American History 1988
Chapter 211 - 205: Dimensional Reduction Strike

Chapter 211: Chapter 205: Dimensional Reduction Strike

Devin withdrew his astonished gaze from the computer screen before him and then cast a slightly peculiar glance at Jack.

"Jack, I didn’t expect you to change jobs. But congratulations on becoming the CEO of a company," he said.

"To be honest, Devin, even though the company that hired me has changed, my boss hasn’t," Jack shrugged, having come to terms with this reality.

"What?" Devin looked over in surprise, "Did Dave switch jobs too?"

"No," Jack shook his head, "The fact is that my current company is still part of the MCI system, but as you just saw, it also involves Byte Company."

"Oh, that’s somewhat complex," Devin raised his eyebrows in surprise.

He and Jack had known each other a long time ago, as they had been colleagues at WorldCom, including Dave, who now served as the vice president.

But then Devin switched to Dell Computer, and Jack went with Dave to MCI.

Now, after a long and circuitous route, the two met again at Dell in Texas.

MCI had business here too, and Jack had also tried to make contact with Dell.

However, because AT&T had more competitive pricing and service in Texas, MCI never succeeded in breaking into Dell’s business.

Today, when Jack came knocking again, Devin initially thought he was here to pitch MCI’s services.

However, Jack told him that he was now employed by World Link and that he brought with him revolutionary communication services.

Hence the scene just now, where a well-prepared Jack and Danny demonstrated the various advantages of IP telephony to Devin on the spot.

Although Devin himself worked at the famed computer company Dell, the evolution of internet technology still took him by surprise.

This was amazing, IP telephony—Internet telephony, such a wildly imaginative concept.

Caller ID, voice business cards, teleconferencing, automatic answering, digital fax...

There were too many; Devin was dazzled by all these novel features.

But one thing he was certain of was that traditional telephones could never achieve this level of functionality.

Most importantly, Jack assured him that the cost of IP telephony would not disappoint him.

"Devin, may I ask a business-sensitive question first?" Jack felt it was time to get down to business.

"Mmm-hmm~" Devin decided to first hear what the question was.

"How much does Dell spend on telephone expenses every month? The expenses I’m referring to include hardware investment, equipment maintenance, and the most basic call costs."

As the former Southern regional sales director for MCI, Jack had a rough idea of these figures.

After all, there might be some difference in costs between MCI and AT&T, but it wouldn’t be much, and MCI also had many large corporate clients.

However, only when clients themselves disclosed such data could they perceive the tremendous difference.

"I’m not sure," Devin rummaged through his desk, "Looking at the expense report from last month, the figure is approximately US$634,000."

"That’s an expensive figure," Jack spread his hands exaggeratedly, "As far as I know, that only covers the pure telephone costs, not even including the investment in equipment."

"Maybe~" Devin shrugged indifferently. As an executive officer, he didn’t concern himself with these minor details.

"OK, let’s take last month’s US$634,000 as an example. This fee includes both long-distance and local calls, but that’s not the point."

Jack took a calculator from Devin’s desk, casually pressed a few buttons, and then showed the result to him.

"If Dell adopts our IP telephony, then next month’s expenses would look like this."

Devin glanced casually at the figure, then was shocked by the number displayed.

"This can’t be possible! Is MCI planning to forgo all profits, or even operate at a loss?"

Mother F*cker, Devin was now suspicious that MCI was preparing to wage a price war with AT&T.

"Yes, it’s US$380,000, which is projected to save Dell more than 40% in costs.

Of course, these are rough figures, since the billing for long-distance and local calls can be quite complex."

In America, the communication expenses of corporate users were mainly in the form of monthly subscriptions, and they would sign different billing contracts with the operators.

For example, within a radius of 12 kilometers, it was billed as local calls, with roughly a US$30 monthly fee per telephone.

Beyond this range, calls were considered long-distance, with monthly fees generally five times that of local calls, about US$150.

Of course, this was just the basic service; for international long-distance or transoceanic calls, these were additional value-added services.

Dell’s headquarters were in Texas, with over four thousand employees, a considerable number of whom were in customer service.

Telephone expenses of over US$600,000 a month were nothing out of the ordinary.

If it was a busy business season, exceeding one million dollars wasn’t impossible.

But now Jack told Devin that this expense could be cut by 40%!

This wasn’t a 4% cut, or even 10%, but a nearly 50% cost reduction.

"Tell me, Jack, how do you do it?" The cost was so low that Devin found it hard to believe easily.

"This is the Internet, this is the information age!" Jack declared proudly, spreading his arms, "Devin, you yourself work at a computer company; you know how fast it develops."

"Can you ensure that after reducing the cost by 40%, Dell will still enjoy a service quality not inferior to the current one?

No, my requirements are even higher, such as those strange features you just demonstrated."

Jack was right; Devin was employed at a computer company.

He was fascinated by these ingenious machines and captivated by the novel Internet technologies demonstrated.

"I can guarantee that World Link’s call charges will definitely be over 40% lower than traditional phones."

As for caller ID, voice business cards, and conference call functions, these are part of the enhanced services.

But rest assured, their charges are also very low, usually only a few US dollars a month.

"Devin, you can think of them as a kind of software, service can be activated as long as you pay for it."

The low cost of IP telephony is determined by its cost.

However, to ensure World Link’s profit, Jack and his team had also devised many enhanced service plans.

Voice business card: Incoming calls are met with an automatic broadcast of Dell’s advertisement.

See, this is an enhanced service.

There are also conference calls and so on, these good things are of course not free, where would the profit come from otherwise?

"Alright," Devin did some calculations in silence, even including the enhanced services, IP telephony was still much cheaper than traditional phones.

"But I’m still very curious about the technology behind it, I need to ensure the quality of IP telephony is reliable enough."

Devin needed to be cautious about something as appealing as high quality for a low price.

"Let me give you a simple example," Jack pointed to the telephone line on the table, "our traditional phones use the PSTN network.

Its channel occupancy is roughly 240 kbit/s, but the bandwidth for IP telephony is 8 kbit/s."

"What?!" Devin was astonished, "How did you manage that?"

"Digital voice compression," Jack raised his eyebrows proudly, "Byte Company’s proprietary technology, which is also why the cost of IP telephony is low."

"Oh, my god." Devin knew that AT&T was in big trouble.

"Devin, what is the cost for Dell to add an ordinary telephone handset?" Jack decided to give him another little shock.

"Around 500 US dollars, including lines, repeaters, and the handset hardware." Devin had a detailed expense sheet in hand.

"World Link’s quote is 150 US dollars." Jack threw out another bombshell.

"I’m not even surprised by this anymore," Devin spread his hands, "I’m just curious about one thing, can you provide IP telephony services across America?

You know, Dell’s business is global. We have a large demand for communication services, and of course, the quality must be reliable."

"In Texas, Louisiana, Georgia, Florida, and other southern states, World Link can guarantee to provide a rich variety of reliable IP telephony services.

As for other parts of America, even the entirety of North America, World Link also offers low-cost call services.

Still, some specific internet functions might require a bit more waiting. We are in the process of laying out fiber-optic lines, and it will take some time."

In the southern states, MCI’s fiber-optic deployment is very comprehensive, so all the features demonstrated for IP telephony are achievable.

But in other regions, they can only access the PTSN network, which is the traditional copper wire telephone network.

Yes, IP telephony is not incompatible with traditional telephones.

With just a relay station and an interchange center, they can achieve data interoperability.

That means here in the southern states, IP telephony can be integrated into MCI’s own telephone network system and then communicate with users nationwide.

To open up the market for World Link in several southern states, MCI has completely opened its channel resources.

After all, this is AT&T’s stronghold, and World Link could fiddle all it wanted without endangering MCI’s own business.

As for IP telephony through relays not being able to interact with traditional telephone users with various digital features, it’s cheaper.

If quality isn’t enough, the price makes up for it.

Devin was indeed tempted by the price; it would save Dell a lot of money.

Calculated at 300,000 US dollars a month, the savings on telephone expenses alone could amount to 3.6 million US dollars a year.

Even if Dell updated all its hardware infrastructure to accommodate IP telephony, this expense would still be far less than the savings on phone bills.

Devin believed that with this lean cost sheet, the board would give him a high evaluation.

"Jack, Dell needs to conduct a comprehensive technical evaluation of IP telephony; we must ensure the communication service we adopt is reliable and secure."

"World Link will fully cooperate with Dell’s evaluation, and if needed, we can also provide comprehensive and detailed solution plans.

This includes server setup and debugging, building an internal phone network, call centers, distributed networking, unified communication management platforms..."

Jack listed a whole host of service items, which all fell within World Link’s business scope.

IP telephony is just the most basic service; the rest are the key points.

Having spent so many years at MCI, Jack was very clear about all the services in the communication field.

After gaining a detailed understanding of the features of IP telephony, he planned many subdivision services for this new industry.

A corporation’s basic business usually doesn’t bring in considerable profit; it’s the solution plans sold to customers that are the major source of earnings.

Devin listened as Jack rattled off a plethora of technical jargon, feeling overwhelmed by the terms he had mostly never heard before.

"I suggest you’d better send a professional technical team, explain all your services in as simple terms as possible.

It’s not easy to impress the CEO, so you need to be well-prepared, Jack."

"No problem, we are more than willing," Jack thought excitedly, this was like getting an entry ticket.

"Oh, by the way, just asking, are you interested in the Teams software that can work in conjunction with IP telephony?"

Devin was taken aback, "We’ll demonstrate it together then."

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