Dinosaur TelecomJim Van Meggelen,

Core Telecom Innovations - iConverged LLC

“The Telephone is Dead”--Lee S. Dryburgh, eComm 2008

How do you embrace the future when everyone says you’re extinct?

What is a SMB?

• Small To Medium Business• Also SME (Small to Medium Enterprise)

• Vast majority of businesses are SMBs• Different stats state that 90-99% of all businesses are SMBs

• 25-250 people (some say 10-500)

• Many (perhaps most?) of these companies have nothing to do with consumers.

• Most of these companies nobody has ever heard of.

• Not generally interested in taking risks

Telecom Challenges of a SMB

• Small or nonexistent IT department• The Boss's Kid

• Generally not certified

• Knows enough to be dangerous

• Network is not going to pass VoIP certification any time soon

• Desktop environment is not suitable for VoIP apps

• Low tolerance for disruption

• No budget for telecom infrastructure• Often phone system upgrade is done as a necessity, not a strategic initiative

(obsolete, move to new premises, startup, etc.)

• They like this stuff; they “need it”, but they aren’t going to spend much money on it

How do we deliver next-generation telecom to these companies?

• Do they care?

• PBX seen as infrastructure• More like plumbing than IT

• Office administrator often handles telecom

• Companies still need typical PBX• Old system is dying

• Suspicion toward new features …

• … but they don't want to be want to be locked out of progress

• Phased approach• Nothing disruptive to start

• Allows for a competitive price

• Deliver simple solution well, and the relationship will grow

“It’s a basic PBX, and we’ll throw in the VoIP for free!”

Dinosaur Telecom is not sexy

• Solving business problems is a cliché, but that is what creates a compelling proposal

• What we are doing is not a panacea

• This is not what we dream of when we’re picturing the future of telecom

• Because of our backgrounds, we often know more about the competitor’s product than they do• The client wants access to our experience

• The problem is that the only way to scale this is by adding talent that shares these skills

Why do we bother?

• $6.7Bn PBX market worldwide in 2007 (that’s just SMBs)• Average of $20,000 per system• Most are still TDM/Proprietary

• 85% of all handsets sold are not VoIP

• SMBs love the “telecom as a commodity” pitch

• Phones that don’t lock them in to one vendor• Commoditized platform• Re-use of Cat 3 cabling

Unorthodox wiring hacks

• Re-terminate Cat 3 wiring

• Build out low-cost dedicated LAN for VoIP

• This thing looks pretty much like the old phone system• That’s a good thing

• Yes, it does PoE (check 802.3af if you don’t believe me)• Proposed 802.3at standard delivers more power, but VoIP phones

don’t need it

• SMB customers love it

We’re still using PRI or Analog circuits

• Reliable and proven

• Direct PSTN connectivity

• Easy to figure out who’s fault it is• Finger-pointing is an unfortunate component of any troubleshooting

process

• Good-old demarcation point is politically simple to understand.

• Until there is a simple, reliable VoIP offering, risk-adverse businesses will be slow to accept VoIP• We allow them to get on with their business, but they can test out

VoIP in a low-risk way

Vertical/Industry Focus

• The only industry that has been widely embraced by traditional PBX manufacturers is Hospitality

• Easier to gain entry to markets

• Massive number of markets to attack

• Crossing the Chasm and The Long Tail

• Focus only on relevant standards for integration• Integration may be simplified

• Find key products in that industry -- contact them about integration

Mobility

• We dream of integrating our mobile phones with our PBX

• Running apps on mobile networks has too many barriers

• The mobile industry appears to have other dreams• In Europe the cost of placing a call from the PSTN to a Mobile

network is such that products have emerged to hack around this

• In North America the content on the phones is locked down

• Kudos to everyone blazing trails and taking risks

• The SMBs are watching

We must, indeed, all hang together, or most assuredly we shall all hang separately.

--Benjamin Franklin

Achieving standardization and commoditization

• Co-opetition

• Separating the noodles from the secret sauce• Is there a base platform?

• Quantify the value of giving something away

• Emerging Telecom industry needs legitimacy• Need something like W3C, TIA, Linux Foundation, etc

• Blending of corporate and community/academic interests

• Hats off to the folks at VOIPSA.org

• Carrier-grade calls with VoIP• Easy to demand; not easy to deliver, but as long as this does not

happen, it will be difficult to get the majority of businesses to take VoIP seriously

Products I'd like to see

• Headset/handset that "just works"

• Cost-effective rich terminals

• Effective QoS on PCs

• über-reception phone• wireless

• FOP panel or similar

• rugged

• lightweight

An eComm 2008 presentation –

http://eCommMedia.com for more