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 Channel Futures

Telephony/UC/Collaboration


Vendors Dish Up Unified Communications for Service Providers

  • Written by Tara
  • April 30, 2001

Posted: 05/2001

Vendors Dish Up Unified Communications for
Service Providers
By Tara Seals

Unified communications (UC) is finally causing a stir, expanding unified
messaging’s voice mail, e-mail and fax consolidation into a bouillabaisse of
voice and Internet convergence, attempting to integrate data and voice needs
from every network, protocol, media and device into one central multimedia
repository. UC platform vendors now incorporate virtual address books, web
portal content, conferencing and voice recognition software, with even greater
capabilities on the horizon.

Vendors are targeting companies such as ISPs, ILECs and CLECs, wireless
carriers and traditional telcos with these broad, everything-to-everyone
propositions. Analysts say the market is poised to take off, and the benefits
and marketing niches for service providers are myriad. But savvy service
providers should look at more than the statistics before selecting a platform.

The Market

A February IDC (www.idc.com) report says the
number of unified mailboxes will increase from 1 million in 1999 to 38 million
in 2004, causing vendors’ revenues to jump from $132 million to $2 billion. The
demand, says IDC, will come largely from North America. Ovum Ltd. (www.ovum.com)
predicts generation of $31 billion in revenue for service providers by 2007, but
warns the "high-growth phase" is still a year away.

"I think that’s going to be our responsibility to educate the market,
which is still obviously in an infancy stage, to get them used to unified
communications," says Bryan Seastead, strategic development manager of
CANBOX Systems AG (www.canbox.com), a global
provider of UC solutions. "But I can tell you the market is picking up
significantly. This is really starting to happen in 2001. It’s not as embryonic
as it once was, and once we see a major player adopt it, the market will take
off.

"But it’s going to take the dollars, the advertising dollars, to invest
in educating the marketplace. Then you’ll see that user adoption rate go
up."

Global Crossing Ltd. (www.globalcrossing.com)
and Sprint Canada Inc. (www.sprintcanada.ca)
implemented UC this year. Global Crossing contracted for eGIX Inc.’s (www.egix.com)
Instant Communications by eGIX (ICE). Sprint Canada implemented Centrinity
Inc.’s (www.centrinity.com) FirstClass
UC technology to service more than 120,000 business customers.

"Centrinity’s unified communications solution allows service providers
like Sprint Canada to leverage their customer base, brand and network
infrastructure by offering a high value-added service that provides the
opportunity to increase revenue and profitability, and attract and retain
subscribers," says Myles McGovern, Centrinity’s president and CEO.

Demand may well be increasing. Rakesh Agrawal, director of product
development at uReach.com Inc. (www.ureach.com),
says that while the company’s core customers are carriers and service providers,
it has launched a "showcase" website to gauge end-user reactions to UC.
Agrawal says 1,000 people signed up for the service without any direct
marketing.

In March, uReach began a subscription offering to test potential price
points.

"The site is a living laboratory where we test out new features and so
on," says Agrawal. "We launched the subscription services March 15,
and it was well beyond our wildest expectations."

Another positive indicator, according to Howard Aiken, head of interactive
services for InterVoice-Brite Inc.’s  (www.intervoicebrite.com)
just-released Omvia suite of products, is that users have reached the saturation
point in dealing with multiple networks.

"Now everyone has multiple phones, and we’re all now users of multiple
networks–fixed, Internet, cable, satellite," he explains. "If we’re
not to go crazy with the different message stacks that arrive for us on these
networks, we have to have available some kind of tool for bringing them
together."

Even as everything evolves to IP, the terminals attached to those networks
will support increasingly variegated capabilities and types of messages, Aiken
adds.

Benefits and Applications for Service Providers

Service providers can win not only by gaining incremental revenues, but also
by offering differentiated services and increasing customers’ incentives to stay
with their SP, experts say. Moreover, a reluctance–and lack of capital–to
expand infrastructure has led providers to embrace value-added services such as
UC as revenue generators requiring little investment.

"You need applications, and you need users to drive the revenue [and]
make the return on [existing] investment," says Seastead. "As the
Nasdaq has crashed, our business has picked up, because people that have
networks are starved for applications."

Ovum senior analyst John Delaney concurs. "As the number of unified
messaging subscribers continues to increase, service providers should use UM/UC
to bolster their business models," he says.

Driving additional up-sell or cross-sell revenue through UC directly benefits
a service provider’s bottom line, says Agrawal. uReach, for example, is
targeting broadband carriers seeking voice over broadband.

"It’s a way to glue together data they’re already providing with the
voice they’re looking to provide," explains Agrawal.

In a twist, Tornado Development Inc. (www.tornadodevelopment.com)
product manager Duke Fonner says UC’s flexibility and ability to "slice and
dice" the service offerings lets providers up-sell and cross-sell depending
on core competencies, without having to market unfamiliar services.

"Wireless providers already have a million or two voice mail subscribers
… and they want to leverage those subscribers from something they’re used
to," he explains. "You can have a voice mail customer and offer him
only voice mail from the web, so fax and e-mail would be transparent; it
wouldn’t even be marketed to them."

Service provider PlanetOne Inc. (www.planet1comm.com)
launched its OneCall unified solution in March. CEO Ted Schuman remarks, "I
firmly believe that within the next 24 to 36 months, you’ll see UC go mainstream
in the business world. The benefits are overwhelming, and they’re offered at
affordable prices to the consumer while the provider can maintain a respectable
margin marketing UC."

The Future

Seastead expects video, instant messaging with replies, and a closer
relationship between telcos and UC providers to emerge soon.

"So you can pretty much imagine anything. I like the idea of instant
message coming in on my wireless device and being able to respond with a voice
mail," he says.

"The big goal in 16 to 18 months is to Internet-enable the telcos so
their users have a much wider gamut of services," he adds.

German-originated CANBOX since 1998 has added short message service (SMS)
notification, conference calling, reminder calls, electronic-to-postal mail,
calendars, an address book and a contact list to UM.

The platform is one of the only global UC options around, with data centers
in Asia, Europe and North America. The company believes its global wireless
features will be a lucrative market differentiator, like SMS messaging–the main
part of its revenue in Europe.

"So now you have the option of bringing SMS technology to the U.S.,
which should have an exponential growth rate just like Europe," Seastead
says. "It is a PC-to-phone text message, right from the platform, imported
through PCS, globally originated and U.S.-terminated."

By the third quarter, CANBOX will offer a Palm OS option. Palm Inc. (www.palm.com),
in return, will be able to market a global unified service.

Another PDA support move was made by uReach in February. Agrawal notes that
3G wireless services will change UC significantly.

"We’re looking forward to adding things like being able to hear messages
over a wireless device," he says. "Right now, most of the wireless
devices don’t support sound, so we can’t play voice mail over the Palm, and we
can’t show you a fax clearly over wireless."

If users are in a wireless application protocol (WAP) session and see a voice
mail message, they must terminate the data session and create a voice session to
play the message. Once 3G hits, all message manipulation will take place in a
single session.

Webley Systems Inc. (www.webley.com) has
a vision to replace local dial tone with its UC proposition, giving providers an
opportunity to bypass the LEC for local services. An always-on IP connection to
a SIP phone gives users a "What would you like to do?" prompt when
they pick up the handset. Users speak the commands, such as "Call Frank
Thomas," "Set up a conference call," "Transfer my calls to
my cell phone and office phone" or "Business News."

What Service Providers Should Consider in a Platform

The possibilities and opportunities may be mind-boggling, but a provider
should look at several key factors before rushing into a platform.

"In the past decade, unified messaging products on the market have not
provided the scalability, reliability or functionality required by
carriers," says Scott Welch, chief evangelist at Centrinity. "However,
[Centrinity’s] FirstClass unified communications provides the robust
functionality service providers need to justify the value-added service to their
business customers."

In addition to scalability and reliability, service providers have other
evaluation criteria to consider when selecting a UC platform.

For example, a unified, rather than integrated, platform could be important.

"There are two different approaches to the core task of data
storage," Agrawal explains. "A number of the providers do a front-end
integration of e-mail, voice mail, fax, and at the user-interface layer they
bring together the different elements and present them to the user. The other
approach is to have one unified store that contains all that information, so all
your messages and files are in one spot."

The key advantages to a unified platform are a better user interface, because
it is not pieced together, and synchronization across all devices and media.
Also, the more complicated the platform, the more inefficient and costly it will
be to maintain and scale.

Bob Thompson, MemberCall’s (www.membercall.com)
president, says service providers should look at the whole picture when
implementing UC products, such as his FasTrack Pro.

"Service providers today should know they have several options," he
says.

"Those range anywhere from purchasing UC hardware and software from high
end vendors such as Cisco and Nortel for significant capital investment, to
internally writing an integrated UC software solution that could take years of
development, to finally implementing a UC managed service solution that has them
in the UC business overnight with little to no capital expenditure."

MemberCall, with its technology partner Intelogistics (www.intelogistics.net),
offers an outsource solution. In addition to getting a cost-effective,
"overnight implementation, Thompson explains SPs avoid maintenance and
upgrade costs (including staff requirements) in a managed environment, along
with billing and other back-office concerns.

MemberCall also provides value-added marketing services.

"We believe that the UC implementation process only completes part of
the sales effort," says Thompson. "The real challenge is to work with
the service provider to share with them valuable hands on UC marketing
experience (if they want it) that will really jump start their UC
offering."

Thompson suggests that marketing gear-up include a test drive of the solution
and due diligence on the vendor before selecting, and education in the market,
features and systems integration requirements of the product in order to
determine cost per subscriber and return on investment.

Many providers start off with an outsourced solution as a market trial phase,
moving to network deployment as response is generated.

"They don’t want to put down several million dollars and hope that it
works," says Agrawal. "However, when you get into a large-scale
deployment of millions or hundreds of thousands of mailboxes, a license solution
makes a lot more sense financially."

A future-proof and presently interoperable solution also is key. As all those
new devices and more packetized networks are deployed, a UC platform should be
flexible enough to accommodate the changes without extensive overhauling.

It also should handle existing infrastructure easily.

"If you just look at the wireless space, there are all kinds of
different protocols and devices, and every time you pick a service you have to
spend money and time in development," says Fonner. "You have to add
services quickly and at low cost, and coexist with my networks today–the IP
world, PSTN, wireless and VoIP networks."

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