Technology Adoption: VoIP in Asia

Tim LauerManaging Director, APAC Ventures

March 26, 2004Tim.Lauer@APACventures.com

Objectives

Provide a common understanding of VoIP & the value propositions

Discuss the adoption of emerging technology and worldwide drivers affecting VoIP in Asia

Present a business case of a Taiwan Company who is an “Early Adopter” of VoIP

Demonstrate the use of Voice-over-Internet (VoI) as a complementary solution to VoIP

Who is APAC Ventures?

APAC Ventures

Asia Pacific Business Development– Specialize in software licensing for foreign

companies who want to expand their business in Asia

Identify Value Add Software Building Blocks– Develop and License Software to complement

Asia companies who develop or provide the following:

• Software• Hardware• Services

What is Voice over Internet Protocol (VoIP)?

Transporting voice over leased or managed data networks

Requires management of Internet traffic (data and voice) to ensure voice quality

Phone Company

Branch

Branch Office

V

Headquarters

V

Leased Line

VoIP

Circuit Network

Why the Hype?

Cost savings associated with transporting voice over an existing Leased Line

Adding a new employee within the facility is as simple as plugging in the phone to the network connection

Branch

Branch Office

V

Headquarters

V

Enterprise/SMB Perspective

V

Phone Company

VoIP

Types of VoIP

Internet Routed Calls– Major service providers use internet to route

calls to save money as their network traffic grows

– Dial 009, Prepaid Cards, etc.– About 10% of all US telephone calls use the

Internet in some way End-to-End VoIP

– Complete Digital Network– PC to PC Calls– Hard IP Phones connected by Data Network

VoIP Value Propositions

Convergence of Voice & Data– Cost Savings for the Enterprise and Consumer

• Reduce cost of long distance calls, setting up new phones

– Convenience• One Bill, One Network

Exciting new applications– Generate new (more?) revenue for service providers

• Unified Messaging: Voicemail, SMS, Email, Fax, Conferencing, all come together

• Video• Others TBD: Cellular examples include Games, Ring Tones,

Ring Back, etc.

Technology Adoption

Emerging Technologies

Characteristics– Sometimes old technology, with new

use– Solve a major problem– Impact an Industry (country/region)– Require companies to change

• Business model, business processes, organization, structure

• Re-invent, Re-tool, RETIRE?

– Provide new opportunities

Geoffrey A. Moore’s Technology Adoption Curve

Time

Innovator

Early Adopter

Chasm

Pragmatists

Traditionalists

The “Chasm”

Dictionary Definition– A very deep crack or separation in the surface

of the earth

Moore’s Meaning– The Chasm represents a critical phase or

opening from the last early adopters that allows for mainstream acceptance of the product.

– Steve Jobs of Apple says "The Chasm is where many high-tech fortunes have been lost. Crossing the Chasm is vital to long-term value creation and market dominance.”

The “Pragmatists”

Dictionary Definition– People concerned with practical or proven

results

Moore’s Meaning– Those people who are interested in new

technology and will adopt as soon as they see that their competition is successful.

– Proven business cases drive Pragatic people to take actions.

Key Drivers to Adoption of VoIP

Ability to deliver voice quality End user experience Proven Business Model (Cost/Revenue) Government Investment Reducing costs Favorable government regulation Agreement on key technology

standards

Quality and User’s Experience

Quality of VoIP has improved Features similar: dial tone, hold,

forward, voicemail, etc. Use is same Hand Phone and Dial

Pad Signs of Change

– Wireless Ear Piece for Cell Phones– Students talking on the Internet thru PC– Mobile Office and Wireless Internet

Proven Business Model: Japan

Broadband Infrastructure is in Place– Government Support– 12Mbps is standard, 25% of homes

Yahoo BB– Free Bundled IP Phone with Broadband

Services– 3.6M VoIP users, consumers cross Chasm– Voice is the “killer broadband application”

Reducing costs

IP Phone versus Analog Phone– Much more expensive

Sweet Spot for IP Phone– US$75

Long Distance VoIP Calls– PC to PC, PC to Phone through Service

provider– Taiwan to US as little $.02 a minute– Free for low quality calls

US Gov Position on VoIP

“In examining VoIP, we should begin with non-regulation of the Internet…… because it maximizes the potential for innovation and increases the opportunities for the nation as a whole.”

Michael Powell, Chairman FCCFebruary 2004

Agreement on Technology Standards

Engineers lobby to have their company’s technology written into an “industry” standard– Standards Bodies– Industry Forums– White papers

Results are sometimes not so Standard– Cell Phones, China driving their own WiFi

Case Study:Enterprise VoIP DeploymentTaiwan HQ to China Branch

Jerry Yang,AVP, LANtel

Reason for Changing to VoIP

Company Background Limited number of lines on existing

PBX Phone Network Plan for expanding China Office Need to build private data network

between offices

Key Points in Evaluation of VoIP

Cost of deployment Ability to Manage Data/Voice

Network from one location Enable new combined applications

– Data, Voice and Video Also integrates with other apps &

business processes– Administrative Sales software/process

Taipei

VoIP Network Diagram

DMZ

PIX-515R

W/CCM

Shanghai

ISDN

3524-PWR*2

3550-12T

Unity VM

2610W/SRST

3524-PWR

IP Phone

ADSLVG

256k

256k

DSP Farm

PSTN

VG

MPLS

PBX

Internet

VG2950T-24

1. Centralized management2. No MIS personnel in Shanghai3. Cut expense in both straits

telecommunication

Voice over Internet (VoI)

The Difference: VoI vs. VoIP

Voice over Internet (VoI)– Impossible manage entire network– Technically challenging

– Unlimited application reach

Voice over IP (VoIP)– Easy (but more expensive) to manage the network

– Common technology

– Application reach based on availability of managed network

• Does your VPN work behind firewalls, over dial up, etc.

Voice over the public Internet?

Transporting voice over the public Internet is free Requires just a simple connection to the Internet• Extend the reach of corporate phone systems

• Add voice to any web experience

Phone Company

Internet

Branch Office

V

Headquarters

V

Leased Line

Branch

VoIP

The Internet Challenge

Jitter– Variable packet arrival– Packets out of sequence

Packet Loss– Dropped packets

Latency– Network delay

Computer A

Computer B

Computer C

A “Web” ofconnections

13 2

23 1

Packets

Routers

Demo of Voice over Internet (VoI)

Click to Talk over the Internet

University Arkansas Non profit Organization

http://www.uapb.edu http://www.nethope.org

CrystalVoice Communications

US Software Company– VoI deployments worldwide with

Cisco, 3Com and others Let’s chat with Steve Zola,

President & COO– Click to Talk – http://www.crystalvoice.com/

contact.htm

Questions?

Thank You for coming