System iNetwork

The biggest question is what does this mean for the 3Com System i telephony solution, and moreover, how does Nortel fit in? This is a joint offering with IBM, so it's not like Nortel just decided to deliver a package on System i all on its own.

"It really has to do with customer segmentation, market segmentation," Herring said. "We think that our partnership with 3Com has been extremely successful to date with us in the mid-market, and we're looking forward to addressing the S in SMB with our Nortel alliance. We've been working with Nortel for a while now on developing a truly integrated turn-key, software-based IP telephony solution that is appropriate for smaller companies that don't have networking and the wherewithal to roll out a huge VoIP or IP telephony implementation. The 3Com solution is outstanding today and the Nortel will be as well."

Fortuitous Timing

IBM wasn't exactly courting Nortel or vice-versa . . . the new VoIP relationship just sort of came together, Herring said, as Nortel worked on its solution and IBM was looking into IP telephony. The two companies have had a long-standing alliance in various business units over the last decade, so as Nortel looked at implementing its software-based initiative, it was aware of the System i and the market opportunity, as well as IBM's collaboration strategy with Lotus-based solutions. It came about through open doors and fortuitous timing.

Will It Scale?

On scalability . . . The 3Com IP telephony solution is robust and can scale in a big way, so it begs the question of Nortel's offering — will it scale, too?

Herring said that it should scale well, based on the architecture that IBM's seen so far, but Nortel and IBM are not looking to sell into a 50,000 handset-sized customer anyway. He pegs the sweet spot for the Nortel solution at the 5-to-100 handset market.

A Few Notes
Nortel has worldwide outlets, but at this point, Herring isn't sure which geographies they'll start selling into.

The Nortel-IBM solution, like the 3Com solution, will run on a Linux partition, and it will come prepackaged and ready to run.

IBM and Nortel are still working through what the offerings will look like, but the likely scenarios are buying a CD and handsets from Nortel, then loading it up on your existing System i, assuming that your network is ready to rock, too. IBM isn't ruling out special bundles or appliance-like boxes that you pickup on your doorstep, then more simply plug in and turn on.

Integration, Collaboration, Etc.

Herring is particularly excited about the integration elements of the package, working with solution providers to deliver integrated applications, not to mention all the Lotus Sametime features.

"I realize we are just at the beginning, but if you think about ten, twelve years ago before everyone had e-mail, who would have thought then that e-mail would become a major part of a company's business processes. And yet, everybody, including IBM, does a tremendous amount of invoicing, notification, everything else, through e-mail," Herring explained.

"I do believe the same thing will be true for unified communications as this technology becomes integrated with the business processes and business applications out there," he added.

Still, even these smaller companies will get a tremendous return on investment just on the IP telephony implementations . . . which will only get better as the organizations add additional features.

Selling Into the VIP Program

The Nortel-IBM VoIP solution will also be available to IBM Business Partners working in the VIP program, giving BPs a chance to offer a solution that's even more valuable — and differentiated from competing ad hoc solutions, because let's face it: the System i is not such a great head-to-head low-end comparison box. It's only when you start adding up the pluses of the System i, so to speak, the things that make it different, that it really starts looking attractive. Integrated offerings have the potential to speak to businesses that want modern, reliable, and cost-effective pre-built solutions. There's definitely potential here. Your thoughts?