Is There Any Future for Voice Mail?

answeringmachineI read that J.P Morgan and Coca-Cola have dropped their voice mail service and I wonder if we are we starting to see the end of voice mail as a product?

In its heyday, voice mail and caller ID were hailed as the big saviors of telcos. A lot of customers dropped clunky answering machines and changed over to the telcos’ voice mail. And it was lucrative, at least for the larger telcos. They charged $5–$7 for residential voice mail and $7-$10 for business voice mail and this drove a lot of revenue.

It was not necessarily such a good deal for smaller telcos, although they had to have it to remain relevant to their customers. I can remember one client upgrading voice mail and spending $150,000 on the new hardware and software platform. I doubt that they had more than a few hundred customers on voice mail, so this made for a slow payback.

Today it’s easy to think that voicemail has been around for a long time. But it was developed by Voice Message Exchange in the late 70s and didn’t hit the market until the early 80s. Many of the larger companies like AT&T didn’t have a large business solution until the early 90s. Voice mail relied on bulk computer storage and wasn’t practical on a large-scale basis until there were large and affordable drum storage units.

But then the market started chipping away at voice mail. A few cellphones came with free voice mail in the early 90s and today it’s a standard feature on almost every cellphone on the market. Voice mail and a lot of other telephone features are now included with the price of the service for most VoIP plans like Vonage, and most unlimited long distance plans. One has to imagine that the residential penetration rate for paid voice mail has dropped significantly.

But the real money in voice mail has been for service to business lines. It’s not unusual for businesses to pay $10 per line for voice mail, even at large businesses. And of course, with today’s cheap data storage, this has to be almost all margin to the voice mail provider.

Companies are dropping voice mail partially because of the cost, but more importantly because people just don’t use it much. I know I hate voice mail and it’s a labor to check my own. I finally installed an app that would transcribe my voice mails to an email so I wouldn’t ever have to check it again. If I call somebody I know and get their voice mail I don’t leave a message but instead send them an email. And all of us remember those people who left us interminably long voice mails that made you groan once you knew who left the message.

The millennials hate voice mail. They are a generation that expects to be able to communicate quickly and they prefer text messages or instant messaging. In fact, one of the big complaints about millennials in the work force is that many of them hate talking on the phone at all. I’ve read that in colleges today leaving voice mails is as rare as sending emails – they are both dismissed as old technology.

We are probably a generation away from a time when voice mail will become a thing of the past just like many other telecom services. It is hard to explain to a kid today why somebody should pay $10 per month just so others can leave them messages.

Today a lot of telcos are pushing unified communications, which is basically enhanced voice mail. This is a product that combines all forms of company communications onto the same platform and lets people receive communications in whatever format they like. But as the millennials become more prevalent in the workplace even unified communications doesn’t look to have a rosy long-term future. A lot of these platforms are about transcribing things from emails and voice mails, and if those aren’t used then you don’t really need a fancy platform if employees are only going to text and  IM each other.

I am positive that when voice mail was introduced in the 80s that absolutely nobody could have imagined that just over thirty years later people would be abandoning it, and by fifty years later it might be completely dead as a product. This goes to show you how quickly things are changing. Now millennials, can I make a request? Can you also get rid of the big corporate IVR systems?

Sharing a Softswitch

I see a lot of companies buying softswitches and it makes me wonder if it might not be a better economic idea to share a switch with somebody else. There is so much potential for savings that anybody thinking of installing one should consider it. In the following I will discuss what it means to share a softswitch and look at the pros and cons.

The Basic Requirements. Sharing requires that somebody already owns a softswitch that can control geographically separated gateways. Such a switch must be able to share both the inter-machine trunking gateways, which facilitate PSTN interconnection and the media gateways which facilitate interconnection to customers. Sharing is also going to require interconnection between the two sharing parties. This means there must be some sort of trunking established between the two parties that can be either traditional TDM trunks or IP trunks.

What Would be Shared. The following elements are the components of a softswitch that can be shared, meaning that only one of each of these needs to be purchased:

  • Core softswitch – the device that contains subscriber and routing information;
  • Feature Server – the device that facilitates phone features;
  • Session Border Controller – the device that provides security between the softswitch and the gateways, some CPE and other networks;
  • Signaling Gateway – the device that interface with the SS7 network;
  • Unified Messaging or Unified Communications server – the device that stores, controls and converts data used in unified communications services like voice mail, email notifications, voice to text and text to voice, etc.

What the Second Company Needs to Buy. If you are going to share somebody another softswitch you only need to buy a few components. These are referred to as the distributed elements in a softswitch network. The two elements that you must buy are:

  • Inter-machine Trunking Gateway – for local interconnection to the PSTN. This lets the lessee still connect to the world using the same connections in place your legacy switch;
  • Media Gateway – for local connection to local distribution network and/or CPE.

Data connections required. As mentioned, there must be a data connection established between the softswitch and the new location that allows communications between the shared elements housed at the core softswitch and the distributed elements found at the new location. The size of the data pipe/connection required depends on the amount of data required between the shared and distributed elements. It only requires a few megabits per second to transmit voice traffic. You’ll need a connection in the tens of megabits per second if you are using a lot of features like voice mail & unified communications or a lot security invocation.

Partitioning. The owner of the shared elements will have to ‘partition’ the shared elements in order to ensure that subscribers of the sharing company can’t be seen or manipulated by other sharing companies; Partitioning will also hide the call detail records, routing control and will make sure that the shared elements can communicate through to the multiple networks operated by the sharing companies.

How to Determine if Sharing is the Right Idea. The big benefit is the savings, but there are other considerations:

  • It is inexpensive to buy only the distributed elements. Depending on how large you are, the distributed elements could cost anywhere between $25k and $200k which is far less than buying a new softswitch.
  • What is the cost of the data connection needed to connect the two locations? Generally companies make these connections using establish Internet backbone and this typically adds nothing to that cost.
  • How much does the switch owner want to charge for using the softswitch core? There are many ways to charge for this service. It could be done on a flat rate monthly lease, a connection fee per telephone number.
  • Reliability. How good is the Internet connection between the two companies? If that connection is lost then voice processes will stop. Ideally the connection ought to be on a ring or have redundant routing.
  • Control. I often hear a company thinking of leasing say that they feel like they don’t have enough control in a shared switch. But you can get access to all important switch functions remotely.

When I look at the numbers I find that it is almost always better to share a switch rather than to buy a whole new switch. However, the one factor that still often drives the decision to buy a new switch rather than share is the reliability of the data connection between the two parties. But this is generally about the same reliability as connecting remote switches in your own network to a host switch.

If you want to consider sharing a softswitch call CCG and we can help you work though this decision.