VoIP and Beyond Communications Enters a New Era

VoIP and Beyond Communications Enters a New Era VoIP is a catalyst for change Change at an unprecedented rate Change with seismic implications

Structure This paper takes a bird s eye view of VoIP s multi-faceted impact on the market for real-time services and applications. A total makeover of the environment is taking place and the boundaries that used to categorize our use of communications are dissolving. This indicates the need for holistic solutions that address our needs both as business professionals and consumers solutions that Siemens markets and implements. They are broadly based on (a) systems and applications located on the company s premises or (b) solutions hosted by a network operator using Siemens carrier class systems. This paper has therefore been divided into these categories: however they do overlap, i.e. solutions can be based on a mix and match of (a) and (b). Terminology IP is a network protocol. VoIP is the technology that allows telephony traffic to be transported over IP networks: it s the technology that disrupted a real-time communications model that had been in place for 125 years. VoIP started on the Internet, which is an unmanaged network, but it is now being used on corporate intranets and in the network cores of service providers. The term IP Telephony is also used. In the office environment it is a convenient way of indicating that the functionality of an IP, packet-switched solution is the same or similar to that of the legacy PBX. IP Communications is an umbrella term. In this paper it is used to encompass the media types (email, Instant Messaging (IM), Voice and Video over IP) and real-time applications such as presence and push email. Page 2

Contents Executive summary p.4 Overview p.4 Transitioning in enterprises p.5 Flexible, cost-effective migration p.5 All-IP environments p.6 Transitioning to Wireless LANs p.6 The service provider sector p.7 Common goals: different transition strategies p.7 IP Multimedia Subsystem (IMS) p.8 Push to talk over Cellular p.8 Hosted services for enterprises p.8 IP services in the home p.10 VoIP for cable companies p.10 VoIP devices for the home p.11 Conclusions p.12 Page 3

Executive summary IP communications is transforming the way people work together, play and stay in touch, creating exciting opportunities as well as intense competition. Migrating from legacy circuit-switched environments to next-generation IP network is a significant challenge for enterprises, large organizations and other businesses as well as carriers and service providers, i.e. fixed network, mobile network, and converged network operators. They require strategies and solutions that leverage the value of legacy installations and at the same time facilitate the implementation of IP-centric services and applications. Given the size and scope of the task it is clear that partnerships are required: more specifically, a partner is needed whose technology and solution portfolio matches the breadth and depth of the challenge. In addition, that partner should be able to demonstrate a total commitment to the set of groundbreaking technologies, solutions and devices that the term IP Communications encompasses. Siemens has the requisite set of capabilities and an unmatched portfolio for both enterprises and service providers, as this paper will demonstrate. Highlights include: a carrier-class platform that enables cost-effective migration from TDM to IP; platforms optimized for use in enterprises; a suite of real-time, presence-aware applications for enterprises; and a service provider solution that provides central multimedia control for mobile and converged networks. Overview A decade ago Voice over IP (VoIP) was feasible but not practical. Five years later it had become a seriously disruptive communications medium, but even then its role as an IP Communications catalyst was undervalued. Now we are transitioning to a communications-centric economy an exciting era that combines voice and multimedia with mobility, a consistent user experience and more much more. Convergence is not simply taking place at the network level, it has moved on from voice-only services and now takes in just about everything you can imagine: TV, photos, games, maps, stock reports, news feeds and so on. And broadband access in the home is enabling triple play service offers that feature video-on-demand and smart recording in the network. When voice is integrated with other media the user s device becomes a multimedia switchboard that uses the click-to-call paradigm. It may be a desktop PC employed in the office environment or a smartphone used by business and consumer users when they are mobile. This means that VoIP represents the first link in a pervasive, valueadded chain that extends to the convergence of real-time comms with real-time data. In addition, Wireless LAN technology is being used to make VoIP calls in offices and hot spots. The new hybrid Wi-Fi / DECT phones enable both wireless VoIP and regular telephony. And 3G mobile networks and phones are set to deliver wide-area VoIP in the second half of the decade. The impact of VoIP-centric networks, services, applications and devices is seismic, but so far we have only seen the tip of the IP Communications iceberg. At the same time the communications industry and its business customers are facing a formidable set of challenges. Siemens is a leading player in the industry and we meet those challenges across the board. They are met for enterprises as well as fixed and mobile network operators, which is important since it allows us to mix and match communications functionality in order to deliver the optimum solution to our customers. Page 4

Transitioning in enterprises Large enterprises have large phone bills so these companies were the early adopters and the transition to VoIP was made in two main phases. The first was the addition of gateways to corporate telephony switches so that the Virtual Private Networks (VPNs) employed for data communications could be used for voice. This development eliminated the need for expensive leased lines. Operating costs were therefore much lower; administration could be centralized; and the full functionality of PBXs could be extended to small sites. In this phase VoIP was simply the transport mechanism: the VPN became the carrier-class equivalent to the Internet. The second phase involves migrating to IP Communications, i.e. delivering real-time applications to the relevant employees. This process involves new communications platforms (IP PBXs) and new devices (IP phones). The way that they are implemented within corporate environments varies: different companies have different requirements and they will proceed along different timelines. The business case for IP Communications is compelling, but companies have made significant investments in legacy hardware. Flexible migration strategies are therefore needed and to implement them companies need a partner that has a flexible set of solutions. Flexible, cost-effective migration Siemens is a transition specialist. The company has won awards for its migration strategy, which combines minimal disruption with the protection of legacy investments in PBXs, phones and cabling. This is achieved via so-called converged platforms, a development that the company pioneered. Converged platforms protect investments in legacy phones and cabling as well as PBXs. They also enable interworking with legacy PBXs. As illustrated, converged platforms such as the HiPath 4000 employ circuit- and packet switching in the same system. One side connects to the PSTN and the other to the LAN. Legacy phones remain in place or they can be connected to the new platform via the circuit switched interface. IP Phones connect to the packet switching interface. Thus, only those employees who need IP Communications functionality are given IP phones. More IP phones can be added at any time and when the time comes to replace the legacy system the converged platform can take over the regular phones and the cabling. Page 5

All-IP environments Enabling elegant, cost-effective transitions from TDM to IP is important, but we are moving towards All-IP environments, as illustrated in this schematic. HiPath platforms provide call processing and IP communications functionality to a wide variety of client devices. In addition, many enterprises and other large organizations have or are implementing a complementary Wireless LAN infrastructure. Platforms such as the HiPath 2000, 5000 and 8000 are native IP platforms. These switches interoperate with legacy PBXs via gateways and they can be mixed and matched with converged platforms. This capability allows migration to proceed along different timelines at different sites, e.g. the headquarters of the company will typically move to an all-ip infrastructure before the smaller offices. It s therefore clear that the breadth and depth of the Siemens portfolio enables migration to align with corporate strategies and thereby deliver cost-effective solutions. Enterprises, network operators and homes are migrating to all-ip environments: it s only a question of time. Enterprise-wide networks will evolve in different ways, as indicated in the previous paragraph, but there is a generic topology. Relatively large all- IP switches will be located in the company s data centers and they will provide services to other sites. These centers will typically host mainstream business processes such as CRM and ERP and technical resources are on hand when the organization decides to integrate real-time communications with these real-time data processes. Enabling VoWLAN The Siemens WLAN portfolio enables data communications as well as robust, wireless VoIP. It allows companies to realize the benefits of true enterprise mobility. The portfolio offers wireless devices, access points and controllers, along with management software and professional services. The HiPath Wireless Controller is the centralized high-performance platform from which up to 200 access points can be controlled and managed. It can be interconnected with other wireless controllers to scale the mobility domains to thousands of access points. Controllers are available in a number of hardware configurations suited for different sized deployments. Located anywhere in the network, the controller aggregates all clients connected to the HiPath access points as well as those of third parties. In addition, Siemens can supply robust access points and Wi-Fi devices for use on factory floors and other industrial locations. Moreover, both the office and industrial WLAN installations can be integrated and managed from the same system. Page 6

The service provider sector The service provider sector comprises fixed and mobile network operators, cable companies, ISPs and virtual network operators. The first four categories employ different technologies and network architectures but they are all transitioning to IP and recognize the pivotal role of VoIP. Regular virtual network operators do not own any infrastructure; they lease capacity. Common goals: different transition strategies Voice revenues in fixed networks have declined as a result of intense competition and the ability to bundle a VoIP service with Internet access. Telephony will therefore become a free service that is employed alongside Instant Messaging (IM) and email. Revenues will come via compelling bundles of added-value services, e.g. the socalled triple-play combination of TV, Internet and Telephony. Network operators are therefore starting to compete with cable operators and vice versa. The market will continue to pay a premium for mobility. In cellular networks voice is predicted to remain the biggest revenue source for the next five to ten years. MNOs are transitioning their network cores from circuit- to packet switching primarily to reduce OPEX, but this process is also needed to facilitate the delivery of value-added services. Migrating to IP is a formidable challenge for both fixed and mobile operators. Significant investments are required and regular services must be maintained in parallel with the introduction of new added-value services. The Siemens SURPASS platform meets the transition needs of both network categories and it also enables flexible transition strategies to be implemented. The SURPASS hiq 8000 softswitch platform allows network operators to construct an IP overlay network and, as illustrated, the SURPASS hie 9200 enables a seamless transition from TDM to IP. SURPASS hie 9200 legacy TDM and IP-based Next Generation Networks. It incorporates all the functionalities of EWSD, the world's most successful switching system, and those of the carrier-grade SURPASS hiq 8000 Softswitch on a single platform. In addition there is a portfolio of integrated voice, video, audio and data services for the home and for the business sector as well as applications such as IP Centrex, unified messaging and video telephony. And last but by no means least, there is the Siemens IMS solution for the delivery of IP-centric services over the new core networks. Page 7

IP Multimedia Subsystem (IMS) IMS provides unified session control for voice, real-time media and data services. Its open architecture allows for access independent service delivery. This groundbreaking solution encompasses all the wireline and wireless networks we employ at home, in the office or on the move. In other words, it enables the creation of converged, unified domains. This means that platforms can be located in the networks of wireline operators and ISPs. Consolidation is achieved via upgrades to the core networks, but no changes are made at the access level. IMS is access agnostic and this allows SIPcompliant, multi-radio phones to provide a consistent user experience over both cellular and Wi-Fi networks. IMS was specifically designed to enable real-time, user-to-user mobile functionality such as rich voice services and video telephony. Key mechanisms include session negotiation and management, QoS and mobility management. The platform also allows operators to offer IM as well as multimedia conferencing and chat rooms. In addition, IMS enables server-to-user services such as email push and click to dial. The architecture also allows different services, e.g. presence, to share common components. Thus, no more communication island solutions: no more service silos. Instead, operators can create a dynamic service environment via the ability to introduce new services, quickly and economically. The service island model also needed to change since it makes roaming virtually impossible and without roaming many users, particularly business users, would be less than impressed with the new services that were on offer. Push to talk over Cellular Push to talk over Cellular (PoC) is another innovative IMS service. VoIP enables efficient use of radio resources, which are reserved for the duration of talk spurts instead of for an entire call session. This translates into much lower charges: only talk time is billed so two or more parties can stay online for hours yet at the same time it is very profitable for operators a real win:win scenario. Hosted services for enterprises One cannot overstate the importance of communications to the business community and the case for IP Communications is more than compelling, it s overwhelming. However, technical resources are needed to implement and manage in-house systems, which is why large enterprises were the early adopters. These resources are lacking in most SMBs and this sector accounts for around 50% of the gross national product of industrialized countries, so the opportunity for service providers is clearly enormous. In addition, the case for outsourcing communications services is becoming increasingly attractive to large organizations. Management may not see it as a core competence and it is possible that IT resources could be better directed, e.g. towards the integration of real-time communications with business processes. In addition to a comprehensive range of converged and native IP platforms and applications, Siemens recognizes the fact that real time communications applications can only realize their full potential when implemented and integrated with the knowledge and skill to fully optimize them. This is the only way that enterprises will get the return on investment they expect. Siemens has therefore created a service offer Page 8

that allows the company to work with clients on every stage of the technology lifecycle, from the design, implementation, maintenance and management of these solutions. In addition, there is a broad range of consulting and operational services designed to help enterprises develop more effective business models, improve business systems and processes, and even take over the day-to-day management of the communications network. Network operators have been able to offer baseline hosted voice service (aka Centrex) for decades. A Centrex service eliminates the need for PBXs the network operator manages the phones. It was a good concept but the technology was less than ideal when the company had several locations and it could not traverse national boundaries. As a result, Centrex was not particularly successful in Europe. A hosted service solution based on SURPASS Hosted Office. Recall that Siemens is agnostic about the delivery channel. The company also provides mix & match solutions based on HiPath systems and applications in the enterprise space and SURPASS in the service provider domain. These constraints do not apply to IP Centrex: IP eliminates distance; any office, anywhere in the world can be part of a unified network and be managed from a single location. Unfortunately the term is associated with the earlier TDM connectivity service and it does not convey the fact that IP telephony allows operators to offer a range of value-added services. The fact that both the CPE and hosted solutions come from the same vendor enables a complementary mix and match of wireline and mobile functionality. For example, the presence and availability of colleagues is displayed in the same way on different devices. And as indicated earlier, there is no need to know whether the other party is in the office or mobile: clicking on the relevant icon sets up the call. In addition, mobile devices can be brought into the corporate 4-digit numbering scheme. SURPASS Hosted Office incorporates a comprehensive array of carrier-class applications that meet the needs of SMBs and large enterprises, particularly those having several branch offices. IP Centrex is the core service: being IP-based allows instant network-wide coverage, multi-tenant capabilities and on-line feature upgrades. The solution has two key elements: the SURPASS hiq 8000 Softswitch and the SURPASS hiq 4200 Application Server. The former product provides control of media gateways, it coordinates the network intelligence presence in the various members of the SURPASS product family and enables PSTN interworking. The latter acts as a call feature server providing SIP-based IP Centrex functionality. The end points are SIP Page 9

IP services in the home Enterprises and other organizations were the early adopters of IP communications but value-added services are also relevant for business professionals working from home as well as regular consumers. The Siemens portfolio has VoIP@Home solutions for both network operators and cable companies. Cable s premier service is TV, which indicates that access is broadband. This allows cable companies to add telephony and other IP-centric services to their offer. On the other side of the equation DSL technology has given local loops a broadband capability and this allows network operators to add TV to their traditional telephony service, which is transitioning to VoIP. VoIP is, of course, the enabler: the offer combines the best attributes of real-time voice, data and video. The benefit of features such as call forwarding, for example, is clearly enhanced when a Web portal is employed and unified messaging is a more convenient way of accessing and returning messages. The various network elements application servers, media gateway controllers and end-user devices can be deployed as needed and scaled accordingly. The application server is the SURPASS hiq 4200 and the SURPASS hiq 8000 Softswitch controls the media gateways. The key functionality of these products was given in the section on SURPASS Open Office. This indicates the ability of Siemens service platforms to deliver the services needed for business professionals as well as consumers. VoIP for cable companies Triple play is the term used to describe a bundled IP service offer comprising Internet access, email and TV, which will normally have both subscription and regular channels. Cable companies are well placed to market themselves as major players in this emerging voice and multimedia sector. By the end of 2005, it is estimated that 14 million subscribers will sign up for VoIP from a cable TV service provider, according to the market research firm In-Stat. And as more cable companies invest in VoIP over the next few years, encouraged by the success of adding voice services to their offering, worldwide cable telephony penetration is projected to exceed 22 million by 2008. As in other areas of telecommunications, breakneck upgrades are out and the careful husbanding of legacy investments, with as little incremental extra capital expenditure as possible, is in. Telcos are adding xdsl to their copper networks to offer broadband Internet access and video-on-demand; cable TV operators are coming from the opposite direction. They are offering voice services on top of cable modem Internet access and multi-channel TV. This has become a mandatory move. For example, the leading cable operators in the US are seeing minimal growth (around 2.5% p.a.) due in part to increasing competition from satellite. In addition, they are looking for ways to cut both capital and operational expenditures without weakening their ability to tap new opportunities. Providing voice services over cable networks means deploying voice over IP technology and Siemens has a comprehensive portfolio of cable-ready components and systems. The principle component, the SURPASS hiq 8000 Softswitch, meets the PacketCable 1.1 specification and the Siemens solution supports both U.S. and European standards for delivering IP-based voice services. In addition, the products of Page 10

best-in-class partners are employed in order to deliver a full solution that includes support security, billing, and network management. VoIP devices for the home In this final section we take a brief look at Siemens VoIP competence with regard to wireless/cordless devices for use in the home. Siemens has been the leading vendor of cordless DECT handsets for many years and Gigaset is a well-known brand name. These devices provide key system functionality and are ideal for use in the home and small offices. Any party can pick up the call and transfer it with a message to another party. Adding a VoIP capability is a logical development and it has been enabled as a PC-based solution or, as shown here, as a dual-mode solution. In both cases an analog connection is available as an option. In this always on hybrid solution the user can decide whether to make an Internet or PSTN call and both lines can be used simultaneously. VoIP functionality includes basic call plus a buddy list, chat, alerts and IM. There is also a messaging capability, e.g. email, store-and-forward and notification that works in conjunction with a service provider. And last but not least, Siemens has developed a range of cordless WLAN devices. The Gigaset SL75 WLAN handset shown on the right connects via the 802.11g air interface to a router that in turn connects to the Internet. The device can also be used in hot spots and WLAN office environments. The handset on the left is a Voice and Video over IP device. This is a proof of concept handset that represents the future of IP Communications in the home. Conclusions The combined impact of the Internet and the Web on data communications was seismic, but we take the amazing functionality for granted, which is the way great Page 11

technology works. Now we are witnessing the impact of VoIP and related IP-centric technologies on telephony. In a decade VoIP has transitioned from a poor quality, PCto-PC medium to a mainstream medium. However, it is VoIP s role as a catalyst that is really significant. Brand-new communications concepts are coming to the homes and offices; new markets are being created; but the convergence of voice and data in enterprises and the transition to IP in public networks are complex tasks that require significant investments backed by long-term strategies. In addition, carriers are facing competition on new fronts, but at the same time the new markets are generating brand-new opportunities. Nobody has all the answers to this complex mix of issues and opportunities, but Siemens has more than most other vendors. As the previous pages have shown, the company s communications portfolio is both broad and deep, and it is backed by consultancy and management services. Systems address the needs of enterprises and carriers; the functionality addresses our needs as business professionals and consumers. Page 12