Popular Telephony Peerio a Skype Killer?

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Popular Telephony Peerio a Skype Killer?

This is a draft of an article I am writing on Popular Telephony's Peerio which will be published in the November issue of Internet Telephony Magazine. With print magazine lead times versus no lead times online, I thought it was imperative to get this important news out to the VoIP industry as quickly as possible. Popular Telephony aims to change the VoIP landscape with their P2P technology, and word has it, Skype is shaking in its boots. Ok, maybe not..

I’ll most likely provide some additional information in the print magazine as well as some more graphics. Here's the draft so far...

The first PBXs started at the Central Office (CO) using Centrex, and as its name states, it was a “centralized” architecture located in the carriers’ offices. PBXs then evolved to a CPE-based (customer-premise equipment) model, which again required a “centralized” PBX to host all the call switching/routing functionality. And now with Popular Telephony’s Peerio P2P (peer-to-peer) technology, the intelligence has moved from a centralized PBX down to the end-user’s device - namely the phone itself which is more than just an evolution - it’s a revolution. This peer-to-peer technology turns the enterprise PBX market on its head. When you examine Peerio, you have to ask yourself “What do I need all this infrastructure for if I just need a phone? There is no longer a need for an $80,000 PBX (or IP-PBX) or even the need to spend $1,000 for a SIP end-point phone.”

Peerio implements a server-less and switch-less telecommunications system via portable middleware installed in embedded devices such as VoIP hardware-based phones as well as support for a soft-client. Peerio is also protocol-agnostic, supporting SIP, H.323 and other standard and proprietary protocols. Direct communication between Peerio-enabled devices operate as a fully functioning telephony system without the need for a call controlling servers, softswitches, proxy, gatekeepers or an actual PBX. By eliminating routing through a centralized PBX, node or switch, Peerio achieves dramatic cost reductions.

peerio architecture diagram

Peerio Architecture Diagram

The founder of Popular Telephony, Dmitry Goroshevsky actually co-founded Deltathree, another VoIP company - so you know he knows his VoIP “stuff”. Rich Tehrani and I interviewed Dmitry to inquire about their ground-breaking technology.

One of the first questions we asked about was security as it pertains to P2P systems, and he claims they solved that security problem and have several patents on their security methods.

Dmitry: “The only problem with p2p system is that there is no ‘trust’ element in the network to for example transmit the keys. But from another perspective, if you solve that problem, it may be even more secure because in the centralized server market, you crack one server and you compromise the whole network. In our environment, they would have to crack into 95% of the phones to crack the whole system, which is not probable. So maybe technologically the challenge was bigger, but once we solved it, in many ways its even more secure than before.”

Rich: If I play devil’s advocate, if you’re an Avaya or Cisco, what would they say to eliminate this “threat”?

Dmitry: There will be a lot of counter attacks from Cisco, Avaya, Nortel, etc. I believe they will try to say that it’s not going to work, it’s not scalable, it’s not going to work to try and protect their market. But if the technology is what I am saying - and I know that is - and soon customers will know as well, then from my perspective it will only cause temporary delays of the adoption, but it will not cause the adoption of the technology to stop because it is just better. Also, it is much cheaper technology, so it will be adopted sooner or later.

Peerio administation interface

Peerio Administration Interface

Tom: How does the admin interface work?
Dmitry: You can use the administrative console to configure the system, create groups, policies, whatever you can do to a regular PBX. You install the admin interface on PC/laptop, configure via the webpage, make changes, then hit the button to upgrade the network . When you do, it’s goes off your computer onto the network, then you can close your computer, and even disconnect from the network. Even if half of you network goes down, it will update when it comes back up.

Tom: Is the admin interface sending some sort of broadcast to find the Peerio end user devices?
Dmitry: No broadcast, no multicast. It’s just how it works. Imagine you are working with a database - but it’s nowhere… it’s everywhere…

Both Rich and I laugh at this remark. What is this double-speak? I felt like I was listening to some martial arts B-movie where the sensei gives advice to his apprentice that is supposed to have some deeper meaning, but the apprentice just doesn’t quite comprehend it yet.

Dmitry continued: I know I’m starting to speak like a matrix, but… When we show the demonstration in our offices, of the scalability, of the modeling of our nodes, with some extensive testing/messages, because it’s green, it looks like a matrix. [Think Matrix the movie]

Tom: How do you compare yourself with Skype, another well-known peer-to-peer VoIP company?

Dmitry: The main difference between us and Skype and whoever else is out there is that our technology is completely different. It’s completely server-less technology. We don’t need any sort of centralized device, superpeers, supernodes, like Skype to create the telephony network and to provide all the features of the telephony network.” The other thing that is different is Skype is more consumer oriented and we are enterprise telephony oriented.

He also pointed out that one of Skype’s most valuable features is its ability to pass calls through firewalls and other security devices that use Network Address Translation (NAT) and stated, “This is great for users because they don’t need to configure anything, but it is a tremendous security threat.”

It was obvious to us, that many IT administrators are not happy that Skype is able to penetrate their firewalls/security procedures put in place, which is probably why till now, Skype is mostly a consumer-oriented application as opposed to a viable enterprise telephony solution. This may change of course. We’ll see what Niklas Zennstrom, CEO of Skype has to say at Internet Telephony Expo. Perhaps they are moving in the direction of enterprise telephony.

Tom: What are some of the cost advantages of using your server-less/PBX-less technology?

Dmitry: There is a huge cost advantage over traditional PBXs. We can cut 80% off the cost of the PBX and 90% of the maintenance costs and over the course of 10 years, up to 99.25% TCO on the enterprise telephony system.

Rich: Tell us about your telephony feature-set as compared to a traditional PBX.

Dmitry: We currently have 200 telephony features, and again let me state that this is on server-less technology. All the routing, conferencing, and other telephony features are all based within the end-user device.

Both Rich and I were very impressed at over 200 telephony features residing on the phone itself. Dmitry stated they are aiming to implement all of PBX/telephony features (which today is estimated at around 750 total telephony features.)

Tom: So what are the technical specs such as the number of P2P end users and the amount of flash memory?

Dmitry: With No voicemail - only 1MB of Flash ROM scalable to a theoretical 4.5 billion end-user devices.

Tom: So how do you discover other end-user clients/phones/extensions?

Dmitry: I cannot explain technologically how it works, because obviously it’s a secret. Basically, by you using our core as let’s say you would use a database engine. The only difference is that it’s not running on any kind of server, but it’s actually running on all the phones combined together. And obviously since it’s scalable without any increase in memory or processing power it’s not storing all the information on all of the nodes, but by posting queries to the Peerio software running on your device, Peerio software will return you necessarily 100% cases the right result or any kind of information you are trying to find on the network.

Tom: (thinking to myself later) How the heck does it return 100% accurate results when the entire database is not stored on each phone????

Logicom cordless phone with Peerio embedded

Logicom cordless phone with Peerio embedded

I should point out that Logicom (see photo of phone), a major French telephone manufacturer will be using Peerio in a consumer product. They are building a cordless phone - that will have both a PSTN plug and an Ethernet plug. Customers will be able to seamlessly make and receive calls with other Peerio devices and over the PSTN from the same wireless handset.
Adtech SI-160 phone with Peerio embedded

Adtech SI-160 phone with Peerio embedded

Also, ADTech (see photo), a Belgian VoIP provider of smart-card based VoIP solutions, has selected Peerio for their SI160 IP phones. The unit will combine Peerio's VoIP application with ADTech's smart card based security and payment technologies during the 3rd quarter of this year.
Vonitel IP110 phone with Peerio embedded

Vonitel IP110 phone with Peerio embedded

One final Peerio-enabled phone worth mentioning is the Vonitel IP110. (see photo to the left.)

Peerio has some great features. For example, it can seamlessly scales from 2 to 4,294,967,296 telephones. They claim Peerio has a redundancy of more than 99.999%. Since Peerio routes calls directly between telephones or other endpoints on the network, without passing them through a centralized switch or server, it eliminates critical points of failure and the costs associated with redundant servers or systems. They also claim to be able to combat security threats, such as Denial of Service (DoS) and Man-in-the-Middle attacks, which is critical in any voice over IP deployment. A brief list of important telephony features include: voicemail, auto attendant, call transfer, forward, park, call conference, call supervision, least cost routing, hunting, soft phones, web and e-mail integration, CDR, logs and other statistics.

I should mention it supports several processors, including the PocketPC ARM, MIPS, Power PC, X86, Alfa, as well as Linux, Lynx, VxWorks, Palm OS, Win32, Mac OS X, OS/2. Their Windows client is called Peero444, which at first I was befuddled as to why the “444” at the end. That was until I discovered that when you are calling a PSTN phone number, you enter the number into the Peerio444 interface and then click on the "444" button.

But essentially the Peero444 softclient goes head-to-head against Skype. The software will let users make VoIP calls to phones on the PSTN and includes free features that include voice mail, call waiting, call hold, and call transfer. Linux and Macintosh versions are coming later this year. Unlike existing peer-to-peer VoIP technology, Peerio444 is not monitored by switchboards or Spyware, does not contain Adware or other backdoor profit tools and does not restrict users to call only other standard VoIP applications. With its H.323 and SIP support, Peerio4444 is not only the first true peer-to-peer software application, it’s also the first P2P product to support both major VoIP protocols.

On Peerio444, Dmitry stated, "Built on open standards and inspired by the principles of true peer-to-peer computing, we expect the enabling technology behind Peerio444 to become a basic platform for peer-to-peer telecommunications. Peerio444 will be forever free to consumers and is phase one of Popular Telephony's plan to become the leader in peer-to-peer telephony."

Make no mistake - Popular Telephony does not expect to attract the same kind of user base numbers that Skype has - over 12 million downloads and 1 million regular users - at least in the short-term. However, they will offer the program for free through popular download sites and make portions of the source code open for users to modify and redistribute. The goal is to help build interest in Peerio, the enterprise-based middleware that can be installed in hardware-based phones that license the technology from Popular Telephony.

Some, including industry analysts are skeptical of Dmitry’s vision which is, “We anticipate that within ten years there will only be peer-to-peer calls placed over the telephony network, making it the de-facto standard for next generation telecommunications," They claim there is a stigma attached to P2P as being consumer-oriented, a security risk, and a hobbyist’s toy - not a serious enterprise telephony solution. Jon Arnold, an analyst at Frost & Sullivan, was quoted as saying, “I don’t see how someone else starting from scratch is going to get that kind of traction.”

While there may be some truth to that statement, in my opinion, the technology in Peerio and Peerio444 is very good and word of mouth will spread about its use of open standards, its very good feature-set, its “right-off-the-bat” PSTN and PC-calling, its excellent security, and of course it’s free ( the software client, Peerio444 anyway). Also, Popular Telephony has inked some deals with some termination partners to offer PC-to-PSTN calling.

Just imagine if Popular Telephony is successful. You will be able to buy a Peerio-enabled hardware-based IP phone, plug it into your home or business router and instantly be able to call not just other Peerio users, but also any PSTN number. If the number you are dialing is a PSTN number, you will simply “hop off” the Internet onto the PSTN using one of the many (and growing) termination service providers, such as Level3, but also cable companies, and others are getting into the termination mix. And of course if you are dialing another Peerio user, the call is free - so you get the best of both worlds. On top of the “cheaper” long distance, with Peerio you also get professional, business-grade telephony features such as auto-attendant, voicemail, conferencing, call supervision, call forwarding, and more without the need for an expensive PBX. Saying that Popular Telephony’s Peerio peer-to-peer VoIP technology could revolutionize the telecom market is an understatement.

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