Posted 01/2001
Voice Plus
PC Voice Grows Up
By Fred Dawson
Amid continuing uncertainties as to when carrier-class packet-based telecommunications services will be ready for prime time, a new way for integrated communications providers to look at the opportunities surrounding VoIP technology is taking hold, thanks to the efforts of a growing core of entities who have gained traction in consumer chat and other PC-to-PC and PC-to-phone spaces.
Known variously as Internet telecommunications service providers (ITSPs) and communications applications service providers (CASPs), these companies are expanding their infrastructures to accommodate ever-more sophisticated business plans, many of them involving tie-ins with ISPs, ASPs and even local exchange carriers as channels for their offerings. While scaling an IP telephony network to serve hundreds of thousands of customers remains a daunting task, these new entities are discovering that it's possible to come up with effective, high-quality service offerings based on use of the latest IP voice protocol platforms such as MGCP (multimedia gateway control protocol) and SIP (session initiation protocol) in conjunction with transport over high-speed IP fiber backbones and broadband Internet access links.
"Once this technology achieves a presence on everyone's desktop, you're going to see it used in a much more immediate, spontaneous way than before," says David Greenblatt, COO at IDT Corp.'s (www.idt.net) Net2Phone division (www.net2phone.com). "It's really at the breakout point."
That presence was greatly accelerated over the past year as big web players like
America Online Inc. (www.aol.com), the Excite portal of Excite@Home (www.corp.excite.com), cable ISP Road Runner Group (www.rr.com) and Yahoo! Inc. (www.yahoo.com) turned to suppliers like Net2Phone for voice enhancements to their services.
Nothing But Natural
"Live voice-based interaction provides a new way for the Road Runner community to interact online," says Meredith Flynn-Ripley, vice president for corporate development at Road Runner. "It offers a natural way for people to connect and interact online and is a natural extension of our current communications services, such as e-mail, personal pages and chat."
Yahoo! in October took the model to a new level in an agreement with Net2Phone to use Net2Phone's IP voice network for its new Yahoo! by Phone service, which includes voice mail, e-mail and access to Yahoo! content by phone or personal digital assistant (PDA). The network will also be used as part of its Yahoo! Messenger service for free PC-to-phone calling.
"We do not consider ourselves a voice portal or ASP," says Lisa Pollock, senior producer for Yahoo!. "What we have done is extended our Yahoo! everywhere strategy, which is to make Yahoo! content or services available on any device to any user at any point in time." The plan is to enhance many of the existing services with voice capabilities, though not necessarily to add more specific voice services.
The growing use of ITSPs' infrastructures by portals and other consumer-oriented entities is now providing the credibility and market momentum these service providers need to make their cases in the business markets. For example, Lipstream Networks (www.lipstream.com), supplier of voice chat capabilities to both of the leading cable ISPs, is also linking up with ASPs and business-oriented portals to extend a vast range of enhancements to business services that don't require an operator to install a full IP telephony system.
One such ASP is e-assist.net (www.e-assist.net), a specialist in "e-business" customer relationship management services (eCRM) which recently contracted with Lipstream to provide PC-to-PC voice capabilities to enhance e-assist's customer interaction services. "Lipstream's product enables live, real-time, interactive web-based support," says Dan Plashkes, president and CEO of e-assist. "With e-mail, chat, and voice over IP, our clients have three ways to interact with their customers, which further strengthens the online relationship."
While Lipstream and competitors like Net2Phone, HearMe (www.hearme.com) and Evoke (www.evoke.com) are targeting many types of web voice applications--including such enterprise-centric capabilities as virtual Centrex and CTI-based extensions to remote offices--the greatest demand for IP voice is focused on the point of online contact between companies and their customers, says Lipstream president and CEO Matt Jones.
"We really believe that the customer service market, both pre- and post-sales, is the largest market for live voice service on the web," he says. "The biggest challenge e-businesses have today is selling, servicing, and retaining their customers. It's really hard to compete with the brick-and-mortar world if you can't communicate with your customers like you can communicate in the real world."
$14 Billion Opportunity
According to a recent Piper Jaffray (www.piperjaffray.com) report, the contact center software market will represent a $14 billion opportunity by 2003, when the ability to blend all media types, including voice, over unified IP transport platforms will be key to the success of service providers operating in this space. The possibilities have caught the attention of Cisco Systems Inc. (www.cisco.com), which has blended the efforts of three recently acquired companies--GeoTel, Ameteva and WebLine--to create an Internet Communications Software Group focusing on managing customer contact via phone, fax, e-mail and Internet chat sessions.
A wide range of eCRM vendors, including Chordiant Software Inc. (www.chordiant.com), Kana Communications (www.kana.com), Octane Software Inc. (www.octane.com), Oracle Corp. (www.oracle.com), Pegasystems (www.pegasystems.com) and Peoplesoft/Vantive (www.peoplesoft.com), along with other suppliers such as Hewlett-Packard Co. (www.hp.com) and Sun Microsystems Inc. (www.sun.com), have signed on with the Cisco initiative, which is targeting ASPs and ISVs (independent software vendors) as well as enterprise end users.
"With Cisco's open software platform approach, customers can take advantage of powerful business applications and Internet communications infrastructure that provide enterprises with a comprehensive e-business solution for managing the convergence of voice and data applications and services," says Mark Barrenechea, senior vice president of CRM product development at Oracle.
The unified communications approach combines the best features of the voice network via IP gateways to traditional fixed service and mobile networks with the flexibility and rich data, content and functionality of the Internet and multimedia/ unified messaging, thereby "unifying media-independent interactions across voice and data networks," says James Richardson, senior vice president at Cisco. Customers can move beyond unified messaging into call control, notification and call management to create value-added, differentiated services, he adds.
Recent moves by American Express (www.americanexpress.com) and Compaq Computer Corp. (www.compaq.com) to put the Lipstream infrastructure to use suggest the extent to which this view is taking hold in consumer e-commerce. Amex is hoping to enhance e-based sales of credit card accounts by activating PC-to-PC voice connectivity, allowing users whose computers are equipped with standards-based voice client software and microphones to interact with sales reps.compaq is going even further, applying voice across all phases of online customer service, including a PC-to-phone interconnection that will be used first in Florida call centers, Jones says.
The Lipstream voice service is supported by a massively scalable, patent-pending architecture comprising high- performance servers with telco-grade uptime, managed QoS and 24x7 support, Jones says. "We've built in redundancy, automatic failover, automatic problem correction, and we've architected the system so that it has multiple routes into the Internet," he adds, noting that the "featherweight" 150 kilobyte client software Lipstream uses requires less than a minute to download over a 28.8kbps modem.
"We've had millions of downloads of our client and daily carry millions of minutes of traffic and thousands of simultaneous calls all over this network," Jones says.
Maximizing Voice Quality
Similar accounts are offered by other providers of IP voice services. "We have peering relationships across the U.S. and internationally whereby we have servers with our proprietary software in those locations that basically allow us to maximize the quality of voice," says Jeremy Verba, director of HearMe, whose parent company, Mpath Interactive, began business several years ago as a supplier of multiplayer online games.
"If you're in New York and I'm in San Francisco, and another person comes in from Kansas, we will find the optimum point where that conversation should happen on a server," Verba explains. "If you're on a 28.8 modem from New York and I'm on a high-speed line from San Francisco, I can assure you that [point of server connection] is going to happen closer to New York."
Another approach to making packet voice services more widely available, especially in the business market, is being taken by Congruency Inc. (www.congruency.com), which calls itself a CASP. Congruency's strategy is similar to that of an ITSP in that it uses IP telecommunications infrastructure to deliver voice capabilities to the edge, but its customers are CLECs and other carriers for whom it serves to host the VoIP support capabilities that they can use to deliver voice-enhanced services.
"A communications ASP is a company that delivers the ability for other companies to provision voice services over their broadband data networks," says Ralph Hayon, chairman and CEO of Congruency. "We believe that the market here ranges from e-commerce to directed content to utility messaging."
Along with providing H.323 and other infrastructural elements, the company supports the provisioning of voice components by its carrier customers and provides end-user devices that work with the transport supplied by the carrier over standard Category 5 or 6 wiring, whether the transport is fractional T1, DSL or something else, Hayon says.
"This allows us to deliver new services directly to the desktop--HTML-based services where you can have advertising and media displayed on the device, or use it for e-commerce," he says.
"We envision an IP network using a rich set of technologies which consist of both H.323 and SIP all the way down the line to using standard gatekeepers and data-based servers that actually have the ability to download new software into the phones as the keys to delivering these new services," Hayon adds. Applications include instant messaging, visual messaging, and the ability to annotate faxes and send the "ink-annotated" versions instantly to other users on the network, he adds.
"Our managed IP network provides the transport mechanism from various enterprise end points out to various carriers such as deltathree [www.deltathree.com], Net2Phone or ITXC. [www.itxc.com]," Hayon explains. "We see this as a new service offering that could be provided to CLECs and even large end-user accounts that have broadband data networks [and who] wish to enable voice services without provisioning and going to all the lengths of providing equipment to offer those services."
Quasi-Wholesale
Some CASPs are pursing the Internet equivalent of the traditional wholesale voice model. iBasis Inc. (www.ibasis.net) was one of the first to describe itself as a wholesale voice application provider with a service called VoCore, selling unified messaging and other hosted voice applications on a wholesale basis. More recently, ITXC bought eFusion Inc. (www.efusion.com), a developer and provider of applications such as push-to-talk for call centers and service providers, and an application, Suite Adeline, which enables simultaneous phone calling and web surfing on one phone line. The applications leverage both iBasis' and ITXC's IP voice networks to add the multiple-service dimension that analysts view as a winning strategy.
Some CASPs, such as enterprise CASP TalkingNets (www.talkingnets.com), have recently begun marketing their service to ISPs and building LECs (BLECs). TalkingNets recently launched what it describes as next-generation telephony in Denver and Cleveland with ISP Interfold (www.interfold.com) and BLEC Next Wave Resources LLC (www.nwcorp.com) as its initial customers. Both channel partners will offer their customers enhanced business-class voice services using the TalkingNets' softswitch-based architecture and the long-haul infrastructure of TalkingNets' supplier Level 3 Communications Inc. (www.level3.com), which also participated as a channel partner for TalkingNets in a recent market trial.
An issue still to be sorted out in this fast-moving environment is who owns the customer and, by extension, who owns the service problems. The services are likely to be branded by the ISP or CLEC doing the marketing to the end user, or the CASP may be identified with a "powered by" kind of reference. Some CASPS sell their commitment to take the problems off the hands of the service providers, but that may be an issue with ISPs and portals, who want to be sure that they own their customers fully.
In the case of BridgeCom.Com Inc. (www.bridgecom.com), another CASP, users first call the service provider when there are problems, says Mike Vacanti, the firm's vice president of sales and marketing. If the user has computer questions or performance is not as expected, the service provider attempts to solve the problem. If the service is not working at all, the call is escalated to BridgeCom, but the service provider will continue to be the point of contact for the customer.
"Service providers are going to want to keep control of the customer," says Vacanti. "Third-party involvement can get real muddy. We are going to try not to allow that to happen. ... [The service provider] has access to our customer support from the beginning. The user always has their comforting point of interaction with their service provider, so they keep client control and get the answers they need."
However such issues are worked out in individual dealings between CASPs or ITSPs and last-mile network service providers, it's clear that the proliferation of voice usage on the web has softened the market for IP voice solutions. For carriers and ISPs that are waiting for the full capabilities of IP telephony to kick in, the types of services available from ITSPs and CASPs represent a recourse that could prove highly rewarding in a much faster time frame.
"The industry has evolved to where real applications are available today," says Paul Berberian, CEO of Evoke, an ITSP with a sharp focus on the business side. "We're making money by selling our services to businesses."
Charlotte Wolter, editor of Sounding Board Magazine, contributed to this story.
