From Ezilon.com
VoIP Market Segments
By Ezilon.com Articles
Jan 24, 2006, 21:05
VoIP Market Segments
In line with projections of incredible growth over the next few years, an impressive set of new gateways increase by an order of magnitude - tenfold, or more - the capacities of today's VOIP gateways for carrier and service-provider networks.
And a whole new class of product is about to emerge, too. These are VOIP-based switches, designed to augment, and eventually supplant, today's decades-old telephone central-office switches. These have been called "hybrid" switches, reflecting their mixed support for circuit switching and IP packet handling.
Clearly VOIP technology is advancing. Only a few years ago voice-over-IP was a plaything for Internet nerds. Then, by its inclusion in such popular applications as Microsoft's NetMeeting, VOIP began to achieve legitimacy. Voice quality of early implementations lagged noticeably behind that of the switched phone network, but ongoing improvement of the hardware and software that handles the conversion of real-time voice to and from IP packets began to quickly close the gap.
First, generation VOIP gateways came in pretty much just one flavor - whether for deployment in private enterprise networks or carrier/service provider facilities. The newer gateways are more modular, enabling carriers to add features - like IVR and database support for pre-paid calling cards - while enterprise customers can forego these expensive options.
The VOIP-based CO switches, on the other hand, are all squarely focused at the carrier marketplace. This is evident not just by the high traffic densities they support, but by their modular scalability, and features including broad support for Signaling System 7 (SS7) and redundancy at all levels.
Whether the VOIP-based CO-switch vendors eventually package versions for the enterprise marketplace remains to be seen. Clearly the bulk of VOIP deployment so far has been by carriers - we estimate at least two-thirds of the roughly 100,000 VOIP ports shipped to date have gone into carrier networks. Indeed, it seems many private-network users are taking a wait-and-see stance: Most are content to see if VOIP first proves out in the carrier space before making a decision to follow suit.
The new high-end VOIP gateways are likely to bring down per-channel costs for VOIP considerably. The reason: much greater densities. The first-generation VOIP gateways tended towards a per-channel price of between about $ 700 and $ 1,500 (with no real distinction between carriers and enterprise, as noted earlier). Several VOIP gateway vendors expect per-channel costs with their next-generation models to be half of that level - $ 500 or less.
The CO-over-IP switch vendors have been more tight-lipped about their prices, but indications are that they, too, are targeting $ 500 "per port" as the market sweet spot. If this turns out to be the case, the market for traditional Class 4 and Class 5 central-office switches - typically costing $ 1,000 and up per channel - could dry up overnight. And this could have dire financial consequences for vendors such as Nortel and Lucent.
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