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VOIP Parasites Take Heart

Light Reading
News Analysis
Light Reading
3/11/2005

SAN JOSE, Calif. –- Voice Over the Net Conference -- Is there really a big business in delivering VOIP services? Absolutely, but attendees insist VOIP is not about saving opex in the trunk of the network. The point of getting into VOIP is to have something else to bundle along with video, data, and wireless services -- and POTS won't cut it.

Service providers here say they can't afford to be consigned to the role of merely delivering bandwidth. Vonage Holdings Corp., for example, rides in on the broadband provider's network to deliver VOIP services. The broadband provider, however, delivers dumb bandwidth at a price that it can't get away with raising. One Cleveland-based ISP executive even went so far as to describe Vonage as “parasitic.”

So how are things faring between the parasites and their hosts? In a roundabout answer, we present some final bits and bobs from the VON show:

  • SIP This: Some service providers are reticent about SIP technology, preferring instead to remain with the H.323 signaling protocol that dominates networks today. But there's high hopes that everyone will come around to SIP soon. Large suppliers such as Siemens AG (NYSE: SI; Frankfurt: SIE), Ericsson AB (Nasdaq: ERICY), Nortel Networks Ltd. (NYSE/Toronto: NT), Lucent Technologies Inc. (NYSE: LU), and Alcatel (NYSE: ALA; Paris: CGEP:PA) are home-growing or partnering to offer end-to-end SIP-based solutions to carriers.

    Many of these solutions, such as Microsoft Corp.'s (Nasdaq: MSFT) Communicator 2005 and Nortel’s Converged Multimedia Services (CMS) solution are being built for the enterprise, which some apparently believe to be VOIP’s beachhead to wider acceptance by the consumer market. Microsoft and Nortel are developing multimedia front ends that combine voicemail, IM, and IP voice in a tightly integrated package for businesses. These products typically involve partnerships between the supplier of the front-end applications (Microsoft, AOL, Nortel), an IP PBX supplier such as Alcatel’s Genesys Telecommunications Laboratories Inc., and a softswitch provider such as Sonus Networks Inc. (Nasdaq: SONS).

  • Gear Smear: Several sources here say that service providers are indeed spending big money on VOIP infrastructure now, but wish to keep it under the covers and have sworn their suppliers to secrecy. However, some deals were brought to light during presentations in the conference sessions this week, such as AT&T’s relationship with Canadian media server maker Convedia Corp. Other alliances were brought to light in the exhibit hall. Light Reading learned that AT&T is using Xten Networks Inc. SIP softphones; the (AT&T-branded) softphones appeared briefly at the AT&T booth, but were quickly removed after their cover was blown.

  • Strange Bedfellows: VOIP infrastructure vendors say they often have to buddy up with sworn enemies in order to get a shot at good carrier bucks. Veraz Networks Inc.'s Ed Camarena, senior director of product marketing, says the game of who partners with whom all depends on the preferences of the service provider.

    “When we are doing an IP Centrex bid, sometimes we may bring Sylantro in as a partner, and in another circumstance we may be partnering with BroadSoft Inc. and competing against Sylantro Systems Corp."

    Camarena says the open standards and interoperability with which many VOIP network elements are now built allows carriers to buy tailor-fit, multi-vendor solutions. The “lead” vendor, he says, often supplies products but also acts as a systems integrator, bringing in various partners that contribute specific functionality.

  • Comebacks and Encores: The VON convention began in 1993 as a PSTN show and grew steadily throughout the 90s. VON’s founder, Jeff Pulver, sold the thing at the height of its popularity during the telecom boom, and bought it back again at pennies on the dollar after the telecom recession had set in. The show has reportedly quadrupled in size since 2001, with around 6,000 in attendance at this year's show here in San Jose.

    Rock band Heart played the big VON bash on Wednesday night, news that had many scrambling to their rock-n-roll history books to see whether the band is now on its ninth or tenth comeback tour. Truth is, it doesn't matter. Heart rocked pretty hard, despite the fact they never wore as much hairspray as Poison, and never wore quite as much makeup as KISS.

    — Mark Sullivan, Reporter, Light Reading

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