Voice Velocity - Microsoft Response Point

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Tucked away fewer than 60 miles (100 kilometers) from Seattle is a hamlet of weekend homes of the Seattle old guard. Here generational families like Nordstrom (retail) and Gates (law, technology) play carefree on Puget Sound beaches with logging and aerospace brethren. It is also where I believe you could say the new Microsoft Response Point small business telephone system was born.

Each spring for the past 12 years, Bill Gates has retreated to his family compound along the shores of Hood Canal for a “think week.” It is here Gates is shut off from the world of running a $50B company and can speed-read whitepapers and create the future. Redmond insiders know this is where major product and policy decisions are made. The competition to have your whitepaper reviewed (and hopefully your idea funded) is ferocious. Two years back, Gates described his Think Week in the April 7, 2006, issue of Fortune magazine. He locks himself in seclusion and reads over 100 papers gathering across Microsoft including Microsoft Research (a 16-year-old basic research entity inside Microsoft). A favorable nod results in millions of dollars in product-development funding. And just such admiring approval was given to a small team of Microsoft researchers to pursue their idea to create a small business phone system, using breakthrough voice navigation as its game-changing asset. Thus the birth of Microsoft Response Point.

Gates’ approval resulted in a Skunk Works team aligned with Microsoft Research, which immediately set out to develop Response Point.  The team deliberately chose to operate like a small business start-up itself. This lean and mean team, led by Gates’s good friend and confidant, Xuedong Huang (XD), lived and breathed the small business experience., Doing everything from raising its own internal Series A-type capital, with Gates serving as executive reviewer and approver, to efficiently getting the product out the door more quickly than larger Redmond-based product teams, its Skunk Works paradigm shows throughout the product today.


Pocket MBA Lesson: Skunk Works

According to Wikipedia, Lockheed Martin (a large aerospace concern) used the term “Skunk Works” to define a 1943 advanced-development team in Burbank, California, tasked with building a high-speed and highly maneuverable fighter. Lockheed Martin has the trademark for the term “Skunk Works” (which we acknowledge), but the term has gone far beyond aerospace projects and has entered common business-speak terminology. Today large companies seeking to ship new products efficiently will create matrix organizations known as Skunk Works projects. Wikipedia correctly distinguishes this concept from “bootlegging,” which in the business context means unauthorized research or development activity within a business group On a humorous note, the first use of the term “Skunk Works” came from an early 1940s Andy Capp Li’l Abner cartoon that referred to Big Barnsmall creating “kickapoo joy juice” from dead skunks! Other sources claim it was really Lonesome Polecat and Hairless Joe who made the juice but that really isn’t the purpose of this article.


Meanwhile, back at the Redmond ranch, the Response Point team started messaging this small business telephone solution to customers at the company’s Small Business Summit (March 2007) and to partners at SMB Nation East (May 2007). One year later, at SMB Nation 2008, Response Point was the central workshop theme (more on that later). The actual product silently launched in late fall 2007 and has grown into a grassroots phenomenon amongst Microsoft Small Business Specialists partners seeking to add voice to data.


Microsoft COO Kevin Turner and Cindy Bates announce Microsoft Response Point at the five-day Small Business Summit 2007 event.


Partner-to-Partner: Charles Keating

Charles Keating is a small business technology consultant in Kitsap County, outside Seattle, Washington, USA. He offers e-business and technology consulting services via his firm, Keating Consulting Service, and has a keen interest in Small Business Server and Response Point. He chaired a small business VoIP forum in January 2008 at the monthly West Sound Technology Association (www.wstpa.org) meeting. Charles and I met recently outside the Gates compound on Hood Canal (See the cover photo) and he shared the following with me.


SBSer Charles Keating.

Q.  Are networking consultants such as yourself seeking to add new areas to your practice?

Without question.  For many years, customers have relied on consultants to help them with increasingly complex information and data communications systems which connected them. As convergence drives traditional phone and IP technology together, one network serves both needs. Customers prefer dealing with a single consultant who can evaluate, install, or support a wide range of their technology needs.

Q.  Does Response Point seem like an attractive way to add telephony to your practice?

Absolutely. In several cases we were already providing telecommunications consulting, leveraging changes in long distance phone calling rates, and adding high-speed Internet services. The initial VoIP systems were feature-rich, expensive, and complex, replacing high-end PBX systems. VoIP in the single-user space was popularized with free calling services such as Skype and the one- or two- line systems with Vonage. Now the middle market is finally maturing, and the next generation of VoIP systems, like Response Point, combine the capabilities of feature-rich VoIP systems and a price that competes head-on against legacy hybrid/key phone systems, which have dominated this market for many years.

Q.  What is the Response Point opportunity for you as a consultant?

Customers have been deploying servers and local area networks in droves. Most already have Web sites and high-speed Internet.  However, the last link in the communication chain is upgrading from legacy telephone systems.  Response Point finally provides a low-cost VoIP alternative with new features that allow for further integration and access to their information systems. Consultants like me are critical to businesses when assessing and implementing this transition.

Q.  How will Response Point fit into your market?

A. It’s ideal for the five- to 30-employee firms that have traditionally used hybrid/key phone systems. It’s also not uncommon to see a relatively new network next to a 10- or even 20-year-old phone system where breaking handsets or simply adding voice mail was a big deal. Response Point lets them replace these obsolete systems, getting all the latest features, advanced voice recognition, voice/email integration, and caller ID pop-ups on their computer screens—at a price almost identical to a new hybrid system with far less capability.

Q.  Other comments?

A. To some customers it sounds too good to be true. They don’t expect voice recognition to work as well as it does and need to see it in action. Others are concerned about losing the personal touch. While Response Point can provide an excellent service as auto-attendant, you can still answer your own phones and Response Point makes it easier for callers to follow mobile, on-the-go employees. Even technical people are concerned with networking and past experiences given early VoIP systems. However, Response Point does an excellent job of addressing these issues.

The last hurdle is really one of workflow. In many small businesses, there is frequently one or a few people designated as the receptionists. A big part of their job responsibility entails tracking phone calls, who’s on which line or waiting on hold. Big phone stations with all those blinking lights provide call appearance, a feature which has been the saving grace for key systems over many years. However, the system works only as well as the person controlling it. 

Response Point takes a completely different approach. The smarts are on the inside and focus on easy and quick caller-to-target connection—whether with the assistance of a person or automatically. It requires a measure of trust to graduate beyond blinking lights yet still keep track of what’s going on while the system does the work for you.


Defining Response Point

Response Point is a small business telephone system designed for companies with one to 50 users. Its core assets consist of:

Setup. When I installed Response Point at SMB Nation, we completed the basic telephone setup in one hour, including adding seven users. Adding new users is a matter of inputting their names and following the simple wizard. Users can also add nicknames to their profiles (e.g., my operations manager, Cyndi Moody, has the nickname “Rock-and-Roll” because of her membership in the Dave Matthews fan club!).  Voicemail is simultaneously configured with each new user profile.

Administration\capable functionality. System changes can be accomplished via a user-friendly and intuitive interface. By balancing functionality and usability with ease of use, the Response Point product is a Goldilocks telephony solution: just right. Whereas some claim that much more expensive systems have more features and can do more, SMB consultants have been amazed at the core features and administrative ease of Response Point upon introduction. Harkening to a popular U.S. beer tag-line: “Tastes great, less filling.”

Small business pricing. The Response Point team wanted to ensure that the product could be accessible, not only based on easy to use features and set up, but in terms of cost to a small business.  Hardware manufacturing partners, D-Link and Quanta (and soon Aastra, who will release its first Response Point system this summer), offer starter  packages that can be had for a modest, one-time price. There are no per-user licensing or per-feature fees, like other telephone systems. A four- or five-phone system is in the range of $2,500 U.S.D MSRP (see sidebar for details).

Voice recognition. A core asset of the Response Point system, leveraging years of research and expertise by General Manager,  XD, is the voice recognition capabilities.  XD and the team saw that the traditional phone system experience was broken.  Features that have been around for decades are still cumbersome and hard to remember, like the keystrokes for call transfer and forwarding.  On Response Point, both internal users and external callers can use the cutting edge voice interface, and simply speak a command.  I liken it to the following real world scenario when you call a major airline, you expect a voice recognition system that allows you to easily do things like checking your flight arrival and departure information. Response Point has the same intelligence, and lets small businesses have features they previously could not afford. For example, with the voice recognition in Response Point, you can do the following right out of the box:

  • Ask for a person by name or nickname
  • Ask frequently asked questions like the business’ address, fax number and business hours
  • Internal users can voice dial colleagues or Outlook contact; forward, transfer and park/retrieve calls
  • No training is required

So how does Response Point do it? The underlying technology is a sophisticated voice-sampling algorithm matched to text words (e.g., you created a user named Cyndi Moody). This is shown, at the layperson level, in the screenshot below borrowed from XD’s landmark book Spoken Language Processing: A Guide to Theory, Algorithm and System Development (Prentice Hall PTR).  

XD wrote a masterful 1,000+ page book on voice recognition. This figure displays some of the hardcore math behind Response Point. XD earned his Ph.D. degree in speech recognition; he was motivated by his childhood in China, where native language keywords were difficult to use. He believed voice navigation was a better way to implement technology.

One of Response Point’s voice recognition secrets is the wide variation of accents and word usage that are supported. For example, as an outside caller, you can ask the Automated Receptionist how late the business stays open, if they are open on weekends, or what time they close on Christmas Eve.  Response Point will correlate the question with the appropriate response for the business’ hours of operation.  The same applies for questions about a company’s location and fax number.  How does this work? The Response Point team collected over 1500 different ways to ask these questions and turned it into a statistical model that is surprisingly good at guessing what you mean. This research was converted into practical use inside Response Point.

Stand-alone system. Right here, right now, I want to clarify something. Response Point does not need a server-based computer network to function. It has minimal requirements—such as computer cabling and at least one computer (e.g., laptop) to run the administrator application. But you do not need to have a computer network if you were using external analog (POTS) telephone lines in the simplest deployment scenario (external VoIP would require an Internet connection). Translation: You can place Response Point into a micro-small business as a stand-alone telephone system and at a later date introduce a computer network. 

Small Business Server integration. Speaking of computer networks, I would be remiss if I did not discuss Small Business Server (SBS) and its relationship to Response Point. Today the integration points are modest and are appropriate for the first release of Response Point. By using a free utility downloadable from the Response Point team, SBS experts have full access to the RP event manager, and can integrate powerful features like “green check email” and more. There is no Active Directory integration, meaning the user name “Cyndi Moody” on the SBS network must be reentered into Response Point. My prediction? Look for Response Point to be more tightly integrated with SBS in future releases. 

VoIP support. Later in the article I will discuss Response Point Service Pack 1 (SP1), which will incorporate external VoIP support to the phone system capabilities. But did you know that Response Point has supported VoIP from the start? The internal network is digital using the IP protocol. Thus VoIP technically existed in the early release of Response Point, before SP1.


How Do I Buy Response Point?

There is a misconception that Microsoft sells Response Point. Such is not the case. Microsoft provides the Response Point software to its three OEM hardware partners, D-Link, Quanta and Aastra, who build the telephone hardware and ultimately set pricing. The typical purchase occurs via a distributor selected by the OEM manufacturer.

  • Quanta’s Syspine Digital Operator Phone System. Baseline price is $2,499 for the base unit plus four phones (see www.cmptel.com/buy). Each additional phone is $159.
  • D-Link’s VoiceCenter IP Phone System. Baseline price is $2,499 for the base unit plus five phones (see http://voicecenter.dlink.com). Each additional phone is $139.
  • Aastra. Toronto-based Aastra will announce price and 2008 availability soon, and I will provide updates in my online SMB Advisor e-mail newsletter. Additional information is expected at SMB Nation Toronto in early May 2008, where Aastra executives will provide the keynote address. Visit www.aastra.com.


Friends With Benefits (FWB)

Looking for a FWB? Look no further than the Response Point development team. The small and nimble Response Point team is thinking outside the telephone box with respect to how it interacts with the partner community. For example, partners attended an advance announcement Webinar where information on SP1 was introduced before being widely released to the public.

A Response Point development team member recently used the term “velocity” to describe the momentum being built around free firmware upgrades. In the case of SP1, he feels the team is really taking care of its partners and customers by offering SP1 as a free upgrade. SP1 is much more than bug fixes and contains new features that will be described below. This is closely tied to another conversation I had with another development team member on shipping tempo. After SP1 hits the streets, the goal is to ship improvements every six months so that a high-velocity stream of enhancements unblocks sales and generates buzz for partners.

Already the Response Point team is engaging in heaps of evangelical outreach. SMB Nation East in late March 2008 was a two-day deep dive into Response Point, with technical drill downs and business model lectures plus a hands-on lab. The 180+ attendees, known as Friends of Response Point (FORP), left the small business telephony love fest armed with the know-how to immediately implement Response Point for bona fide customers. The team is attending numerous other shows, including the Microsoft Worldwide Partner Conference in early-July 2008 in Houston.

And finally the Response Point team is developing an assessment to test potential new Response Point resellers. This provides a baseline quality bar you and I must clear to be part of the Response Point partner community.

Response Point Service Pack 1

Now for the good stuff. As of this writing, it is anticipated that Response Point SP1 will hit the streets in midsummer. Personally I look for the product to steal the show at the Microsoft Worldwide Partner Conference (WPC) in Houston. So what exactly is SP1?

SIP Trunking. First and foremost, SP1 will forever be tied to SIP trunking. SIP trunking provides external VoIP capabilities so that a small business can rapidly expand its line capacity, enjoy lower overall total cost of ownership (TCO) in the telephony realm, and use a host of additional features (e.g., enjoy a New York City area code even though you live in Seattle). Part of the VoIP configuration is to select a VoIP service provider, and here Microsoft is working with several, including New Global Telecom (NGT) and Cbeyond. I spoke with Matt Wilson, Director of Product Management at NGT out of Golden, Colorado, who told me that its Digital Voice Partner Program for Response Point directly  engages the SMB channel partner and is a cornerstone to its delivery model. NGT does not sell directly to the end customer in the Response Point scenario. Rather, the end customer purchases telco services from a partner who works with NGT (www.ngt.com). “After speaking with a variety of Microsoft partners, we learned that to best serve their needs, the NGT agent program required simple interfaces with rock-solid support,” Matt said. “We’ve catered our program to meet the unique needs of the Microsoft small business specialist and hope that NGT’s Digital Voice will become the logical, easy, add-on sale for Response Point.”

The Response Point team is still carrying out extensive testing of SP1 before it ships this summer.  The following are a sampling of the features that are being considered for SP1.

Call Status. This improvement will allow you to see call status activity on the Assistant software, which resides on each user’s computer. For example, you can view who in the organization is currently on the telephone.

Call History. The call history function will provide interesting reporting capabilities not previously available, including the ability to monitor details of all calls, including date, length of call, to what number and whether initiated through an analog or VoIP line.

Click to Call. In the Assistant, you will have the ability to click to initiate a call to a specific contact (either internal or external). I find this feature especially useful in the context of a marketing campaign with high call volumes.

Configure Parked Call Music. With SP1, you will be able to specify the hold music or audio that plays on the phone when a call is parked. This is a much-requested feature.

Firmware Upgrade. There will be a management screen to update the firmware for the system phones and base unit.

Executive Sponsorship

Back in the early days of SBS, pioneer SBSers attributed the initial survival of the SBS product to having friends in high places. Microsoft CEO Steve Ballmer liked SBS and provided political air cover as the SBS product found its footing. Today, the situation with Response Point is different. The SP1 product is ready for prime time, and there are two executive sponsors: Bill Gates and Craig Mundie, chief research and strategy officer, who oversees the company’s research and long-term innovation efforts. Apparently Craig Mundie has become so impressed with Response Point that he has it installed in his residence. This is akin to how outgoing Microsoft executive Jeff Raikes (Office) ran SBS on the computer network at his lodge on the Hood Canal (right next door to the Gates weekend compound). It’s a small world and having big-league Microsoft executives personally use small business products is essential to ongoing success in Redmond. Partners should take comfort in knowing the executives fully support Response Point, so your time and money are well invested.


As of this writing, Response Point is available to customers in the USA and Canada. It is not yet available in Europe, Asia, or Australia/New Zealand. But that will change in the next year (or so) as Response Point is introduced worldwide with English-speaking countries as first targets. One of the challenges in introducing Response Point in other countries is education. As we prepared for our early May 2008 SMB Nation Canada event, where Response Point was to debut, we found ourselves spending a great deal of time defining Response Point. The Canadian resellers simply did not know what Response Point was. But a few extra minutes on the telephone cleared that up, eh?

The ideal arrangement for partners is to purchase Response Point from a distributor (D&H, CMP, etc.) and install it at a client site. This is by far the smoothest path to success. However, some participants on the Response Point newsgroup are reporting that e-tailers (online retailers) are starting to sell Response Point directly to the customer. I will investigate further and report on this in a future article.

At the end of this article, I provide the link to become a Response Point partner. One of the distributors (CMP) is providing discounted demonstration units to partners. I caught up with a very busy Bob Gordan, Director – Sales and Marketing for Syspine as he waited for a flight at the Albuquerque New Mexico airport. “Based on partner feedback, Syspine, Microsoft and CMP have teamed to make available a three-unit Response Point demo unit for under $1,000 USD. Gordan shared. “This allows the partners to learn Response Point and also have a back-up unit in case a customer suffers failure and needs an interim loaner system.”


Looking forward, here are some things I bet the RP team is going to focus on.

       Client enhancements

       Response Point soft phone

       Tighter Outlook integration

       More third-party, call-control features

       Voice UI enhancements

       After hours

       Speech barge-in

       More customization, etc.

       Server enhancements

       Better integration with SBS

       Rich dial-plan capabilities

       A tech preview of RP running on Windows Server/SBS rather than a base unit

       Multi-site support

       Remote phones and Assistants outside the LAN

       Support for branch offices

       More devices

       T1, conference phones, more cordless phones, FXS ATA ports 

Finally, I end with my own story. SMB Nation is looking to move into new office space soon. That means we have the opportunity to revisit how our Response Point telephone system is configured and move from analog to VoIP. This move phenomenon is well documented, affirms Brenda Luper, consultant with Franklin Computer Services Group. “Approximately 10 percent of all small businesses move or upgrade office space annually. This is a key opportunity to introduce a new telephone system,” observed Luper, who has carved a niche in moving voice and data networks for clients. 


Someday a management best seller will be written about the Response Point team and how this small Skunk Works group operated inside an 88,000-person company called Microsoft. It’s the stuff of legends. “The environment within Microsoft Research has allowed the team to stay focused on solving the customer problem while developing creative solutions. Response Point Service Pack 1 is a testament to Microsoft’s focus on rapid but pragmatic innovation,” said Sanjay Parthasarathy, corporate vice president of the Startup Business Accelerator at Microsoft. “Not only has the team listened and responded to their customers, but they have also done so with amazing speed and agility.” 

Harry Brelsford is author of book on Microsoft Response Point Primer released at the WPC conference in Houston in July, 2008. Writing this book has allowed me to not only learn a new technology area but learn much about Response Point. One of the learning's is that Response Point is NOT THAT TECHNICAL. Rather, it is an easy product to setup and maintain. So the book is not that technical (although I do have an advanced technical chapter). Rather, this book grew into a BusinessSpeak book on how to implement Response Point as a SMB consultant as part of a much larger technology strategy for small businesses. Many partners contributed to the work and I truly believe you will enjoy reading it. To order book please visit at www.smbnation.com

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