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Commentary: Rattling the VoIP industry

Microsoft and IBM are racing ahead of companies in voice over Internet Protocol technology. VoIP companies should take note and use the duo's software to develop apps.

Commentary: Rattling the VoIP industry
By Forrester Research
Special to CNET
September 16, 2003, 2:25PM PT

Vijay K. Bhagavath, Analyst

Microsoft and IBM are racing ahead of companies in voice over Internet Protocol technology, bringing the power of live communications to enterprise desktops. Instead of battling the two, VoIP companies should use the duo's software products to develop applications that marry live communications with data and business processes.

Microsoft and IBM are energizing their software solutions with live communications capabilities. They're accomplishing this feat by implementing three Internet standards in their software solutions that Forrester has named "Triple-S"--SIP, SOAP and SIMPLE. Individually, each Triple-S standard is important, but together they fuel a new software category called "communications middleware," defined as:

Standards-based software for building applications that combine live communication, data, and business processes.

Both Microsoft and IBM have set their sights on dominating the emerging live communications apps market by utilizing their stronghold in enterprise software. Currently, both companies offer:

• Live communications clients. Microsoft's Triple-S-enabled software platforms, Windows XP and Windows CE, function as live communications clients, providing users with a single general-purpose desktop or mobile device to access a variety of presence-aware telephony, messaging and collaboration capabilities. IBM offers Lotus Sametime, an enterprise-class live communications client, which provides interactive messaging and conferencing capabilities on Windows, Linux and Solaris.

• Real-time server platforms. Microsoft's recently announced Live Communications Server 2003 offers presence awareness and real-time media processing capabilities. This communications server provides VoIP companies like Siemens with a Triple-S platform to build its OpenScape presence-aware conferencing, collaboration and messaging application. IBM supports SIMPLE and SOAP in Sametime and WebSphere today, and Forrester expects IBM to add SIP to the Domino and Sametime servers.

The duo bring software savvy
IBM and Microsoft bring deep software expertise, combined with huge developer bases and large partner ecosystems, to the fledgling enterprise live communications app market. Contrast this with the baby steps that VoIP companies are taking with their telephony soft-client apps. Forrester expects IBM and Microsoft to disrupt the VoIP industry's soft-client-oriented app initiatives by bringing:

• Presence-aware click-to-call features to Outlook. Microsoft's Triple-S-ready Windows clients will encourage firms to unveil third-party plug-ins like presence-aware click-to-call. Employees can use the click-to-call feature to respond to e-mails via a phone call by clicking on the sender's name after confirming that he is ready for calls. Firms running Outlook get a much easier path to VoIP than the alternative: VoIP vendors' standalone software client.

• Client-to-server interoperability. Unlike company-supplied VoIP soft clients that currently talk only with their respective IP phone switch servers, live communications apps and features developed for IBM's or Microsoft's desktop solutions don't have a PBX, or phone switch, dependency. Phone calls dialed using the click-to-call feature in Outlook, for instance, can be handled by any IP or legacy PBX server--even a Centrex service. And the telephony presence notification is provided by the IBM or Microsoft presence server, not the PBX, effectively decoupling presence from the PBX as well.

• Live communications tools to their developers. Both Windows and IBM app developers can implement live communications features in their respective software solutions using familiar Microsoft and IBM development tools. For example, Windows programmers can rapidly implement features like pop-up telephony dial-pads in Microsoft Office documents by using the telephony user interfaces available in Visual Studio .Net.

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VoIP companies should embrace Triple-S software
With their recent string of live communications announcements, Microsoft and IBM caught VoIP companies by surprise. The VoIP companies we spoke with seem undecided about whether to partner with the duo or build their own Triple-S stacks. Why? Because their app revenue hinges on using proprietary middleware to prevent third parties from independently developing apps like telephony soft clients for their VoIP gear. The VoIP companies' hesitancy is understandable. After all, they're deep into plans to develop PC- and phone-based voice communications apps based on their own technology stacks. Rather than battle the two companies, Forrester recommends that VoIP vendors:

• Build on IBM's or Microsoft's Triple-S stacks. Instead of replicating IBM's or Microsoft's Triple-S stacks, the VoIP vendors should use the software heavyweights' middleware stacks and developer tools to integrate utilitarian features like audio conferencing or presence-aware click-to-call into Outlook or Sametime. The benefits? A receptive IT audience that's willing to pay for cost-saving live communications features that integrate into their existing desktop apps.

• Make vertical desktop apps live-communications-aware. The VoIP vendors should partner with companies like IBM Global Services and Accenture to build industry-specific desktop apps. For example, the brokerage industry would leap on presence-driven, one-touch conferencing with secure message logging. The payoff? A new market for VoIP live communications solutions catering to industries like financial services, health care, and consulting, many of whom are heavy users of custom e-mail and messaging apps.

• Grow their integration businesses. The days of being a sole-source provider of VoIP solutions based on H.323 middleware lock-in will soon be gone. Triple-S standards will kill that ailing goose. The result? An industry that includes deep partnerships of software, systems, network, professional services and device companies. To succeed in this world, the VoIP companies should grow their nascent network, app, and server integration businesses using Triple-S standards.

© 2003, Forrester Research, Inc. All rights reserved. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.