The 2000’s The Telephony Decade from Hell (or was it?)
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Creative Innovation – Customer Satisfaction – Continual Quality Improvement Danny Windham, CEO Digium, Inc. The 2000’s The Telephony Decade from Hell (or was it?)
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The 2000’s The Telephony Decade from Hell (or was it?). Danny Windham, CEO Digium, Inc. The telephony industry today holds little resemblance to the one in place at the beginning of the decade !. The beginning of the decade …. The Year 2000. Life was good! - PowerPoint PPT Presentation
Transcript of The 2000’s The Telephony Decade from Hell (or was it?)
1Creative Innovation – Customer Satisfaction – Continual Quality Improvement
Danny Windham, CEO
Digium, Inc.
The 2000’s The Telephony Decade from Hell
(or was it?)
2Creative Innovation – Customer Satisfaction – Continual Quality Improvement
The telephony industry today holds little resemblance to the
one in place at the beginning of the decade !
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The beginning of the decade …
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The Year 2000
Life was good! Economy was strong, industry was wealthy Y2K
– Drove infrastructure upgrades Nortel’s market cap was > $300B Lucent’s market cap > $250B
– Avaya spun out in Fall 2000 Cisco Call Manager introduced
– Based upon the 1998 acquisition of Selsius Asterisk was an infant – born in 1999
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The end of the decade …
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The Year 2009
Life is scary! Industry in turmoil World economy melts down Significant changes in the vendor community
–Avaya, Siemens Enterprise, Mitel have all become private companies
–And now Nortel is private Nortel acquired by Avaya for $900M
PBX market down 31% over prior year (Infonetics)
– IP PBX down only 13%
Asterisk turns 10 years old
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What’s different today?
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Significant Changes
Big Iron PBXs are a dying breed– Voice becomes an application running on standard hardware
Separate Telephony departments are headed toward extinction– Voice becomes a type of data on the data network
Long distance charges no longer dominate the IT budget– Voice rides on public and/or private IP circuits
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PBX Market Share - 2000
LucentNortelNECInter-TelSiemensMitelToshibaComdialPanasonicNitsukoExecutoneVodaviTadiranOther
Source: Eastern Management
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PBX Market Share - 2009
Open Source NortelCiscoAvayaNECMitelToshiba ShoreTelSiemensIwatsuAastraOther
Source: Eastern Management
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PBX Per User Pricing
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009$0
$200
$400
$600
$800
$1,000
$1,200
$1,400Source: Eastern Management
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What happened?
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Industry Trend:
Data networks became reliable enough to
support voice
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Industry Trend:
IP became the preferred transport for all data
types
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Industry Trend:
Voice over IP displacing traditional TDM
telephony
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Industry Trend:
Bandwidth costs plummeted
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Industry Trend:
Communication systems becoming software products
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Industry Trend:
Open source software disrupting proprietary
alternatives
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Why did this happen?
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It’s all about the money!
Running a single department costs less than running two– Driving the extinction of the voice department
Installing a single infrastructure costs less than installing two– Driving the adoption of VoIP
Bandwidth falls victim to supply and demand– Cost To stream a movie - Today: $.05 : In 1998, $270
Dan Rayburn, Wired Magazine
Standards-based, high-volume, computers cost less than proprietary big iron– Driving voice solutions to a software model
Open Source costs less than proprietary alternatives– Driving the acceptance of open source voice solutions
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What happened?
Users seeking to lower costs drove these industry trends
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What can we learn that can be applied
to this decade?
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Users seeking to lower costs will drive a
number of new industry trends !
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Industry Trend
Economic weakness driving
new cost pressures
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General Economic Impacts
Downturn in the economy has taught companies to do more with less
Discretionary spending has been reduced Market conditions favor cost-effective
solutions over premium branded ones Economic pressures raising awareness and
interest in lower cost alternatives – such as open source
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IT spending declined 3.9% in 2009 – will we see a recovery in 2010?– Gartner doesn’t see spending returning to 2008 levels until
2012
26% of CIOs see VoIP as a way to save money on recurring service fees
70% of CIOs expect to make near-term VoIP investments– VoIP is the fourth highest rated investment area
21% of VARs named VoIP the technology that will generate the most near-term growth
Economic Impacts on VoIP
Source: ChannelWeb 2009
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Industry Trend:
Unified Communications adoption will rise
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Unified Communications Impact
UC = complete communications solution supporting:– Voice– Fax– Presence– Conferencing– Chat– Video
Market for UC Products– $2.8B in 2009– Predicted to be $18B by 2012
41% of VARs predicted Unified Communications to be the area of most innovation/creativity over the next 12-18 months
Forrester GroupInStat 2009ChannelWeb 2009
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Industry Trend:
Mobility plays a bigger role in corporate communications
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Mobility Impacts
Mobile VoIP grows– 3G, WiFI, WiMax, and LTE network options– 50% of all mobile traffic will be VoIP by 2019
Gartner Group - 2009
2009 – 15% of mobile phones are smart phones 2013 – Predicted to be 38%
Informa Telecom and Media - 2009
4B estimated mobile subscribers in 2013– 1.5B smart phones
Fixed mobile convergence gains acceptance– 6.3M FMC handset connections in 2009– Predicted to be 27M connections in 2014
ABI Research - 2009
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Industry Trend:
Voice services join the cloud computing party – albeit a
late arrival
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Cloud Computing Impacts
IDC predicts three-fold increase in cloud computing spending over the next 5 years– Capturing 25% of IT spending in the process
PBX as an application benefits little from the elasticity of cloud computing
PBX as an application can benefit from virtualization – Lowers hardware costs
Hosted voice service adoption will come initially from small businesses
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Industry Trend:
Open source software continues to disrupt
proprietary alternatives
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Open Source Adoption Trends
Source: Forrester Research 2/2009
Germany
United States
Canada
Britian
France
0 10 20 30 40 50 60 70 80 90 100
Implementing or Expand-ingPiloting or ConsideringDecreasingNot Interested
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Industry Trend:
Asterisk remains the de facto choice for
open source telephony
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Creative Innovation – Customer Satisfaction – Continual Quality Improvement
What is Asterisk?
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Open source software project that is a flexible communications engine from which many
communications applications can be constructed
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Asterisk – The Project
–10 years in the making–More than 65,000 community members–Deployed in more than 170 countries–Over 2 million downloads in 2009–Over 800 active & current contributors–Extensive hardware interoperability matrix–Over 150 apps available
Voicemail, IM integration (XMPP), speech recognition Speech synthesis, Native Skype connectivity, etc.
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Asterisk Ecosystem
An entire industry has formed around open source telephony …
–Hundreds of Ecosystem members
–Digium Asterisk World 20 Asterisk ecosystem partners represented
–New Asterisk Marketplace launched todaywww.asteriskexchange.comOver 100 products there today
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So, were the ‘naughts’ really the telephony decade from hell?
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If you were a traditional big-iron PBX vendor or employee, then
…
YES!
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But, if you were an end-user of communications products and
services – then …
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You saw your …
Equipment costs fall by more than 33%
Infrastructure management costs fall by 50% +
Bandwidth costs reduced by 1000%
and…
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The power shift…
From proprietary suppliers to End Users
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It was one hell of a decade!
45Creative Innovation – Customer Satisfaction – Continual Quality Improvement
Danny Windham, CEO
Digium, Inc.
The 2000’s The Telephony Decade from Hell
(or was it?)
