Selling Points Against the Cisco^Ò CallManager^Ò

Date: January 11, 2001

NEC America, Inc.

Corporate Networks Group

1555 W. Walnut Hill Lane

Irving, Texas 75038

S & TRPORTFOLIO MARKETING COMPETITIVE ANALYSIS September 2000 rev.

What Is the Cisco CallManager?

Cisco CallManager

The Cisco CallManager is the software component of the Cisco^Ò AVVID^Ò voice solution, which runs on top of a Windows^Ò 2000 server and “voice enables” an enterprise telephony network consisting of H.323 IP terminals, gateways, and voice applications. The CallManager represents the intelligence of the network, providing call processing, signaling, call control and connection services to network telephony devices and integrated voice applications.

Cisco supports 4 hardware platforms for use with the CallManager, the 7820, 7830, 7835 and the newly announced ICS 7750. Each CallManager Server supports a maximum of 2,500 devices (IP phones, trunk gateways, and station gateways for FAX machines and analog phones) and 50,000 BHCC. Up to five servers can be connected for a maximum of 10,000 devices and 125,000 BHCC per site or cluster. Up to 10 sites can be networked using an H.323 gatekeeper.

The MCS-7820 is Cisco’s low-end platform that is intended to be a “demo” platform; used as a standalone server in a test environment; or deployed in a backup role. When the MCS-7820 is used in a production environment, the customer must configure two servers, one for switching and one for backup.

The Cisco MCS-7820 includes Intel's Pentium^Ò III chip, which delivers 500-MHz and ships with 128 MB of Error-Correcting Code (ECC) RAM. Currently, customers can have a primary and secondary server that will support small to medium-sized facilities and large branch offices.

Cisco CallManager Product Positioning

Cisco claims to bring to multi-service networking and standards based, open systems architecture for converged networking. Cisco depicts the traditional TDM PBX as being Old World technology that performs one function only, switching voice calls. Cisco argues that the high reliability for traditional PBX systems (PBX up times of 99.999% of the time) comes at a huge cost to owners. Cisco claims that this results in a cost-prohibitive system that has limited scalability and flexibility, often requiring a forklift upgrade to expand capacity.

Cisco positions their CallManager as offering the following advantages over traditional PBX’s:

• A Unified network to the desktop for common delivery of voice and data resulting in reduced wiring and maintenance costs.
• Lower cost of communications when connecting to remote offices and remote workers.
• Adds voice to the existing corporate WAN, while Voice and Data share the same infrastructure.
• All traditional PBX features are supported in addition to the advantage of a unified network.

Cisco Marketing Remarks Regarding CallManager Strengths

• The Cisco IP Telephony Solution's strong name recognition, as well as the company's financial resources and strong market share in data networking are great advantages.

• In the area of converged network communications, the Cisco IP Telephony Solution represents leading-edge technology.

• The solution is based on a distributed architecture (unlike traditional PBX environments) that provides the ability to manage widely dispersed phones, gateways, and voice applications across an enterprise IP network. It reduces total cost of ownership through the reduction of administrative costs associated with managing disparate PBXs. The Cisco IP telephony business case indicates that the effort associated with telecom moves, adds, and changes (MACs) in a 100-user network is reduced 75% when telephony services are transitioned over to the data network.

• The Cisco IP Telephony Solution is set up and administered using a Web browser facility.

• Click-and-talk and user-directed mobility are new applications available in the Cisco IP Telephony Solution.

CallManager Disadvantages

Lack of Voice Experience

Cisco is having difficulties finding support people who know voice as well as data. It is too new and Cisco is still very much data centric. Because of this personnel limitation, Cisco gives customers product documentation in the hopes that customers will be able to figure out how to engineer their networks to support voice.

Integration Issues

Challenges like interfacing with existing technologies such as voice messaging systems, IVR, and Call Center products will cause concerns for customers looking to IP enable their voice networks.

Scalable Solutions

Many aspects of the CallManager system fall short in delivery scalable features. The CallManager’s analog trunk and station capability relies on external modem sized adapters that simply cannot meet large deployment requirements. These issues arise with support for T-1 and ISDN circuits.

E911 Emergency Services Access (ESA)

Cisco ESA implementation allows for ANI/CLID via ISDN PRI to the local access tandem only. There is NO support for ESA Call Recognition, ESA Call Routing, On Site Notification (OSN), or ESA ANI/CLID Composition.

Choice

Cisco’s single vendor mentality leaves customers with no choice. Cisco’s solutions provide customers with no multiple vendor interoperability, keeping customers locked into Cisco’s proprietary solutions for many years. With this strategy, Cisco is able to slow development cycles simply because they know customers would have to abandon their initial investment trying to migrate to newer features and technology which most customers can not afford to do. Cisco’s AVVID strategy offers no smooth migration plan for customers who would prefer to data-enable their existing voice systems or voice enable their existing data networks.

No Open Systems

Cisco talks about open systems, but with every new product released they inject proprietary schemes that block 3^rd party development. Cisco does NOT publish its routing software specification. Cisco does NOT follow the H.323 Version 2.0 specification. Cisco invented a proprietary terminal-to-host protocol labeled “Skinny”, which is a non-published specification preventing 3^rd party IP terminals from working with their CallManager system. Cisco’s extensive use of proprietary schemes within their various flavors of IOS lock customers into a Cisco-only solution, instead of being able to select best-of-breed products for a solution set. Cisco has been slow to accept industry standards, such as virtual redundant routers (VRRP), 802.1p/Q trunking, and COPS policy protocols, preferring instead to lock customers into proprietary protocols.

No Investment Protection

Cisco claims to offer some investment protection by way of the Calista products. The Calista product connects PBX digital phones to a data network. This unfortunately means the customer could rid itself of all investment in the PBX, and spend a great amount on adapter boxes. The customer also loses all of the features and functionality of the phone.

Quality

There are some questions as to how well Cisco understands voice quality. Can they handle data-bursts after calls have been established? Do they drop calls? (It’s hard to measure voice quality on a dropped call). Tests completed by a competitive vendor show Cisco’s inability to handle significant voice traffic reliably on their 2600 branch router. This raises serious questions about the stability and reliability of Cisco’s solution.

Reliability

Cisco is now displaying “5 nines” for reliability, but there is a world of difference between writing this number down on a marketing brochure and actually attaining this number. Putting a different logo on an NT server doesn’t make it “5 nines” reliable. Cisco is questioning how reliability is measured in order to attempt to measure things with a different ruler. Cisco claims that a PBX measures reliability by the presence of dial tone, and not by routed calls. The answer to making converged networks reliable is not to lower the standards, but to rise up and meet them. With the latest release of the CallManager solution, Cisco is now pushing for triple redundancy. Does Cisco hardware solution fail so often that customers must even consider the burdening cost of triple hardware components through out their network?

Anti-CallManager Sentiment Within Cisco from the World Wide Web

Tera Capital's Mr. Stewart points out that industry giant Cisco Systems Inc. (CSCO) uses an IP-based phone system for its own operations, but the equipment is unreliable. 'The Cisco guys are always (complaining) that their phone calls can't get in or out,' Mr. Stewart said.

Cisco IP Telephony Pricing

Product/Range

Base Price

Cisco IP Phone 12SP+	$385
Cisco IP Phone VIP30+	$485
Cisco Digital IP Telephony Gateways	$10,000 (DT-24+) $12,000 (DE-30+)
Cisco CallManager	Bundled with MCS-7830
Cisco Media Convergence Server (MCS-7830)	$14,995

GSA Pricing

CallManager is NOT on the GSA price list.

Gartner Group Identified CallManager Limitations

Concerns about the Cisco IP Telephony Solution's scalability factor still remain for large enterprises.

• Will Cisco be able to competitively scale the solution up above the 1,000-user range and beyond? A proven track record of reliability is also not available yet on this solution.

• Many know of Cisco's data networking prowess, but is the company a viable voice solution vendor?

• Can Cisco sell and adequately service and support its IP Telephony Solution (as well as its whole AVVID concept) through its established, data-centric distribution channels (or pending new channels) to targeted voice customers?

• The Cisco IP Telephony Solution currently has a limited feature set when compared to traditional PBXs, but the vendor is rapidly working on providing features and functions like ACD and unified messaging, which will help to bridge the gap.

• In general, these IP telephony systems are all relatively new and unproven, but offer alternatives that are less costly and are scalable and more standards-based.

Additional Features and Options Which CallManager Does NOT Provide

• Operating Temperature – The CallManager operates in an environment of 50 to 93 degrees F. The NEAX systems operate in an environment of 32 to 104 degrees F and with a humidity rating of 95 %. Cisco operates at up to 80% humidity. This could cause major problems in the event of power loss.

• The CallManager has a Pentium III, 500 MHz processor but lacks the common control circuit redundancy.

• Cisco’s plan for the customer in the event that a server goes down is to sell the customer a back-up server with NO registered phones.

• Doorphones (major security issue here along with their E-911 problems)

• Malicious Call Trace (yet, another security issue)

• The CallManager lacks a TSAPI interface

• The CallManager does not offer a Remote Equipment Module

As mentioned, the CallManager lacks a lot of the major features of the reliable and traditional PBX including:

• CCSA Access
• Classes of Service
• No Night Service
• Least Cost Routing
• No Toll Restriction Override
• Account Codes
• Authorization Codes

The CallManager does not support or plan to support the following packages:

• Healthcare Package
• Lodging Package
• PMS Interface
• ACD Package

Station Features Not Supported

• Automatic Busy Redial
• Incoming Call Groups
• Multilingual Display
• Off-Hook Voice Announcement
• Off-Hook Alert
• Personalized Ringing
• Power Fail Transfer
• Saved Number Redial
• Station Hunting

2000 NEC America, Inc. All specifications are subject to change. All products indicated by trademark symbols are trademarked and/or registered by their respective companies:

CallManager and AVVID are registered trademarks of Cisco

Windows is a registered trademark of Microsoft

Pentium is a registered trademark of Intel