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Saturday, January 3, 2009

VoIP Gains Traction in Slower Economy


As if we needed any more proof, rumors swirling this week of massive layoffs at Microsoft Corp. show us that no company is immune from the recession that’s taken hold.

Yet, just as mobility is emerging as an attractive option in this economy, with its inherent cost-savings, so VoIP, with its lower costs and increasingly reliable and high quality, is poised to gain a healthy share of the voice communications space.

Experts already have told us that VoIP will gain a greater appreciation from the federal agency that regulates communications in the United States under President-elect Barack Obama’s administration. They’ve also said that VoIP stands to get better carrier interconnection rights and recognition among policy-makers that the telecommunications world is evolving toward Internet telephony.

As Sam Li, chief executive officer and co-founder of Clearsight Networks says, demand for VoIP test solutions remains very healthy. Li’s Fremont, California-based company provides network monitoring and analysis tools for real-time application troubleshooting.

Interestingly, in our interview with Li, printed below, we learn that for many of Clearsight’s customers, unified communications haven’t yet reached a point where solutions are compelling enough to draw clients.

Our exchange follows.

TMCnet: As it has for many industries, the recession has thrown a wrench into plans for companies in the telecommunications space. At the same time, VoIP is emerging as an increasingly attractive way for many businesses navigating the slower economy to cut costs. How has demand for ClearSight Networks’ VoIP analysis tools changed since the slowdown, if at all, and what does the company anticipate for 2009?

Sam Li (pictured left): While it is true that today’s economic situation is hitting the telecommunications space hard, there is a silver lining. VoIP’s big draw is, and always has been, that it is more cost-effective than traditional telephony. As a result, there’s good reason to believe that the VoIP industry may not be as impacted as other businesses, as companies looking to save money continue to dedicate more attention to VoIP solutions than traditional telecom services. To ensure the ongoing health of their network and these VoIP services, these organizations require management tools such as the kind ClearSight provides.

ClearSight has received quite a few awards for our VoIP test solutions. These awards help us position ClearSight as a leader in this space and help boost customer confidence when selecting one of our solutions.

Demand for our tools is still relatively healthy – all things considered. We continue to push our products into new markets and verticals. For example, ClearSight is currently working with one of largest telecom organizations in Japan for the third phase of a large triple play project; the end-users are residential and home customers.

As far as the outlook for 2009, ClearSight is on track to grow our business and make our revenue targets, despite the challenging economy.

TMCnet: Though the market hype for some time has been around “unified communications,” some would say that companies must get VoIP right first – that is, of a high and consistent quality – before they consider moving into a unified messaging environment. What do you hear from customers who are pursuing UC options such as fixed and mobile voice, e-mail, instant messaging, desktop and advanced business applications, IP-PBX (News - Alert), VoIP, telepresence, voicemail, fax, audio video and Web conferencing?

SL: UC has not reached a critical point yet with our customers and I think this is mainly due to the lack of compelling solutions. ClearSight is closely researching the market, especially for the UC infrastructure solutions such as Cisco UC Manager orMicrosoft ( News - Alert) Office Communication Server.

Ultimately, however, UC requires a higher quality network experience that any organization looking to invest in the technologies needs to closely consider. ClearSight Networks’ quality of service monitoring and trouble-shooting functions are major differentiators to any competitive offering, and as demand for UC increases, we anticipate so will demand for our solutions to properly monitor and manage them. Currently, ClearSight offers sophisticated and in-depth application analysis features for managing VoIP, video, fax and Web applications. As you mentioned, most of our customers would like to get VoIP deployed and working first, and so that is were we are focusing much of our efforts.

TMCnet: How often do the problems that ClearSight sees emerge in a VoIP system – whether it’s packet loss or something else – have to do with the IP network itself?

SL: When it comes to system problems, I would say it is 50/50 for the VoIP deployment. Fifty percent of the problems in a VoIP system are caused by the network, which is perhaps not as well-designed and engineered as it should be. Some companies are still running the applications other than VoIP in their VoIP backbone. Such practices should be discouraged as packet loss, jitter and delay are the major culprit to good VoIP quality and running such applications can only detrimental to achieving good VoIP. Lastly, VoIP equipment and applications are also major culprits.

TMCnet: Your company’s ClearSight Analyzer and ClearSight Distributed products monitor VoIP transmission through sets of audio and video statistics and reports. TMCnet has talked to companies that offer similar services in the past, such asPsytechnics ( News - Alert), which provides software solutions that improve video communications and the quality of IP telephony. In a market that’s expected to become even more crowded, what specific value proposition does ClearSight bring?

SL: Since VoIP is becoming increasingly important, there will be more and more companies entering the market and the total market size will grow significantly for the next few years. ClearSight enjoys several clear advantages in the area of VoIP and video monitoring and management. As a pioneer in application monitoring, analysis and reporting, we not only have years of experience strengthening our solutions, but we are also committed to continuously enhancing our products and solutions so that we may provide innovative and cutting-edge tools to our loyal customers.

There are a handful of unique, key innovations at work within ClearSight solutions that gives us advantages over the competition. For example, in the area of unified communications, ClearSight solutions are adept at VoIP, video, fax and Web applications, ensuring organizations can proactively protect the health of their cutting-edge networks. ClearSight has also built up intuitive VoIP application level analysis features on top of ClearSight Network Time Machine product line, which will continue to be a focus of ours for the next three years.

ClearSight delivers the only solutions that can accurately identify problems at the application layer. This enables ClearSight to more effectively capture, report and store data for real-time, proactive monitoring and management of your most critical applications as well as new, emerging technologies—better than any competitive solution available today.

TMCnet: What about video? Many IT insiders, such as Cisco CEO John Chambers (News - Alert), have said that video-based communications are the wave of the future. The United States is lagging behind Europe as far as mobile video communications go, yet we hear every day about new telepresence and similar systems proliferating. What does ClearSight see as the future of those technologies and the future of its services that support them?

SL: Video is becoming more and more important as Cisco (News - Alert) is pushing its MXE or media engine switch. When ClearSight was building a VoIP engine for our tools, the video component was part of the architecture, so our solutions are already prepared to support this fast growing technology. In fact, that support is one of the reasons why ClearSight’s VoIP and video features are so highly regarded today. We developed a video QoS measurement called VQ-Factor which is the equipment part of Audio MOS. We will be able to go into Video CODEC to provide much deeper Video QOS measurement and alarming. Additionally, as 3G service is getting popular, ClearSight is also anticipating adding our audio and video features into PDA or mobile devices.

By Michael Dinan
TMCnet Editor

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