Imagine a new secure P2P (Skype like) offer that also supported SIP in the client. You could use the client software on it’s own (just like Skype) or attach it to just about any VoIP service or phone system for free.
Does it make sense for consumers?
Does it make sense for business users?
Is there room in the market?
Would you use it?
Martyn Davies chimes in…
I would use it, but as a telecom industry insider, I know that I’m not the average business user or consumer. As to whether there is room in the market, I think that depends a lot on what Microsoft do with Skype now that they own it. From a business point-of-view, their efforts are focused around OCS/Lync (and software licenses), so Skype there is not adding to their central proposition. Skype has a lot of users, but produces very little revenue, since the majority just use the free services. As a Skype competitor you would have the same problems getting to the cash.
Skype was really the first company to take VoIP and make it completely trivial to install and use. To do that, they had to take some liberties and deviate from standards (like SIP), so that they could add the magic that made it work from behind firewalls, add security and self-configuration, and integrate video so seamlessly. Like Facebook, once it is clearly the biggest of its kind of services, it becomes the community that everyone must join. I can’t see that another Skype-alike has a way in, unless Microsoft significantly change the rules now.
It looks like the first victim in the Microsoft acquisition of Skype is Digium and the open source PBX – Asterisk. The following is an email sent to existing Skype for Asterisk users…
Skype for Asterisk will not be available for sale or activation after July 26, 2011.
Skype for Asterisk was developed by Digium in cooperation with Skype. It includes proprietary software from Skype that allows Asterisk to join the Skype network as a native client. Skype has decided not to renew the agreement that permits us to package this proprietary software. Therefore Skype for Asterisk sales and activations will cease on July 26, 2011.
This change should not affect any existing users of Skype for Asterisk. Representatives of Skype have assured us that they will continue to support and maintain the Skype for Asterisk software for a period of two years thereafter, as specified in the agreement with Digium. We expect that users of Skype for Asterisk will be able to continue using their Asterisk systems on the Skype network until at least July 26, 2013. Skype may extend this at their discretion.
Skype for Asterisk remains for sale and activation until July 26, 2011. Please complete any purchases and activations before that date.
Thank you for your business.
Digium Product Management
One has to wonder what will become of Skype Connect, Skype’s answer to SIP Trunking. Will Microsoft shut off the Skype Connect vendors (Cisco, Avaya, Grandstream, etc.) as well?
Original forum post here.
Well, maybe the PBX term is dead. Maybe, going forward, we will be referring to the platforms delivering PBX functionality as “communications systems” or “UC solutions” or something else. But it is just funny how industry pundits frequently seek a sensational effect by using strong terms like “death” and “extinction” to refer to certain aspects of technology evolution. The reality is – market trends take a long time to mature and legacy technologies just don’t disappear over night. We were quick to “bury” the TDM PBX some ten years ago, but TDM line shipments, lo and behold, account for an impressive 25% of total line shipments today.
I was reading my colleague Alaa Saayed’s upcoming study World Enterprise Telephony Platform and Endpoint Markets and the following excerpt made me smile so I thought I would share it here.
•Just like in 2009 many observers prematurely pronounced the death of IP desktop phones, today, the same group of people is predicting the impending death of premises-based telephony platforms.
•Our findings show that the premises-based telephony platform market is still very much alive and displaying sizeable growth rates in terms of both shipments and revenue across the world.
•Although Frost & Sullivan recognizes the relentless advancements in communication technologies that are, today, allowing businesses to choose from multiple deployment and architectural options for enterprise telephony, including hosted and cloud-based technologies, premises-based solutions are still the most popular and dominant type of architecture among businesses of all sizes and verticals. The unfamiliarity with other technologies, the uncertainty about the benefits offered by the new delivery models, and the potential risks associated with decommissioning and/or replacing existing solutions are some of the main reasons why businesses continue to choose premises-based systems.
•Instead of the death of the premises-based telephony platform market, Frost & Sullivan prefers to talk about the death of the “PBX” terminology and the continuous transformation of communications architectures. In fact, since the introduction of enterprise IP telephony technologies around a decade ago, the traditional PBX platform has been completely re-designed, enhanced and re-purposed for the ultimate benefit of the customer. The multiple “boxes” required to support an enterprise-grade communications architecture in the past have been condensed into a smaller number of multi-purpose servers. The market has shifted from hardware-centric solutions to software-based, application-centric solutions. The call-control component of the PBX (practically, the heart of the PBX) has been extracted, in many cases, and modified into a software application that can run on any third-party standard servers or treated as a virtualized application in a virtualized data-center environment. Finally, the IP PBX functionality is increasingly becoming just one of several applications in a comprehensive unified communications solution/bundle.
•While all these technological advancements have certainly transformed the communications marketplace, from large, isolated, proprietary cabinets to easily distributable low-cost, space-efficient, rack-mountable chassis equipment (servers for call control and media gateways for port interfaces), this evolution should not be misconstrued as the death of enterprise premises-based telephony.
The study will be published within the next few weeks on Frost & Sullivan’s Enterprise Communications portal.
Siemens Enterprise Communications has launched a new cloud communications solution. Leveraging SIP, open standards and its highly scalable softswitch-based OpenScape suite, it is looking to provide partners and customers with more flexible deployment options. The cloud solution includes virtualized, multi-tenant versions of Siemens’ OpenScape Voice, OpenScape UC and OpenScape Web Collaboration software, hosted in four geo-redundant data centers. The service features top-notch availability, survivability, governance and data privacy features, including:
- Highest availability, TIA-942 class data center, voice redundancy, secure endpoints
- Edge survivability option, local trunking, IPSec VPN, local firewalls, SBC and media server
- Multi-tier role-based access management, automated management and provisioning, application-level data center protection
- End-to-end encryption in the cloud, local country data storage, multitenant capability, data protection audits
Cloud-based voice and UC services will be available only through partners, who will handle customer needs assessment, CPE installation, billing, 1st and 2nd level tech support and ongoing equipment maintenance. The service will be first launched in the U.S., Germany and the Netherlands. Initial partners include Black Box in the U.S., mr.net and Telefonbau Schneider in Germany, and Televersal, ICT Trends Group and onecentral in the Netherlands.
The cloud solution is considered optimal for organizations with about 350 to 1,000 users, with a need for highly packaged, tightly integrated solutions. Users can choose from a variety of features and capabilities grouped in Base Packs and Booster Packs. The estimated end-user list pricing ranges between $5 and $30 per seat per month, based on required functionality.
What I like about this announcement:
Siemens has finally launched a cloud solution – something it started exploring about two years ago by demonstrating a proof of concept with Amazon’s EC infrastructure. With the incredible (I think, almost unreasonable) amount of hype surrounding cloud technologies and the cloud business model, it was about time for Siemens to finally bring this effort to fruition. I have to agree that there is a group of customers out there that would indeed appreciate the opportunity to outsource its communications infrastructure to avoid CAPEX, focus on core competencies or gain access to superior technologies and expertise. This customer segment would remain out of reach for Siemens, unless it finds an appropriate role for itself in the hosted/cloud-based communications marketplace.
It should be noted that Siemens has had a multi-tenant voice platform for years and some service providers such as Postrack and Engage have been using it to deliver services to end users just like others use BroadSoft’s or Metaswitch’s platforms. Other vendors such as Alcatel-Lucent, Cisco and Mitel have also deployed multi-tenant communication managers with service provider partners.
The new approach has significant advantages, however. It gives Siemens continued control over the platform and its capabilities. But more importantly, it empowers partners that cannot or do not wish to manage their own data centers to deliver services using Siemens’ feature-rich and highly scalable platform. Siemens allows partners to use its brand, co-market or white label their cloud services. This is an opportunity for them to gain differentiation as well as new recurring revenue streams. This model provides a fast and economical entry point for small MSPs and VARs to become hosted service providers. It is noteworthy that Siemens announces the new solution along with six partners already lined up.
Issues that Siemens will need to address:
Siemens is not alone in this market. Other telephony vendors are experimenting with new delivery models as well. For example, Mitel offers the Mitel Anywhere service, which it sells directly to business customers. Now it is exploring opportunities with data center providers such as Host.net and Hosting.com, which can host the platform on behalf of small MSPs and VARs. Siemens and other vendors will need to find ways to differentiate or be fast to market with the right partnerships while the market is still nascent and untapped.
More importantly, this new delivery model is still unproven and it is not clear how all market participants in the value chain will reposition themselves for competition in the evolving marketplace. Will the MSPs and VARs be successful in penetrating the CPE customer base? Will the vendors be able to successfully manage their channels to ensure customer satisfaction and optimal benefits from the cloud services? How will carriers be involved to ensure proper bandwidth and QoS management – critical elements for real-time communications services delivered over the WAN? Who will manage the carrier relationship? How will the hosted IP PBX and UC solutions be aligned with SIP trunking and IP VPN services to provide superior benefits to multi-site organizations?
The Hosted IP Communications Market
I am currently updating Frost & Sullivan’s North American Hosted IP Telephony and UC Services study. This is one of my favorite enterprise communications markets and I have tracked it closely over the past nine years. To many that may sound unbelievable as hosted IP PBX and UC services have only recently gained popularity, boosted by the cloud hype.
Over the years, hosted communications services have evolved and matured – both on the platform/technology side and the business model side. BroadSoft has gobbled up two of its original competitors – VocalData (aka Tekelec, aka GenBand) and Sylantro; softswitch vendors such as Sonus and Metaswitch have more aggressively pursued feature-rich services; Nortel’s carrier group has been acquired by GenBand; and a host of PBX vendors have launched various hosted/cloud platforms. Fortunately for these vendors, service providers are becoming increasingly interested in hosted IP communications as traditional voice loses ground to mobile and consumer PC-based communications. On the demand side, economic factors coupled with greater awareness of the benefits of hosted communications are making enterprise decision makers more open to discussing outsourcing alternatives.
I will delve deeper into market trends, market size and competitive factors when I complete my research. In this article, I would like to focus on Mitel and its portfolio of hosted solutions. As always, Mitel is at the forefront of technology development, but this time also venturing with some new delivery models.
For about a year now, Mitel has been offering a multi-tenant platform – the Multi-Instance Communications Director (MICD). This solution is targeted at service providers looking to brand their own hosted IP communications services and provide all billing and management support. MICD is a high-density platform that competes directly with the more “traditional” hosted IP telephony platforms (such as BroadSoft’s) and appears best suited for SMBs looking for standard PBX functionality, along with voicemail, twinning and basic conferencing. Its architecture makes it more flexible than most other hosted platforms, however, enabling service providers to deliver more distinct sets of capabilities to each customer, resembling single-tenant hosted PBX implementations.
MICD has so far found appeal with CLECs, traditional VARs, as well as for in-building multi-tenant deployments. Service providers can purchase either perpetual licenses or a licensing subscription. Mitel claims about 15 service provider customers globally.
Mitel has been one of the first communications vendors to offer a virtualized solution – Virtual Mitel Communications Director (MCD). It is available to service providers looking to target a slightly different customer base – typically larger businesses with hybrid (hosted and premises-based) environments. Distributed organizations typically have different needs across their geographically dispersed sites. While larger locations favor premises-based implementations, smaller remote sites are more suited for hosted services. Virtual MCD allows service providers to deliver highly customized communications solutions to businesses that require integrations with premises-based platforms and databases. For service providers, the virtual MCD architecture is comparable to MICD in terms of implementation and management costs. It is less scalable, but delivers some superior features and functionalities, such as virtualized contact center, web conferencing and UC capabilities.
Virtual MCD has been commercially available for approximately one year and, to date, Mitel has mostly marketed it, directly and through its channel, to the traditional CPE base. More recently, it has enabled hosted providers to also take advantage of this cloud-based offering. Resellers can use this solution to generate additional revenues and differentiate, leveraging their existing customer relationships, knowledge of customer CPE infrastructure and close familiarity with Mitel’s portfolio.
For a little over two months now, Mitel has been offering yet another hosted alternative – Mitel Anywhere. With this solution, Mitel steps in as the communications service provider hosting the MICD platform in its own data center. Mitel recognizes that, while demand for hosted communications is growing, a lot of the service providers are not equipped to host advanced communications infrastructures. Mitel has identified the SMB customer segment up to 100 users as the sweet spot for Mitel Anywhere services. It can, however, meet the demand of larger, distributed organizations using Virtual MCD.
Mitel plans to add some advanced capabilities such as contact center ACD to its suite of messaging and audio and web conferencing apps currently available on the platform. Eventually, the full Unified Communicator Advanced capabilities are likely to become part of the offering.
Datacenter Accreditation for Cloud-based Communications Services
On February 7th, Mitel announced a new initiative. The Virtualized Datacenter Accreditation program is targeted at datacenters, and Platform-as-a-Service (PaaS), and Infrastructure-as-a-Service (IaaS) providers. The program is intended to certify partners’ infrastructure capabilities required to support Mitel voice and UC applications. Mitel announced three certified IaaS providers: Artisan Infrastructure, Host.net, and Hosting.com, who intend to support or offer hosted voice and UC solutions to the market in the coming months based on Mitel cloud-ready software.
Mitel acknowledges that there are many partners who wish to be between an agent and a service provider. They have the capabilities to interface directly with end users and design and market hosted communications to them, but are not well equipped to manage a datacenter or a sophisticated communications platform with the required billing and management infrastructure and processes. By enabling IaaS and PaaS providers to deliver the appropriate infrastructure to VARs and managed services providers (MSPs), Mitel effectively creates a new business model that leverages the specific skills and capabilities of different providers to extend the reach of advanced communications to a larger number of market participants.
The value chain in the communications marketplace is likely to disintegrate further as vendors and service providers choose whether to develop technologies, manage datacenter infrastructure and/or communications platforms (now increasingly part of virtual datacenter environments), or specialize in marketing, sales and customer relationship management. New business models will emerge and market participants will have to find the formula that best works for them.
Mitel has been fast to market with its hosted/cloud initiatives and is now offering some appealing deployment options to its partners and business customers. It is likely to face competition from other carrier and traditionally CPE vendors pursuing similar strategies. For example, BroadSoft has a cloud service delivered out of its own datacenter in beta trials and claims overwhelming interest from the service provider community. Microsoft is likley to launch a multi-tenant VoIP capability on its Lync platform in the future, even though it has so far declined to support service providers in customizing Lync for hosted voice. Alcatel-Lucent, Cisco and Siemens are developing technologies and strategies for the cloud market as well. As the market evolves, functionality, partner relationships and financial viability will represent key success factors.
I know I have dedicated quite a bit of blog space to discussing cloud and hosted communications. I have also, however, pointed out that premises-based solutions will continue to dominate the market for a long time to come. Growth in this market will be driven primarily by the replacement of the installed TDM base with advanced IP telephony solutions.
Multiple trends are converging to drive further penetration of IP telephony into the business market. The technology has matured, and concerns over voice quality related to jitter, echo, and packet loss are rapidly dissolving. Moreover, high definition (HD) voice is now promising to give end users a superior experience compared with TDM communications. Furthermore, the cost of advanced IP telephony solutions (including platforms, endpoints, and media gateways) is continuously declining, making them an appealing investment even for the more cost-conscious customers. The available pool of professional and managed services expertise is also continuously expanding, driving down the cost of IP telephony implementation and support. Finally, SIP is quickly becoming the de-facto standard for voice communications, and its wider adoption is enabling businesses to take advantage of IP telephony’s full array of communications benefits.
The above chart shows the evolution of convergence technologies and their value to businesses over time. Over the past 10 years, IP telephony has evolved and asserted itself as the communications foundation of the future. Today, we are at a juncture where customers have acknowledged the value of network convergence and are rapidly deploying IP telephony. We are estimating that about half of all business telephony users are on IP or converged systems, though only about 30% use IP endpoints. It is important to note, however, that convergence is a gradual, stepped process for most organizations even today. Most start small and then look to grow bigger by adding more capabilities, more sites, etc.
As UC technologies mature and decision makers become more aware of the benefits of UC, forward-looking businesses are beginning to transition to the next stage of convergence – that of application integration. Yet, it will be at least 3 to 4 years before UC becomes truly mainstream and more businesses integrate communications into business processes. For customers to transition to that final stage and realize the strategic benefits of communications-enabled business processes (CEBP), technologies need to mature further and become more exposed to the larger developer community so they can develop specific applications for specific uses.
My colleague Alaa Saayed just completed our World Enterprise Telephony Platforms and Endpoints research and here below are some of his findings.
The year 2009 can be defined as a very challenging, yet interesting year, characterized by landmark events and trends that will have a long-term impact on both technology evolution and competitive dynamics. On the negative side, 2009 was marked by worsened macroeconomic conditions, rising unemployment rates and a significant reduction of technology investments. Not only did the economic turmoil cause the sales of almost all major enterprise telephony vendors to decline at double-digit rates, but it also caused the demise of the former telco giant and one of the world’s premier technology companies – Nortel.
Nonetheless, history has shown that pulling out of recession often comes on the back of innovation and continued investment in technology development. In fact, the enterprise telephony sector has been one of the fastest and most efficient sectors to quickly adapt to these new challenging market conditions. Important actions that were taken to fight back the negative impact of the recession included major acquisitions and reorganizations (e.g. HP/3Com and Avaya/Nortel), the introduction of new flexible IP telephony solutions, the implementation of very aggressive customer programs, and increased focus on channel expansion strategies. Furthermore, 2009 was also marked by a significant uptake in certain advanced technologies and innovative delivery models such as SIP trunking, virtualization, hosted communications/ Communications as a Service (CaaS) offerings, SIP and SOA-based architectures (e.g. Avaya Aura), and professional and managed services. Finally, although it slowed down the pace, the economy did not completely stop the evolution of some of the key trends of previous years including enterprise mobility, collaboration, social media and open-source telephony. Social media, for example, enabled many telephony vendors to use non-conventional marketing methods to promote and communicate the value of their products and solutions throughout the recession.
It is no surprise the market plunged in 2009, but we do expect a modest recovery in 2010, with North America and APAC leading the way out of the recession and Europe maybe experiencing some continued challenges. This year, we expect positive growth in units, but close to 0% revenue growth. In the near term, there may be some continued hesitation in investment decisions– some Nortel customers debating what route to take, others waiting for Wave 14 to prove its value, yet others looking for cloud models to mature.
Over the next 5 to 6 years, however, we are projecting about 1% growth in revenues and about 3% to 4% growth in unit shipments. We expect customers with TDM systems to pursue IP telephony for both cost savings and productivity benefits, laying the foundation for advanced IP apps and future UC implementations. Infrastructure consolidation through SIP and SOA will be the other two drivers for IP telephony migration and further investments in this space. Towards the end of the forecast period, the user base should be almost all converted to IP , barring the impact of some unforeseen disruptive events. Cloud technologies may begin to have a larger impact in the long term restraining PBX line shipments towards 2014 and 2015.
A few days ago, I had the pleasure to visit Aastra’s Concord, ON, headquarters and to meet again with Tony Shen, Aastra’s Co-CEO, President and COO. I must admit, he is quite different from other executives I interact with! His practical, down-to-Earth talk is in complete contrast with the inflated marketing bravado of most other high-ranking individuals in the industry.
I also enjoyed listening to Jason Andersson, Head of Aastra’s Center of Excellence for Applications, brief me about Aastra’s current UC strategy and portfolio using Aastra’s ViPr videoconferencing technology. Thank you, Jason, for going back to the office at 9 pm Swedish time to do this video call for me! I have to say video really adds to the quality of the conversation. It helps establish a rapport with the other participants and be more productive. Although I found the ViPr quite good, the Aastra folks hinted at the upcoming launch of a next-gen product that will help bring better and much more affordable video to the mass market.
So where does Aastra stand today in the global communications market? According to our recent research, in 2009, Aastra was among the top 6 market participants in terms of total PBX and IP PBX line shipments and revenues and IP desktop phone shipments. It has a large installed base it can leverage for future growth. It is also on track to gradually consolidate and synchronize its multiple product lines over the next couple of years. But how does it differentiate? What does it do better than its competitors?
It is tempting to quote Shen who addressed the above questions by saying “We all sell sugar,” referring to the fact that communications have become a commodity, adding “we are just easier to do business with.” He strongly believes that Aastra’s main competitive advantage is in delivering technologies tailored to local customer needs and its ability to use local resources who speak the language and best understand the peculiarities of the specific market. “The French buy French”, Shen elaborated, pointing to one reason why Aastra is doing so well in France, whereas Ericsson before couldn’t (and where U.S. vendors are struggling, too).
Aastra has also adopted a very pragmatic approach to UC. While the rest of the market has gotten a little carried away with the desktop-centric approach spearheaded by Microsoft (as it best serves its purposes), Shen and his team see little demand for soft clients. As I have indicated in other blog posts and presentations, I also think it will take a few years for soft clients to populate the marketplace and become a more commonly used interface. It will not be until customers deploy a larger number of advanced communications and collaboration applications such as IM, presence and conferencing, that they will see the value in the unified desktop client. For most users, a basic softphone provides little more than a convenient alternative when travelling. Yet, Aastra is looking to keep up with its competitors and potential customer demand and will soon be launching InTouch Plus, an advanced client that can be used both for voice and IM. So, if you are looking for an OCS-like experience and you believe in convergence at the desktop – Aastra will have a solution for you later this year.
Aastra sees greater potential in mobility. In fact, according to Shen’s definition, UC is more about integrating corporate and mobile voice communications, than it is about the desktop client. Aastra offers both mobile PBX extensions and a solid portfolio of VoWLAN and DECT capabilities, which can meet both outdoor and indoor mobility requirements. Although Frost & Sullivan’s definition of UC is quite client-centric as well, I have to agree that mobile smartphones have a greater potential than desktop clients in replacing the desktop phone as a primary communications device.
Aastra is also one of the few telephony vendors heavily promoting the voice interface. I thought voice navigation remained somewhat confined to the IVR and auto attendant space. Shen, however, gave me some interesting examples of his vision for speech, which included voice navigation of calendars and folders. When I think of the time I waste looking for documents, this sounds like a life-saver to me. Also, the ability to schedule a meeting over the phone, speaking commands such as “book me a meeting with Joe at 2 pm on July 3rd” may be where the market is going next.
Aastra is also offering some interesting collaboration capabilities with its recently launched InReach social networking software. It enables employees to create various interest or project groups where they can post comments (“micro-blogs”) and share files and ideas. This software will eventually become integrated with InTouch Plus, the advanced UC client, so users can IM each other, see status updates and pictures, etc.
Although it feels like Aastra is lacking that single defining characteristic that will differentiate it in the marketplace – such as Microsoft’s message around software-based communications or Cisco’s one-stop-shop approach, for example – it may very well be that Shen and his team have identified a successful growth formula that is not based so much on marketing, but on practical, customer-centric strategies. In the SMB market especially, its local approach is far more important than technology superiority or marketing clout. Of course, this is not to say that Aastra’s technologies are not competitive, it is just to reinforce Shen’s pragmatic view of the commoditization of communications.
Shen stated that Aastra seeks to evolve its portfolio around four main tenets: the voice interface, mobility, video and security. Although I believe these have a very different value for different users, they seem like potential growth opportunities and differentiators for Aastra.
In my opinion, Aastra’s open, standards-based approach and ability to integrate its endpoints and applications with other vendors’ technologies could be its ultimate key to success. Going forward, an accelerated portfolio harmonization roadmap and a stronger message around the benefits it can deliver to larger businesses with disparate, multi-vendor environments could help it maintain and grow its market share in the communications marketplace.