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IP Telephony Dematerialization

I attended a local Siemens event last week at which one of the presenters, Elliot Kass, Vice President of Content Services, Information Week (a Techweb sister publication of No Jitter), asked the audience if they were familiar with the term dematerialization. When no one in the audience raised their hand in affirmative response Kass explained that the economics term was currently in vogue in Europe. As applied to IT systems, dematerialization is simply defined as a reduction or replacement of physical materials, without a reduction in associated services or functions, while providing added benefits to the customer. In effect, dematerialization is doing more with less. An example many are familiar with is server virtualization (see below): fewer physical servers are used to support software operating requirements with associated economic benefits to the customer, including lower capital and operating costs. Server virtualization also helps support Green initiatives, such as reduced energy and cooling requirements.

Dematerialization through technological advances has been an important trend within the enterprise communications market for many years, dating back to digital PBXs. For example, the development of high density port circuit cards reduced carrier shelf and cabinet requirements. During the past the past decade the development of IP telephony systems has followed a strong dematerialization trend. A foundation of IP telephony system design evolution has been the ongoing replacement of 20th century circuit switched PBX technology with soft switch technology: a limited number of compact servers and distributed media gateways replacing multiple cabinets of stacked carrier shelves (equipped with numerous printed circuit board cards) for control, switching, and port interface requirements. The defining characteristic of an IP telephony system--to leverage a single shared transport/switching network for both voice and data services, replacing the need for two physical networks--is a further example of dematerialization.

Dematerialization is also realized by the IP telephony option to implement a single "virtual" system housed at a centralized customer data center to service multiple geo-distributed facilities previously supported by a network of local PBXs: one system, with shared and optimized resources, replacing many. Customers also have the option to implement a Cloud-based third party Communications as a Service (CaaS) solution, minimizing their own premises-based hardware requirements. Service providers can leverage a single partitioned system to support the communications requirements of many customers across many locations. The customer data center and the hosted CaaS solutions each offer significant reductions in overall hardware requirements without loss of feature or performance capabilities.

For either a customer premises or Cloud-based solution the deployment of virtualized server technology dramatically reduces the need for physical servers. Before virtualization, IP telephony systems required a number of physical servers to support a variety of specific communications processing functions including telephony call control/feature provisioning and associated peripheral applications, such as messaging (voice, fax, email), contact center and a range of Unified Communications functions/processes (presence, conferencing, collaboration, mobility, et al). With virtualization, one server is capable of replacing the need for many.

A highly visible example of IP telephony dematerialization is the alternative use of client soft phones and/or mobile smartphones as replacements for desktop telephone instruments. Soft phones leverage existing computing terminals (desktop, notebook, tablet). Smartphones (Blackberries, iPhones, whatever), operating as cellular extensions behind the IP telephony system, have become standard equipment for most, if not all, white collar workers (as well as for a sizable number of pink- and blue collar workers). Though replacing the desktop telephone may not be a viable option for everyone (and more than a few would loudly protest losing their traditional interface to the enterprise communications system), the percent of stations users using a soft phone and/or smartphone as their link to the enterprise communications system is forecast to be on the rise. Is it possible that the current generation of desktop telephone instruments will be the last generation if the dematerialization trend continues?

Another IP telephony capability contributing to the reduction of system hardware requirements is SIP trunking. Requirements for PSTN media gateways, which replaced previous generation trunk circuit cards, are beginning to decline as customers begin to take advantage of available SIP trunk services for their local, long distance and E911 voice calling needs. Utilizing SIP trunks also reduces the number of physical trunk circuits required to support off-premises communications requirements while optimizing available bandwidth capacity in support of multiple media communications services. IP telephony system media gateway requirements for analog communications terminals can also decline if customers replace their aging 2500-type telephone instruments with low-cost SIP telephone instruments and their facsimile machines with unified messaging systems and desktop UC clients.

There are also IP telephony system features and applications that reduce physical materials or cost items other than system hardware components. Examples are: teleworking and shared hot desks (reduced office space and overhead); shared desktops; audio/video teleconferencing (travel); presence and contact management (reduced message storage requirements).

There has been an ongoing 40 year shift from a hardware-based to software-based enterprise communications system. Compared to only ten years ago, today’s necessary system hardware components are minimal, with significantly less footprint and fewer associated overhead requirements. The all-software system is not quite here, but we are getting close. There are some systems that are currently being shipped as a DVD, only, with necessary third party off-the-shelf hardware components provided by the customer or channel dealer. And for some open source solutions you can skip the DVD and download the software directly from the Web. It makes one wonder how much further IP telephony system dematerialization can continue into the future.