.

Computer telephony is the applications end of what used to be calledst technology making it feasible as well as practical, we should see it become the growth market for the future. CTI (computer telephony integration). But it now has its own UK exhibition (CT Expo running alongside Networks Telecom 98 at the NEC, Birmingham 23-25 June) and a refined sense of purpose.

Vendors believe their time is coming. The old standards wars, that have held back the emergence of a substantial CT market, are apparently over.

And the telecoms world needs some coherent computer telephony integration applied to many of its raw edges as the sheer volume of business communications threatens to overwhelm the ability of users to absorb it.

Telephony is laying claim to a leading role in an emerging IT convergence phase that will apply some much-needed automation and control into business communications processes.

CT platforms will enable unified messaging arrangements, where faxes, emails and voicemail all arrive at a single server to be accessed from a range of terminals. CT will also downscale call centre and sophisticated PBX technology down scale to small enterprises that cannot take advantage of proprietary solutions because of cost. It will be the basis of this IP telephony technology that will eventually merge the stubbornly separate voice and data networking worlds.

'CT is about applying intelligence to the telephone ... and making money,' according to CT guru Harry Newton, who will be keynote speaker at CT Expo UK.

According to Newton, the telephone, as we now use it, is a hindrance rather than a help in the money-making stakes. Plug in some open computing power, however, and the whole thing opens up. CT users and vendors get to ride a wave of exponentially increasing power and reducing cost (unheard of in the proprietary telecoms equipment world).

They also enjoy an open environment based on Wintel and a range of firm CT standards, enabling them to pick 'best of breed' components and platforms.

Best of all, the huge PC industry and its army of programmers and deep well of expertise come along for the ride, so new applications can be taken on as they emerge - a boon for both users and the industry trying to make a living in a fast-changing world.

It is a simple message for what Newton claims is a simple proposition.

So will the channel come along for the ride too, and what can it expect to get out of it?

Market analysts differ over the numbers but the trend is clear. The perception that organisations need to invest heavily in intelligent communications systems to keep their customers happy will see the European market for CT-based systems zoom from less than #100 million in 1995 to more than #1 billion by 2000, according to telecoms research consultancy Schema.

London-based Ovum, meanwhile, expects the combined European and US market to reach $6 billion by the same date.

This rising market has some prime opportunities, according to Ian Hunter, sales director of distributor MTV: 'It all depends on the way they sell the stuff. We have the Network Alchemy product, which is basically a 96-port router which can act as a voice switch and which you can also tie to a PC to give you voicemail and CTI applications. If you come in and say, here's a voice switch which can also do data routing and all these applications, then my dealers can make up to 70 per cent margin on it.'

The key, says Hunter, is how the pricing compares with equivalent PBX products. 'If you take a 96 port SDX Index (a popular small business PBX), it will cost #28,000, whereas we turn our product over to dealers for a few pounds over #10,000. Don't sell it as a router, otherwise you get trapped in comparative router pricing, sell it as a voice switch.'

With the right approach, adds Hunter, dealers can make margins they only dream about in the computer market: 'Quite often you're selling this product to a marketing manager, not an IT guy, so you can sell the benefit of all the customer care stuff and the applications can be preconfigured on our existing PC products to go with the box.'

Selling PC technology as a replacement for the proprietary PBX may be lucrative now, but the real value of the open technology kicks in when the platforms include more complex applications. Top of the list here is the call centre.

This is essentially an industrialised telephone system, since the application must involve a repetitive set of tasks (cold calling or taking orders or queries) and produce a measurable result (such as sales made and service queries dealt with). This is important because the 'measurable result' and its improvement is the basis of the sale. The call centre not only helps manage obvious things such as queuing calls for an available 'agent' and popping the appropriate customer record to the agent's screen once a call is put through, but can also measure the agents' individual and joint performance against the measurable result with Orwellian degrees of refinement.

For instance, the manager can see how much downtime each agent takes between calls; how long is being spent on average with each caller, what the call to sale ratio is and so on. The call centre manager can also listen in to what's being said. Obviously, this data is used as a basis for ongoing training and doesn't increase workplace stress levels in the slightest.

Call centres are big business in the UK as the service economy continues to boom and the humble telephone becomes an increasingly popular way to access retail therapy. At the top end of the scale, the huge call centres required by credit card companies or utilities will probably remain the province of specialist integrators, but small companies employing less than 25 agents are a growing sector of call centre business because of the parallel growth of companies that generate a proportion of their business over the telephone.

As the UK takes telecoms competition to heart, we can expect to see more cost-effective, freephone and premium number service offerings to up the tempo further.

The call centre concept is just one of the basic CT ingredients. Apply different software and you end up with variations to suit other niches.

A close cousin of the call centre is the helpdesk. Again, we have telephone-to-computer system integration for more efficient business processes.

Calls are routed to the right specialist, queries are ticketed and tracked and there is a measurable result where the system allows the manager to analyse and improve subsequent performance.

Don't be fooled by talk of an imminent explosion of e-commerce. In the UK, we're still only at the fledgling stage in telephone commerce, never mind its Web-enabled relative. Nevertheless, technology vendors like to show leading edge applications involving 'call me' buttons on Web servers.

The idea is that the internet-browsing customer does all the information gathering and product comparisons in his own time, but clicks on the 'call me' button to ask a few final questions and close the sale. At the customer end, the user enters his telephone number into a form. The form is then submitted to the call centre where an agent can not only call the customer, but also see which page is being read. The agent and customer discuss the transaction, the credit card number is exchanged and the sale is made.

The slight hitch here is that the customer may be using his only phone line to access the Web and is therefore out of reach for the call.

Enter internet telephony. US-based telecoms equipment vendor Lucent is currently showing a system that lets the customer download an IP telephony applet, enabling the agent and user to conduct a conversation via the internet.

In fact, internet or IP telephony is seen by many as the next big thing in the CT world, and proponents offer this sort of application as the way ahead. The idea started out as a ham radio application for the Web, allowing users with multimedia PCs to exchange poor-quality voice conversations while online. The past couple of years, however, have seen the technology refined and its prospects improve.

As a connectionless packet network, the internet does not naturally suit voice transmission because of the random delay experience by data packets on their journey. Further delay is inserted by the encoding and packing at each end of the link.

But as the internet has been scaled up, the transit delay has dropped for many routes.

Meanwhile, gateway technology has been refined. Rather than user software doing the codec, vendors have come up with dedicated gateways, accessible by conventional telephones at one end and converted back to conventional circuit format at the other, enabling the internet (or managed IP network) to be used as an alternative long-distance network. The same technology can be used by enterprises to add a private voice network to intranets.

There may be some way to go before these advanced applications become prime dealer territory. 'The PC channel is a potential area for us,' says Mark Purdom, European strategic marketing manager for access server specialist Ascend Communications. 'Now that IP telephony is a standards-based system, it makes it easier, but are they capable of this level of technical sell?

Some of the big ones are. But for the smaller guy it's a bit harder. This is still fairly technical stuff.'

But Purdom agrees that ISPs - Ascend's main customers - need routes to market. In the future, dealers might be one way.

One of the first applications for IP telephony technology was as a variant of the old voice-over-data. The leader in this market is Micom, now owned by Nortel, which produced a successful line of proprietary voice-over-data multiplexers in the early 1990s with its Marathon products. Micom was quick to seize on IP as the new bearer of its application and launched its VIP (voice-over-IP) technology early last year.

Another use of standard voice over the internet is being used by competitive telephony service providers to provide cheap calls, especially where the regulatory tangle provides an extra spur. In the US, for instance, internet telephony enjoys an exemption from the access charges a long-distance provider such as AT&T or MCI pays the local telephone company for each minute a customer uses its services to make a long-distance call. Internet telephony is carving a share for itself as a result.

The same dynamic is even more attractive in countries where the old incumbent telecoms operator has a monopoly. Here, service providers are using internet telephony to 'smuggle' conventional voice conversations out of the country at a fraction of the cost of a conventional call. In some cases, internet telephony is replacing the old call-back techniques that substituted low US international rates for high foreign rates, by switching the direction of a call so it appears to originate in the US.

Micom's recent foray into this toll bypass may be a pointer to future revenue streams in the European channel as competition heats up. Micom recently signed a deal where its distributors provide access equipment to connect customers to an alternative US-based international telephony provider called Justice. Micom's distributors sell and maintain the VIP gateways on the customer premises and take a slice of the call revenue.

Watch out for similar deals in the UK. If you require tickets for the Networks Telecom 98 and/or the Computer Telephony show, visit www.networks-telecom.com/www.ctexpo.co.uk or call 01203 426511/01203 426485. If you would like to attend the Computer Telephony seminar on 24 June, call Susan Burnell on 0171 316 9638.