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Tuesday, January 08, 2008

VoWLAN for the enterprise - role of the service provider?

It's come to my attention that a particular vendor has sent out a press release taking shots at my recent VoIPo3G report and some of my other commentary on VoWLAN. So far, it seems to have got precisely zero coverage, so I'm not going to embarrass them further by naming them. (One journalist has been a consummate professional and asked me for my response to the comments, though).

I've got no particular problems with either different opinions, or people criticising my conclusions. I dish out my own views with a fairly pointed tone; it would be hypocritical not to accept back counter-arguments.

That said, I do take exception to exaggeration and outright misrepresentation of my views. Given I have previously had a good working relationship & several healthy debates with the anonymous firm, I'll blame the tone & wording on the hapless PR-droid, who may still be hungover from the excesses of the New Year, and who I guess may now be looking for another job.

I'm particularly irked by the false suggestion that I've predicted that VoIPo3G is "set to end" VoWLAN, especially in the enterprise. Even more bizarrely, the release infers that the alternative I suggest in the report is "a dedicated 3G femtocell for the enterprise".

The reason it's an inference rather than stated as a fact, is because neither the company nor the PR agency has bought or read the complete report. They've seen a brief summary and a conference presentation. Neither of those mentioned enterprise femtos as the way forward, as I've long held the view that's an extremely unlikely proposition in the near term. Given that I've closely followed the excruciatingly-slow evolution of enterprise picocells since 2001, I like to think I'm on fairly safe ground here knowing what I'm talking about.

Conversely, I've long been moderately bullish on enterprise use of VoWLAN, especially when it's provided in an "enterprise-centric" fashion, integrated with an IP-PBX or corporate mobility controller. The sort of approach taken by Cisco, Avaya, Divitas, Siemens, Nortel/Microsoft & others resonates well with enterprise users who wish to operate a blend of desk phones, cellphones, dual-modes and PC softphones and manage the system themselves. No, it's certainly not easy, either in creating a good on-handset experience with access to applications like SMS, nor in providing good-quality voice-optimised WiFi coverage on enterprise sites. Integrating with existing systems - especially enterprise network security systems - is also a challenge.

But if anyone can solve these issues, it's the people with lots of LAN expertise, existing PBX/telephony sales & support relationships with the customer organisations, the ability to install complex WiFi installations and integrate them with all the appropriate security widgets, and integrate the whole thing with other IT and communications platforms ranging from SAP to Exchange to investment dealers' trading systems. Frankly, the mobile bit is easy in comparison to much of this.

Some of the best channels for this sort of thing are actually the systems integration arms of the large fixed (or fixed-mobile) operators. Often, they have long-standing expertise in selling PBXs, loads of established client relationships and engineers in vans, and they actually have some customer-facing personnel who understand things like ethernet, firewalls, contact centres, calling groups and so on. They also understand all the annoying minutiae of fixed-line telephony in businesses - things like fax machines, alarm systems and so on. Also for large companies VoWLAN involves some serious work doing RF site surveys, installing and monitoring complex WiFi installations from the likes of Cisco, Aruba, Trapeze or Meru. And because the fixed operators are shifting towards IT services and consulting models (plus things like international VPNs), they're not going to get too hung up on precious minutes of mobile traffic being diverted into the IP domain. And they have a healthy dislike of excessive mobile termination costs.

As well as fixed operators, some other channel partners at the vanguard of the IP-PBX industry are also well-placed to fulfill this type of project and provide adequate consultancy, integration and support.

But the average mobile operator does not possess these skillsets. Sure, they might have recently started selling ADSL lines, on which they could (in theory) hang a WiFi AP and connect to some dual-mode phones (or a pico/femto for that . Or they may have been brave and attempted dual-mode services on another operator's broadband, hoping for benign traffic management conditions. They might even have sold a few UMA or pre-VCC phones and plans to consumers. Maybe even a handful to some 'small businesses' (generally home workers or perhaps 3-person offices or shops, I'd guess).

But the simple (broadband+one or two WiFi APs+dualmode) operator proposition is not 'enterprise-grade', and nor is selling it going to be necessarily a straightfoward or profitable exercise. Clearly, the odd WiFi AP here & there isn't going to cut it for large campus sites or office blocks. Yes in theory they could put a general-purpose WiFi hotspot in the lobby for visitors, but frankly that's not a hugely profitable business. And although retailers and fastfood companies and other "high street" operations have 1000s of small locations which could get by with smaller WiFi networks, getting them to deploy VoWLAN is a huge exercise in systems integration and rollout logistics. And is usually linked to 100 other in-store retail systems, IT back-end, corporate VPN etc etc which again is well outside of scope for the mobile guys.

Which leaves the semi-mythical SME (small-medium enterprise market). I wrote what was quite possibly the first major analyst research report on selling IT to SMEs, back in 1995ish. Key takeaway - it's not one market, it's hundreds. And the headline numbers are misleading. When you first look at the statistics, you discover there are millions of SMEs (ie companies registered or paying tax). Marketing departments love this. Then they discover that half of them are actually self-employed people working at home, and many of the rest are dormant companies (XYZ Trading Ltd with the same address and sole director as ABC Trading Ltd). Then they realise that some of them aren't exactly ideal for VoWLAN deployment with dual-mode phones (eg farms, factories etc.)

Then they find information/telecoms-rich segments like fast-growing media companies or small software firms, or consulting/accountancy practices. These are indeed the right targets for FMC. Then they realise that they already have PBXs halfway through the depreciation cycle, and buy their kit exclusively through one of 30,000 local VARs and resellers who know their business inside-out. Where the wiring closets are, who's going to be around on Saturday to unlock the building to install stuff, where the sales team sits in the office, and so on. Then you find that they've moved office 3 times in the last 2 years as they're growing so fast, so are reluctant to sign a 24 month contract tied to a specific location.

And so on. That's not to say that certain companies, with the right technology set-up, caught at the right time in the investment cycle, aren't potential targets for operator-led VoWLAN. But identifying them and keeping down the cost-of-sale (and cost-of-support) isn't an easy task.

In addition to this, there's a bunch of other issues to consider - but I'll leave discussion of those for my clients. As a taster - think about numbering, user behaviour with mobile devices, WiFi performance, DSL performance, security, dual sourcing and myriad others. Not to mention the fact that many mobile operators still (often rightly in my view) treat WiFi with disdain or at least caution.

In general, the discussions above are part of the reason I am so dismissive about the prospect for Mobile Centrex, especially when positioned as a "PBX replacement". Most of the issues about customer support apply to single-mode cellular enterprise systems as well. My view is that is very much a 2003-type black and white story, and that in reality, any mobile substitution story in the enterprise will need to go through many steps of interoperability, integration and slow migration. Maybe adding 50 mobile 'seats' onto the existing system, for example. Or rolling out to a couple of retail sites a week over the course of a 2-year project. Any business model which works on the premise of "throw all your old gear in the bin on Friday night, and the new system will be 100% ready on Monday morning" is laughable.

Bottom line on my real views (as actually discussed in my reports, presentations and this blog, as opposed to being guessed or inferred by someone who hasn't asked me):

  • VoWLAN in enterprise is a tough nut to crack, but there's a lot of the hardest work done already, and deployments are now growing. But it's primarily going to be enterprise-centric rather than carrier-centric. Some operators are definitely going to be involved, it's principally going to be as channels to market via their fixed/IT/PBX systems integration and reseller divisions. There are some options for future enterprise VCC-based dualmode with more carrier involvement and management, but it's still likely to be integrated with existing corporate-managed PBXs and LAN/security infrastructure.
  • VoIPo3G in enterprise will be driven firstly by laptop users with mobile broadband, then will be slowly added on to smartphones which may also have VoWLAN capabilities. VoIPo3G is unlikely to gain much near-term traction indoors in large enterprise sites beause of RF coverage limitations.
  • Enterprise femtocells are a very long way off
  • Mobile-operator managed VoWLAN in enterprise is going to be almost trivially small. My predictions for 2008 stated that mobile IP centrex had an opportunity to capture "10-20% of 10-20% of business lines". Well, I'll follow on that theme and estimate that mobile operator-managed DSL+VoWLAN/dualmode mobile IP centrex has an opportunity for 10-20% of the 10-20% of the 10-20%. Total market worldwide is about 400m business extensions - you do the sums.

1 comment:

David H. Deans said...

Finding people with expertise for VoWLAN can be difficult, particularly a multi-location enterprise network. The Cisco Powered Program is one solution for identifying managed service providers, worldwide. They offer a tool to identify qualified MSP members on their website.