who wants to be an ip telephony millionaire ? (2002)

Marc JadoulVoN Europe — Helsinki, 12 June 2002

All rights reserved © 2002, Alcatel.VON Europe 2002 - M. Jadoul - 1

In 1965, an Intel co-founder made a prediction about transistor density on

microprocessors, that is often being used as the basis for forecasting technology evolution.How is this prediction commonly known ?

• A: Moore’s Law

50:50

• B: Newton’s Law

• C: Murphy’s Law • D: Pulver’s Law


In 1965, an Intel co-founder made a prediction about transistor density on

microprocessors, that is often being used as the basis for forecasting technology evolution.How is this prediction commonly known ?

• A: Moore’s Law

50:50

• B: Newton’s Law

• C: Murphy’s Law • D: Pulver’s Law


• A: Moore’s Law• A: Moore’s Law• A: Moore’s Law

Some years later, Ethernet pioneer and 3Com co-founder Bob Metcalfe also made an

observation, known as Metcalfe’s Law.What is Metcalfe’s Law about ?

• A: Packet loss

50:50

• B: Voice quality

• C: Medium access • D: Network value


Some years later, Ethernet pioneer and 3Com co-founder Bob Metcalfe also made an

observation, known as Metcalfe’s Law.What is Metcalfe’s Law about ?

• A: Packet loss

50:50

• B: Voice quality

• C: Medium access • D: Network value


• D: Network Value• D: Network Value• D: Network Value

Are you a

???



IP Telephony:IP Telephony:turning Technology into Valueturning Technology into Value

Marc JadoulMarc JadoulVoNVoN Europe Europe —— Helsinki, 12 June 2002Helsinki, 12 June 2002


Moore’s LawMoore’s Law

Transistor density on microprocessors doubles each 18 months.(Technology evolves at a predictable pace…)

Gordon Moore

timetime

densitydensity

technology technology evolutionevolution


Metcalfe’s LawMetcalfe’s Law

The value of a network rises exponentially (N2) with the number of network nodes, while the cost follows a more or less linear function.

Bob Metcalfe

# # network network nodes (N)nodes (N)

€€valuevalue

costcost

00 11 22 33 44 55


Moore’s Law and IP TelephonyMoore’s Law and IP Telephony

Gateway density and voice qualityGateway density and voice quality Ten thousands of ports per GW rack Encoding, silence suppression, comfort noise,

echo cancellation, jitter buffer size, etc.

Maturing softswitches and GW control protocolsMaturing softswitches and GW control protocols Millions of BHCA handled by one softswitch Megaco/H.248 and MGCP are up and running Class 4, Class 5 and “rich voice” features

SIP is theSIP is the signallingsignalling protocol of choiceprotocol of choice H.323 is still kicking SS7 a prerequisite for “carrier” voice

ATM, MPLS andATM, MPLS and DiffservDiffserv Guaranteed QoS with acceptable roundtrip delays


Metcalfe’s Law and IP TelephonyMetcalfe’s Law and IP Telephony

Plain vanilla voice is not enoughPlain vanilla voice is not enough There’s more than arbitrage Voice services competing with… voice services What happened to the C2D, ICW and UMS promises ? “Nice to have” is not always “need to have”

Broadband access customer base is too narrow Broadband access customer base is too narrow PC is not the right voice terminal IP phones are scarce and expensive Windows XP Messenger the catalyst for SIP ?

The dot.com hype is overThe dot.com hype is over Competitive providers getting out of business Incumbents still in “wait and see” mode Legacy is here to stay (and interoperability is a must)


Technology Adoption CycleTechnology Adoption Cycle

InnovatorsInnovators EarlyEarlyAdoptersAdopters

EarlyEarlyMajorityMajority

LateLateMajorityMajority LaggardsLaggards

Techies

Visionaries

Pragmatists Conservatives

Skeptics

“Get ahead of the herd!”

“Try it!”

“Stick with the herd!”

“Hold on!”

“No way!”

Source: the Chasm Group, 2001


Introducing the “Chasm”Introducing the “Chasm”

Early MarketEarly Market Mainstream MarketMainstream Market

CHASMCHASM

Source: the Chasm Group, 2001

Techies

Visionaries

Pragmatists Conservatives

Skeptics

The greatest peril in in developing highThe greatest peril in in developing high--tech tech markets is making the transition from an early markets is making the transition from an early market to a mainstream marketmarket to a mainstream market


Technology drivenTechnology driven Value drivenValue driven

Metcalfe’s curveMetcalfe’s curve

Moore’s curveMoore’s curve

IP Telephony trapped in the Chasm ?IP Telephony trapped in the Chasm ?

?? IP Telephony is in the middle of the IP Telephony is in the middle of the transition from a technology driven business transition from a technology driven business to a value driven businessto a value driven business


Only the Winners will be ableOnly the Winners will be ableto Cross the IP Telephony Chasmto Cross the IP Telephony Chasm

Good value proposition for EndGood value proposition for End--usersusers Go for the “purple minutes” “Sticky” services (need to have) “Full service” packs (e.g. bundling with xDSL) “No risk” service providers

Revenue generating solutions for CarriersRevenue generating solutions for Carriers “From CPE to CO” (end-to-end offering) Service creation, management and charging capabilities Scalability, “five nines”, flexibility, interoperability Local market presence and professional services

… Marketing, Marketing, Marketing !… Marketing, Marketing, Marketing !

So, ... are you a

???
