Front Lines is a guest viewpoint section offering perspectives on current issues and events from people working on the front lines of Canada's technology industry. Ross MacLeod is the founder and host of Voice 2.0 — Beyond Telecom, a conference being held to explore these themes in Ottawa on October 16th with help from the Ottawa Center for Research and Innovation (OCRI).
Having weathered what seems to be the worst of the post-bubble melt down, the telecom industry finds itself in relatively calm waters. Sales have largely recovered, and the necessary industry consolidation is gradually rationalizing the imbalance between supply and demand.
While traditional industry players (service providers and vendors) continue to sort themselves out, new players like Skype (Voice Over IP), Digium (Open Source Private Branch eXchanges), and Toronto Hydro Telecom (Municipal WiFi Network) are entering the industry with disruptive technologies and business models. As carriers deal with these new competitive challenges, and equipment vendors are distracted with consolidation politics, a storm is brewing that has barely begun to register on the radar of many of these traditional telecom companies. They are in the eye of a perfect storm.
First coined by blogger and telecom executive Alec Saunders, Voice 2.0 is a term that refers to the consequences of voice becoming a simple data stream that will integrate seamlessly with Web based business and consumer applications. This convergence of telephony communication and the Web will lead to fundamental changes in the way communication services are provided and a dramatic shift in the industry value chain.
Historically, independent application developers and mobile vendors have been restricted from offering many of their products directly to the consumer. Service providers - those who owned the communication infrastructure - insisted on tightly controlling access to their network and customers. This has often been referred to as the walled garden, and has resulted in high barriers to entry and limited innovation.
VoIP has become a key trigger to challenging the supremacy of the walled garden; however, on its own it is not sufficient to unleash the potential innovation around voice applications. But, when combined with several maturing technologies including; voice recognition, the Web markup language VoiceXML, and open source telephony, VoIP will enable an avalanche of new voice enhanced Web applications.
Companies like Skype, Project Gizmo, and Talkster are demonstrating that traditional service provider's control over voice services can be broken. The unstoppable march toward a dis-intermediated industry has begun as network facility providers are loosing their ability to control the entire voice ecosystem. These changes will unleash a wave of innovation with far reaching implications.
Separating the network and services from the physical infrastructure will be the next logical step in the evolution of networks. The rise of municipal WiFi and user-owned optical networks provides two examples of how owners of right of way may cost-effectively provide communication infrastructure that could be offered to a multitude of service providers, creating more choice for consumers.
The growth in demand for bandwidth intensive services like flickr and YouTube, and the growing movement of services and applications off the desktop via Web based AJAX technologies, is leading to a revival of the optical equipment industry. At the same time, continuing cost improvements in optical technologies is creating exciting opportunities. Bill St-Arnaud of next-generation network research organization CANARIE, has been a leading advocate of privately owned and managed optical networks. He suggests that for as little as $500, consumers could gain access to Gigabit transmission speeds that would enable novel services, and more choice for consumers in selecting a service provider. One such build-out in Vasteras, Sweden resulted in consumers being able to choose between 20 different service providers.
Open Source Telephony represents a clear and present danger for traditional vendors of communication products and PBXs. A company at the vanguard of this movement is Digium, with their Open Source project called Asterisk. Despite being led by a small group of people under 30 years old, with no formal training or experience in telecom, Digium has developed very capable technology. Their youth and open source methodology follows the very nature of this revolution.
Asterisk is not, however, the only Open Source telephony project. PingTel, FreeSwitch, TuxPhone and many others are quickly staking their claim in what has traditionally been a very tightly controlled market. Open source is accelerating the convergence of voice with the Web by bringing the PBX and voice application into the IT shop and also by driving feature innovation at a rate that proprietary PBX vendors can't match.
Open APIs (Application Programming Interfaces) are driving the so-called network effect by allowing developers to effectively leverage the capabilities of other products. By opening up the API to its mapping application, Google has created a fascinating ecosystem of mash-up businesses to support and promote their mapping tool. Imagine if a similarly compelling voice / telephony tool and API was available to all. Consider the variety of interesting applications that could be created by simply voice enabling different business processes. Tony Lavender, head of Ovum Research got it right when he said, "voice remains a killer app as an add-on or in conjunction with other business services."
These changes will launch an unprecedented level of innovation in the communications industry. The eye of the storm is moving and the winds are picking up. For those with vision, the opportunities will rival those at the beginning of the PC boom in the 1980s, and the communications sector as we know it will be forever changed.
