VON ATTENDEES STAND FIRM IN FACE OF TELE-CONOMICS

One could almost hear the crackle of stiffening spines and setting jaws as the true believers of voice-over-IP, session initiation protocol and other Internet-based forms of communication attending last week's VON conference in Atlanta braced themselves against mounting economic forces and spit progress into its wind.

Fourteen enterprise customers of various sizes turned out to share their mostly successful stories of IP-PBX and hosted IP service implementations, even as some softswitch and gateway vendors' futures grow dim. An encouraging show of newcomers, particularly from Japan, almost negated the noticeable absence of big names such as Nortel Networks, which had no booth but sent its senior manager of emerging networks — and resident optimist — John Yoakum. And several companies announced innovations in media gateways, peering solutions and testing (see www.telephonyonline for news from the show).

“Those who come to VON are the people in charge of setting the strategic direction of their companies. It is a self-filtering process,” said Jeff Pulver, president and CEO of pulver.com, the show's former owner and current ombudsman.

WorldCom continued its strong presence at VON and called on Vinton Cerf to announce the company's new business offering: the WorldCom Connection, a converged voice and data IP-based service that works across all of WorldCom's network architectures, including frame relay and ATM. Along with the new service comes a new fixed-pricing model that Cerf said “might influence the way the whole industry thinks about pricing.”

Meanwhile, while their messages were discouraging to those banking on a quick return to capex spending, participating service providers hinted at better times to come for those who can survive the wait.

“We are IP zealots and are off and running, building our core infrastructure,” said Ray Smets, vice president of network transformation at BellSouth. “We are sticking our heads out of the weeds a little bit to look at the future.”

However, he added the caveat that vendors have come to dread: “[Carriers] have to think about getting the most out of our $50 billion worth of assets,” Smets said. “For a service provider to really step on the gas, we need to see carrier-grade functionality.”

While the RBOCs push their vendors or toil in their own labs to create carrier-grade solutions, most agree that the enterprise has begun leading the way into VoIP.

But why? And is it dangerous for major carriers other than WorldCom to hold back while small service providers or vendors take their customers away?

Some carriers are waiting on the customer. “If we could get a clear articulation from our customers about what they want, we will deliver it.” said Todd Hesskamp, VoIP product manager for Sprint.

But Joe Rinde, AT&T's director of Internet architecture, said that carriers sometimes must take the first steps to show customers what's possible. “No one asked for the World Wide Web. No one asked for wireless. How can they ask for something they don't know is there?” he said.

While service providers figure out when and how they want to deliver IP services, vendors are left out in the cold. And according to Goldman Sachs Vice President Chris Fine, they might be there for a while.

“Expect more turmoil,” Fine said. “The market has to work out the bubble that grew [from spending] between 1995 and 2000 just like IT had to work out the Y2K bubble,” he said.