VoIP Demystified

John Poole's a phone guy. All things telephony have been his bailiwick since the late '80s. Today, phones are just one piece of the monolith called unified communications. Poole's business is changing--for good.

"In the old world of phone systems, it was all under our control," says Poole, president of SPSCom, a solution provider in Cedar Knolls, N.J. "Now, voice is just one application alongside multiple solutions like messaging, storage, security and integration. I want to know how far I can expand my business to selling not just phone systems, but other apps associated with voice."

Poole has hired data-networking engineers. He's expanded his service offerings around security, disaster recovery and storage--tangential skills necessary to unified communications. He's brokered a new relationship with Microsoft around the Exchange and Live Communications servers. And he's redefined the selling process with tools and guides that help customers understand today's much broader communications market.

Welcome to the world of unified communications, a market moving at breakneck speed; a market vendors and solution providers alike are still trying to define given the dizzying array of available products and systems. At its simplest, we're talking about the convergence of voice and data across common networks and any kind of device. The full gamut of technology--hardware, software, networking infrastructure and mobility--plays a role in this emerging universe. Some components are fully or nearly mature, such as e-mail and VoIP, while others, like videoconferencing, have kinks to work out.

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Ample Communication Choices
Headlines trumpet a battle brewing between networking titan Cisco Systems and software king Microsoft. (Within days of one another, Microsoft bought TellMe Networks; Cisco trumped by acquiring WebEx.) Regardless, there's really no one-stop shop for unified communications. One can easily rattle off a long list of manufacturers that have skin in the game, including Adtran, Avaya, AVST, IBM, Motorola, Nokia, Nortel, Polycom, 3Com and many more.

Inevitably, consolidation will come.

"As the market matures and consolidates, we won't need as many [unified communications] vendors in each area as we have today," says Bern Elliot, research vice president at Gartner. "But this is a very long-range consolidation, and you won't see this market go down to just three big suppliers."

Solution providers with attractive bundling opportunities can offer customers a more efficient way to communicate to their employees, partners and customers. A recent Aberdeen study found that 77 percent of companies that employ unified communications do so to improve customer service. The VARBusiness 2006 Market Insight survey of enterprise and midmarket IT decision makers found that 40 percent are searching for technologies to improve employee communications and 29 percent seek solutions for better collaboration with suppliers, business partners and customers.

NEXT: Now comes the tricky part.

What's tricky for solution providers is picking the needed pieces. In many respects, that means aligning with vendors whose unified communications vision most resembles their own.

At Nortel, unified communications is mostly about seamlessly tying people and the way they work together, according to Net Payne, Nortel's vice president for North American marketing.

"Unified communications is sometimes as simple as tying your mobile voicemail to your home voicemail," Payne says. He sees unified communications as the primary trend driving converged network upgrades (for more, read "Making the Convergence Switch").

Regardless of the definition nuances, vendors seem to agree that unified communications means creating easier access to advanced business applications. Nortel officials describe their approach as leveraging investments that businesses already made in their desktop applications, namely from its partners Microsoft and IBM.

"What we have really started to drive is the integrated communications between the desktop, the mobile device and all your business-level critical communications into a seamless experience," Payne says. "It's a very different approach from that taken by other markets, where it's about trying to take ownership of the desktop."

Under Nortel's Innovative Communications Alliance (ICA) with Microsoft, the partners plan to work together on contact-center and business-communications server technologies, according to Sowmya Varadarajan, ICA's product-marketing leader.

In the contact center, ICA plans to enable SIP-based agents with single-queue instant-messaging presence in the first half of next year. They'll also increase the functionality of Nortel's business-communications server platform to deliver advanced telephony and advanced contact-center applications.

Microsoft's approach to unified communications is based on the newly released Exchange Server 2007 and the soon-to-be released Office Communications Server 2007 (the upgrade to Live Communications Server 2005), which provides instant messaging, presence, conferencing and VoIP.

With Exchange Server 2007, Microsoft has beefed up its unified messaging capabilities on both the client and server side. One example: The convergence of voicemail and e-mail onto one server instead of two has integrated speech to enable voice-activated commands.

As is Microsoft's style, it included a rich set of APIs in the forthcoming Office Communicator so partners can embed features like presence, conferencing, voice and click-to-call into other applications such as its own Dynamics CRM and ERP packages.

"We basically want to enable all different modes of communication to be available in one place and for it to be easy to move among them," says Greg James, director of unified communications at Microsoft.

At Cisco, the IP network, not surprisingly, is the cornerstone of that company's unified communications strategy. Cisco arguably has the most complete portfolio under the Cisco Unified Communications family: IP telephony phone systems, call control routing and voice gateways to the public phone network, unified messaging and voicemail, conferencing and contact-center products.

"We provide a network that serves as a platform for a variety of communications services," says Alec Henderson, Cisco's senior manager of product marketing. "If you look at Microsoft, they focus on the clients and on the use of Windows and on voice/communications-enabling Office, logically their area of strength."

NEXT: A cure for the common unified communication headache?

Solution provider Berbee takes a neutral approach. The company mixes Cisco's complement of call control, handsets, contact center and Web-collaboration software with Microsoft's IM, unified messaging, Exchange and Live Communications Server. The result is end-to-end solutions for midsize and large enterprises, according to Pat Scheckel, Berbee's senior director of products.

"The integration points between different vendors' systems are still immature," Scheckel says, noting external federation of presence and IM are still lacking. "The holy grail isn't just to have different products in one organization work well, but to have customers able to talk to each other across companies and business units."

Scheckel identifies mobility as one of the most promising areas of the market. Mobile sales forces and verticals such as health care and manufacturing are driving demand for integrated communications on any device. From a technology perspective, Scheckel cites a forthcoming dual-mode Cisco phone made by Nokia that operates in an office on a wireless network and automatically roams over to cellular networks when taken outside.

Dial V For Value
Unified communications should solve one major headache: multiple phone numbers. Avaya, for example, has technology enabling a single phone number to work over multiple devices including cellphones, according to Diane Shariff, director of unified communications. Avaya is preparing four bundled offerings--including one with this capability. Shariff says that solution providers can use the tiered bundles to scale as customers need. "This makes it easier to understand the pricing and explain the value to customers," Shariff says.

Solution providers become even more essential as guides to their customers in such a complex and relatively new market. For those who dive in, the payoff comes on multiple fronts: strong sales opportunities, services and integration work.

SPSCom's Poole is seeing those returns. Last year, his company rang up $96 million in sales with projections for $110 million this year. "The word I keep coming back to is integration," he says. "As a VAR, I have to integrate into the bigger IT services world."

He's no longer just a phone guy.

Caron Carlson contributed to this article.