Voice Revolution Watch

The vision of our Voice & Messaging 2.0 project is coming ever closer in reality. Two pieces of news this week underline this; first, Sony extends in-game VoIP to more PlayStation Portables. (You'll remember, of course, that earlier this week Sony filed patents on a PSPhone.). Second, IBM pours $1bn into unified comms. In this article we explore where the telco can fit in...

Sony's move is an example of one major world trend; the extension of voice (and video) into applications and devices that have never had it in the past. The PSP is a games device; ever since the first MUD (Multi-User Dungeon)s, the ability to chat or rather, to mock, taunt, gloat at, or conspire with fellow players has been common in gaming. (Arguably, it's been so ever since Dungeons and Dragons.) Equally, sound is critical to the realism of the gaming experience. But so far, most sound in games originates from a file of predetermined effects triggered by...the trigger, more often than not. Communication is usually restricted to text equivalents to IRC (Internet Relay Chat - Chat Rooms being the most prominent example), and gestures in virtual space; no voice.

Putting voice functions into the console means that - to start with - voice and messaging can happen alongside games. It also means - much more importantly - that games developers who want voice or messaging can use the device API and its hardware capabilities rather than building their own, which in turn means that many more games will have in-game voice.

And where are the telcos in this? Nowhere. (But imagine the possibilities of presence/availability, mobility, location, and payments.) Here's what the respondents to our Future Broadband Business Models survey think will happen to mobile voice over the next 10 years in Europe.

The decline of telco voice; the boom of embedded voice

The upshot is that voice minutes of use - in so far as this measurement is at all meaningful - will keep rising, indeed, may rise faster than ever before. But the share that telcos handle and bill will fall. Up to a point, it's a good thing that telcos aren't part of some of this voice activity; for example, there is very little point building a telco instant-messaging platform, because there is very little revenue or customer retention to be had. (Imagine telcos trying to design a games console; and weep.) It's essentially junk voice; there's no money in competing for free or near-free VoIP traffic.

Telcos could, however, make their contextual features useful to the emerging embedded voice applications - remember the "Seven Questions", and this scenario for value-based pricing of voice into social networking sites.

Probably the most commercially interesting IM users in the world are the 17 million people who use Lotus Notes' instant messaging client, Sametime, inside enterprises.
Their traffic is highly valuable to them, and to their companies; the archived chatter is valuable, both for reference and for regulatory compliance. Security, reliability, and identity authentication are critically important. They can't just churn off to MSN, Yahoo, Skype or IRC - hence they are a genuine asset to Lotus's owners, IBM. This brings us to the second piece of news: IBM pours $1bn into unified comms.

IBM is targeting its biggest enterprise customers with the latest version of Sametime, which now includes VoIP and video conferencing next to IM, e-mail, group scheduling and other collaboration/teamwork applications as an integrated suite. As far as voice goes, the first new feature is intelligent call-routing telephony; watch this grow as an application.

This is their response to Microsoft's Unified Comms server software, and Cisco's Unified Comms hardware. Computerworld perceptively points out the synergy with IBM Global Services; their network and hosting/managed services infrastructure is, in a sense, IBM's answer to all those Cisco voice switches. It's also a lot like the "pipes" and "platters" in the Telco 2.0 model; with the software as the "product" and possibly the platform, and probably IBM itself as the "partner".

It's worth noting that much of the new functionality originated with third-party developers contributing to IBM's Eclipse ecosystem for Java coders; IBM put the source code out on Eclipse two years ago and is now reaping the rewards.

The upshot? Voice is growing at both ends of the spectrum - but telcos are in the middle of it. At one end, we see many, many ad-hoc micro-networks providing basic chat inside all kinds of other applications - chat that will be free in itself. Telcos can participate here by making nonvoice functionality available for cheap through their APIs. At the other end, we see increasingly sophisticated total-communications managers developing value from the context of every communication event; large enterprises and companies like IBM will develop their own solutions, mostly needing bulk bandwidth and mass-scale infrastructure from the telcos.

But who will bring these functions to the vast numbers of power users and SMBs who don't have the scale for an IBMicroHP TotalComms Enterprise Environment? The answer could be - you. Remember that telcos already have the ability to interconnect pretty much anything in terms of voice and messaging, and to bill for anything that raises a signalling event, wherever in the world it happens. They also know who and where their customers are; all of these capabilities are difficult and expensive to implement as an over-the-top application using the Internet, which means that only really big companies can afford to do so for their own needs.

Telcos, however, have these capabilities as part of their evolutionary inheritance, and already operate at huge scale. A scale that Google et al cannot match today...

[Ed. - find out about the praticalities of exploiting these capabilities at the Telco 2.0 event on 16-17 April in London].