3Com Buys LAN Telephony Vendor NBX

The LAN telephony market is gaining momentum.

A recent bold move in this budding market, which 3Com Corp. estimates will grow to $5 billion by 2003, was the 3Com purchase of NBX Corp., a developer of network-based telephony systems that integrate voice and data communications over LANs and WANs.

"NBX will play a part in our converged networking strategy by bringing voice and data together," says Tim Jones, vice president of business development for voice, video and data at 3Com.

According to 3Com, NBX will bring the ability to consolidate voice and data information onto a single network, resulting in cost savings and a new generation of converged applications.

"We’re optimistic about this for 3Com because it addresses a key product area," says Ron Westfall, an analyst at Current Analysis Inc. (www.currentanalysis.com). "It addresses a need that networking vendors in general have to demonstrate packetized voice competency."

Westfall points out that Cisco Systems Inc., Nortel Networks (www.nortel.com) and Lucent Technologies (www.lucent.com) are looking at ways to transport packetized voice as well. "Clearly, the competition is heating up and 3Com needed to keep up," he says.

The NBX acquisition is part of 3Com’s convergence strategy, which Jones says has three parts. The first is voice over IP, which is the melding of voice and data over one IP backbone. The biggest advantage to this is cost savings from placing long-distance calls over the Internet.

The second phase is bringing voice and data together on one network and requiring one cable for both. This is where NBX’s solution comes into play. "With NBX, we’re talking about a single infrastructure, driven and managed from a Windows NT interface," Jones says.

For instance, a LAN telephony solution is integrated into Windows and because they are both on the same network system phones can be managed from a Windows interface. Users, therefore, can configure telephone features such as hot keys, dial tones, rings and answering capabilities from a Windows NT server.

The third phase of 3Com’s strategy is the open applications that networking vendors and third-party vendors will build to take advantage of converged networks.

3Com expects to sell LAN telephony solutions to corporations looking for more value-added features than what today’s PBX provides, and as replacements for old PBX systems that are not Y2K-compliant. "We’ve seen a lot of movement in those parts of the market," Jones says.

Current Analysis’s Westfall points out, however, that there are risks in moving to LAN telephony. Many details need to be worked out in converting to packetized voice technology.

"I’d almost figure that IT managers would embrace LAN telephony for the single point of management," he says. "But they’re really not because they have enough challenges just making a LAN work, and throwing voice on top of that is daunting."

Westfall also counts Windows NT’s reliability as an issue in the eyes of many administrators used to PBXs. "NT has to prove that it can execute calls on a reliable basis," he says. "One thing about traditional PBXs, they are very reliable."