Dan McLean: Hard times aside, Canuck companies eager to invest in network convergence

Troubling times for Nortel, Cisco and the rest of the network equipment makers give an appearance of stagnation and decline gripping the industry. Many might well wonder who’s building what these days and, more specifically, what’s happened to the concept of next-generation networks and the notion of multiservice communications where voice, data and video are flowing through one transport infrastructure.

Well, Canadian businesses continue to invest heavily in enterprise communication infrastructures despite the hard times, and the evolution to network convergence continues. Results of an end-user survey conducted by IDC earlier this year show a Canadian market that is extremely interested in current network convergence solutions and is ready to spend.

Research shows many Canadian businesses have advanced well beyond the packetized voice/data networks window-shopping stage. They are, in fact, ready to make significant investments and begin the evolution.

It’s quite an amazing thing when you consider two short years ago, the adoption of voice/data technology and solutions was literally non-existent. Some businesses were experimenting with early packetized telephony solutions, but there was tremendous market confusion around the entire concept of converging voice, data and eventually video communications. In its most recent survey of Canadian business in late 2000 and early 2001, IDC Canada expectations were that, given the tremendous challenge of educating the market, that packetized voice/data market probably wouldn’t be much beyond an extremely early adoption phase.

Not only is there high interest in network convergence applications such as IP/LAN-based PBX, but also a general willingness by many to now invest. Budgets are being allocated. In fact, most Canadian companies surveyed said they would make significant purchases in the next three years – among other things, to transition traditional PBX to next-generation IP/packetized solutions. Other applications showing strong interest include distance learning, training and call centres, all driven by packetized voice/data networks.

There’s strong evidence that, within Canadian business, convergence is taking place of traditional telecom and datacom groups to a more singular entity, plus greater involvement by business groups in driving both the vision and purchase processes. Adoption of packetized voice/data is happening and probably sooner than most believed.

Research also shows IS/IT vice-presidents and/or directors are still by far the singular individuals identified most often as most important in driving the vision of packetized voice/data/video technology and solutions within their companies. But it is the CEO who will make the final decision to purchase and invest, based on the trusted advice of IS.

A slight majority of respondents believe their data networks are reliable enough as transport infrastructures for voice communications. The issue here may clearly be one of perception. Many may have been assured and convinced by packetized voice/data equipment makers that existent data infrastructures will support this new technology.

When it comes to introducing packetized voice/data technologies and solutions in their environments, most Canadian businesses admit they can’t and won’t do it alone. Many will look to external providers for assistance in consulting and implementation of these next-generation systems. In fact, only seven per cent of survey respondents said they would only use in-house resources to implement packetized voice/data solutions.

Equipment vendors are the primary sought-out source by Canadian business of information about packetized voice/data technologies and solutions, and clearly play a vital role in driving market adoption.

While there is no clear-cut choice of a voice/data-enabled network infrastructure for next-generation call centres, there is definitely a highly preferred option for the operating system to run these call centres – Windows NT.

The overall message regarding Canadian market adoption and implementation readiness is extremely encouraging for those who sell equipment and provide services for packetized voice/data technology and solutions. There’s strong validation of an emerging market in Canada and one that is poised to see tremendous spending in the next three years.

There is momentum in the market now and willingness by Canadian business to make a move to packetized voice/data communications. However, there’s also reason for prospective adopters to proceed with caution and concern. What’s the reliability readiness of packetized voice? The question has yet to be definitively answered and equipment makers sit on two sides – adding to the confusion.

Some say multiservice IP technology has achieved the necessarily reliability and packetized voice is not just possible, but absolutely practical and provides real benefit. The opposing view suggests packetized voice is extremely unreliable and dependable packetized voice is still a long way off.

Not only that, but some suggest the feature richness of IP PBX comes nowhere near to duplicating traditional systems and as a result, these communication systems have little value. What’s the real story?

Vendors and service providers certainly need to drive the excitement and interest by building more applications, which are driven by these converged network infrastructures. They must continue to demonstrate the perceived strengths of the technology – its ease of use, ability to provide competitive advantage through creation of powerful new business applications, and lower cost versus traditional less functional separate voice and data communications solutions.