iTel Business Plan
July 26, 2000
ºExecutive summary
iTel will develop, market and sell a combination of software and hardware products that are computer and computer network based, but designed to replace traditional business PBX premises equipment and desk phone sets, while simultaneously merging traditional as well as new, leading edge network services, all into one revolutionary product line. The basis of this product line is the tele-server, which will be the heart of the system much like the phone switch is the heart of traditional premises PBX business phone systems. Complete obselescence of the traditional desk phone set is the goal by moving all those functions into the desktop or laptop computer of each user, however iTel will offer several replacement products in that space for those applications where no computer exists or the users computer is simply not adequate for the task (unreliable operating system like Windows or flaky hardware).
ºBusiness model/Revenue
Profits will be derived from margins on sales of unified messaging and media servers, desk phone sets, phone/network appliances and software. Primarily this consists of telephone, voicemail, email, fax, and unifying those as much as possible so that each can be accessed by any of the others. While there is an emerging marketing term for unified messaging services, freely available versions of such services are actually in wide abundance (uReach.com, OneRedBox.com and clones). Also, such implementations are large, expensive custom developed services. Productized unified messaging software exists, but all such implementations are aimed at existing computer installations and do not attempt to displace the need for separate phone equipment and wiring. iTel will start out marketing complete premises solutions for small and medium sized businesses and small business units. These products will be targeted directly at business telephony premises equipment resellers and channels where it can be offered to their customers as an alternative to traditional premises phone equipment. In addition, the product line will be marketed to systems integrator channels. The attraction to end business customers will be the significant feature advantages over traditional premises phone equipment as well as the lower purchase, ownership and upgrade costs (TCO). At the same time, these phone servers can also be touted as email and fax handling, supplanting the need for customers to have to deal with separate systems and vendors for those needs.
Hardware
ºTele-Server
iTel's tele-servers will be white box, commodity hardware. The software will be engineered to be highly portable; able to run on almost any Unix server hardware. The architecture will consist of dual systems for reliability and fault tolerance. In the event of a fault, the backup system will take over, maintaining service, while simultaneously informing the vendor so that a service visit can be scheduled.
ºDesktop Phone Sets
The basic idea of this company is to combine computer networking and services with telephone services in a sensible manner, which means suggests that there should only be one device on your desk: the computer. It serves as both the phone and the computer. However, some desktop operating systems are not yet stable enough to be relied upon to be a phone in a business environment, nor do all workers or business locations that need phone capabilities have computers. Therefore it will be necessary to offer an optional desk phone set which will share the network cable with the computer for those customers who don't use one of the Unix variants for their operating system. Although this doesn't eliminate the extra phone desk set for some users, the added bonus of not needing separate additional wiring for a phone system is still there.
The source for these desk phone sets has not been fully decided as there are many possible options. One option is to develop one in house. This would require significant in house hardware and manufacturing talent. Another option is to source them from another company, however not enough is known, at the time of this writing, about the exact specifications of currently available products to fully determine their possible suitability.
ºNetwork Appliances
In addition to a low cost phone set replacement product, the ability to hang a large variety of network appliances from the system is very exciting. In locations and situations where previously only a phone set made sense, a low cost network appliance, with both phone and web application capabilities is now economically possible. Lobby waiting areas, shipping docks and warehouses are just a few examples.
Software
The software will be the main part of the engineering output, and designed from the start to be widely portable on virtually any Unix computer, but primarily targeted towards our own Linux based server products. The reason for the portability goal is that it holds open the door for future strategic alliances that could prove essential to a successful exit strategy. The client software will be available for all common client platforms, including Windows, Macintosh, Unix and so called "network appliances" or thin clients. The client software is essential to the success of the system, and therefore must be deliverable on most common platforms from the beginning to avoid any possible sales barriers. Time to market for the software should be quite good, approximately six months after proof of concept code is running. Since this is a phone system, significantly more QA testing time is needed than traditionally required for application software. Much of the code already exists in Linux, including a fairly significant telephony API library. Our software will not be derivations of, but additions to, all currently available open source software, thereby permitting us to keep our software proprietary if we desire to do so.
ºProduct Architecture
The system is designed to supply the following needs of small and medium sized businesses, replacing any products traditionally used for such needs:
Turnkey phone system PBX and "handsets" and any such services they provide, including voicemail, company PA system, and so forth.
Email.
External access to certain kinds of internal corporate data, including company calendar/scheduling, from WAP enabled devices, like web enabled cell phones and PDAs.
Integrated access to voicemail, email, faxes and WAP enabled devices such as pagers and digital cell phones. Emails, voice mails, pages, the internet and faxes can be accessed via a computer, PDA or phone.
A simplified description of the architecture of the system is as follows: the tele-server utilizing our software, and client software on each users desktop, laptop or thin client, and a lightweight headset that connects to the computer for voice communication. Computers equipped with a sound card, speakers and microphone would be able to access voice services utilizing these devices in a speaker phone like manner. This client software and headset completely replaces the traditional separate phone set that resides on the desk or wall. The look of the client software, amongst other things, will be a representation of a traditional phone set in terms of buttons and functionality. Dialing will be done with the mouse or with touch screen or even via voice recognition software. Traditional looking phone handsets that connect to a computer's USB port are also currently available on the market and could be offered as an alternative to a lightweight USB headset.
Significant Benefits:
Only one set of wiring needed for an office. Network wiring will handle all services. Traditional phone wiring in the office is now a thing of the past.
No phone hand/desk set required. For any employee with a computer, that computer is all that is required. Employees or locations without a computer can be served by a thin client network appliance that will serve as a phone and much more. ITel will sell these devices as well.
One vendor for phone, voicemail, email, SMS (cell phone and pager messaging) and fax services.
Moving an employee's office is now as simple as plugging their computer into a different network socket. No more phone system reprogramming. No more preplanning with the phone vendor, etc.
Mobile or laptop equipped employees carry their "phones" with them, and can download their voicemail as well as their email and faxes via the internet without having to call into the office voicemail system. Voicemails and faxes can be stored on the client machine just like emails, for later reference without having to call back into the office and without having to store and keep track of traditional paper based faxes.
High compression MP3 encoding techniques will be used for voicemails, requiring significantly less disk space than normal voicemail systems. Current general use processors can simultaneously encode 3-4 audio streams in real time. Commonly available two processor systems can handle a standard small business 12 incoming line setup with plenty of performance to spare. Processors available in 3 months will be able to handle double that capacity. Current processors can simultaneously decode as many as 10-15 simultaneous MP3 streams per second, but since the decoding will be primarily done on the client processors, there will almost no load on the server for listening to voice mails (except for those calling in to listen to their voice mails). The level of compression will be much greater than that normally used for music MP3s, so downloading your voice mails over a modem connection will not be the time consuming trial that downloading music MP3s can be.
Expansion of the voicemail system from 40 to 80, or from 80 to 160, and so on, is as trivial as adding a new disk drive to a computer. Customers can expand their phone/voicemail capabilities for a fraction of the cost of expanding traditional systems.
Development of new features and capabilities is a matter of months, rather than years with traditional hardware/firmware based phone systems. Response to customer requests new features or fixes can be much more timely.
The concept of fixed station/features will be a thing of the past. For example, any person with a computer can be the main operator with a click of their mouse; any regular person can have as many or as few features as desired without having to call the vendor to upgrade their hardware or spend any more money.
Customization level of features and look-and-feel at the customer level will be several orders of magnitude greater than traditional systems. For instance, each user can customize any and all "button" labels with a few clicks of their mouse. Similarly, internationalization will be built in from the start, meaning that foreign country versions will be available nearly as soon as North American versions.
System monitoring and diagnostic capabilities will be vastly increased for even the smallest customers. These capabilities were previously not available at all or only on the largest, most expensive systems or system options. Virtually anyone will be able to determine how much voicemail disk space is available.
Since the cost of the hardware will be significantly less than traditional systems, a customer can buy dual redundant systems still for much less than traditional systems. Estimated price for a 50 or less employee tele-server and all software would be in the 10-15 thousand dollar range including hardware. A second redundant backup tele-server would only cost the price of the hardware, or about 3,000 to 4,000 dollars.
A small home system for upscale home owners could be marketed for $2,000. Most new upscale homes are being built with network wiring installed. Such a system would not compete with current home automation systems for upscale homes, but such companies would make good strategic and sales partners.
ºInitial Staffing Requirements
Engineering staff will be the initial staffing focus. The first company milestone will be the proof of concept version of the code. This will include the basic tele-server code and a basic client, basic voice mail capabilities, and integration of standard modems or modem concentrator boards. A T1 line integration will be studied but not necessarily included in the proof of concept version.
ºCompetition Summary
The focus of this company will be on the software PBX server and related premises equipment. Most companies looking to do anything in this space are focusing on VoIP and making phone calls from your PC. We are doing nothing with the latter, and using the former in the fabric of our business strategy. While not trying in any way to compete with those companies trying to roll out telephone service over the Internet, we expect to fully integrate with such systems as they become prevalent, vastly simplifying much of our product. Many telephone premises providers are making available early stage VoIP products, which we hope will be side by side sellers with our product. Our research has turned up no companies that are making a product like ours available nor any planning one in the future. One reason for this is that it is a complex software product that most simply don't want to attempt. The vision necessary is complicated and rare. Another reason is that such a product requires considerable support for telephony in the operating system. Companies like Cisco are not trying to bring computer integrated telephony to the desktop, some that are are comfortable aiming a product for a Microsoft operating system, but right now Linux is the only operating system offering the right kind of support necessary to implement the tele-server project. In short, the right expertise, experience and confidence at the entrepreneur level necessary to carry this off is in extremely short supply. Cisco has announced a line of products in the VoIP space, some of which overlap our product. We consider this good news: while Cisco's products are far more expensive and complicated than a traditional PBX, and require multiple products to achieve the functionality of ours, we will be basing our sales strategy on a price competitive, drop in replacement, for traditional PBXes requiring no special expertise or training for the customers beyond that of a traditional PBX. At the same time, their presence in this technology space legitimizes ours, and many of their peripheral products will supplement our offering.
ºInitial Development Schedule
Requirements for proof of concept software release:
Staff: 6 developers, CEO, and Pres.,
Infrastructure: Internet connection, modest location
Time frame: 6 months
12 computers, 5-10 telephony boards
ºCurrent Officers and Staff Members
TBD