Rumble in the telecom jungle?

an inevitable collision in the voice world:  irresistible force meets movable objects.

Working as I do for a Microsoft  Gold partner I tend to approach all our long term strategies with Microsoft integration in mind.

Our Telecom strategy is no different, the solutions we provide now are capable of integrating with back end services like Live Communication Server,  Exchange and Microsoft CRM, whether it’s two way phone status to contribute to presence management, unified voice, fax and email or population of contact centre agent app’s with CRM data, this stuff is pretty old hat these days.

the traditional telecom’s companies have been loudly proclaiming their ability to seamlessly integrate with applications in the dominant desktop and server environment for a while now but this is going to change, I can see a kanute like move to reclaim  the applications, one that is doomed to fail.

I’ve been involved in the sales cycle of telecom’s systems since 1994 and I’ve witnessed  the change in direction first hand, it’s a change in direction that has delivered the initiative to  traditional data companies  who have now taken the lead in communications.

the telecom’s market seems to me to have passed through several phases in the last decade

Phase one was a simple cost manipulation, leasing PABX’s against the savings made through least cost routing to give you brand new technology and a cost neutral telecom’s budget. The main problem for customers was that there were far too many sales people out there willing to make the fast buck: you want an upgrade, it’s cost neutral just re-sign the lease and I’ve heard some horrific stories of photocopier sales style exploitation of customers.  

Phase two was the rise of simple applications: from  key and lamp (really primitive voice presence);  lines and extensions (capacity); voice mail (messaging), then ACD and call centres (workflow) the beginning of clever stuff.

until now a traditional PABX salesman would be used to making  30-40% plus on hardware and nothing or very little on services, they’d make all their money up front with some annuity revenue on maintenance and whatever they could get away with charging for moves and changes on the proprietary system that had been installed.

more often than  not, the customer would not even get the password to the system they’d purchased.  the salesman would be in contact with their customer roughly every seven years ( the average PABX product cycle) and hay would be made whilst the sun shone.

the advent of ACD and voicemail meant that applications started coming to the fore and telecom’s manufacturers started to make their systems palatable to the traditional applications providers.. the IT industry.

then the bottom fell out  of the market…. all-in-one telephony boxes were introduced, IT friendly,  jack of all trades systems that your average computer reseller could design implement and support,  with very little knowledge of telephony.  after all 75% of all basic phone systems are installed with default settings.  competition was fierce and in a matter of months margins  became eroded and it seemed that everyone did phones.

to IT resellers voice was just incremental margin, they were far more interested in the three year PC life cycle than the seven year telephony one. 

Phase three was the fight back; the telecom’s people really understood voice, the data guys didn’t, they viewed it as just another bit of data. The voice world new how to get  people to talk to people the data world just talked in packets and about delivery. Voice companies understood one to many possibilities, the need to provide multipath conclusions for voice transactions and the data world needed to spend time catching up. about this time I first heard a telephony salesman utter the the word solution and, then the phrase consultative sale.

Phase three point five was when  The value of applications dawned on the voice world, it had been in the high end salesman’s kitbag for a while  but it had started to percolate down.  Integration with backend systems started to be affordable CTI, IVR blended multimedia  Contact centres came to the fore ( everyone has a contact centre of some sort) , the applications became more invasive in the data world, more  integrated and the telephony manager started to disappear, voice became the (usually reluctant) IT professionals domain. 

Phase four started with the IT professional  taking over responsibility for telephony immediately  there was a drive to make them feel comfortable by driving voice management firmly into the data world, more integration with outlook / notes more familiar interfaces more GUIs more PC app’s just make voice another application on the desktop, voice gets added to data services across the board and voice companies shout loudly about open standards ( although you usually need to purchase a license to use them)

so voice and data worlds converge and collide become easy bedfellows because the the servers the voice company integrates with don’t do voice

in their eagerness  to give succor to their new partners without even realising it the voice world had handed the data world the rope the data world would hand back to the voice world so it could to hang itself.

Now Microsoft reveals office communications server 2007 which incorporates voice server functionality. I’ve spoken to Microsoft on a number of occasions and they suggest they will never do a PABX. ( I seem to remember Bill gates suggesting that they would never do the Internet either)   OCS 2007 will not only do presence information a la LCS 2005 , it will integrate closely with exchange 2007 and speaks SIP, ostensibly to allow integration with your existing PBX to allow feature rich voice applications but also to allow native SIP endpoints off OCS itself. bear in mind all those PBXs  out there with default settings most of the long tail don’t want anything more, also think of the high end applications written in a Microsoft environment why complicate things with a nasty proprietary PBX in the middle.

the voice world has engendered the appetite for applications, they’ve insisted they work on a Microsoft platform, they’ve ensured interoperability with that platform and they’re bet their future on the ability to make money out of those applications.   at least until now they had the option to make money on proprietary hardware


Microsoft have the platform, they don’t care about the hardware, it’s a commodity,  they can support all the applications, they can even support the phones  give the whole construct a firm foundation and it’s bye bye  MR PBX.

The Voice companies, kanute like may try to turn the tide but let’s face it I may add voice to my exchange server but there’s not a whelks chance in a supernova that I’d hand my email over to a telephone system.

the only hope I see for the PBX vendors: divorce yourselves from your  hardware, get your applications out there, use your experirience in call routing , shout loud about your software, ensure your application is the voice application of choice … or die


3 Responses to Rumble in the telecom jungle?

  1. […] not only are Microsoft looking to erode the profits of the traditional telephony guys in their high value applications market place they’re also battering their bread and butter […]

  2. […] Alasdair Ford writes an excellent piece plotting the rise, and predicting the ‘possible’ eventual fall of the PBX. […]

  3. Interesting blog. I’m glad I found it. Thanks again, Rory

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