Monday, July 07, 2008

Microsoft's Unified Communications Initiative: What's Up With That??

Vonage is struggling with debt. SunRocket collapsed outright. Now Jangl (VoIP to Mobile) is the first of (potentially many of) the Voice 2.0 firms to fall (granted these were / are consumer plays in the market). ebay and Skype didn't revolutionize the Telco Industry as once was predicted. Conversely, Jaxtr just secured another $10 Million in funding. there has been a lot of 'show' in this space over the past few years, and, not always a lot of 'substance.'

In light of these events (and others not mentioned) ..... how viable is Microsoft's Unified Communications (VoIP) Initiative?

Redmond's entrance into the market last year (partnering and competing with Cisco) clearly made some waves. Moreover, now supposedly more than ½ of Microsoft's partners are reselling, servicing or recommending Office Communications Server 2007.

Is there room for both Microsoft and Cisco to co-exist within this space? If so, is it possible that Microsoft will be able to lead in the SMB and/or Enterprise market with a unified communications solution? Or, will Redmond always be forced to play catch-up with Cisco? Finally, is there another looming VoIP play (Consumer or Enterprise) that is poised to sneak up on the industry independent of the segment?

My opinion??

True competition in the voice space won't exist until telco patents that maintain their monopoly status expire or are invalidated. Once this happens, competition can grow with little overhead and be able to integrate with other SIP networks and the existing POTS lines to create the last link in the unified communication space.

And for the communication to be truly unified, we will need to use open communication protocols, and avoid MS's attempts to embrace and extend, destroying competition and create just another monopoly player in the same space. Whether that means Google gets involved is yet to be seen.

First, VoIP covers a lot of space. Let's look at some:

There's the Internet Telephony Service Provider (ITSP) gang, like Vonage, Packet8, Skype, and a plethora of free services. Given the net-neutral position of the Internet, which effectively precludes using quality of service (QoS) over the public Internet, these services are doomed to offer marginal quality at best.

There are the Incumbent Local Exchange Carriers (ILEC). A decidedly USA-centric view of the world, I admit, but a valid model for much of the developed world. Just substitute "PTT" for "ILEC." As these firms deploy fiber throughout their networks, look for more VoIP services to the home and office directly from the central office (CO). For example Verizon, a local carrier, offers voice, video, and Internet (FiOS) using wave division multiplexing (WDM) and Metro Ethernet. Your internal phones are still traditional POTS devices, but Verizon could relatively easily convert your home (or a FiOS-connected business) to a VoIP endpoint and install IP-to-IP gateways to connect to other telcos.

But the big market Cisco is looking at, and where Microsoft is trying to compete, is in the Enterprise Telephony market. The connection to the public switched telephone network (PSTN) is still most often via a VoIP-to-POTS gateway. As more carriers convert their internal networks to VoIP, you'll see Enterprises connect via IP-to-IP gateways which are capable of support a variety of protocols, such as Cisco's SCCP ("Skinny"), H.323, SIP, and MGCP.

There was an adage in a USA Presidential campaign several years ago: "Follow the money." Keep in mind that no one is going to develop software for large-scale deployment that is entirely free. Asterisk may be free, but Digium still sells the hardware and G.729 codecs which provide the revenue to support continued Asterisk development. No one will sneak up on Cisco or Microsoft (or Avaya, Nortel, or Siemens, for that matter) without the sound of currency being disbursed.

To be really blunt though .... this is a tough question.

It seems that most of the "big guys" are offering the same thing which is a way to simplify communication and save some money. What is finally getting attention is the fact that most of us are not using our office/home phone as much but our cell phones since all our information is there (address, phone, email etc...) but the solutions to extend the UC out to the mobile are quite complex.

I certainly think Microsoft will quickly become a force to be reckoned with in Unified Communications. Here are a few reasons why....

* Think back 5 years ago and imagine asking the same question about Cisco. You could have posed the question "is there room for Cisco and Avaya/Nortel, etc... to co-exist in this space?" What organization could repeat the feat that Cisco pulled off?

* The whole industry is moving towards software-based functionality. Everything from Asterisk on down to Nortel's new SCS framework. In some ways you can say the telecom industry is moving towards Microsoft as much as they're entering this market.

* Channels...perhaps 1/2 of Microsoft's partners are reselling or otherwise involved with OCS. Whether that figure is correct or not, there are thousands (millions?) of MS partners out there. They've got an opportunity to get into telecom and add revenue streams. You can bet a large percentage of them will take it.

* End-users....No need to convince anyone about their installed base. Adding another piece of Microsoft software isn't exactly a daunting idea to propose to a business owner.

* Right now we still think of telephony as a separate domain from computing. What if they choose to build telephony into their products just like IE or Outlook/Exchange? How would that change the game?

Finally, I wouldn't overlook the fact that they're approaching this market from several different perspectives. Obviously there's OCS, but don't overlook Response Point, the SMB "key-like" system and even some of the Windows-based products that they could easily acquire (3CX and Objectworld for instance).

Here's some random thoughts and maybe wishful thinking .....

I would include VoIP in the Live package and get potential revenue out of ads.

I guess it would be a good idea to have some Microsoft cell phone that works with Wlan and that could be used as a normal cell phone or a VoIP device.

I would really like to have all that function on my PC, especially VoIP telephone service, Voice mail box, Video conferences and Faxes, besides the IM stuff. All in one poackage. One programme integrating all in one. Something like an Outlook + MSN + Xobni stuff + VoIP all in one package, where it would be okay to have some ads if you use MSN or VoIP services. . .

I would wish that for all plattforms, and cell phones and PDAs. A unique system. Even usuable on SymbianOS devices, or Palm Devices, and other devices that do not use WindowsPocket. And why not even on Linux? Something really "Unique" even if the code remains proprietary. (That's up to MSFT).

Alternatively, I would offer the whole package as a free download and establish a subscription service, and feature all the fax numbers, phone numbers, and voice mail services and infrastructure.

It is very hard really to penetrate a VoIP market where more and more players start in, and where some operate on a 'free' basis, for PC to PC services. I would really offer that free, and just charge the communications from PC to normal phone, and sell a MSFT VoIP cell phone (like the Skype phones) that were dual, VoIP and normal Tri-band cell phone and offer the same programme for really ALL plattforms, and I mean REALLY ALL, and offer synchronization.

Let the customer subscribe to special services as a fax or voice mail box, and keep the basic package free of charge. Finance VoIP Pc-to-pc by ads, just like MSN Messenger chat. Offer a whole package, like a super Outlook, that either you pay once for, and get all the basic services free, or get as a free download if you open a subscription.

Now .... what say you??

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