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Where Are the Carriers?

This is the VoiceCon UC eWeekly newsletter for this week, written by Fred Knight, GM and Publisher of No Jitter and VoiceCon GM and conference co-chair: Amid all of the UC-focused presentations, demos, exhibits and debate that took place during VoiceCon Orlando, I was struck by the relative silence from one group that, you'd think, would be playing a critical role in UC's evolution--the carriers and service providers.

This is the VoiceCon UC eWeekly newsletter for this week, written by Fred Knight, GM and Publisher of No Jitter and VoiceCon GM and conference co-chair:

Amid all of the UC-focused presentations, demos, exhibits and debate that took place during VoiceCon Orlando, I was struck by the relative silence from one group that, you'd think, would be playing a critical role in UC's evolution--the carriers and service providers.To be sure, AT&T and Verizon Business have made announcements relative to UC. Last November, for example, AT&T completed its acquisition of Interwise, a web-based conferencing service that will enable AT&T to complement its video offerings with web-based collaboration and its messaging services. And indeed, those two elements--conferencing and messaging--dominate the UC offerings on AT&T's website.

Meanwhile, on Verizon Business' site, you can find a new service, the Integrated Communications Package, which was announced last August and is available to customers of Verizon's IP Centrex service. The Integrated Communications Package, according to Verizon, "....provides a dynamic hub where employees can access voice mail, control incoming and outgoing calls, manage their online presence, send text messages, and synchronize contacts and calendars." Future plans call for integrating ICP "with Verizon Business' portfolio of advanced audio, net and video conferencing services, and contact center services."

A visit to the SprintBiz website yielded zero--no heading or product group called Unified Communications and nothing turned up when I put on a search for "Unified Communications." Indeed, no matter where I clicked, Sprint seemed to always take me to a page that was pushing cell phones.

Of course, all of the carriers distribute IP-PBXs and UC offerings from the equipment vendors, so they're not shut out of the game. And as the industry migrates toward more software-intensive communications architectures and products, presumably, the carriers will find themselves distributing UC application packages that run on the hardware platforms they've installed.

The question, however, is whether the carriers intend to become more active participants in the UC process. So far, there's no evidence that they intend to do so.

Part of their hesitancy reflects the low-key role they've played in the overall migration from TDM to IP. Lisa Pierce, VP at Forrester Research, has written a terrific article that we've posted on NoJitter.com which sheds light on the lack of market pick up of hosted/managed IP Telephony services (see "The State of North American Business Customer Adoption of IPT and VOIP".

Lisa notes, "Use of managed VOIP services is unchanged from 2006. Overall year-over-year adoption trends were flat....6% of North American enterprises already use managed VOIP services, 8% were 'very interested' and 25% were 'somewhat interested'. As for current users, size doesn't matter, but industry does--with 12% of manufacturers and 11% of utilities as the heaviest current users. For those who indicated they were 'very interested' in using managed VOIP services, companies in the media, utilities, and finance and insurance sectors express the most interest--at 11%, 14% and 13% respectively."

Lisa goes on to identify a number of inhibitors the service providers face, but one, in particular, caught my eye: "...overall enterprise interest in managed and hosted IP telephony services lags considerably behind use of other managed network services, such as managed MPLS "which has a 35% adoption rate in North America. It's entirely possible this reflects lingering enterprise customer perceptions about legacy Centrex services--whose capabilities distinctly lagged those of major brands of digital PBXs. Many service providers have done very little to date to fully disprove the same problems won't apply to IP Centrex. And on WAN VOIP, the business case is still much easier for international calls than it is for domestic calls."

I think Lisa has hit on a critically important point: The carriers have yet to demonstrate that they will deliver modern services in an IP-Telephony/UC world. Since Digital Centrex couldn't match digital PBXs, why should customers believe that IP Centrex will keep pace with IP-PBXs loaded with UC capabilities?

In the past decade we've seen the carriers jockey for position against the cable companies and move into entertainment video. In the wireless market, we've watched as they've hyped the latest gadgets. And we've listened as they've argued ad nauseum against net neutrality. The one thing we haven't heard or seen is a concentrated push to create products and services that meet the changing needs and business realities of their enterprise customers.

UC is still a nascent marketplace, with no clear leaders or even a clearly defined set of capabilities. If there was ever an opportunity for the carriers to re-assert themselves in the enterprise communications market, this is it.