IP phone: Are operators missing a trick?
... part IIVoice-over-VPN
The same sort of learning curve is discernible in the early adoption of various modes of conferencing and voice-over-VPN (virtual private network) services that are taking hold here and there. As with the e-commerce opportunities, these activities point the way for providers of high-speed data access to develop value-added components by using the quality-of-service capabilities available in various advanced modem systems.
"Voice VPNs are basically a sweet spot (for ISPs)," says Michael Casin, product manager for IP voice services at Concentric Network Inc. Concentric has put in place an IP-over-ATM (asynchronous transfer mode), fully managed, nationwide backbone that supports a wide range of VPN services, including IP voice and videoconferencing.
"You take a managed network like ours, put voice gateways at the end of dedicated (VPN) pipes and connect the gateways into PBXes," Casin says. "This stuff works."
It's easy to see why ISPs believe that, with technical improvements now in hand, the voice-over-VPN opportunity is coming into play. Chris Aronis, an analyst with the Boston-based consulting firm Strategic Networks, calculates that a big company with several branch offices and/or hundreds of telecommuters interconnected via VPNs can reduce telecommunications services costs by nearly a third by putting voice traffic on the VPN data feed. "The big issue for companies looking at this option is uncertainty about the technology and whether voice-over-IP meets their performance and security requirements," Aronis says. "The technology is right on the cusp of making this a viable option."
In fact, "on-net," which is to say strictly internal VPN applications, are now "ready to go," Aronis adds. But in off-net applications, including extranets where companies and their suppliers and customers are linked together over the host company's IP infrastructure, significant barriers remain, he notes, including incompatibility among H.323-based systems.
While a new generation of IP voice gear operating in conjunction with networks like Concentric's that guarantee roundtrip coast-to-coast latencies of 125 milliseconds or less has brought the voice-over-VPN option to corporate doorsteps, there are impediments imposed by the VPN components that must be addressed as well. "VPNs require 20 to 100 times more processing per packet than other (non-voice) applications, which, when added to voice, takes you over the latency requirements on the voice end," notes Richard Kagan, vice president of marketing for VPNet Technologies Inc.
Virtually all of VPNet's carrier customers are demanding voice-capable systems to ensure they'll be able to deliver this application as the corporate community becomes comfortable with putting voice into their data traffic, Kagan says. VPNet, an OEM (original equipment manufacturer) partner with Nortel Networks, ADC Kentrox and others, has managed to cut its systems' contribution to latency to under three milliseconds at each location, typically averaging one millisecond, Kagan says. "This allows service providers to stay under the latency bar for IP voice if they use (IP voice) gateway systems that fit our criteria," he adds.
Further fueling the VPN opportunity for the IP voice sector is the fact that it's much easier for small companies to implement VPNs than it once was, thanks in part to improvements in data transport costs and in part to falling costs of VPN software and hardware. Vendors are now offering VPN platforms in the $4,000 range for small businesses with the capacity to support about 25 users at connection rates of up to eight megabits per second.Conferencing
Another application associated with VPNs, and other niches in data communications as well, is public network-supported IP video and audio conferencing services. Products under development among leading providers of conference-oriented software and hardware make clear that the low-cost, high-margin conferencing service businesses now in startup mode at a handful of ISPs are a harbinger of things to come at fairly massive market scales.
"Video conferencing technology is nearing the flashpoint where more and more consumer-oriented products are making it easy for service providers to market such services, especially where there's more bandwidth available," says Lior Haramaty, vice president for technical marketing at VocalTec Communications Ltd., a leading supplier of H.323 systems.
Early-adopting ISPs say they see IP conferencing, with or without video, as a low-cost feature that can stand on its own as an appealing service or serve as a value-added incentive to draw customers to the cut-rate long-distance voice services many are selling. "We're seeing significant interest from casual users as well as the business community," says Donald Brown, executive vice president of Houston-based Network-On-Line, an ISP subsidiary of Comtech Consolidation Group Inc.
NOL is using H.323 gateway software from White Pine Software Inc. to support "virtual conference room" services via ISDN-rate (128 kilobits per second) IP connections that can be rented by the hour or leased on a full-time, dedicated basis. White Pine co-founder and "evangelist" Forrest Milkowski says a number of ISPs, including the Time Warner/MediaOne Road Runner venture, Worldcom Corp.'s UUNet and America Online, are in beta trials of the latest releases of his firm's MeetingPoint gateway software.
One of the reasons such companies are moving into the conferencing business is that the new tools have significantly reduced the management hassles traditionally associated with conferencing, allowing providers to cost-effectively supply out-sourced services to companies too small to run conferencing themselves. For example, in the case of White Pine, the MeetingPoint software, which works with any H.323-compliant client, supports "audio switching," where the document referenced by the person talking-and also the person's image if video is involved-is automatically displayed on the screens of participating parties, Milkowski notes.
In addition, the software can manage bandwidth allocations to fit the access speeds of individual users. Thus, in the case of NOL in Houston, users accessing the ISP's virtual conference room over ISDN lines can automatically communicate with customers on dial-up lines without requiring special setup preparations by NOL.
Where VPNs are concerned, companies installing H.323 gateways linking IP to PBX-based internal conferencing systems are able to extend conferencing to road warriors and branch offices, notes Eric Newman, group product manager for Data Beam Corp., a supplier of products supporting shared computing that wrote many of the key algorithms for the T.120 multipoint whiteboarding and data collaboration standard. "You want this technology to be able to interwork with the telephone network already in place," Newman notes. "That's what H.323 is all about."
Market acclimation to the advantages of collaborative computing has spawned vendor development of ever more application-specific tools, Newman adds. "We're seeing not just generic business conference tools like NetMeeting, but very specialized products for telemedicine, distance learning and other segments-really compelling applications that people are buying into," he says.
This is a development path the @Work unit of @Home Network sees as it implements VPN technology in conjunction with offering telecommuting services, notes Don Hutchison, executive vice president and general manager of @Work.
"Conferencing is down the road a ways for us, but we see it as a natural extension of the benefits we can deliver with our telecommuting services over broadband connections," he says.
"This is getting very hot in cable right now," says George Foley, director of broadband networks at Lucent, which, like other vendors working with cable, is developing packet convertors that will feed calls from standard phones directly into cable modems. "This is not a game of trying to save a penny on a call," Foley adds. "Collaborative calling and call centers are helping to redefine what voice technology is."