Industry Insight

Two weeks ago, I talked about the rise in sales of video-enabled mobile devices and how consumers now expect exceptional quality since they are paying extra for premium services.  But how can video quality really be measured?

Traditional methods of measuring video quality focused around QoS, and usually involved some technical measure of network performance that dates back to voice technology. These methods may have been state-of-the-art in the past, but in today’s environment they can be inaccurate from a customer point of view, making them insufficient.

The historical way of measuring service quality has been to measure packet loss. For a voice call, with relatively steady packet transmission throughout the process, this was an acceptable measure of service quality. If a large percentage of packets were lost in transmission, the quality of the call was degraded significantly or lost entirely.

But video transmission is very different. Continue Reading...

IT Expo East was held last week in Miami.

One thing I like to do at shows is to figure out if there is a clear theme or not.  Sometimes there is, and sometimes there isn’t.  I would say this year, one of the themes at IT Expo East was mobile video.  The Dialogic booth had a mobile video conferencing demo (video conference tablets, smartphones, laptops – any broadband endpoint) that was busy much of time, and others at the show were also demonstrating aspects of mobile video.  Additionally, there were multiple sessions that touched on video conferencing.  The panel I was part of had a full audience and very good audience interaction around this topic.  We talked about some of the issues, but also talked about how adding video, or visuals of some sort, to an IVR or to conferencing enhances the overall experience.

Device manufacturers and carriers are touting the quality and speed of their offerings. You’ve probably noticed that they’re always advertising how fast movies and videos can be downloaded, the quality of video streaming, and the sharpness of video quality.  Meanwhile, television networks and other content providers are promoting the convenience of video on demand. Together, this provides an expectation among consumers that not only will they be able to view everything from football games to their favorite shows wherever and whenever they want, but that the experience will be similar to watching the same content in real time.

In my next few blogs, I’m going to talk about the surge in growth of video-enabled mobile devices, what consumers now expect in terms of mobile video quality, and how quality of experience can be measured, tracked and monetized by operators.

Robust sales of iPhones, iPads and Android-enabled devices shows that consumers are willing to pay a premium for mobile devices that provide access to high quality video, on demand.  In fact, IDC reported that media tablet shipments rose by 88.9% on a sequential basis during the second quarter of 2011, and forecasts that 62.5 million tablet units will be shipped by the end of 2012.  That’s a lot!!

But what are the implications of this exactly?  For starters, since consumers are paying more money for premium service, they’re going to want exceptional quality. Continue Reading...

In last week’s blog, I introduced this graph showing the history and expected trends for network border elements - the Media Gateway and the SBC.



Graph derived from Infonetics data, November 2011

There are two interesting things going on in this graph.  First of all, you see the gateways declining and the SBCs growing as time goes on.  This makes sense since as more and more IP networks are deployed, SBCs are required to connect them to each other.  Wireline IP voice-based networks, such as cable networks, and telco data backbones being used for VoIP, have been driving service provider SBC growth.   Adding value-added services to these networks helps drive Access SBCs.  And as LTE starts to get deployed, with the IP network this brings, there is an avenue for continued growth of Service Provider SBCs.  After all, SBCs came into fruition with the introduction of IMS networks.  As these IMS, or IMS-like networks, get deployed, we need SBCs.  Hence, we see SBC past growth and continued expected growth.

At the same time, it makes sense that the service provider gateways will decline.  While connecting to TDM networks is critical and we see continued sales of gateways, the number of new ports required to do this just isn’t sustainable in past numbers.  New TDM networks aren’t being deployed so connecting to them isn’t a growth business. We still need gateways to connect to existing ones as more VoIP is deployed, or we need expansion as more VoIP is deployed (see my blog two weeks ago on Skype), but just not at the same rate as the past.

I would even predict that we’ll see the marriage of media gateways and SBCs for a combined gateway/SBC border element, since in some cases this would make the most sense when VoIP is deployed in both a TDM and pure IP network scenario.  These products would likely come from vendors with both TDM and IP experience, such as Dialogic.  The pure IP vendors would continue to insist the world is conveniently only IP.

But there is another thing going on here, which is an overall border element decline with a nadir in 2011, then border element growth starting again in 2012.  What is going on here?  Well, likely there are a few things happening. First of all, we are seeing the effects of the recession and overall economic uncertainly in these declining timeframes.  But I also think we’re seeing something else, which is the realization from the service providers that they didn’t need the wireline gateways in the numbers they had in the past, but they hadn’t quite rolled out IP networks yet and thus didn’t need the service provider SBCs in the numbers they need now.   

Network Border Elements connect two types of networks to each other, sitting at the edge, or border, of each network.  Looking at the data below from Infonetics, you can see a trend developing from back in 2007, which we will explore in more detail in next week’s blog. 

The wireline service provider border element of choice back in 2007 was a gateway.  Gateways are required to connect IP networks to TDM networks and deal with the media and signaling conversion between the two networks.   When voice interconnects between IP and TDM networks, then we need a VoIP gateway to handle all the transcoding and signaling conversion.  When video interconnects between these two networks, then we need a video gateway.

You can also see the SBC’s starting to come into the picture, as IP-IP network interoperability started to come into play.  Since we don’t have a single gigantic homogeneous IP network, we need border elements on the edges of these IP networks to translate one type of IP signaling to another (for instance, SIP-I to SIP-T), and handle the media transfer, and also to handle the security so the networks can effectively be insulated from each other.   

Together, these two types of edge equipment created a service provider border element market well in excess of $1Billion back in 2007, where it declined and is expected to climb well over $1B again in the future.  (Note: If you want to get the full report with the actual figures, please visit the Infonetics website.)

Graph derived from Infonetics data, November 2011

Next week we will explore this graph in more detail.

Two years ago, Skype was doing about 13% of all International minutes.  One year ago, Skype was doing about 20% of all International minutes.  We should find out soon what the research analysts think Skype’s percent of 2011 International minutes is, but I’m guessing it will be over 25%, perhaps even approaching 30% for 2011. 

People are even using it as a verb – i.e. “When did you talk to him?” “Well, I Skyped him just now.”  And it’s becoming a well known brand. (I figured this out when my parents knew what it was and used it as a verb!)  Talk about entering the mainstream.

The real value-add though is in the video calling.  According to Skype, 300 million minutes of video calls per day are using Skype, and that’s about 42% of all Skype to Skype minutes.

Since international calling isn’t a great revenue driver for most telcos, all of this isn’t that big of a deal to many folks.  However, Skype calls can happen on mobile devices via WiFi or via the over-the-top data.  As LTE gets deployed, and the wireless mobile networks get even faster, these kinds of calls will become more commonplace.  Couple this with Facetime, and we’re on the cusp of seeing video calling moving from a laptop experience to a truly mobile experience.

A few weeks ago, I explored how fast networks and cloud computing are impacting the Premise Network.  This week, the final blog of this series, let me explore some of the apps that could attach themselves to this kind of “new CPE” network.

First of all, we see some movement of so-called “non-essential” apps to the cloud.  A typical one falling into this area is fax.  Fax is still utilized today, but maybe not in the same volume as 10 years ago.  Nonetheless, it’s still important to companies, but the IT departments may not want to support it. As such, it becomes a great candidate to move off premise to the cloud.

Given these are IP networks, High Definition (HD) Voice apps will surely pop up.   HD Voice uses wideband codecs to more accurately reproduce the human voice. The result is significantly more natural speech, and some early users liken it to “being in the same room” as the person on the other end of the phone.  HD Voice codecs are used in some Unified Communication Hubs, and they are making their way to some mobile networks as well, so we will hear more and more about HD Voice in the new CPE.

Conferencing is also a key application.  Many companies use an external conferencing company already.  We are also seeing that “new” enterprise productivity apps, such as video conferencing, would be good for the cloud and are not currently being implemented that way.  Other examples of new enterprise apps include video-enabled IVRs, social networking and mobile advertising.  You might find social networking surprising, but social networking is important to many businesses, especially businesses that market to consumers.  These types of applications were not really possible ten years ago, but they are being implemented now.

In short, the definition of CPE has radically changed due to fast networks and mobile devices.   It’s no longer a simple brick and mortar definition.  It’s all moving to cloud-based applications, even for telephony.  HD Voice is now being heard, and video is entering the picture as well – there are a great deal of possibilities for the future premise network.

How can Dialogic help you get to the “New Premise”?

Dialogic has been servicing enterprise customers since our inception almost 30 years ago.  We have innovated continuously as networks have evolved,  and we continue to do so.  We understand the enterprise, how to service our customers there, and we have a vision for where it is going.  This history of excellence is something you can count on.

Dialogic has products that can help you participate in this New Premise.  Our PowerMedia Media Server Software is virtualized and has the APIs to move you to a Cloud environment.  It also supports the new media that that the cloud will enable, such as video and HD Voice.  Remember that any value added service that’s connected to an HD Voice enabled network (such as Voice Mail or IVRs) should also be HD Voice enabled so you don’t lose that wideband capability, so having HD Voice in your media server is critical.

Dialogic also has an Enterprise SBC (E-SBC) that is architected as an enterprise border element.  It is a combined SBC and traditional Gateway so that you don’t need to buy two border elements for the enterprise. Continue Reading...

It’s the time of year to make some predictions.

1. 2012 will be year of interactivity.  What does that mean?  The increased penetration of smartphones worldwide, with worldwide 3G network buildout, will enable more mobile interactivity via social networking tools like Facebook and Skype instant messaging.  Additionally, in the enterprise, more people will use the collaboration tools such as “sharing.”  As such, more interactivity in communications will occur, as opposed to one way communications like email.
   
2. If you buy into the above premise, then it will stand to reason that one way communications such as email and SMS will start to decrease.  Even the US Post Office is seeing a decline in its business since its peak in 2001 due to online communications methods and is considering moving to 4 day work weeks.
   
3. As 3G networks build out around the world, we will see worldwide bandwidth constraint issues like we saw in the US when the iPhone came to AT&T.
   
4. LTE will take the US by storm, at least in the areas LTE will be deployed.  This increased speed will also create new expectations for consumers since LTE very much delivers a wired broadband experience.  As such, consumers will demand the video they are consuming over LTE be of high quality.  We’ll see some issues in this regard pop up in 2012.
   
5. Voice will continue to make money.  Let’s not forget that.  Even my kids are realizing it’s sometimes quicker and easier to actually talk.

Last year, I made 5 predictions for 2011.  Let’s be honest and see how I did?

1. It will become more of an everyday occurrence that people find the benefit and joys of using WiFi offload instead of utilizing the 3G data path.

Score:  Probably right, though not to the extent I had envisioned since even if you are in WiFi range, if you have to pay extra for it, it’s not going to happen.  People will continue to use the 3G data path.  However, I do see people with iPads and iPhones going right to WiFi if they’re in a convention center, or airport, or something like that where there is free WiFi available.

2. The last all-TDM PBX will ship!  And as a bonus note, Microsoft will actually keep the name of Lync for at least 2011

Score:  Not quite on the TDM PBX, but I was just making a point.  It will be soon.  And yes, Microsoft hasn’t yet changed the name of Lync.

3. iPads will overrun the enterprise, even though outside of being a bigger email reader, they really aren’t the greatest office tool.

Score:  There are a lot of iPads, but people have typically bought them on their own, and they are asking to get them connected to the corporate IT environment since they are great at consuming content, such as email.  So they haven’t overrun the enterprise as far as I can see, as corporate management I think is smart enough to realize, at least for now, that iPads are hard to create content with.  However, I have heard of some companies giving these out to employees!  

4. Continue Reading...

Yesterday, I experienced my first LTE interaction by using an LTE phone that belonged to a colleague.  I am not usually easily wowed, but Wow, that was an unexpected experience.  I knew it would be fast but I was floored by just how fast it was!   I mean like it says on the commercials, going out to websites and grabbing videos was faster than using my laptop from work, not to mention from home.  Now, maybe I was the only person in the cell vicinity to be on that LTE network so there was no bandwidth hogging action going on, but I was impressed.  If anyone in my family is reading this, I want one for Christmas fast!

Last week, I level-set on what a typical Premise Network might look like today. Advanced networks, including mobile networks, are impacting the definition of the premise though and so this “typical” concept is evolving rapidly.  More and more people are connecting to the enterprise network via mobile devices, even on mobile devices the IT people wish they wouldn’t connect with.  But customer desire is overwhelming the IT people and these devices are coming to the enterprise networks, whether IT managers like it or not.  Additionally, fast IP networks enable applications to be hosted outside the premise, but serve the premise nonetheless.  In other words, cloud computing is having a huge impact on the enterprise or CPE network.  Advanced networks enable the premise to be expanded, and the definition becomes fuzzy, so it’s no longer “premise” per se, it’s more of your “corporate network.”  This is not really a new concept, since for years VPNs have been enabling the enterprise network to shift out to cover whatever is IP-connected.  But that was for data type of applications.  Now it’s happening for all the traditional enterprise communication applications.

Cloud is now entering the realm of telephony and is not just for CRM or for storage.  Analysis I’ve done of Infonetics data shows that PBX lines should be about 25% hosted/cloud by 2015, and UC applications should be a little under 10%.  In other words, this is happening, but it’s also still in the early stages. 

Two weeks ago, I presented at the US Telecom Voice Innovation 2011 Conference on the topic “The Premise Network.”   While it might not sound so interesting, the Premise Network is undergoing much change because work is not just a place to go anymore, it’s a state of mind.  The talk was mostly about the future of the premise network, but before I got to that, I needed to level set on what a typical premise enterprise network might look like.  In my estimation, “typical” means there is likely still a traditional TDM network, but only because it’s there and exists and IT doesn’t want to rip it out and remove it, and there is a VoIP network as well.  There is no doubt that on most enterprise networks, VoIP is there and is either the lead communication network overall, or major pieces of the enterprise network have been totally VoIP enabled.  This could be all “adds” to the enterprise networks occur on the VoIP networks, such as with new remote offices or with new employees.

Dialogic is a typical enterprise in this regard.  In the building where I have an office, we still have a traditional PBX, but we also have the whole building on a “Unified Communications Hub,” with some users exclusive to it.  In our case, this is Microsoft Lync.  And we have most of our remote offices exclusive to Lync, with PSTN connectivity requirements handled via the Dialogic gateways.  We do most inter-company calls, including our conference calls, using this setup. 

Interestingly enough, the concept of a call “changes” from a traditional conference call where you all sit in a conference room around a phone and stare at it.  This experience is way more interactive since desktop sharing is involved.  If you are talking about something and want to show people on the call what you mean, you can bring up your screen to show them.  Much more interactive and useful.   Or if you choose to read this another way, people are probably doing less multitasking (i.e. reading less email, or less of instant messaging someone, or less of surfing the internet) than on a typical conference call.

The "Typical" CPE Network Today

But for many readers, this setup is pretty standard now and is in fact, pretty “old school.”  Like I said, I needed to level set.

About a year ago, I got an iPad to use at work.  About a month after I got it,  I predicted I wouldn’t use it too much since I found the iPad great at consuming content but not creating content.  And I create a lot of content, for instance this blog (yes, this is content to some folks).

Now that the holiday season is upon us and many people out there will be finding iPads in their stockings, I figured I’d tell you how in fact I used mine. 

Well, I tried, I really tried, to use it to create content as simple as this blog.  But I just cannot type very well with the iPad.   When I was in the 7^th grade, my mother made me take typing class because she had a vision for the future - no, not computers - but me typing various high school and college reports on typewriters (remember, this is the era when we went to college with LARGE record players and LARGE speakers, and, of course, a sleek IBM Selectric briefcase – different times people!).  And at that time I tested out at 52 words a minute.  I remember since it matched the weeks in the year.  So maybe I am hopeless in that I’m too wedded to tactile keyboards.  Who knows, but I have a hard time typing on the iPad.  So I do not use it for creating content, as I suspected might happen.

And because of that, I don’t actually use it when I go on a business trip.  Or shall I say not as much as I thought I would.  Because when I’m on a trip, I’m usually creating content of some sort.  And I don’t want to lug two computer-like things around.  So guess what stays behind?  Yes, typically the iPad unless I know for sure I won’t be needing to create content or I know for sure that I’ll be walking around needing to show presentations, like when I’m meeting people at shows, in which case I will bring both. 

So what do I use it for?  It’s definitely about the apps.  I have some good apps for showing presentations, even where you can “share” presentations so if someone else has an iPad you can just share it via WiFi with them.  And there are other useful things like shortcuts to websites that I frequent for work, such as the Dialogic website.  On-ramping to these is clearly superior with the iPad as opposed to a laptop.  It's much quicker. 

And when I’m at the office, I actually use it as well.  When I need to leave my office and go to a conference room, I don’t have to undock the computer and go through all that stuff – I simply take the iPad with me.  Clearly the iPad is better at consuming content like email than my blackberry is.  So I’ve been using it more and more for that.  I never thought I’d use it at work like that, but you take the best tool for the job, right?

Outside of the office I use it way more than I ever thought I would.  If I go on a day trip in the car, I take it because of the good navigator app.  I just keep it in the car.  But guess what – I do more work when it’s with me since it’s easier to consume work content.  So I do more email, and read more information, than I ever did.  I’m sure this was the diabolical plan of my management team when I got one.  But I don’t care.  The power of the iPad!

Back in June, I wrote a blog about mobile commerce and using your phone to pay for services, or using your phone to enable mobile banking.  These are all huge growth opportunities for the industry. 

I wanted to follow that up with some comments about how this works.  Some of the payments will be made using the internet, that is, the mobile internet.  Since a smartphone is an on-ramp to the internet, then the same mechanisms to pay via the internet can apply.  This is a little cumbersome since we’ve all likely done this in airports with our laptop – we’ve had to put in our credit card numbers, etc.  To make this easier there might be specific applications downloaded to the smartphone to better enable this.  And there is the concept of near field communication where the phone can be waved near a reader to enable payment.

However, a substantial subset of mobile payments will be made using SMS or USSD, which involves SS7 signaling.  One method of payment would be to charge your mobile phone.  You can say a lot of things about mobile phone companies, but one thing they DO know how to do is to bill you.  In this case, that is an advantage.  You simply add the charge to your mobile bill.  All of this activity would be accomplished via text messages or USSD codes that request and confirm payment.  While this may not stem the tide of pending SMS doom (see last week’s blog), it expands the role of SMS.

Mobile payments.  It exists today.   It’s easy.  It works.  It’s there.  Smartphone not required.  Thanks to that crafty SS7 protocol suite.

The last few months, I have been thinking a lot about SMS.  We’ve had customers deploy and develop voice and video SMS solutions, which are innovative in their own right, and we’ve seen what Twitter can do.  But at a very high level, what is the future of SMS?  

I mean, as IP mobile networks proliferate, you can “instant message” people much more easily by using over the top data services.  And with the rise of Smartphones (see last week’s blog) the use of over the top data services arrives. I’m also a Blackberry user and while I don’t really use the Blackberry messenger feature, I could.   These, and other technologies, would impact SMS.  The need to “nearly instant” message is still there, you’d simply “nearly instant” message just using different technologies.

So I found this blog from Matt Ablott very interesting – he cites data from a Dutch regulator about SMS declines.  Matt raises some good points about how fast the decline may be, and how the operators may or may not respond.  Good thoughts for all of us to wrap our head around.