The emerging convergence

The emerging convergence

Standard telephones, mobile phones and associated components have been a part of the technology and electronics sales sector for years, but they are now to be joined by a wide range of new devices as broadband Internet services become available. In the consumer sector, we can expect to see DSL modems, digital television storage devices, multiservice boxes and the like. In the business sphere, we are beginning to see entire phone systems migrating to the computer network, complete with PABXs, sophisticated voice-mail systems and Web-based call centre management.

Although many of these capabilities have been available for some years at the large corporate level, they are now shifting to the SMEs. As part of the downward migration, these capabilities are becoming available in easy-to-install components rather than as complex network systems. For systems integrators, this means the evolution of whole new markets, and a variety of components to be added to standard PCs. Converged communications, including data and voice, plus a multitude of multimedia offspring, are creating a number of new challenges, and rewriting the distribution match.

Channel convergence

The retail and supply chains for computers, telephones and other multimedia products have long been served by different companies with different areas of expertise. As these technologies come together, retailers and distributors from all sides will vie for the convergent products and their markets.

New applications

New uses are being found for computers in managing telephony and serving as the hub for digital devices. This opens new opportunities for software and add-ons, but also requires new knowledge. In the consumer area, this includes things like integration of digital cameras and PDAs; in the corporate sphere, it includes voice-over-data networks, PC/PBXes, voice mail and voice links on Web pages.


Because products in this area are new, and standards are in a state of flux, considerable care is required in ensuring that products required for a solution actually work together. This is leading to numerous partnerships throughout the industry, and for integrators, requires equires development of strong relationships with new vendor partners.

More capabilities mean more opportunities for tailoring a solution to a client's needs, and developing innovative new solutions to problems.

The market is sufficiently strong for component vendor Intel to be taking an interest. In December last year it bought into US-based telecommunications and computer telephony component manufacturer Dialogic. The purchase was in line with its declared goal of providing building blocks for the Internet from silicon to full systems and software applications.

In consolidating that acquisition, it is now in the process of introducing a new product area (the converged communications platform), which is expected to be released at the end of the year.

"Intel's converged communications platforms are designed to help systems integrators and their business customers realise the exciting new growth opportunities offered by convergence," says Intel's regional product marketing manager, Eamonn Kearns. "The platforms are built with standards-based building blocks and are initially tailored for small businesses. They let small businesses take advantage of converged communications opportunities at a pace that best suits their business needs. Businesses can begin with platforms that support analogue or digital phone service, and expand by adding applications, increasing system size, and seamless migration to IP trunks and phones at any time. Systems integrators can meet their customers' varying needs by building solutions based on pre-configured application-ready platforms from Intel, and a variety of certified applications and peripherals from members of the CT Media Value Network, a collaborative community of ISVs and other vendors."

Although Intel has not yet released the converged communications products in Australasia, it is expecting to do so at the end of the year. Meanwhile, the company continues to sell the Dialogic voice/data products.

Voice data effect

Voice/data convergence is also having an effect on the channel, as vendors and distributors from formerly dissimilar areas attempt to provide combined solutions.

"The major impact we are seeing is in how we distribute products," says Renaissance's general manager, Paul Johnston. Renaissance is a systems and software distributor that is also heavily involved in the PDA market.

"The PC is becoming the digital hub of a digital lifestyle," he says. It becomes a central piece in a multimedia universe that includes PDAs, MP3 players, DVD, digital cameras and video cameras. Telephony is just another component. A whole new market is opening for adding value to these multimedia appliances with software. As an example, Apple provides a system for taking a digital camera output, inputting to an Apple PC, using the PC to create videos and provide transition, and using that to create your own DVDs. The largest growth area in this space is, of course, the consumer area where people are finding that they can now do things themselves, which used to require professionals. PCs are ideally suited to serving as the hub of this activity."

Storage solution focus

One result of this is that systems integrators need to focus on storage solutions. Voice, sound and multimedia applications all create data that must be stored. While a wide range of local storage mechanisms for devices such as PDAs and digital cameras is now available, a lot of data must come back to the PC hub, and that means even larger hard disks on home systems.

"In the corporate sector, there is more interest in telephony management, such as PC/PABXs," Johnston says. "We're also looking into customer relationship management (CRM) systems that provide capabilities such as Web-page linked voice response. Network speeds are getting higher, with most upgrading to 100Kbps ethernet and gigabit, and this opens the way for other network capabilities. The demand for ADSL modems is also quite large, and growing swiftly, with up to 50 per cent growth per month, although starting from relatively small numbers. ADSL is becoming increasingly attractive to medium-sized businesses."

For Renaissance, that means closely monitoring demand to ensure that products are available as systems integrators and resellers meet customer requirements.

As voice/data convergence and gradual evolution toward multimedia systems creates a new range of products that require digital storage, it is increasing the amount of storage that standard PCs must contain. At the systems level, this is the most obvious effect of convergence.

Quantum/ATL's Australia/New Zealand marketing director, Simon Harvey, says the company continues to see demand for additional storage growing. "We're working with a number of multimedia companies, as well as handling increasing demand from telcos. Video producers, telephone companies and other organisations whose products are part of the convergence are also moving to increased use of high-end storage and archive systems."

Quantum itself, a major storage provider, is moving toward becoming a solutions-oriented business to meet the needs of a wide range of new and emerging market segments.

"One thing we are certainly seeing as a result of this is an increasing usage of business alliances, where companies come together in partnerships to provide complete solutions. This provides synergy, and allows the client to build an integrated total solution, rather than attempting to tie together a lot of unrelated parts."

Telecommunications companies are inherently concerned with developments in this area. It poses new market possibilities, such as ADSL; new competition from companies taking advantage of voice-over-data-network capabilities such as VoIP; and it offers a wide range of new service combinations. Telecom New Zealand's Internet/TV package with Sky provides a case point, though the two services remain separate. It is possible to run voice and television on the same line. Telecom is also entering the combined service space through its esolutions venture with Fujitsu and EDS. In this venture, it is helping to provide an ASP-based network management solution, taking advantage of its networking skills and the systems skills of its partners.

"Convergence is certainly part of our plan for future," Telecom's chief information officer, Mark Ratcliffe, says. "We operate here in many capacities - as partners, customers and suppliers. Multimedia solutions require robust, reliable networks. We have part of the solution. We can provide secure, managed data networks using the largest IP network in Australasia. We can also provide the reliability that is generally required, with experience in building and managing large data networks."

Telecom's esolutions venture also demonstrates how convergence can affect conventional distribution channels. esolutions is distributing its networked ASP solutions via Tech Pacific into the standard retail channel, where they can be sold as though they were conventional software or components. It is also an example of the types of alliances that are becoming necessary to operate in this area. Although esolutions does not explicitly link data and voice, that would be an easy addition.

Telstra/Saturn is also moving into the convergence area, with a variety of mixed television/ISP/telephony packages available in Christchurch and Wellington. Using an advanced fibre-optic network, Telstra/Saturn is also situated to take advantage of broadband opportunities.

As broadband networks and multimedia applications continue to develop, a wide range of new opportunities will emerge in all areas of the reseller market. Potential effects are across both consumer and business sectors. New appliances, applications and new capabilities will continue to emerge, and keeping track of this sector is becoming increasingly important.

Brian Dooley is a correspondent for ARN's sister publication, New Zealand Reseller News.

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