By Simon Duddy
Many experts claim vendors are over-selling convergence technology in a market that has not developed a widespread business need for its applications. Vendors need to focus clearly and realistically on what they can and cannot achieve if convergence is to prove successful for businesses in the Middle East.
|~|JeanLouisPrevidi_m.jpg|~|“Convergence will not save your company money,” says Jean-Louis Previdi, senior vice president and research director, Meta Group, Europe Middle East Africa (EMEA). “You may reduce infrastructure costs by having only one network but that network will be much more complex now that you are running voice and data over it. This will have knock-on costs as you have to hire new employees and re-train existing ones,” he explains.|~|A surfeit of vendor hype has propelled network convergence into the headlines in recent years. It remains to be seen, however, how much of this hype stands up to scrutiny. There is a real danger that companies have been over-selling the benefits of the technology. If this translates into bad user experience, it could create a groundswell of opinion against convergence that could have serious repercussions well into the future.
Chief among the vendor claims that are being hotly disputed by some analysts is that network convergence is a money-saver. The convergence vendor argument is that, despite the cost of upgrading your infrastructure to IP, by moving voice and data traffic on to one network companies can make savings on equipment and infrastructure over time as there is one rather than two networks to maintain. This seems a very obvious gain at first glance, but it has been questioned in some corners.
“Convergence will not save your company money,” says Jean-Louis Previdi, senior vice president and research director, Meta Group, Europe Middle East Africa (EMEA). “You may reduce infrastructure costs by having only one network but that network will be much more complex now that you are running voice and data over it. This will have knock-on costs as you have to hire new employees and re-train existing ones,” he explains.
Many studies have declared that convergence has decreased costs while increasing productivity. However, in these surveys companies rarely factor the soft costs into their figures. These include knock-on effects such as increased salaries and greater support complexity. These factors mitigate against the idea that the converged network is intrinsically more cost effective.
There also is a general consensus that convergence technology is getting ahead of business need. At an Etisalat call centre seminar last month, call centre consultant Paul Buchanan spoke of a regional call centre that dived straight into a convergence upgrade. “This company spent US$600,000 on a state-of-the-art call centre for only five seats,” he says. “They spent US$150,000 on e-mail support alone and only receive three e-mails a day. Obviously, this company has got no chance of making this money back.”
The technology may be available and it may be able to carry out some impressive tasks, but if it does not fit the needs of user’s business it will not rapidly recoup expenditure and will weigh a company down.
Taking this argument further, despite its many frills, convergence lacks a killer application. Voice over Internet Protocol (VoIP), video conferencing, unified messaging, Interactive Voice Recognition (IVR) and so on are all driving the technology forward but arguably none is a must-have application for most of today’s enterprises. Therefore a converged network cannot be described as an inevitable upgrade. Put simply, if a company doesn’t need the applications, then it does not need the infrastructure.
The second disputed hype from convergence vendors concerns simplifying the network. “The idea is that it’s easier to manage because it’s one network,” says Buchanan. “In practice, that’s not true. Multiple screens are more complicated and require greater effort to make them work successfully,” he adds.
It’s clear that any transition as big as bringing voice and data traffic together is going to create challenges and it is by no means an issue that is ignored by convergence vendors. “Convergence is number one in IP communications but it’s important that the network is thought through,” says David Tucker, senior director IP communications business unit (IPCBU), Cisco Systems. “Companies have to plan for convergence. Cisco has the tools to measure voice and data traffic, determine the busy hours and call flows so you can size WAN connectivity according to a company’s needs,” he adds.
As well as arguably suffering from over-sell, convergence has plenty of uncontrived challenges to overcome. In addition to the issue of perceived cost savings from convergence, another issue that currently attracts little controversy is the cost of the installation. This is a hefty expense, particularly if a company is going to rip out a PBX system. As well as infrastructure, users may have to replace handsets as well. Again, this can add up to a pretty penny, especially if in PBX handsets have been recently upgraded.
Convergence technology has advanced at a hectic pace and this brings problems as well as benefits. The higher end features offered by IP telephony have not been standardised and therefore compatibility is patchy. Often the high-end features offered by handsets will only work with other products from the same vendor. This contrasts with PBX, where it is taken for granted that a handset’s features can be used on a TDM network.
Another area where IP telephony is playing catch up is monitoring of calls. “Management practices in the data network need bringing up to date to match the high levels currently provided by the voice network,” says Michael Allen, EMEA director of performance solutions at Compuware. “For example, in the voice industry it’s quite easy and standard practice to want to know the quality of calls, connections and lots of other details about service levels. There is still work to do before this can achieved at the data level,” he explains.Perhaps an even more striking challenge in the region is the uncertain legal framework concerning using VoIP for commercial purposes. Naturally, there is reluctance to invest in a technology that has its wings clipped by protective legislation in many countries. However, there are signs that this barrier may soon be removed in some countries.
“International calls are a large part of the revenue of service providers,” says Stanislas De Boisset, technical manager, 3Com Middle East. “However, most of the countries in the Middle East are part of WTO (World trade organisation) and ITU (International Telecomunication Union), which requires VoIP to be allowed.”
Egypt, for example, has signed up to the WTO’s agreement and has pledged to deregulate its telecoms sector by 2006. A central part of that endeavour is the country’s plans to make commercial VoIP available to all. “We are taking steps to gradually open up the VoIP service in Egypt,” confirms Ahmed Nazif, Egypt’s minister of communications & information technology (MCIT).
VoIP also has long term revenue potential so regional telecoms cannot afford to ignore it, although the transition will be painful. “From Egypt Telecom’s point of view, there will be less revenue for international voice communication. But in the long run, VoIP will dominate voice communication,” says Alaa Fahmy, executive director of the Egyptian National Telecom Regulatory Authority.
In Saudi Arabia, although VoIP is illegal, some users manage to work around the system. For example, Almarai has permission from STC to use VoIP in some offices, as it is not practical for STC to extend its network to these remote rural locations.
As well as the concrete barriers in the way of convergence vendors, there is also a job to overcome negative perceptions in the minds of decision makers in the region. For example, convergence vendors have a hill to climb to reverse the general perception that the quality of VoIP is not as good as that of voice over traditional networks. “Quality is the biggest barrier to VoIP adoption. That isn’t to say you can’t have good voice quality with VoIP, in fact you most definitely can, it’s just that organisations need to be convinced and guaranteed of this,” says Compuware’s Allen.
Nevertheless there are technical issues in transferring voice over the data network. “Voice over IP is less concerned about packet loss, the human ear can cope with some voice packet loss, but cannot tolerate delay beyond 350ms or jitter which can cause echo,” says Joseph Mehawej, Middle East market development manager, Nortel networks.
The data network needs heavier management than the traditional voice network. This brings VoIP monitoring into play, which again increases the complexity of voice services. Many vendors offer automated VoIP monitoring tools but it is an area that will require greater management, putting additional workload on to network managers.
Another widespread negative perception is that moving voice on to the data network can compromise the voice service if the data network is brought down by a virus attack. VoIP early adopter Merrill Lynch recently replaced its Cisco IP telephony installations with a mix of IP and TDM solutions from Avaya. A spokesman for Merrill Lynch says, “If we were to move to an IP only telephony network, then a successful attack on our IP network would leave us without both voice and data.” This ‘eggs-in-one-basket’ issue is a serious concern for enterprises. The prevalent thinking is that if a company’s e-mail goes down it’s a headache but if the phones go down it’s a disaster.
But Cisco has countered this argument by claiming that although a data network may be compromised, voice traffic over the same network need not be affected. “Just because a network goes down doesn’t mean voice goes down,” says Tucker. “Servers and PCs get hit but switches and routers do not. Voice and data may be converged on the same network physically but they are logically separate. We have seen examples where the data IP network has gone down but the voice function was unaffected.
Despite these barriers to implementation and the hype weighing down the technology, convergence is opening up some interesting opportunities for companies in the region.Globalcom is a contact centre outsourcing company looking to move beyond Syria as its business grows. It sees a converged infrastructure as a keystone of this. “We are upgrading to an IP infrastructure as it is the most reliable and cost effective option,” says Rami Habbal, executive manager, Globalcom. “It will help us to communicate better with clients that use in-house call centres for some functions and out-source some other functions to us. We need IP to communicate effectively with them because of the physical distance.”
One feature that vendors are making relatively little fuss about is the ability to use the internet to plug into the company phone system anywhere in the world.
“Not only are vendors over-selling convergence, in my opinion they are selling the wrong benefits by focusing too much on VoIP and cost saving,” says Buchanan. “The real benefit of convergence is extending the reach of the telephony network to anywhere on the internet.”
Steven A Brown, regional manager, at Zultys, elaborates: “With the ‘here I am’ capability of VoIP, the user has instant access to home communications, whether in their home city or traveling anywhere in the world. You can always be in the office, even if it is virtual,” he says.
This has great potential for call centres in particular, as it means that call centre operatives need not be centralised in one location. Users can also introduce flexibility, by allowing staff to work from home for example.
Clearly, if there is competitive advantage to be gained from applications such as video conferencing, unified messaging or VoIP, then convergence should be considered. If a call centre worker’s productivity will increase significantly, because they can see what the customer sees on their screen at the same time as dealing with the call for example, then this is the beginning of a compelling case. Companies have to be hungry for these applications if convergence is going to work. Equally important to their ultimate success or failure is ease of use. “It has to be as easy as making a phone call,” says Tucker. “There is integrated instant messaging with Cisco IP phones. At the push of a button the user can jump from making a voice call to desktop video. The solution is tied to the phone and it’s simple enough for the average worker who doesn’t want to have to think about IP addresses.”
Choosing the convergence path is perhaps most compelling when building an infrastructure from scratch. It certainly beats TDM as a future-proofed technology and won’t cost any more when building from new. Likewise, if a company needs to upgrade an out-dated PBX infrastructure anyway, the decision will most probably be weighted heavily towards a converged solution.
Even so, the decision should not be swayed by the technology but rather by the IP-based applications a company will use, or plan to use in the future. If it brings cost savings in international calls, then do it, if executives are crying out for a video conferencing feature, then give it to them. The wrong path is to upgrade to the technology simply because it’s there, and this is a mistake that many companies in the Middle East are making.
“Don’t look at the technology, look at the applications. Don’t buy converged networking, buy IP PBX, IP phones, unified messaging, if these applications will enhance your business,” explains Meta Group’s Previdi.
When considering network convergence it pays to keep a business head on, no matter how much excitement surrounds the technology. First of all, users should assess business needs and invest only if the technology can help the company meet these needs. It’s also important to calculate the costs of convergence fully. Users should not underestimate the knock-on costs that can incur, such as re-training of staff.
While the future of converged networking is glittering with opportunities, there are many important issues that demand the attention of users. Compatibility among devices is crucial — for example it might be worth delaying the decision to upgrade until IP handsets are standardised. Deploying a convergence pilot may also prove valuable. It will afford a company the opportunity to learn lessons and assess the impact of the technology on management processes and ascertain if the real world benefits justify the expense.||**||