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Business Opportunities in the UC Channel - 8 part series:
Federation, Monarchy or Anarchy?
The Shape of the 21st Century Global Communications Network
by Russell Bennett, UC Insights
It is becoming increasingly clear (if it had ever been in doubt) that 21st century communications will be significantly different from those of the 20th Century. Although wireline telecommunications has been in steady decline for at least a decade, old habits and technologies tend to persist until emergent technologies are fully established among the majority of users. Arguably, email and other textual communications methods have significantly supplanted telephony in specific scenarios; and mobile telephony is rapidly overtaking wireline telephony on almost every metric. However, the real-time modalities (i.e. voice, video, data collaboration, etc.) of unified communications (UC) are only now ‘crossing the chasm’. Given that the advent of UC is bringing a significant shift in network topologies and communications vendors, this might be a good time to examine what might replace the familiar 20th century communications networks in coming decades.
Federation, Monarchy and Anarchy
While this paper is clearly about communication networks, the title alludes to three forms of governmental structure:
Clearly, federation is the more modern system that is implemented either constitutionally or is the de facto form of government for the majority of the world’s population, whereas monarchy is a system that variously fell into disuse as the needs and aspirations of the monarch’s subjects could no longer be fulfilled by that system and viable alternatives became available. Anarchy, on the other hand, has tended to exist only as a transitional state between one form of government and another.
From monopoly to oligopoly
Prior to the deregulation of telecommunications in many countries, the communications networks were deemed to be of strategic national importance and were therefore government owned monopolies: the so-called Postal, Telegraph and Telephone (PTT) services. Furthermore, until the 1980s, the nature of telephone network technology necessitated that phone companies be natural monopolies, as it was not economically possible for competing telephone networks and infrastructures to arise: thus telephony was provided by “communication monarchies”. However, as communications technology evolved it became possible (i.e. when spurred by deregulatory legislation) for various providers to share a single physical network by creating virtual networks. As new physical networks emerged (most notably cable networks) alternate providers found opportunities to compete with the newly deregulated PTTs. Nevertheless, it took huge amounts of capital to compete with the former PTT companies and they, or their successors, have typically maintained majority market share in most countries. Today landline communications are oligopolistic markets providing limited opportunities for business or consumers to negotiate price or service levels.
The emergence of the concept of communications federation
UC has provided the opportunity for a different model to emerge, that of communications federation. The notion of federation in communications technology comes from the internet where the routing and addressing of internet traffic is based on the Domain Name System (DNS). When you enter a target domain name in your browser or click on a link, the browser uses DNS to resolve the domain name to an IP address in order to be able to route the web page request to the correct web server. Email addressing works the same way, but the IP address returned is for the destination email server. Like email messages, UC sessions are routed over IP networks: thus UC data packets (both signaling and media) transit the internet at the network/session layers directly from one domain to another without the intervention of service provider companies (at least in theory).
The opportunity of avoiding service provider toll charges for ‘phone calls’ has driven the growth of internet telephony over the last decade, driving a significant proportion of consumer traffic to the ‘messenger clients’ and giving rise to companies such as Vonage and Skype. UC federation uses the same technology to provide direct communications between businesses with lower costs and higher utility. As with self-hosted corporate email, UC federation presents some interesting opportunities and challenges.
The Advantages of UC Federation
The advantages of UC federation are:
The Disadvantages of Federation
The disadvantages of UC federation are:
An Examination of Federation Implementations
As stated above, the challenges of interoperability and the maintenance of network security means that ‘open federation’ is not currently available, in the same way that, for example, a Yahoo! Instant Messenger user cannot communicate with a Skype user. Therefore, the only inter-enterprise UC federation option is to communicate with business associates using the same UC technology: currently provided by Microsoft, Cisco and Skype.
Microsoft Lync Federation
Microsoft first deployed federation for instant messaging and presence with the shipment of Live Communications Server 2005 SP1: this enabled inter-enterprise federation and federation from the enterprise to AOL, Yahoo! and Windows Live services. In later releases (Office Communications Server and Lync) federation was expanded to encompass inter-enterprise multi-media federation and, most recently, between enterprise and Windows Live users.
The Microsoft federation implementation ensures network edge security via a transitive trust model ; utilizing the public key infrastructure (PKI) with DNS and implementing MTLS. Once DNS has been used to locate the target domain, MTLS requires the edge servers at both enterprises to exchange digital certificates from a specific set of certificate authorities. A valid certificate exchange enables the establishment of an authenticated and encrypted SIP session between the enterprises which also establishes an encrypted media channel using SRTP. Network edge security is defined by the network administrator with 3 options for federation:
Cisco Intercompany Media Engine
Cisco started to ship its version of federation in April 2010, with Unified CM 8.0 and the Intercompany Media Engine (IME). Interestingly, it diverges from the direct, managed federation model used by Microsoft by using the PSTN as an initial intermediary to establish credentials and a prior relationship between callers. This is to say that if Alice calls Bob (a business associate in another company) on the PSTN and both companies have deployed the required technology and both are members of the Cisco ViPRNet; then the IME is able to use this information to verify the relationship and store the address data in a distributed hash table (DHT): aka a ‘lookup table’. When either caller makes a subsequent call, the IME routes the session directly over the internet, establishing an encrypted SIP and multi-media federation session in a similar manner to Microsoft. The advantage of IME over Lync is the minimization of administrator intervention; however the disadvantage is the requirement to make the initial PSTN phone call to establish the connection. Note that the connections have a limited life-time (to enhance security), so infrequent contacts may rarely benefit from federation connections.
‘Peer to Peer’ Networks
‘Peer to Peer’ (P2P) networks such as Skype are, in effect, federation networks. However, unlike UC networks which require significant server infrastructure, P2P systems are comprised mostly of soft clients or device endpoints which use IP address data stored locally or in adjacent clients to discover the address of the intended subscriber. This address data is stored in DHTs within the clients themselves and this provides the same function as DNS in SIP routing.
The process used for the address lookup is that if the local client doesn’t already know the address of the person being called, it will ask the other clients that it does have in its DHT. If they don’t have the address, they will pass the query on to their adjacent nodes, and so on until the address is resolved. The algorithms used to populate the distributed hash tables by the central service ensures an optimal distribution of addresses that minimizes the number of address resolution hand-offs. This design essentially reduces the need for network infrastructure to the bare minimum of provisioning services.
If simple consumer person-to-person communication is all that is required then, clearly, monolithic routing infrastructures are redundant. However, some of the more elaborate features that some telephony customers regard as ‘essential’ (e.g. call park and pickup) cannot be implemented without network infrastructures, whether hosted by a network operator or self-hosted by an enterprise.
Options for Future Networks
Clearinghouses – the compromise?
One conceptual model for a network intermediary that has been promoted and, in various guises, implemented is that of a UC ‘clearinghouse’. A clearinghouse is an internet domiciled service provider that, like the telephony networks, would:
The difference between a clearinghouse and a UC service provider is that the clearinghouse would only handle signaling; leaving the media to flow over the most direct internet route between the endpoints. This is a neat work-around to the challenge of handling huge volumes of media bandwidth within the clearinghouse network; however it does not address the QoS issue.
Federation and Cloud-Based UC
An intermediate step between clearinghouses and full service UC service providers would be for cloud UC service providers to offer federation connections between their network and a self-hosted enterprise UC system. This federation connection would be required in any case for the enterprise to be able to federate with the small and medium sized business customers of the cloud service provider. However, the enterprise would gain all the benefits of a clearinghouse from the cloud service provider as well as gaining access to various media oriented services (e.g. PSTN origination and termination, QoS, etc.) as well as leveraging any inter-network peering relationships that the cloud service offers.
Incumbents as UC service providers
While federation has its advantages, it also has its drawbacks (see above). One could make a case that incumbent network service providers could carry inter-enterprise UC traffic and that the value that they could provide would mitigate the disadvantages of UC federation while enhancing the advantages. One opportunity would be that, with their extensive network of customer relationships, the incumbents could provide the kind of UC enrichment services (e.g. federation directories and services targeted at industry verticals) that would justify the additional layer of cost.
However, as stated above, the traditional networks are not currently capable of carrying end-to-end UC sessions across their core networks. Many incumbents currently address UC via the provision of ‘SIP Trunks’ but, quite apart from the many other challenges of the SIP Trunk model, it currently only supports voice service as the voice session is transcoded to native PSTN protocols at the edge of the operator’s core network. For the incumbent providers to provide a service that would obviate the need for federation, they would have to implement a UC signaling infrastructure. Also, as market adoption grows, the amounts of bandwidth required to provide guaranteed QoS for wide-band UC sessions would grow exponentially.
Despite this, the incumbent service providers will inevitably consider themselves to be ideal candidates to operate 21st century UC networks, i.e. they currently:
However, per above, the incumbents have been slow to react to the advent of the UC era and may have already missed the boat. Indeed, the process of deregulation has separated the communications equipment business from the network operations business, so the network operators do not own the next generation communications technology. The new communications innovators are not compelled to sell their technology exclusively to the incumbents; so new, more nimble, operators are already winning business away from the traditional operators. Inevitably, some communications technology companies (e.g. Microsoft) are considering becoming communications operators themselves, following the cloud computing model. However, other vendors (e.g. Cisco) prefer to sell their UC technology to the incumbent operators for them to host and manage.
The Implications of Federation
Whether or not UC federation becomes a broadly adopted communications technology, the implications of enterprises being capable of bilaterally deploying richer communications channels without involving network operators are profound:
The indications are that all of these scenarios are already starting to play out – the only question is how long these issues will take to be resolved and what will be the shape of communications networks for the remainder of the 21st century. Clearly there will be new business models, some of which have been discussed above and some of which we can’t currently envision (who could have predicted Amazon and eBay 20 years ago?)
Telecommunications has evolved from the monolithic networks created in the 19th century through to deregulation and subsequently to the creation of consumer-oriented internet phone companies (e.g. Vonage, Skype, etc.) in the early 2000s. Now with advent of UC and federation; communications innovation has become an unstoppable force which will shortly result in the complete disintermediation of the monolithic telephone operators. What takes their place, and how certain technical, business and governmental challenges will be addressed will be as interesting and exciting as the original creation of telephony itself. The alternative to the timely resolution of these challenges will be a period of communications anarchy where, as depicted in apocalyptic movies such as ‘Mad Max’ and ‘The Book of Eli’ it will be ‘every man (read vendor/operator) for themselves’ and ‘may the devil take the hindmost’. The communications landscape that emerges is likely to be barely recognizable.
As to whether it will be another 150 years before the next communications revolution: I highly doubt it.
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