January 14th, 2009
R.I.P., 'V.O.I.P.' Long live packet-based telephony.
Not much more than a decade ago, the idea that a packet-routing company could compete effectively in the circuit-switched world of telecommunications was oft the font of laughter. For the telecom giants.
Lucent, spun out from AT&T, and what once was known as Northern Telecom could and would crush the Internet doyenne, Cisco Systems. Because what mattered to large corporate clients was the kind of ultrareliability that only experienced telecom carriers could deliver.
Motorola was part of the pack, because it had a special skill in supplying gear for wireless telecom networks.
Well, now, the game is pretty much over. Cisco has utterly routed its rivals. As has packet-switching, where lots of calls can share a given slice of bandwidth, over circuit-switching, where only one call could occupy a given slice of bandwidth.
Northern Telecom, now called Nortel Networks, filed for Chapter 11 bankruptcy, at long last. Alcatel Lucent is seeking some kind of leadership. Motorola brought in a computer guy (Ed Zander) and still managed to wind up in a tailspin.
The chart for just the last five years tells the tale: Cisco, if it so chose, could easily buy all three of the the would-be big guns. But it would face Justice Department challenges, almost certainly. More succinctly, though, why bother? Just let them all self-destruct. You’ll own the vast majority of the telecom world, anyway, without the baggage.
Going forward, the dominant way to deliver voice calls really will be packet-switching. Meaning: More and more Cisco gear will get sold. Even in handsets, if your phone can’t run user-installed software, pretty soon it won’t be bought. From telecom to TV, digits have won.
So why don’t we just get on with it and mothball the term “Voice Over Internet Protocol” telephony altogether?
Let an anachronistic and awkward acronym rest in peace. Call it packet-based telephony, if you must.
But, in any case, let Nortel and Alcatel Lucent come up with a term for what they try to supply, instead.
Tom Steinert-Threlkeld is editor-in-chief of Securities Industry News, as well as a long-time media, technology and business journalist. See his full profile and disclosure of his industry affiliations.
Subscribe to Between the Lines via Email alerts or RSS.
