NGN: Enterprise IP Telephony

Transcription

1 NGN: Enterprise IP Telephony Research Brief Abstract: Enterprises have been slow to adopt Internet Protocol-based telephony. Vendors should educate them as to its benefits, using realistic calculations to prove lower costs and faster returns on investment. By Drew Kraus and Terry Hicks Recommendations Vendors offering premises-based systems and hosting options must educate enterprises about the benefits of Internet Protocol (IP)-based voice and data communications. Enterprises should not take vendors' models for total cost of ownership (TCO) or return on investment (ROI) at face value but adjust them to reflect their specific enterprise environments. Publication Date:14 February 2003

2 2 NGN: Enterprise IP Telephony Unifying Communications Facilities Technology Transition IP Telephony Deployments A next-generation network (NGN) enables the delivery of a broad range of communications formats via standard protocols and platforms. Therefore, it promises to address enterprises' varied and dynamic communications needs. However, adoption of one of the NGN's critical elements IP telephony has not met many vendors' expectations. The scalability and reliability of conventional telephony platforms and networks continue to present a significant competitive challenge for IP telephony alternatives. Nonetheless, declining systems costs and improvements in reliability and channel support are positioning IP telephony to become the enterprise solution of choice by enabling a unified communications architecture throughout an enterprise. In recent years, many industry observers have suggested that a fundamental transition was taking place from the traditional technologies of the private branch exchange (PBX) and key telephone system (KTS) to a market dominated by IP-PBX systems. Several small vendors have introduced IP-enabled or pure IP-PBX solutions, and traditional PBX vendors have expanded their IP-related PBX product development. Despite this seeming shift in focus, sales have been disappointing. Although worldwide shipments of IP lines increased approximately 215 percent (year over year) in 2001, traditional telephony systems still comprise approximately 90 percent of shipments. Instead of adopting pure IP solutions, many enterprises are deploying IP-enabled systems, with many of the lines on these systems still using traditional circuit-switching matrixes based on time division multiplexing (TDM). The overall state of the PBX market and the worldwide economic climate do not favor rapid change. The expected migration toward pure next-generation PBX equipment has failed to materialize. The main reason why IP telephony adoption has been so slow is that the traditional PBX system remains a relatively safe enterprise investment. Migrating toward a less-proven system presents unacceptable risks for many telecommunications and data managers. Moreover, many IP telephony standards in such key areas as signaling, quality of service (QOS) and power over Ethernet and phone sets have not yet been definitively established. An additional problem is that vendors have failed to deliver on one of their most important promises: simple centralized management.

3 Those enterprises that have chosen to deploy in-house (that is, premisesbased) IP telephony have largely been motivated by the promise of cost savings. Many vendors, including Cisco Systems, Shoreline Communications and Avaya, have offered detailed TCO and ROI tools designed to help prospective customers assign specific monetary values to the anticipated improvements in business processes and functionality associated with IP-PBX system deployments. Gartner Dataquest recommends that enterprises should not take these models at face value but adjust them to reflect the real enterprise environment. In some cases, enterprises can reduce TCO simply by employing best practices for their telephony applications without moving to IP-based systems. 3 Hosting Options The location-independent nature of IP telephony presents a broad range of hosting alternatives. A service provider (for example, a central office, Internet service provider [ISP] or independent applications service provider) can deliver provisioning services from its location, using either client-dedicated servers or multitenant-provisioned servers. An alternative is to have the servers located at the customer site but managed by the service provider. Yet another model is to have a company's remote sites hosted by a central site, as is typically the case with services. One of the key benefits of these various models is the anticipated reduction of capital expenditure costs, to be achieved either through centralization of services or the use of a service provider. Providers of hosted solutions, like their premises-based counterparts, offer models showing lowered TCO and rapid ROI models. However, in the absence of thorough, enterprise-specific benchmarking of costs and service levels, these models have little real-world value. Furthermore, many emerging service providers lack the necessary financial backing and services track record to inspire confidence in enterprise decision makers. (The incumbent local and long-distance service providers have also failed to distinguish themselves as able marketers or providers of Centrex services to the larger enterprise market, and this situation is unlikely to change.) Hosting services between enterprise sites typically suits enterprise communications models well; the widespread acceptance of hosted provisioning of real-time applications will require a major cultural change in organizational management practices that is unlikely within the next five years.

4 4 NGN: Enterprise IP Telephony IP Telephony in the Contact Center Call centers have traditionally been supported by proprietary platforms, provided either by a dedicated system or on a PBX with call center routing and management capabilities. The call center solutions were either provided as a bundle of software and hardware, or provided on an adjunct server with an application program interface (API) used for interconnectivity between the telephony switching platform and the computer server hosting the call center call management function. Most call center system vendors have published their APIs, allowing them to be leveraged by others and a market to emerge for servers providing computer telephony integration (CTI). During the same period, the LAN infrastructure market was also changing, with switched Ethernet becoming the dominant technique for desktop connectivity. These developments made it feasible to use a single converged network to support voice and data. IP-Based Convergence Beyond the Contact Center For several years, traditional PBX and call center infrastructure manufacturers have been working to adapt their proprietary software to work on standard operating systems, accelerating the movement toward hardware-independent software and management systems. In 1999, standard IP began to replace circuit-switched TDM as the dominant protocol for end-to-end communications over LANs and WANs. Traditional, data-only infrastructure vendors began to add voice transmission using IP and telephony call routing to their portfolios. The advent of converged IP-based voice and data systems and the need to manage communications in all forms highlight the need for a universal queue management system and for communications software and management systems independent of the underlying TDM, IP or hybrid network infrastructures. This will require the removal of the dependency on infrastructure for call queuing and may lead to the expansion of established multimedia contact center management software into more enterprisewide contact management solutions. This represents a significant step toward a unified communications architecture for enterprises. It must provide access to real-time, near-realtime and message-based communications applications, as well as to content (such as calendaring, project management and inventory) without requiring knowledge of the devices or network involved. Gartner Dataquest believes that vendors' offerings will evolve to support enterprise communications software suites; however, these suites will likely become more closely integrated within specific workgroup activities such as enterprise resources planning (ERP) or customer relationship management (CRM). Openness and interoperability between different vendors' communications software suites may become legacy system migration issues. The market may, as a result, move toward a model based on software licensing rather than system purchase.

5 Channel Challenges As the market expands for converged networking equipment that handles voice and data communications, the discrete distribution channels that enterprises typically rely on one for voice, another for data are converging. This trend places a significant burden on enterprises and particularly small and midsize businesses (SMBs) that are trying to understand their options for telephony and networking. Distribution channels are also struggling with the effects of convergence, including a serious skills shortage. Estimated demand for converged solutions throughout enterprises represents less than one-third of the current market. Where demand exists, the primary drivers are converged applications and anticipated cost reductions. However, many enterprises are skeptical of vendor TCO models and have difficulty articulating specific advantages of converged applications. Gartner Dataquest believes that vendors must increase their efforts to educate enterprises about the benefits of converged applications, instead of focusing on frequently dubious cost-reduction models. 5 Gartner Dataquest Perspective Gartner Dataquest believes that the emergence of IP and CTI (in contact centers) is enabling the long-anticipated advent of integrated and open multimedia solutions across enterprises. Vendors, anticipating the development of a networking environment that uses IP and TDM but is increasingly dominated by IP are also providing integral softswitch capabilities within their PBX and contact center communications software suites. This will allow even call routing and queuing to be freed from their remaining ties to proprietary physical infrastructures. As a result, the market for the next decade will be characterized by the growing independence of communications software and physical transmission infrastructure, and a general migration from TDM to IP. Through 2007, sales of TDM-based products will coexist with an increasingly large number of systems based on IP switches and routers. Manufacturers will also shift their focus away from TDM and IP hardware supply and begin to target sales of call management servers and software licensing. By the end of 2007, traditional enterprise telephony system manufacturers will have ceased development (though not necessarily production) of TDM-based PBX and contact center systems, and they will have announced their intention to discontinue support within five years (0.8 probability).

6 6 NGN: Enterprise IP Telephony IP telephony has finally begun to achieve critical mass within the enterprise and SMB markets, driven largely by the promise of reduced TCO and rapid ROI. However, vendors' promises about TCO and ROI remain largely unproven and are unlikely to be adequate drivers of the growth of this market. Providers of premises-based solutions and hosting options must work to educate enterprises about the benefits of IP-based voice and data communications to realize the full potential of this market. Key Issue What are the business models that justify and accelerate next-generation technology deployment? This document has been published to the following Marketplace codes: TELC-WW-DP-0321 For More Information... In North America and Latin America: In Europe, the Middle East and Africa: In Asia/Pacific: In Japan: Worldwide via gartner.com: Entire contents 2003 Gartner, Inc. and/or its Affiliates. All rights reserved. Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice