Greg Galitzine's VoIP Authority Blog - Research Archives

Oh My! We're Doomed!

2009-04-30T19:37:18Z

The Sunday Times of London has a story about the end of the Internet.

Ok, maybe the Internet's not dying, but the report from the UK says that users will begin seeing rolling network slowdowns or "brownouts," which will cause their PCs to "freeze" as "capacity runs out in cyberspace."

The culprits? No, not global warming, but rather the increased use of online video services like YouTube and the BBC's iPlayer.

The Times reports that in a report, reportedly being prepared by the US's Nemertes Research, experts will claim that "...in 2012, PCs and laptops are likely to operate at a much reduced speed, rendering the Internet an 'unreliable toy.'"

The Web: The Best is Yet to Come

2009-04-23T14:51:33Z

If you think the Internet's a crowded place today, guess what? One of the Internets founders (insert Al Gore jokes here) Tim Berners-Lee, keynoting at the 18^th Annual World Wide Web conference in Madrid this week, believes that the best of the Internet is yet to come.

"The Web as I envisaged it, we have not seen it yet. The future is still so much bigger than the past," he said.

The ITU report, Measuring the Information Society, The ICT Development Index, finds that only 23% of the global population currently uses the Internet, as compared to over 60% of the world's population that is currently subscribing to mobile cellular phone services.

An article on Breitbart quotes Internet co-founder Vinton Cerf who says, "We will have more Internet, larger numbers of users, more mobile access, more speed, more things online and more appliances we can control over the Internet."

I for one, think we all can agree that the future of the Web is mobile. As smartphones proliferate and becomes less expensive; as next-generation wireless networks bring Internet access into every far-flung corner of the globe; as more people are able to get access to more information, we will see the truly transformational power of the Internet facilitate a freer exchange of ideas, resulting in new advances in technology, society, etc...

Now if only we can do away with e-Mail spam...

Stock Blog Compares AT&T, Verizon

2009-04-22T11:28:46Z

This morning, over at Seeking Alpha, there's a nice article from ValueExpectations (a stock blog and investment newsletter that provides institutional quality equity research) on the difference between AT&T and Verizon. ValueExpectations.com is run by the founders of The Applied Finance Group and Toreador Research and Trading.

To start, the article separates AT&T and Verizon from the third place U.S. wireless provider, Sprint.

Then, it compares the relative value proposition of both top wireless operators.

AT&T's market cap is $150 billion to Verizon's $90 billion.

AT&T is considered to have the better 3G network and a partnership with Apple to offer what is considered the hottest smartphone on the market, the iPhone. Verizon however has a "decent" 3G network, according to the article, and through its partnership with and support for several Blackberry models, is riding a positive trend.

Verizon's FiOS is considered the wave of the future, delivering "lightning-fast fiber optics" while AT&T's FTTN (fiber to the node) strategy is somewhat wanting. FiOS is also enjoying a much higher rate of adoption than AT&T's U-Verse product.

Finally the article compares the two operators' plans for fourth-generation wireless, or 4G. Verizon seems to be better positioned here, with a more aggressive rollout schedule, looking to deploy 4G services by 2010 as opposed to AT&T looking to roll out service two years later.

Finally, using a proprietary valuation model, the article by Value Expectations views Verizon as an attractive play, while AT&T looks overpriced.

To learn more about 4G and to stay up-to-date on the latest news and trends in the space, visit the 4G-Wireless Evolution homepage.

DIRECTV Tops for Would-Be TV Service Switchers... Really?

2009-03-26T13:15:12Z

Seeking Alpha has an article titled, Who's Winning the Cable Service Provider Wars? that discusses a recent ChangeWave survey.

While some of the results make perfect sense, other results may surprise you as they did me.

ChangeWave surveyed 2,830 respondents and found that price is now the key issue when consumers decide to switch TV service providers. Given the state of the economy, that's not too surprising. Apparently 48% of respondents who plan to switch their cable, satellite or fiber-optic TV provider in the next six months say price is the primary reason.

Slightly more surprising, but perhaps understandable is the fact that when asked how satisfied they were with their current TV service provider, respondents overwhelmingly gave fiber-optic TV services high marks.

According to the research, Verizon's FiOS service tops the list in terms of having the highest percentage of customers who say they are Very or Somewhat Satisfied with their provider. AT&T's U-Verse service is second. DIRECTV and DISH Network came in third and fourth respectively, followed by cable.

That surprises me. The part about cable being last. Perhaps familiarity breeds contempt?

But what really surprises me is that the survey results say that DIRECTV tops the list of providers that switchers plan to move to in the next 6 months. Following behind, Verizon's FiOS and AT&T's U-Verse services drew the same level of interest.

If it's based on price alone, then I would assume it's because DIRECTV offers the best deal. I know they have a basic package for ~$30/ month, but I didn't really research how it compares with other offerings from competitors, so I can't say what kind of value that brings to the table.

I had looked into switching to FiOS, but it was unavailable in my town as of now, and I assume that fiber is more reliable than satellite, and would offer higher bandwidth throughput.

AT&T's U-Verse must be doing some serious advertising, because of all the people in our office who have been tempted to switch, exactly none of them were satisfied with the experience, be it for lack of bandwidth to support multiple HD streams, or simply a lack of availability. (Don't service providers generally know whose house they can reach before they send a truck?)

For what it's worth, I am satisfied with my cable provider (Cablevision) and with the variety of programming that's available. Sure the price could be lower, but the service works, and it's reliable. The HD is satisfactory, and they just started offering a WiFi service in the area (Optimum WiFi - see Rich's blog for his take on this enticement). And yes I subscribe to a three-service bundle, (with excellent Internet and very good phone service) which helps my overall perception.

And I should mention I live in a hilly area, with lots of trees and frequent cloud cover, and I don't see many dishes in our neighborhood, so I'm not sure if that affects my perception of satellite-based television service, but I'm just a bit surprised that DIRECTV was tops on the list for people who were planning to switch.

Microsoft Surveys SMBs to Identify Business Priorities

2009-03-25T21:22:45Z

Microsoft today released its first-ever Microsoft SMB Insight Report, which is planned as an annual study of the business challenges and technology priorities facing SMBs.

The report identified virtualization, IT consolidation, business intelligence, software as a service (SaaS) and support of remote workers as the top technology investment priorities for SMBs in 2009.

The authors surveyed over 600 Microsoft Small Business Specialists in five countries.

The following are some of Microsoft's key findings on the technologies most likely to drive growth and profitability for SMBs in 2009:

· 50% identified virtualization or IT consolidation through a small or midsize server as the technology most likely to reduce operating costs.

· The Small Business Specialists expect a 20 % increase this year in the number of SMBs that use software as a service.

· More than 50 % of the Small Business Specialists considered customer relationship management (CRM), virtualization or IT consolidation through a small or midsize server as the best investment for maximizing business growth in a down economy.

· Nearly 40 % expect an increased interest in business intelligence and identified it as a critical tool for helping improve a customer's experience and increase loyalty.

· More than half of the surveyed Small Business Specialists anticipate an increase in the number of SMB remote workers, and nearly 60 % expect that the shift to more remote workers also will lead to bigger roles and more responsibilities for those individuals working remotely.

A complete version of the 2009 Microsoft SMB Insight Report is available online.

Infonetics: Carrier VoIP Market Down

2009-03-03T22:29:25Z

Infonetics Research has released the Q4 2008 edition of its Service Provider VoIP Equipment and Subscribers report.

And the news is not good.

According to Infonetics' Diane Myers, Directing Analyst, Service Provider VoIP and IMS:

"The fourth quarter of 2008 confirmed what we started seeing in the previous two quarters in North America, with signs in Western Europe and some parts of Asia as well: the market for carrier VoIP equipment has stalled due to large deployments nearing completion and shifting strategic priorities. The global economic downturn will likely exacerbate the drop in VoIP equipment sales."

According to the report, the streak of double-digit annual revenue growth, which has characterized the worldwide carrier VoIP equipment market since 2002, has come to a close.

In fact, the market declined for the first time ever in 2008, dropping 6%.

According to Infonetics, large RBOCs and ILECs are putting the brakes on VoIP as major projects are (or have been) completed. Furthermore, the economic downturn is forcing operators to move their capital expenditures to other strategic priorities.

There were some bright spots in the report. On the plus side, the Infonetics research bears out the following:

· The number of residential and SOHO VoIP subscribers worldwide increased at a steady clip, topping 107 million in 2008, driven mostly by EMEA and Asia Pacific;

· Nortel increased softswitch and trunk media gateway revenue, gaining share in both categories;

· Sonus increased its trunk media gateway revenue 45% in 4Q08 from 3Q08.

ITU Says One-Fourth of World is Online

2009-03-03T16:15:42Z

Out of context, it's a funny pull quote: "Internet usage is up due to an increase in job searches." A sad commentary on the state of the times.

However, in context, it makes for a good example of one small element of usage behavior that is driving increased Internet traffic, in the face of a global economic crunch.

The International Telecommunications Union (ITU) says that that nearly a quarter of the world's 6.7 billion people use the Internet, with use more than doubling from 11% in 2002.

Jonathan Wright, Director of Wholesale Products at Interoute, owner operator of Europe's largest next-generation network, had this to say:

"Internet usage is simply reflective of global demographics. Whilst the digital divide is ever present, demands on telecom providers are from both sides. On the one hand, established Internet users are demanding higher capacity connectivity due to their engagement with more sophisticated uses of the internet applications like peer to peer and social networking sites that require higher bandwidth support from access technologies. And, on the other hand, the entry of new users driving initially less sophisticated demands for internet access from economies like China and India is exploding.

"The Internet explosion will not be interrupted by the economic downturn in the developed world. Indeed we have seen an upturn in internet traffic from access providers who connect to residential customers. This can partly be attributed to the fact that consumers are being offered flat fee tariffs and are coming reliant on the information they pull from the Web, whether than be from shopping sites, financial websites, job searches, social networking or peer to peer sites. This growth trend will no doubt continue over the coming year."

Infonetics' Enterprise Telephony Report: Winners and Prognostications

2009-02-26T15:43:51Z

I was on the road yesterday, a quick jaunt to Chicago for an interview with Tellabs. Rich blogged about it and posted a bunch of images from the trip, including one picture that so eloquently captured my thoughts on how busy O'Hare was.

The Tellabs facility is a beautiful. Modern, spacious, everything a corporate headquarters should be.

Watch for the interview with president and CEO Robert Pullen to be published soon in NGN magazine.

While I was winging my way back home, Infonetics Research announced its Q4 (2008) Enterprise Telephony report.

The headline of the release suns it up quite nicely: "Cisco takes lead in 2008 enterprise telephony market; Alcatel-Lucent, ShoreTel sole 4Q08 winners"

So amid the gloom:

· The worldwide enterprise telephony market dropped 14% sequentially in 4Q08 to $2.3 billion, with vendor revenue down for all types of equipment including pure IP PBX, hybrid PBX, and TDM PBX

· The main cause of the decline is the lack of new business creation and business expansion due to the difficult economic climate worldwide

There were some bright spots as well:

· Year-over-year, the overall PBX market is up 1.1%, with the IP PBX segments up and the TDM segment down as the market continues switching over from TDM to IP equipment

· Pure IP PBX revenue grew 25% worldwide in 2008, sustained by new product introductions

On the vendor front, the Infonetics report found that Alcatel-Lucent and ShoreTel -- alone among their competitors -- realized PBX equipment revenue gains in Q4, with Alcatel-Lucent's revenue up 13% sequentially and ShoreTel's revenue up 1%.

And despite a quarterly revenue loss, Cisco maintained the first spot in overall PBX/KTS revenue market share in 4Q08. According to the report, 2008 saw Cisco "grab the lead" for the entire year for the first time as well.

Matthias Machowinski, Directing Analyst, Enterprise Voice and Data, Infonetics Research had this to say:

Because of the significantly deteriorating worldwide economic conditions, we expect the overall enterprise telephony market to contract fairly significantly in 2009. Once the world's major economies start growing again, however, a recovery in the PBX market will follow. We expect the market to stabilize in 2010, resume growth in 2011, and hit double-digit annual growth by 2012.

Siemens Announces Results of Communications Survey

2009-02-24T15:55:42Z

Siemens Communications announced the results of a global survey conducted by SIS Research that uncovered the top five pain points in communication for small and medium-sized businesses (SMBs). The survey found that companies with 100 employees could be losing more than $5,000 per employee per year by not addressing common communication issues.

Among the key findings:

· 68% of respondents have trouble coordinating communications among team members, affecting their ability to respond quickly to time-sensitive requests.

· 68% of respondents said they experience work delays while waiting for information from others.

· 77% of respondents receive unwanted communications that disrupt workflow and decrease productivity.

The complete text of the release as I received it follows:

Companies with 100 Employees Could Be Losing More Than $5,000 Per Employee Per Year by Not Addressing Inefficient Communication Issues

Communications barriers and latencies can cost small and medium businesses up to 40 percent of their productive time, according to a Siemens-sponsored global study

On average, 70 percent of employee respondents of small and medium businesses (SMBs) with up to 400 employees said they spend 17.5 hours each week addressing the pain points caused by communications barriers and latencies, according to a global study sponsored by Siemens Enterprise Communications and conducted by SIS International Research. The research also showed that while SMB awareness of unified communications as a solution is rising, nearly 60 percent of SMBs do not currently employ one based on the sampling.

In addition, researchers at SIS International Research determined that the time spent per week dealing with communications issues was more than 50 percent higher in companies with more than 20 workers. In hard costs, the study concluded, companies of 100 employees could be losing more than $500,000 each year by not addressing their employees' most painful communications issues.

Key Findings. The Siemens-sponsored SMB study ascertained the top five pain points to be, in order of their estimated expense to an SMB: inefficient coordination; waiting for information; unwanted communications; customer complaints; and barriers to communication. Specifically, they obtained the following responses to each of these pain points:

1. Inefficient Coordination: Sixty-eight percent of respondents have trouble coordinating communications among team members, affecting their ability to respond quickly to time-sensitive customer requests. They also average 3.7 hours per week attempting to coordinate communications across team members, slowing the realization of goals and deadlines.

2. Waiting for Information: Sixty-eight percent of respondents said they experience work delays while waiting for information from others that they have attempted to reach live multiple times using multiple methods. The average delay is 3.5 hours per week per knowledge worker. This is a considerable amount of time to spend before making progress on a particular task, which could negatively affect critical business processes.

3. Unwanted Communications: Unwanted communications, including low-priority calls and voicemail, were experienced by the survey group by 77 percent of respondents, who said they spend two or more hours per week dealing with unwanted communications. These interruptions create distractions and disrupt workflow, leading to lower productivity and missed deadlines.

4. Customer Complaints: Seventy-four percent of respondents said they average 3.3 hours per week dealing with negative comments or complaints from customers, specifically because the customer was unable to reach them in a timely fashion. This eight percent loss in productivity is itself significant, but the true cost of customer dissatisfaction may be much greater.

5. Barriers to Collaboration: Sixty-one percent of respondents find difficulty in establishing collaboration sessions with colleagues and average 3.3 hours per week attempting to address issues of inaccessibility or lack of full collaboration with colleagues.

Other Findings. Another finding of the SIS International Research study is that SMB employees are highly mobile, with more than 50 percent identifying themselves as mobile workers, either traveling outside the office, roaming inside the office, or working from home some or all of the time. Overall, SMBs placed a high or very high priority on improving communications for mobile workers.

Researchers also confirmed that SMBs are increasingly using various communications technologies, including phone, instant messaging, and video conferencing, in an effort to increase productivity. However, they found that the proliferation of these technologies has created multiple points of presence for individual employees with which other employees must contend. The resulting fragmentation of the SMB communication fabric can create a barrier to effective communications and collaboration.

According Frost & Sullivan analyst, Vanessa Alvarez, in general SMBs currently have very ad-hoc communications strategies in place. Integrated unified communications solutions, such as Siemens OpenScape® Office, which integrates voice, email, instant messaging, presence and mobility, can help efforts to solve the increasingly fragmented communications landscape SMBs are facing. "With the SIS research suggesting that unified communications can help SMBs eliminate as much as 20 percent of hidden costs due to fragmented communications, it's clear that the return on investment is significant," Alvarez said.

"This study echoes the very communication pain points that many of our SMB customers have told us are driving their adoption of our UC solutions," said Rudolf Hamann, Vice President of SMB Product Management, Siemens Enterprise Communications. "Although we are seeing strong adoption in this market, based on this study's findings, we believe that more than 60 percent of SMBs are not currently using a UC solution and are missing out on a major opportunity to cut costs. In addition, they can gain new levels of competitiveness, productivity and collaboration."

"Even by assigning hard costs of more than $5,000 per employee a year for these pain points, there remain the soft costs of lost opportunities and customer dissatisfaction due to the lack of responsiveness caused by disparate communications."

The study surveyed a total of 513 knowledge workers, in Brazil, France, Germany, India, Italy, Russia, United States, and United Kingdom. The knowledge workers also represented eight key vertical industries: communications, finance, healthcare, insurance, manufacturing, professional business services, real estate, and wholesale or retail trade.

For an executive summary of the research, go to [www.siemens.com/us/open/smb].

About Siemens Enterprise Communications Group (SEN Group)

The SEN Group is a premier provider of enterprise communications solutions. More than 14,000 employees in 80 countries carry on the tradition of voice and data excellence started more than 160 years ago with Werner von Siemens and the invention of the pointer telegraph. Today the company leads the market with its "Open Communications" approach that enables teams working within any IT infrastructure to improve productivity through a unified collaboration experience. SEN Group is a joint venture between the private equity firm, The Gores Group, and Siemens AG and incorporates Siemens Enterprise Communications, Enterasys Networks, SER Solutions, Cycos and iSEC. In fiscal 2008, The SEN Group generated revenues of approximately 3.21 billion Euros.

Note: Siemens and OpenScape are registered trademarks of Siemens AG or its subsidiaries and affiliates. All other company, brand, product and service names are trademarks or registered trademarks of their respective holders.

This release contains forward-looking statements based on beliefs of Siemens management. The words "anticipate," "believe," "estimate," "forecast," "expect," "intend," "plan," "should," and "project" are used to identify forward-looking statements. Such statements reflect the company's current views with respect to future events and are subject to risks and uncertainties. Many factors could cause the actual results to be materially different, including, among others, changes in general economic and business conditions, changes in currency exchange rates and interest rates, introduction of competing products, lack of acceptance of new products or services and changes in business strategy. Actual results may vary materially from those projected here. Siemens does not intend or assume any obligation to update these forward-looking statements.

###

Dittberner Data Shows Increase in Router Revenue

2009-02-18T13:12:32Z

According to DITTBERNER's "Service Provider Switch and Router Market Analysis", overall carrier grade market router revenue posted a 21% annual increase for 2008, surpassing $11 B.

The top five router vendors in order were: Cisco, Juniper, Huawei, Alcatel-Lucent and Ericsson.

Here's what the report authors had to say:

Even with the expectation of a decline in fixed line broadband access shipments this year, Dittberner had originally expected a 30% increase in router revenue for 2008. This was because flat growth in new broadband subscribers would be offset by an increase in bandwidth per user due to the growth in video traffic. Router revenue came in at $11.3 B, a 21% annual increase, which was less than the forecast, but a healthy increase none-the-less.

Dittberner expects 10% revenue growth for CY 2009, based on forecasts of higher fixed broadband port shipments than in 2008, and a definite increase in bandwidth per user. Even with the general state of the economy for next year, as fixed line broadband slows, mobile broadband is expected to take up the slack pushing carrier router revenue to historically higher levels for years to come.

For more information visit Dittberner's site.

In-Stat: VoIP Market Slowing Down?

2009-02-17T14:41:29Z

A somewhat deceiving headline made me sit up and take notice this morning. A news item from In-Stat, titled: Struggling Economy Will Slow the Growth of Voice over IP (VoIP) in US Business Markets drew my attention.

A closer look at the release, and it turns out things aren't all grim for the VoIP market after all.

According to David Lemelin, In-Stat analyst:

"IP continues to be a partial voice solution for most businesses with VoIP, particularly among larger businesses. Therefore, there is significant room for growth even among businesses that have already adopted it."

Recent research by In-Stat found that:

· 32% of Enterprise size businesses say the economic situation has slowed their VoIP deployment plans.

· Broadband IP Telephony remains the most common carrier-based business VoIP solution with revenues exceeding $1.1 billion in 2008, compared to $857 million for hosted IP Centrex service within the US.

· Adoption varies significantly by size of business, with Enterprise businesses preferring a partial deployment, while SOHO businesses are more likely to go IP-only.

· 13% of US businesses use both carrier-based and premises-based IP solutions

In-Stat's report 2008 US Business VoIP Overview: Stick to Fundamentals covers the U.S. business market for VoIP. The effort analyzes and provides end-user survey data by size of business for the following:

· The key factors driving or impeding VoIP adoption

· The impact of a slowing economy

· Carrier versus premise-based solutions

· Installed Vendor Market share

· The multiple flavors of IP finding roots in the US business market

IP Phones Find a Home in Business, Not at Home

2009-02-11T15:57:42Z

In-Stat is reporting that the business IP Phone market is thriving, and that by 2012, 31 million voice centric IP phones will ship into businesses.

And while IP phones are making some headway into the consumer space, In-Stat believes business IP phones will continue to outpace consumers by 10:1.

According to the report IP Phones Worldwide - On the Desk and Beyond, IP-based communication is enjoying much more vigorous adoption rate in enterprises than in the consumer space.

"Within the business market, corded IP phones remain the standard, and will continue to dominate the enterprise IP phone market through 2012," says Norm Bogen, In-Stat analyst. "However, WLAN and IP DECT phones continue to grow, especially within some specific vertical and geographical markets."

In-Stat: WiMAX Market Strong, Yet Some Vendors Shrink from Opportunity

2009-02-10T15:09:56Z

According to industry researcher In-Stat, "Broadband communications have become a crucial communications tool, so demand for mobile WiMAX technology remains strong."

But some vendors, especially those slow to migrate to the latest standards, might not be willing to wait around for that demand to translate into tangible sales.

"While the market for 802.16e will continue to grow, it does not mean happy days are here for every vendor," says Daryl Schoolar, In-Stat analyst. "In-Stat expects to see more infrastructure vendors pull back or leave the WiMAX market entirely. This is especially true for vendors that have been slow moving from 802.16d to the 802.16e standard."

According to the In-Stat research:

· WiMAX base station revenues grew by 137.9% in 2008.

· Global WiMAX subscriptions will be over 85 million by the end of 2013.

· Deployments of 802.16e are contributing to the decline of sales in the fixed WiMAX standard, 802.16d.

Seems to me that this market opportunity is real and continues to evolve. With some vendors pulling out before the market matures, it appears that there will be more to go around for the remaining players that do hang in there.

More on Broadband, Jobs, Stimulus

2009-02-01T15:49:29Z

In case you followed the recent blog chatter about the proposed $40 billion that would go toward improving broadband availability and speeds as part of broader economic stimulus, here's some more information.

According to a Reuters article, Robert Crandall, a Brookings Institution economist said of a study he co-authored that the numbers that are being widely cited in newspaper reports are grossly overstated.

He is referring to a forecast that nearly 300,000 U.S. jobs would be created for every percentage point rise in high-speed Internet use

According to the Reuters report, Crandall said, "the Brookings Institution study, published in July 2007, is not particularly relevant now because of differing employment and related migration trends at the time of the study. Attempting to extrapolate it nationwide at this time is a "gross overstatement."

The article goes on to quote Chris King, an investment analyst at Stifel Nicolaus who believes that the section of the stimulus plan that call for targeting unserved rural areas would not really incentivize rural providers to invest.

Said King, "We believe the current plans are unlikely to stimulate private sector investment in unserved areas."

King is among a group of Wall Street analysts who maintain that tax credits for ultra-fast Internet speeds for underserved areas would likely only benefit Verizon Communications and perhaps some cable companies.

ABI Research: Netbooks to Play Secondary Role

2009-01-30T15:23:27Z

Looks like ABI has been spending a lot of time researching the netbook market.

A November 2008 study targeting 1,000 North American adults found that only 11% would use a netbook as their primary computer while 79% would purchase a netbook for use in concert with a laptop or desktop computer.

According to ABI Research principal analyst Philip Solis, "While their low price does cause some consumers to view netbooks as a replacement for a laptop given the current economic conditions, the majority view a netbook as being a secondary device."

"Even as a device that is secondary to the PC, this has to cut into the laptop market somewhat. When considering another laptop as an additional device mostly for browsing the web and using other Internet-based communications applications, consumers will find netbooks to be an appropriate alternative."