February 07, 2001, 9:06 AM — What a difference a year makes. No matter how you slice and dice the numbers, the popularity of voice over IP grew by leaps and bounds in 2001. The number of installed voice-over-IP networks, the number of players in the voice-over-IP arena, the dollars spent on voice-over-IP products, the number of channels shipped and even the capacity of voice-over-IP products -- all of these elements more than doubled last year.
A few years ago, voice over IP was the domain of just a handful of early pioneers including 3Com, Cisco, Clarent, Nuera Communications and Hypercom. But now this convergence technology is finally being embraced by more traditional networking and telecommunications vendors that previously viewed voice over IP as a serious threat to their installed base.
According to an ongoing survey conducted by Miercom, these early voice-over-IP pioneers have been joined by the classic PBX vendors -- Alcatel, Avaya, Ericsson, Mitel, NEC, Nortel Networks and Siemens. Within the last year, all of the vendors have introduced viable voice-over-IP products, often in the form of add-ons, which "IP-enable" the latest versions of their time-division multiplexer (TDM) and switching matrix-based PBXs. We have seen this technology working -- with good to excellent voice quality and acceptable to very good reliability. In the early days, that wasn't always the case.
Interoperability among voice-over-IP products has been a major stumbling block to widespread acceptance of the technology. The ITU-T's H.323 "umbrella" standard, the first posed for voice-over-IP interoperability, proved complex and difficult to implement. As a result, other less-unwieldy standards were posed in its place, and until recently, we have seen little consensus on which voice-over-IP standards would be most widely implemented.
However, we are now beginning to see some general agreement within the vendor community about where voice-over-IP standards are headed. Based on Miercom's latest survey of voice-over-IP vendors, a number of relative standards -- among them the ITU-T's H.323, the Internet Engineering Task Force (IETF) Session Initiation Protocol (SIP) and Media Gateway Control Protocol (MGCP), and International Softswitch Consortium (ISC) specifications, and the ITU-T's H.248/ Megaco -- will all coexist. So don't expect any single standard to emerge as the basis for interoperability -- at least not anytime soon.
The prevailing opinion among vendor respondents is that H.323 will become the enterprise legacy standard, while MGCP and H.248/ Megaco will be used between carriers' call agents and other media gateways.
Many believe SIP will be used between call agents and between call agents and residential IP phones. In other words, how protoocols are implemented will depend on where the voice-over-IP equipment is situated in the network. Clearly there will need to be coexistence among all these standards -- at least in the short term.
We first examined trends in the voice-over-IP arena with a survey asking vendors about their IP telephony products.
Miercom conducted a second survey late last year, which was sent to 175 voice-over-IP vendors. All told we ended up with 84 valid responses from 79 vendors. In our estimation, this survey response base represents about two-thirds -- from about 65% to 70% -- of the total universe of vendors who make and sell voice-over-IP equipment to end users, according to Miercom's analysis of the market.
In summarizing this voice-over-IP data, we've learned there are new product categories emerging, capacities are on the rise, prices are coming down at the high end, the standards arena is shaking out and vendors are forming interoperability alliances.
Trend no. 1: New product classes hit the market
Product categories resulting from our survey comprise complete voice-over-IP systems, voice-over-IP gateways, voice-over-IP gatekeepers, IP PBXs, public switched telephone networks (PSTN) central office replacement switches, IP phones and "other".
Interesting trends emerge when you compare this 2000 data with our previous results tracked in 1999.
First, the voice-over-IP product category that has seen the most rapid growth is IP telephony, which includes IP PBXs and IP-enabled PBXs. The number of discrete products and IP-telephony systems, which provide PBX-type functions over an IP transport and thus are candidates for replacing the traditional circuit-switched PBXs, has more than doubled from year-end 1999 to year-end 2000.
