Microsoft Messenger Means
New Carrier Opportunities
by David S. Isenberg,
Prosultant is a service mark of isen.com, inc.
Microsoft's new Messenger client introduces a set of Internet-based communications
capabilities that will open ways for telecommunications service providers
-- traditional and new -- to earn new revenues and create new value.
Messenger begins with Internet telephony. It provides PC-based Internet
telephony that is a leap forward in voice quality and ease of use. Previously,
Internet telephony had a toy-like voice quality. Set-up was quirky and
complicated. Today the impetus of Microsoft's technical advances and
marketing muscle is accelerating Internet telephony towards mainstream,
Microsoft’s Messenger client is an integral part of Windows XP, where
it is called Windows Messenger. It is also available for use with other
versions of Windows (and even for Apple's Mac) as part of MSN Messenger.
In the future, analysts expect that Microsoft will release the Messenger
client for other environments as well.
Microsoft's Messenger lowers important barriers to PC-based Internet
telephony (e.g., latency, difficulty of use). Windows Messenger voice
sounds better than plain old telephony in some cases. An intuitive user
interface and a stone-simple set-up procedure makes Windows Messenger
telephony easy to use. As the Microsoft Messenger client hastens the
growth of Internet telephony minutes, it will increase the demand for
gateway services between the Internet and the Public Switched Telephone
But the importance of Microsoft Messenger goes beyond gateway minutes.
Messenger changes the way we make telephone calls. Indeed, it could change
the way we communicate. It delivers new functionality and fast-track
innovation capabilities. Carriers that understand Microsoft Messenger
will be able to participate in new opportunities in an expanded communications
space. Carriers that ignore or misread these changes are likely to find
their old ways of doing business decreasingly profitable.
In other words, carriers can use Windows and MSN Messenger to generate
proven revenues in the VOIP-to-PSTN marketplace. Then, once the Messenger
platform is in place, it will become a launching pad for future services
-- and new revenue opportunities -- as they are discovered.
Windows Messenger is tightly integrated into every Windows XP system.
XP is expected to become the dominant PC operating system over the next
five years, reaching over 120 million computers. Furthermore, industry observers expect Microsoft
will extend Windows Messenger to mobile and handheld platforms, set-top
boxes, and game consoles.
Even more importantly, the MSN Messenger client, which is available via
download from Microsoft, can be used with most available Windows-based
PCs because the client supports Windows 95, 98, Me, 2000 and NT 4 operating
systems in addition to Windows XP. To round out ubiquitous support, there’s
even a version of MSN Messenger available for the Apple Mac OS. This
broad support for many operating systems means that most Web-enabled PCs
that meet Messenger's (fairly standard) hardware requirements can run
a version of the Messenger client.
Microsoft Messenger users will need to call plain old telephones. It
is likely that users of Messenger will become addicted to basic features
like one-click dialing from their contact list. Therefore, the first
carrier opportunity is to become the gateway between Microsoft Messenger's
Internet telephony and the plain old telephone network, originating and
terminating Messenger PC-to-phone minutes. Within five years, there could
be several hundred billion yearly originating and terminating Messenger
Microsoft opened this market in October 2001 when it announced several
carrier partners for terminating Windows Messenger Internet telephony
minutes to the PSTN including Net2Phone, Callserve and deltathree..
Future Windows and MSN Messenger services will offer carriers larger
opportunities. Revenue potential for new services could become greater
than basic call revenues over the next five years. These include:
IP-based Centrex-like services for small businesses,
location-based presence services,
personal reachability management services,
IP-based voice and multimedia conferencing
Voice portal services
etc. -- (to be discovered)
At last October’s Windows XP launch event, Bill Gates chose Verizon to
demonstrate how Windows Messenger would change telephony.
Verizon personnel demonstrated how a Windows Messenger interface to Verizon
services could be used from a remote location (anywhere on the Internet)
to change forwarding status of a user's home phone, gain access to Verizon
voice messages, get real-time alerts of incoming calls, and custom-manage
home-phone reachability on a caller-by-caller basis.
Session Initiation Protocol (SIP) is the key technology underlying Microsoft
Messenger. SIP is an industry-standard protocol for Internet communications.
It defines how client-to-client sessions -- from phone calls to document
sharing -- are established across the Internet. Some of SIP's modular
functions include determining presence of a known party, establishing
Internet telephone calls, and setting up instant messaging, video conferencing,
document sharing, and whiteboard collaboration sessions. These sessions
can be set up individually or as associated streams (e.g., voice plus
SIP is consistent with other Internet-based successes -- it is simple,
modular, extensible and scalable. SIP works through servers that contain
Internet addresses (e.g., 222.333.22.33) of the various endpoints in a
session. Since users (e.g., sip:email@example.com) are not always at the
same Internet address, a primary function of SIP is to determine where
an invited party is on the network when a session starts. SIP will also
play a major role in next-generation wireless systems, since it has been
designated the call control standard for 3GPP and 3GPP2 networks.
Once location is established, the SIP device, or a proxy server that
represents the device, sends a description of the desired session (voice,
whiteboard, etc.) to the invited party's device (or to that device's proxy),
which can accept or reject the session. The session is established when
the invited party accepts it. In the establishment of each SIP session,
there is a negotiation to determine the capabilities of the session's
endpoint devices. So, for example, if a telephony session is established
between endpoints with both audio and video capabilities, and later in
the session the callers decide to add video, then SIP can establish a
video connection by issuing a newly specified re-invitation.
The resulting capability -- the ability to reach a person regardless
of location or device -- is the realization of a long-held telephone company
Microsoft's user interface for the Messenger client is based on an instant
messaging (IM) window on the user's screen. IM is becoming a preferred
workplace communications medium -- IM minutes in the workplace increased
by 110% in 2001.
The Microsoft Messenger IM application does not only the usual user-to-user
instant messaging, it also mediates SIP session startup and does signaling
to control SIP capabilities. Session set-up is intuitive. A presence
protocol tells the user when his or her contacts are available. The user
that wants to set up a session first determines that the intended session
participant is online. Then the caller sends a special kind of instant
message -- an invitation to talk. This invitation appears to the invited
party as a hyperlinked field in the invited party's IM window. If the
invited party clicks to accept the invitation, the session begins. Or
the invited party could reply to the caller via text, e.g., "Try
me again in ten minutes."
If both users are using Windows XP version of Messenger, either party
can add additional streams as the session progresses. One party might
offer to show the other a spreadsheet or a website. Or the two parties
might agree to upgrade the call to include video telephony. In all cases,
additional media streams are offered by one party to the other as hyperlinked
fields in the Instant Messaging window. This can be as simple as dragging
an open document to the Instant Messaging window and dropping it there.
Or it can be initiated with pull-down menus. The second party clicks
on new hyperlinks as they are offered and the session is redefined to
include the corresponding new media. The experience is of a single, infinitely
expansible, continuous interaction.
How Carriers Participate
Carriers that wish to participate in these new SIP offerings that Microsoft
offers with Windows and MSN Messenger can begin by provisioning call origination
and termination services on SIP. Then, once the SIP infrastructure is
in place, carriers can use the rapid application development capabilities
of SIP to expand their base of revenue generating network services.
Interworking between SIP and the PSTN is well understood. Several vendors,
including Cisco, Sonus and Nuera, offer SIP-to-PSTN gateway products.
These come in two basic flavors -- access gateways and trunking gateways.
Access gateways interface SIP to PSTN using the ISDN D-channel. This
provides an entry-level product that can be engineered flexibly for smaller
offices and/or to meet local requirements. Trunking gateways, on the
other hand, support higher port densities; they interface directly to
legacy SS7 Signal Transfer Points via native A-links.
Both kinds of gateways support all features needed to extend and complete
legacy calls across the Internet-PSTN boundary, such as packet-to-circuit
voice transcoding, translation of telephone numbers to Internet-style
addresses, generation of in-band tones and announcements, generation and
interpretation of ISUP messages, providing voice cut-through at the appropriate
point in the call, and handling the various non-completion conditions.
dynamicsoft's Carrier Solution
Unlike the PSTN, which is owned by known entities operating standardized,
well-specified technologies, the Internet is a diversely owned network
of different kinds of networks. This means that the provider of even
the most basic application-layer services can assume that these services
will traverse several physical networks owned and operated by multiple
facility providers. A SIP Edge Proxy (a device that mediates between
end-user terminals and SIP service providers) will usually connect to
more than one wholesale Voice over Internet provider. This creates routing
and accounting issues. Furthermore, security is a critical concern because
the SIP infrastructure is exposed to the public Internet, where, in principle,
it is accessible by every Internet user.
dynamicsoft introduced the idea of carrier-class SIP networks in 1998,
when the company was founded with the goal of creating a new a communications
infrastructure that embodied and extended the Internet's strengths. dynamicsoft's
early carrier experience with SIP networks has shown that carrier requirements
extend beyond the basic SIP specification in three areas: routing, accounting
Routing: Under SIP, sessions are routed based on the location
of the invited party and the Internet address of the invited party's proxy.
When call volumes grow, route set-up can be slowed by network elements
that are busy or unavailable. Other kinds of routing issues affect operating
costs. For example, when a carrier operates multiple facilities for redundancy,
or peers with multiple service providers, load balancing is desirable,
but a flexible load-balancing scheme that favors low cost facilities is
even better. The logic of low-cost load balancing can be extended to
redundant network elements of all kinds.
dynamicsoft has built a carrier-class Route Engine that can set
up as many as 3,000,000 sessions an hour. It uses awareness of the application,
the characteristics of individual sessions, and the parameters of the
carrier's network to make optimized decisions that drive up network throughput
and drive down costs. When a route is discovered, it is cached so future
sessions can be established efficiently. Routes can be based on SIP addresses
or on PSTN numbers -- this allows communication between SIP and non-SIP
endpoints and the re-creation of classic telco services, e.g., 800 dialing,
within the SIP context.
Accounting: The Internet creates a separation between facilities
and services. In so doing, it introduces the liklihood of third party
communications applications -- indeed it makes third parties virtually
impossible to exclude. Carriers need to know (a) how to bill their customers,
(b) how to allocate costs among providers of network facilities and service
peers, and (c) what kinds of advanced services were used and their billing
parameters. There are additional issues specific to Internet telephony.
For example, customer-use minutes are not tightly tied to network facility
parameters. (For example, a minute of speech could use anywhere from
5 to 64 kbit/s of facility bandwidth.)
dynamicsoft has created a carrier-class billing mediation methodology
to serve the needs of the wholesale Internet telephony provider. Under
this methodology, a special SIP Session Event Record is created at the
SIP Edge Proxy. This Session Event Record logs the unique session identifier,
and the start and end times of the call. It also collects other session-specific
information, for example, it uses the persistent Internet address of the
service provider to record which provider's facilities carried the call.
The Session Event Record is extensible to track additional customer variables,
network resource usage, and usage of additional application resources.
It is combined with the Call Detail Record (CDR) of the switch to create
a SIP Wholesale CDR that meets the requirements of both new and legacy
Security: The Internet's separation of services, facilities and
customers creates security issues that don't exist in the PSTN. Normally,
Internet service providers and companies use firewalls, which allow certain
Internet addresses to pass through them. In many cases this allows too
much access, especially where real-time media streams must be allowed.
Hackers can embed information within streams to spoof the system to gain
access to subscriber authentication, service authorization, service provisioning,
accounting and billing information. Once accessed, this information can
be stolen outright, or used to steal services. Or the information could
be maliciously corrupted to attack and potentially disable services.
There is a second reason why Internet security is a critical concern.
Network elements facing the Internet are targets for denial-of-service
(DOS) attacks that could render these elements dysfunctional or inoperative.
dynamicsoft has created a carrier-class SIP security solution.
The solution features enhancements to its Edge Proxy, a new dynamicsoft
Firewall Control Proxy and a new kind of firewall. The new firewall permits
traffic passing through it to access only one network element -- the SIP
Edge Proxy. When the Edge Proxy receives a SIP invitation, it authenticates
and authorizes it. Then the Edge Proxy passes it to the Firewall Control
Proxy (FCP), which examines the SIP header to determine that the requested
application is permitted (for example, if it is a voice call invite).
If so, the Firewall Control Proxy tells the special firewall to create
a media "pinhole" so e.g., the voice stream can pass through
There is even more to it. For example, the Edge Proxy masks critical
fields in outgoing headers to prevent unauthorized discovery of inside-the-firewall
network topology. And because firewall control is so critical, the FCP
is always hidden from the outside world, accessible only through the firewall
and the edge proxy. In the call set-up process, the firewall and the
FCP communicate via special protocol designed to add another layer of
security to firewall control. The result is carrier-class security within
the public Internet.
Pay as you grow. All three functions -- routing, accounting,
and security -- work together to provide linear scalability with automatic
fail-over and automatic route discovery managed by dynamicsoft's load
balancing technology, so carriers can implement SIP infrastructure growth
without single points of failure. Return on investment for an entry-level
(but fully carrier-class) SIP network can be measured in months. dynamicsoft
ensures continuous network growth that follows the growth of revenue.
The SIP infrastructure ensures rapid participation in new service opportunities
as they arise.
dynamicsoft's Microsoft Messenger
Until now, this discussion has focused on SIP network requirements for
wholesale carriers and large enterprise networks. But the demands of
serving Microsoft Windows and MSN Messenger SIP terminals require that
participating carriers must extend SIP functionality towards the end-user
Consider, for example, the prepaid calling application, in which a caller
originates a SIP call from a Microsoft Messenger PC out to a plain old
telephone on the PSTN. Not only must the call be routed from the Internet
to the correct PSTN number via a carrier chosen according to user-defined
(or other criteria, e.g., least-cost routing), but the caller must be
securely authorized to verify available funds and examine billing information
in real time. There must be third-party call control to insert announcements
(as funds are depleted or other user-specific or call-specific conditions
occur) and terminate the call should funds run out. Furthermore, self-provisioning
via a Web interface reduces carrier costs; users should be able to set
up their own account, change their own account information, add funds,
terminate service, et cetera.
The dynamicsoft AppEngine is the platform on which the main aspects of
dynamicsoft's Microsoft Messenger Solution are implemented. The AppEngine
is an open, programmable development platform that uses a Web-like Application
Program Interface (API) designed for rapid SIP service creation and deployment.
Logically, the AppEngine sits close to the user, right next to the Edge
dynamicsoft offers a basic application for terminating Windows or MSN
Messenger minutes as a turnkey application and as a framework for other,
more advanced carrier-class applications. The termination application
does subscriber authentication, authorization, call set-up, call control
and call supervision. It interfaces to an industry-standard billing server
for account balance verification and maximum call duration computation.
It provides optional real-time account information to the end-user (via
Web or IM).
The dynamicsoft AppEngine's API makes the termination application easily
expansible. Service developers can upgrade and improve classic telecom
services, create new services or add communications capabilities to existing
PC or Internet applications. The API includes support for operations,
administration, maintenance and provisioning of all applications written
for the AppEngine.
Business Model Growth
Jonathan Rosenberg, dynamicsoft's chief scientist, says, "The killer
communications apps of the future have not been discovered yet."
He has devoted his career to the proposition that SIP provides the flexibility
to discover and deploy these massively useful future applications.
The "Death of Distance",
brought by radical improvements in network technologies, and the Internet
have weakened the foundations of the old telecommunications business model.
Telephone companies around the world are struggling. New services, even
new business models, are needed. Carriers will need to evolve into the
new environment. The carrier-class SIP platform offered by dynamicsoft
allows carriers to begin the evolution process by following known revenue
sources, beginning with Microsoft Windows and MSN Messenger minutes.
At the same time, deploying the dynamicsoft SIP infrastructure will prepare
these carriers for the undiscovered future.
For more information a Service Provider Solution Brief is available at
In addition, deeper technical detail is available in, "Generating
New Revenues with a SIP-based Network Solution for Microsoft Messenger
Termination" by Matt Lazaro, solutions manager at dynamicsoft;
it can be requested at http://www.dynamicsoft.com/resources/whitepaperform.html.
For further information, visit http://www.dynamicsoft.com
or write to firstname.lastname@example.org.
David Isenberg is
Principal Prosultant(SM) of isen.com, inc., an independent communications
analysis firm. He is author of the influential essay “The Rise of The
Stupid Network” on the advantages of the Internet’s distributed intelligence
architecture. Prosultant is a service mark of isen.com, inc.
This paper was written
at the request of dynamicsoft to support dynamicsoft Messenger Solutions.