The transition to all-IP networks is a foregone conclusion, and a technological certainty. Less certain, however, is how service providers will make their profits in the all-IP universe, and avoid being relegated to the packet pipe. At NXTcomm08 (June 15-19), exhibitors will be very much focused on answering this all-important question by showing how to deliver profitable IP-based services to both the business and consumer markets.

“The biggest thing we have seen as a change, is that service providers are seeing their ARPU [average revenue per user] is dropping,” said Michael Rothschild, solutions manager in managed services for Juniper Networks. “The value proposition and the way customers have moved is based on price. They are price shopping. The services are undifferentiated.”

On the business side, the biggest push to combat that falling ARPU is in developing more network-based, managed services that combine communications with IT – information technology – to aid enterprise customers looking to outsource network complexity.

Business customers are asking their network service providers to deliver IT functionality as a service, said Al Safarikas, Cisco Systems’ senior director of managed services marketing.

That’s why companies such as Juniper, Cisco and Microsoft are focusing segments of their NXTcomm exhibits on showing how service providers can meet that demand.

“We can connect all those dots,” said Alex Danyluk, industry director, global telecom business, of Microsoft’s Communications Sector. “Our software, which can be distributed through service providers, including Microsoft Office and new applications like Communicator, can help deliver communications services like hosted email, hosted unified communications that work with applications services like customer relationship management, like SharePoint for documents management and really help service providers create an end-to-end solution from software through communications services.”

Delivering the applications or managed services on top of communications services can not only drive revenue but also improve retention, Danyluk said. Microsoft will be showing how service providers “can start with what is just plain old email and evolve it to a broad set of communications services and we will show how that plugs into applications,” he said.

Juniper is using NXTcomm to demonstrate how it provides the technology that enables service providers to deliver managed services, Rothschild said. “It’s more than commoditized service, and more than point solutions,” he said. “Service providers need to start looking at a solutions-based focus. If you start selling solutions, you have that stickier customer, you are able to now influence not only the IT line of business but line items on the business side challenges that you can hit. So what we are showing at NXTcomm, through a bunch of different demos, is how different pieces of a solution come together,” Rothschild said. “We will be showing also what we mean by a security solution – versus a lot of separate security services – and also branch optimization.”

Two new NXTcomm exhibitors are also exhibiting technology that is aimed at helping service providers move up the value chain.

Phybridge will be showing its UnPhyer, a gateway that connects an IP network to legacy telephone cabling. “This is an all-IP solution that runs Ethernet and power over Ethernet over the existing telephone cabling,” said Will Harris, vice president of sales. “When the customer wants to go to IP telephony and Unified communications solution, this represents a very easy way for the mid market to get benefits of IP Telephony.”

Since launching the product in March, Phybridge has been getting strong industry response. The company plans to sell through partners, especially service providers, Harris said, as they seek to aid business customers move to all IP in a way that is cost-effective.

McObject, an embedded database vendor, also is coming to NXTcomm for the first time, exhibiting technology that is enabling new IP services.

“Everybody knows about Oracle -- we provide the same sort of data management services that Oracle does but at the other end of computing spectrum,” said Steve Graves, CEO. “What we generally call embedded database systems are databases that mostly runs in memory, and don’t have to reside on a hard disk. Instead of being part of a client-server architecture, this is a library that gets linked into the application and is accessed by the applications, which can give it blazingly fast speed. Also it can run in routers that don’t have any hard disks.”

McObject technology facilitates IP services such as VoIP and WiMAX, and is also the database inside F5 Networks, which specializes in application delivery networking.

“Our customers all have a lot of data they need to manage and need to manage it very quickly,” Graves said. “They all provide different types of IP services.”

NXTcomm veteran Metaswitch, maker of softswitch and applications/services platforms, will use NXTcomm to show off the MetaSphere CommAssistant toolbar it launched earlier this year, said Martin Taylor, vice president, Product Management and Technology Strategy. The new toolbar is one of several ways in which MetaSwitch is extending the usefulness of business VoIP and making it easier to use.

“It installs on a PC, sits on the Windows taskbar, and it has a search box that will search for contacts, so all you have to do is click on a match and you get the option to dial that person’s number,” Taylor said. “Users can get shortcut access to setting on the phone like forwarding and do not disturb, that they can change as they need to. And there is a popup that alerts you when someone leaves you a new voice message. The user can see who it is and click and go to message playback on the PC. This gives you a way of screening calls, and is quite an appealing feature.”

Businesses want to use the functionality of VoIP to improve productivity, but need to have quick and easy ways to access the new functions, Taylor added, particularly small businesses that don’t have in-house technical know-how.

Redback Networks, now part of Ericsson, is exhibiting its SmartEdge Multi-Service Edge Router at NXTcomm, showing how it can manage VoIP streams and provide a higher level of service, said Doug Wills, director of marketing.

“On the business side, there is traditional voice, voice with data and voice with video – all these types of upgrades on business side that are carrier managed are starting to evolve rapidly,” Wills said. “Industry consolidation is driving network consolidation, and carriers are looking to take the cost out of networks using IP infrastructures and to take the cost out of the delivery of certain applications like voice. The challenge going forward is bundling voice in a way that makes sense for enterprises, and lets service providers move into higher value services, like video conferencing and telepresence.”

The SmartEdge is enabling that transition by allow service providers to priorities IP flows at the edge of the network, Wills said.

AcuLab also is demonstrating enabling technology at NXTcomm, announcing new technology to adapt SS7 signaling to run over an IP network to enable IP Centrex technology, call centers, mass calling technology and more, said Simon Millard, vice president of sales for Europe the Middle East and Asia. “We are seeing the technology going into larger scale, hosted applications which are deployed remotely, but managed centrally,” he said.

E-mail me at cwilson3@telephonyonline.com.