Microsoft will enter telco space: IDC

Microsoft will go head-to-head with telco providers in the next two years as the VoIP battle heats up, according to recent IDC findings.

The report – Australia VoIP Services Forecast and Analysis, 2002-2007 – predicts VoIP will continue to be the sweetspot of next-generation networks. It will double every year over the next four years from $14.3 million in 2003 to $288 million by 2007.

IDC telecommunications research program manager, Landry Fevre, said the movements playing out with session initiative protocol (SIP) would have an impact on the industry. Microsoft would become the big winner.

Sending voice over data networks using SIP would position Microsoft as a competitor to Cisco, Avaya, Alcatel, Siemens, Mitel, Nortel and 3Com - telephony vendors that were adopting the SIP standard, he said.

“Even though the market remains embryonic today, it will be all about software and who else but Microsoft is better positioned in this market?” Fevre said.

The market would heat up over the next three years, he said.

“SIP is promised to be as disruptive to the traditional telephone system and the carriers operating it, as the PC has been to the mainframe in the last two decades."

Today, the technology exists in Live Communication Server 2003 (as a standalone product) but will be embedded into the next version of Microsoft’s Longhorn, slated for 2006.

Microsoft, along with the traditional telephony players, were not making waves about it, he said.

“At this stage, there’s been no comment from Cisco," Fevre said. "They don’t see it coming. And Microsoft will be quiet about it.”

In addition, the movement of voice from analog/digital-centric to IP-centric would create a greater demand for presence management, self-provisioning and on-demand conferencing at a lower cost, he said.

VoIP services should be judged by enterprises on the value that comes from its integration with enterprise applications rather than on the traditional view of cost-per-minute to end users, he said.

The study also shows the government, education and healthcare sectors would see the highest implementation of self-implemented IP telephony, he said.

About 13.9 per cent of companies interviewed in this space were currently using the technology.

Globally, there are a host of voice-over-broadband (VoBB) technologies including offerings from SIPphone, Vonage, deltathree, Yahoo BB Phone, Skype and DOCSIS 1.1 or 2.0.

“There is nothing exactly like this in the local market,” Fevre said. Today, the only regional VoBB players are Neighbourhood Cable, Bright Online and Transact. These regional players are not playing nationally and are not very significant to the total Australian market, he said.

He said there are no VoBB providers addressing the consumer market, however over the last few weeks some VoDSL offerings have been launched by Primus, Optus and Request.

"The Optusnet DSL Service is a consumer play for offering ADSL services by buying wholesale from Telstra. "This will help Optus in bundling their fixed line services with their DSL offerings.