- 17 August, 2007 15:04
Voice and Data convergence changing the nature of the gameVoice and Data convergence changing the nature of the game
A few years ago, the network was only used to carry to packets of data and those that were dropped could simply be resent. But voice and data convergence has changed the game recently and the network is now much less tolerant of failure. In the next few years, things will get even tougher as video is increasingly added to the fray but what does this continued evolution mean for the channel? ARN - in conjunction with LAN Systems, Emerson Networks and Cisco Systems - hosted a discussion recently with a table of integrators to find out.
How has the convergence of voice and data changed the role of the integrator?
Craig Somerville, Somerville Group (CS):We see both sides of the fence because we have a traditional voice business that is worlds apart from our IT business. One of the stumbling blocks we have had is that our Cisco engineers get really excited about voice but when they get down to the reality of implementing it they realise it's about call forwarding and customer functions that really don't excite engineers all that much. We are lucky that we have some of those traditional guys who understand voice for what it is. When it comes to our role with the customer these days, we are still at a point where we need to educate a lot of them about where a converged network is going to deliver value. We are still getting through the perception that it is a new technology but there are a lot more opportunities on the table. As people change PABX systems we don't look at anything but IP voice going forward.
Ed Jeffers, Alphawest (EJ):Our customers are maybe a little more mature. IP is IP and we are all going that way. We are seeing more conversation around collaboration. Adding content and applications is where we are starting to see some pick up and maturity. I wouldn't say VoIP is a foregone conclusion just yet but we are certainly reaching a point where that's the case. We went through a bit of a transition trying to get traditional communications engineers to take it on-board but I think we have probably got there. We are struggling to keep up with demand because of that and customers just expect us to show up, put the stuff in and make it work. As a CIO I talk to on a regular basis said: "Look, I want my phone to work, I want to get my email and I want it to be secure. After that, I don't really care."
CS:That's TDM. It's old technology and it's exactly what we're still doing. We are talking about applications but the general community rolls out IP voice and they go: "Dial tone, voicemail, happy days." It's an education thing. We have a younger generation of people coming in now that are used to video-on-demand and instant communications. They will drive a lot more but sitting in most businesses today that run IP voice, they are using dial tone.
Are customers aware that integrating voice onto a data network will impact on reliability requirements?
Chris Fydler, Oriel (CF):There's an expectation now that the LAN will be of sufficient quality to support various applications. From a staffing point of view, the people who have traditionally done switching and routing are being forced to step up to voice. There is a bit of pushback there but how often do you hear about major technology releases in switching and routing anymore? You don't because everybody is focused on the applications that sit on top of it. We are finding that customers expect things will run on the network and we have upgraded most of our customers to an environment where they will. Reliability is something we talk to our customers about but we are not going to have dual WANs running, for example, because the reliability of kit is better than 5-10 years ago.
Ed Phillips, Getronics (EP):Our market message has changed a lot recently. Two years ago, the argument for convergence was primarily a cost consideration with a fluffy productivity message. People are now taking it for granted - you still need to make a case for the infrastructure but they are going to buy it. The unified communications message is now about productivity. Most customers in Australia seem to be pretty educated about what you need in order to realise the productivity gains. There's a bunch of fairly mundane stuff you need to do first to get the infrastructure ready and I think people accept that.
What are the relative difficulties of coming to convergence from a voice or data background?
Jules Rumsey, Telarus (JR):A lot of service providers have tried to get into data from the voice side or vice versa. Similarly, the integrators have tried to do the same. There have been barriers to entry coming from one side or the other but for me it's been more of a mental thing. Some of these guys find it a bit confronting to move into an area that is outside of their comfort zone. That's going to change but a lot of our channel partners are still looking for support when it come to things like QoS, network design, disaster recovery and power.
Kevin Bloch, Cisco Systems (KB):I think the key is experience. It's easy to read the manual on a course but it's the details that make the difference. Our challenge five or six years ago, talking to existing data partners, was convincing them there was a new world we could help them be involved in. That worked to a point but accelerated when we told voice partners that their world was going to be shut down. Some of them didn't believe it at the time but I think they believe it now. The best example is in the call centre. There weren't a lot of data vendors that understood the contact centre because it was the realm of the voice guys. The customer interaction is so important in that environment and comes predominantly through the telephone so we needed to engage with people that understood that interaction. We have come a long way in six years and have partners that are pretty savvy. They are bilingual.
Maree Lowe, ASI Solutions (ML):The difficulty has been cross-training engineers when they have been 100 per cent data but are suddenly expected to be 25 per cent voice. The industry is moving so quickly and you have the continual problem of up-skilling. The second problem is customer expectation. They have the feeling that the unified messaging employed on current systems can just be moved across when they upgrade but some of those are not entirely compatible. Setting a schedule of works for what you are going to deliver, and who is going to deliver it, becomes absolutely crucial. Having your engineers sitting around because somebody hasn't turned up when you are supposed to be doing a weekend install are the sorts of complications we have to come to terms with on the voice side.
Tony Heywood, ComputerCorp (TH):We seem to be focusing on the engineering side but we almost need a different kind of sales person - somebody that asks questions based on emotions rather than fact. If the managing director doesn't get his data on time, he can handle that; but if his phone doesn't work, he's going to crack it. If his major customer interface doesn't work, he's really in trouble and the sales person that can talk to those needs develops a different rapport than someone talking about ports and switching. Andrew Lowy, Efficient Data (AL): The problem is finding those resources. It's really hard to find somebody who understands the technology but can also communicate that to the client and ask the right questions.
TH:That's why there's a lot of buying activity around voice integrators at the moment.
AL:We work very hard on retaining resources and bringing them into the culture of our company.
Brad Engstrom, Cisco Systems (BE):My brother's a diesel mechanic and has been for a while. He spends a huge amount of time in training; it's all chips and electronics but that's just part of being a diesel mechanic now. I think we are just a little bit earlier in that cycle. The engineers at Cisco are already across both [data and voice] and there are no real specialisations.
EJ:It might be those young engineers who are going to drive this technology. I hate to say it but all of us around this table are digital immigrants. We are already seeing engineering staff making demands on the company that reflect back on the technology. These guys expect video applications on a device in their hand and they will sometimes not take a job if they can't get that. Like I've said, IP is a foregone conclusion as far as I'm concerned but we have to get it out there and step up to the training aspects, which are a huge challenge because you still have data engineers that have been on the job for 20 years and it's hard to get them to come across. IP has become so critical that you can attach an engineer's IP directly to the revenue of our company, which tells us that is what the customer is paying us for. We all need to take a broader view and realise the way we communicate has changed. It's not changing, it has changed. Everybody thinks the phone is the number one interface but it's no longer just a phone. I can do word processing on my phone and it's a whole different way of thinking about things. For me it's a very exciting time and it's all good for us in this room. We're all going to at least keep our jobs for a little while.
Nathan Godsall, LAN Systems (NG):I have to agree with you. LAN Systems is a fairly young organisation with a lot of people who are Generation Y. If my Instant Messenger goes off it's a disturbance and I don't like it but I walk around our company floor and they average about three screens open each. They way people communicate has changed and I am watching it happen around me.
Ralph Marshall, LAN Systems (RM):This generation is growing up in an age where they are used to YouTube and instant messaging. They are in our organisations but also those of our customers and they are getting to the levels where they are going to influence, if not make, decisions.
JR:We are seeing people using VoIP at home but then plugging the same box into the office network and starting to have issues. They are looking for somebody to provide a solution and that generates opportunities for us.
ML:Experience at home is a huge driver. They come into work and don't understand why they can't do the same things.
AL:We have started putting Skype gateways into our clients now, which is pretty funky stuff and we get a cost reduction from the telco.
Gary O'Sullivan, Intelligent IP (GO):It's also having different ways to communicate with your customers - mobile phones, desk phones, Skype, MSN. Regardless of which way you interact with them, it's all going through the IP network one way or another.
CS: We are all selling IP-enabled networks. One of the early parts of the sales cycle that killed all the Cisco resellers was having presence and all this technology to offer but then pricing it up and finding it was eight times the cost of a TDM system. So we turned back to concentrating on selling IP voice and then installing the applications as they became available. When you have the base dial tone, the incremental cost of things like presence then becomes a very small decision. That's where I think a lot of us are now. It's all upside for us now as these applications become viable and are required by business.
Bjarne Munch, Gartner (BM):I talk to clients that have been looking at the technology for a long time and they understand the technology but don't really know how to evaluate it. They don't know what they need to buy and what the consequences are.
EJ:The network is IT and if you don't think that way now you are probably going out of business. The challenge is working out how improving IT will make your company better in its market segment. IT was the stepchild but now it's about beating your competition because you have a better network. The last dramatic change was Y2K but there are still hundreds of old PBXs out there and we are sitting on another one of those transitions.
KB: It is important that phone systems are up but, in the context of collaboration, 70 per cent of communication might be coming through email. Most kids are on SMS and there are about a dozen other ways to reach somebody. There are still some companies with PABX systems but more than half the enterprise would have an IP infrastructure with unified communications.
BM: I agree with your vision but based on what I see it still sounds like a vision. I would question if those buying today have that vision. TDM systems have declined dramatically but IP on a TDM system is still more popular than pure IP systems.
EP: It depends on the vertical. In companies that really understand communications are core to their business we have seen them acknowledge IT as a differentiator. It's not about IP telephony anymore; it's about a number of applications using common infrastructure.
JR: There's a critical design element when you start to put so many services over a single network because the growing number of applications thrown onto it are getting into all sorts of facets of business. The network is now so important that you need to design something robust so there's a way of handling the situation if something fails. People can have their various different collaboration tools but what happens if they lose power? It becomes complex and might not perform to the level people expect so you have to design for these contingencies.
BE: Some decisions are made without thinking about what is going to happen to the network. If they did that in consultation with IT, they could plan for that ahead of time. Resellers can understand the impact of applications on networks.
The people problemThe people problem
Although the local integration market is undoubtedly buoyant at the moment, and has been for some time, life is still far from being a bed of roses for the senior management teams running those businesses. Competition is fierce and winning contracts is not easy. To make matters worse, there is a well-documented skills shortage that makes attracting the right people tough and retaining them next to impossible. Our panel of industry experts debated this issue at a recent ARN round table.
There can be little doubt that this is a good time to be an IT network engineer. Skills that commanded a salary of $80,000 not long ago are now in extremely high demand and regularly attract packages at least 50 per cent higher.
"We have committed to training our staff for years in various areas of business, but it is a problem that we all spend a lot of money training guys and they get poached," Somerville Group's Craig Somerville said. "Anybody who stands next to an engineer for a day in a work environment will hear a recruiter calling at least once or twice.
"That pressure is on them all the time and the problem is that it's so easy for them to make a move because certifications go with them. We need to work together to find a solution."
Of course, unemployment is at its lowest level for many years and IT is not the only industry suffering a skills shortage. But the problem in IT is exacerbated by very well-defined training requirements.
"When I look at our two different businesses, which are poles apart, the electrical and communications business has structure, standards, awards and all of these things that you can gauge people on when you employ them," Somerville said. "In the IT business, everybody in this room is struggling when it comes to getting guys with cross-skills. That is a long-term problem and I don't know how we are going to get out of it without an industry association getting together and working towards building structure."
The need for partnerships One of the biggest problems is that the growing need for specialisation is making it increasingly impossible for most integrators to provide end-to-end solutions. As a result, there is a growing acceptance of the need to partner with companies that would have been thought of as competitors in the past.
ComputerCorp's Tony Heywood recently attended a Cisco conference in the Gold Coast, where he said the vendor talked ad nauseum about an inflection point in the market that meant integrators could no longer consider themselves 'the Cisco guy'. Instead, partners were encouraged to pick a specialisation and hone their skills in that area.
"If we do our bit really well, we get high utilisation of our resources and good customer penetration that is vertically independent," he said. "We cannot be all things to all people but there's no longer any customer expectation that you are going to be able to do everything."
Signing on the dotted line One way of tackling the staff retention problem, according to Telarus' Jules Rumsey, would be to put engineers on contracts that stipulate anybody leaving within a certain timeframe is required to pay back a percentage of the training costs that have been incurred by their employer. But, at the end of the day, he argued it was part of a manager's job to make sure skilled employees were retained.
"We take people at the most junior level possible and take them right through the organisation so they have a real sense of ownership in the company," he said. "They become an important part of the machine and they know it."
But Rumsey said the current skills shortage meant integrators were being forced to hire staff that they wouldn't have even considered for the same positions 10 years ago.
"People talk about tertiary education but that doesn't even come into it these days with a lot of the people you are trying to hire," he said. "You have somebody who is straight out of school or has been to TAFE and decided to zone in on a particular area where there's a key skill set."
The grass roots approach The problem of finding good staff and keeping them is so bad, according to Alphawest's Ed Jeffers, that employee retention has now replaced growth as his company's number one strategic objective. Issues exist at both ends of the scale, he said, with baby boomers retiring and IT graduates declining by 40 per cent for the past three years.
Emerson's Peter Spiteri said it has created an apprenticeship program with a number of TAFEs that offers electrical mechanical coursework. The idea is to build a base of precision air and power skills in the market that traditional IT integrators will be able to draw on.
"Why would somebody with a computer science background understand mechanical and electrical engineering considerations like power factor correction and sensible heat ratio?" he said. "You can't just pick it up. To understand thermal dynamics you have got to do the hard yards."
Similarly, Cisco runs a Network Academy Program designed to seed the bottom end of the skills market. However, Efficient Data's Andrew Lowy said he had hired people out of the academy and found they were not ready.
Somerville said the problem with graduates coming out of academies was that they might have technical ability but lacked the customer skills necessary to be a top engineer. While investing in graduates and school leavers was the ideal way to build a skills base, he argued this was becoming increasingly difficult because young people today were driven by rapid change and no longer interested in long-term employment.
He also said recruiters were a problem because they would often try to put a round peg in a square hole in order to earn commission. As an example, he cited an agency that put forward three candidates for a sales position - two of the candidates were below standard but he had hired the third, who had little or no interest in a sales role, as a Java code-cutter.
A fundamental change in relationships Partnering with other integrators, making employees sign contracts relating to training spend and improving education will all have some impact on the dearth of skills in the industry. But Jeffers called for a fundamental shift in the way vendors work with systems integrators.
"The idea that it's a privilege [for integrators to sell vendor products] has got to change because it's not the case. There are not enough people out there for you to cover the market and yet I have difficulty getting vendors to come in and proactively deliver training," he said.
"There needs to be a collaborative understanding that we all have the same problem. I have 700 people and you don't so how do we make that work? I'm going to sell products other than yours but you need to have some faith that I'm going to represent you properly.
"Not only do you need to help us get the skills in place but, and here's the real big issue, you have to help us keep them. We go out and spend $100,000 to get a Cisco engineer at the level we need and for an extra $20,000 somebody pinches them. I get no credit back from the vendor for having made that investment.
"OK that's the cost of doing business, I understand and I'm not complaining, but we need to cooperate and figure out a way to keep the IP where it needs to be. Without that IP, I'm not going to sell your product."
Next stop videoNext stop video
Imagine a scenario where somebody sitting at a slot machine could push a button for service and the machine dials into an IP network to notify a customer service representative. The rep has access to an integrated CRM system and a pop-up screen tells them what brand of scotch the customer back at the slot machine prefers, what food they love to eat and what kind of shows they are likely to be interested in.
The customer gets a more personal experience and feels valued, while the sales rep at the other end knows all the right buttons to press in order to maximise selling opportunities.
This picture was painted at a recent ARN round table by Alphawest's Ed Jeffers but it isn't a glimpse into the future; Las Vegas casinos have had this functionality for some time already.
"They've taken the technology to a customer service level that we are all eventually going to end up doing," Jeffers said. "Can you imagine your helpdesk having a face-to-face relationship with your clients? The relationship we have with machines is changing and that's going to benefit everybody in this room."
Jeffers' boss calls him the 'mad scientist' because he is willing to talk about the future of IP-based video delivery even though he freely admits his team is only playing with the technology today and cannot grasp the full scale of its implications as a business tool.
"The only reason we are playing with it is because my parent company [SingTel] enjoys the bandwidth required. They are very excited about that but our clients are too," Jeffers said. "Video is going to become a business tool because you look at telepresence and it's just obvious. As soon as you sit down at a demonstration it immediately comes to mind what this could do for your business.
"We are only a couple of years from this getting really crazy. Your receptionist is going to be an avatar that will respond to you emotionally and be the smartest person in the room. I've seen it. Collaboration is going to be totally different to how we know it today because all of a sudden there will be 300 people with a camera on their PC. Tasks that previously took weeks to do will be sorted out in an hour because there's so much difference in relating to people via video."
ComputerCorp's Tony Heywood said it was still experiencing problems with conveying the video message to its customers because there was a perception that videoconferencing was a standalone unit in the boardroom that nobody knew how to use the remote for.
"They are not thinking about video endpoints on the network at all. There's a huge education opportunity in the mid-market; it's just IP and it's not frightening at all," he said.
Gartner's Bjarne Munch has seen a significant rise in client enquiries about videoconferencing during the past six months. He said the move to IP networks was largely responsible because there had previously been concerns that ISDN was plagued by difficulties. IP, on the other hand, worked smoothly most of the time without any hassle and was cheaper, he said.
Telarus' Jules Rumsey said it had started pushing videoconferencing through collaboration tools integrated with the phone system.
"If they want to kick off a collaboration session, it only takes one click after they've got the call open to share a PowerPoint presentation or a desktop," he said. "It's cool stuff and quite straightforward, but you need to be conscious of the bandwidth drain. The IT manager will have an issue to deal with if there are 20 concurrent video sessions at head office.
"There can also be QoS issues because it's easy to set up but doesn't always work. That causes a massive seesaw effect because if people try it and it doesn't work it will take them a while before they want to go back and try again."
Rumsey also flagged growing security concerns as the IP video market continues to develop, and not just because of malicious activity. For example, the cross-pollination of marketing data for cable customers with set-top boxes and Internet customers with browsers will mean companies can compare the channels people are watching with the websites they are surfing.
"If you add facial recognition software in a store, they will be able to work out who the shopper is and target them with little snippets of things they might be interested in," Rumsey said. "Then you know it's gone too far."
On the malicious front, Efficient Data's Andrew Lowy pointed out that there are already many security implications including spam voicemail on IP telephony and the redirection of IP routes. While these needed to be taken into consideration, he said they offered integrators an opportunity to add security services into customer conversations.
Cisco's Brad Engstrom said there have been PBX hacks for years doing similar things but Telarus' Rumsey claimed it was much more difficult to hack into a PBX phone system than one based on IP.
"Hacking into a PBX requires special hardware, a bit of know-how and maybe even access to some manuals," he said. "To hack an IP phone system you just download a bit of script off the Internet somewhere and give it a go."
Keeping it up and runningKeeping it up and running
Only last month, the Sydney grid drew record power levels of 13,870 megawatts in one night, causing blackouts in several suburbs across the city. While the addition of voice and video has seen the network become increasingly central to business operations, and created a host of new opportunities for traditional data integrators to embrace a brave new world, it is also fraught with danger. The network of the future is much less tolerant of failure than it was when only carrying data and, as a result, it's essential that power and cooling are right.
Emerson's Peter Spiteri pointed out that the applications driving business advantages could quickly be lost if integrators failed to adequately consider the physical infrastructure.
"The smart integrators, who actually understand how to map the correct infrastructure in terms of scale and appropriateness, are the ones that will get the best engagement with the customer. It's about providing a complete solution," he said. "Centralising business intelligence into the network is fantastic because it reduces disparate systems but there's an increased risk because if it goes down you've lost everything.
"We tend to get involved in one of two ways - either we arrive in an ambulance because something has gone out, or we are brought in earlier in a partnership with resellers where an appropriate solution can be thought out."
Applications and physical infrastructure used to be separate worlds but integrators are now having those conversations with IT managers that are accountable. Telarus' Jules Rumsey said the way to sell power and cooling infrastructure is to sell mission-critical applications.
"If you have people in there talking about a $200 million investment, or even $10,000 at small business level if that is a big deal for a particular customer, you start to talk to them about 'what if' scenarios," he said.
"A bit of fear, uncertainty and doubt goes a long way. You ask probing questions and all of a sudden fault tolerance and power protection becomes important."
ASI Solutions' Maree Lowe said it had been engaging in a lot of datacentre work during the past couple of years. This had been a huge learning curve for her staff, she said, and had seen ASI partnering with specialist electrical engineers rather than dabbling in something they don't understand properly.
"The electrical guys come in to do the roof generators because they know their stuff and it's a good partnership," she said. "They might tell us what we need but then our engineers point out that there will be another switch added in the next 3-4 months so the battery backup won't hold the load that's about to come in. Together we build an appropriate solution."
Telarus' Rumsey said monitoring services were vital because users had a tendency to buy a firewall or power protection unit and then think they were safe.
"That's a great opportunity for resellers to ask customers whether their firewall has the latest firmware or what the load balance is on a UPS," he said. "A lot of the time they don't know."
Slicing and dicing the marketSlicing and dicing the market
With the move to IP-based networks reaching a tipping point as customers continue to replace legacy phone systems, integrators are exploring new opportunities around unified communications. Customer conversations are now centred on applications that can be layered on top of the network to give organisations competitive advantage. That brings a whole new set of challenges.
"As a traditional infrastructure provider we are now dealing in the applications space and there's so much to know," Efficient Data's Andrew Lowy said. "We are always on the edge; testing them and deploying them. That's changed the landscape a lot."
A focus on applications naturally leads to vertical specialisations. Members of our panel were keeping their cards close to their chests when it came to discussing their vertical strategies but Somerville Group's Craig Somerville said many were employing them.
"I remember when we picked one years ago. We were hearing that vertical marketing was the way to go and it actually works. You get focused and you become good at it," he said. "There are applications in the market today that leverage unified communications in certain verticals and that is the Holy Grail for many of us in the integration space. Taking those applications out of the office with mobility means we can deliver them anywhere."
Although agreeing that vertical specialisation was already being employed by vendors and telcos, LAN Systems' Ralph Marshall questioned whether the Australian market was big enough or sufficiently mature at channel level to support that model.
"As the market evolves, and more of the old iron is replaced, there will be a need for the channel to become more focused," he said. "But we all like to do things we have done them before because it is lower risk and lower cost."
Telarus' Jules Rumsey agreed with Marshall's assessment of local market maturity and pointed to residential fixed-line phones, broadband and cable TV as examples of a more established model. Telstra had a segmented marketing model that had sliced up very specific segments around particular types of people, he said, and targeted each group across every product line it had. Once the local IT market matures to the point where things become commoditised, he predicted integrators would also be forced to drill down like that in order to secure ongoing growth from existing customers.