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On the Road to Convergence (November 01, 2005)

In this space, strategic-minded providers with a keen eye for customer needs can build sizeable market share.

November 1, 2005  

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After much speculation, IP converged technologies have now hit the mainstream and telecom and cable service providers stand to realize significant revenue gains.

There is a continuing need for providers to help business operations and residential customers understand the opportunities — and the challenges — that can be found in converging their voice, video and data services.

As with most new technologies the needs and the challenges can differ significantly between large enterprises, small businesses and/or residential customers.

Whatever their state of readiness for IP adoption might be, IP convergence is an area where strategic-minded providers with a keen eye for customer needs can build sizeable market share.

Enterprise Customers: For enterprise customers, the principal driver for transitioning to IP technology will be reducing the operational costs associated with managing multiple networks.

Distinct separation

Many are also feeling increased pressure from customers and vendors to adopt IP convergence in the interests of efficiency.

Enterprises are expecting to get more out of their networks by looking to services such as VoIP as a means to leverage their investments and save costs.

However, many of these implementations will certainly present technical challenges to those not well versed in the proper processes required.

For the most part, large enterprises have maintained a distinct separation between voice and data services and support. When the IP convergence process begins, telecom and network specialists will find themselves outside of their traditional domains and obliged to work as one.

A key issue for enterprise customers therefore will be evaluating their internal processes and teams and understanding the steps needed to integrate functions that once operated independently.

Another significant challenge is the infrastructure changes needed to migrate from legacy to IP systems. Enterprises for the most part are not equipped to migrate overnight, so providers must offer options to help them transition at their own pace and be able to accommodate the many varying facets of IP integration.

Small Business: As with larger enterprises, small businesses will also look to IP convergence as a means to reduce costs.

An added incentive is that IP convergence will also provide them with access to features that were previously only available to corporate networks.

Providers should be prepared to see small businesses disillusioned during the early stages of deployment, when the results of their convergence efforts may fall short of rather lofty expectations.

Since it is a relatively new technology, they will likely face a few challenges during the first year of adoption.

Small businesses are also tied to limited budgets, so may be hard pressed to keep pace with the required technology changes.

The onus is on providers to continue to educate and inform small business operations of the realistic business benefits they can hope to achieve with IP convergence.

While most are aware of the technology, many require more tangible proof of how IP can positively impact their business today.

One issue that will play a key role in their decision making process will be scalability, since many will be looking at an incremental transition to IP as a means to reach more customers as affordably, simply and effectively as possible.

Residential: Residential users are the least conversant in IP convergence and less willing to make the transition.

Adoption for the residential group on the whole is not an imperative, so don’t expect many to be committing to a course of action any time soon.

Fierce Competition

The eventual decision to move to IP will be solely driven by a need to reduce costs and/or increase capabilities. Remote workers will likely be among the first to adopt the convergence route.

Competition for winning over residential customers will be fierce.

Many homes today already have access to DSL, cable or wireless high speed, and traditional telecom and cable providers will be fighting for market share with an influx of incoming VoIP specialists.

No matter what the sector, it is critical that providers working with customers as they move along the road to IP convergence understand the specific challenges and needs of each.

While some are well entrenched in making the transition, others will need to gain a clearer understanding of the business benefits, and technology and process change requirements before they commit.

Brad Masterson is Canadian Product Manager for Fluke Networks and a member of CNS Magazine’s Editorial Advisory Board. He has been involved in the field of networking and network testing since 1995.