Voice over IP promises cost savings, simplified network management and the opportunity to build unified voice and data applications--but is it fit for corporate deployment?

Vendors of network tools and telecoms are promoting voice over IP (VoIP) solutions for corporate networks, and analysts continue to predict a big market for this technology.

Analyst company IDC forecast that firms worldwide will spend over US$24bn on VoIP next year. However, many companies are still unsure about what VoIP can do and what benefits it can bring to their organisations. More importantly, there are still cost, quality and performance issues that have to be tackled before VoIP can become a mainstream technology.

VoIP can provide organisations with an alternative to analogue telephone connections. Instead of having to set up a dedicated circuit between parties, as happens with calls over the public telephone network or mobile networks, VoIP digitises conversations and transmits the data using standard TCP/IP networking packets.

This allows voice traffic to be carried over the same wires as Ethernet LAN and WAN data, or across wireless networks if required. With the right equipment, voice calls can be transmitted over the Internet, just like ordinary emails, Web pages and other Net-borne data.

Net savings
Because carrying voice and data on the same wire removes the need for separate networks, implementing VoIP can save companies money, although special digital exchanges and telephones are required. There may be little difference in terms of running costs when compared with a private branch exchange (PBX), but savings can be made on calls between offices.

The really big savings all come from international calls, as traffic can be sent via the Internet to call anywhere in the world. Fax costs can also be cut using VoIP.

One of the biggest advantages of VoIP is that it can support integrated voice and data applications Ã,­it enables what used to be referred to as computer telephony integration. VoIP can make it a lot easier to build customer relationship management (CRM) applications, providing, for example, the ability to link Web and voice services. Video can also be added to the mix if required.

Target markets

Call centres and helpdesks are seen as a big target market by VoIP vendors Ã,­ potentially allowing operators to see what customers can see on their screen, and to converse with and answer questions from shoppers on e-commerce sites.

There are also advantages for general telephony, especially for mobile users where VoIP will make it possible to send and retrieve a mix of voice and email messages through a single integrated mailbox. And service providers see VoIP as a way of earning extra revenue Ã,­ enabling them to compete against telecoms providers such as BT.

The International Telecommunication Union (ITU) H.323 standard provides a broad foundation for the transmission of voice, video and data over packet-based networks, with little or no need for infrastructure changes. Since the standard's ratification in 1998, H.323 has been widely adopted to provide interoperability between VoIP products over local and wide area networks.

Along with other standards, notably the Session Initiation Protocol (SIP) that makes it easier to translate phone numbers to IP addresses and back again, H.323 can enable VoIP solutions to work alongside traditional public switched telephone network (PSTN) networks. This would make it possible, for instance, to call an ordinary phone from a VoIP system and vice versa.

However, the very nature of IP communications presents problems that will have to be overcome before VoIP can offer reliability and quality.

A lot of work has already gone into coping with the delays on IP networks. Delays in packet transmission can result in echo and jitter effects and, in extreme cases, talker overlap. And there is actually no guarantee of packet delivery at all. On a standard IP network Ã,­ packets are often dropped altogether during peak loads or when a link fails. With data that is not a problem Ã,­the lost packets are simply re-sent Ã,­but with speech it is a different matter, a loss of one to two percent of the packet stream may cause unacceptable quality for a conversation. And security measures for firewalls and virtual private networks (VPNs) can bring still further delays and packet losses.

Increased quality

Advances in compression and low-cost digital signal processors (DSPs) have provided the main methods of improving quality. Such technologies can also reduce the bandwidth needed to carry voice traffic Ã,­another big advantage of VoIP.

The standardisation of quality of service (QoS) protocols has also brought benefits for organisations, enabling the latest generation of switches to allocate guaranteed bandwidth to particular types of traffic Ã,­prioritising traffic from particular sources, for example. But there are still many concerns about quality, particularly for long-distance calls involving the Internet.

However, VoIP vendors and service providers are constantly improving their tools and infrastructures to improve transmission rates.

Firms can use VoIP for internal deployment to enable voice and data to be carried over traditional copper lines, whether in a single building, or between locations and out to branch offices. IP-based PBXs are readily available from a number of vendors, and can typically support a mix of PCs equipped with audio cards, IP-enabled phones and, in many cases, ordinary analogue handsets. Many vendors can also provide the gateway necessary to interface to the analogue public phone network.

However, most companies currently considering IP-based PBX equipment will want to completely replace an analogue system or equip a new building from scratch Ã,­ because it is much harder to justify the installation and upgrade costs if adequate analogue facilities are already in place. The lure of some other benefits, such as the ability to build integrated voice and data applications, may well change that, but it may still be some time before VoIP becomes a first choice for many firms. That said, some analysts predict that by 2005 up to a third of corporate voice traffic will be carried over IP connections.

Internet service providers initially saw VoIP as a way of competing against the PSTN network providers, such as BT in the UK. But the telecoms providers have not been idle and have countered with VoIP services of their own. Most of these VoIP services are aimed primarily at corporate customers and there has been a slew of announcements of late. Most are currently pilot schemes, and firms such as BT are wary of stealing custom away from their very profitable PSTN businesses.

Despite the technical advances and the ready availability of products, VoIP is still an emerging technology. Solutions for in-house deployment are maturing rapidly, but a lot of work needs to be done before IP-based telephony can fully rival the PSTN alternative, particularly for long-distance calls. The full benefits of VoIP have not yet been realised.

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