Although the benefits and potential savings are well known, businesses have long been taking a wait-and-see approach to voice over IP. It's time to stop waiting and start seeing how converging voice and data networks can work for you.

Technology marketers love a good thing, and Voice over IP (VoIP), when it emerged in the mid 1990s, was even better than that.

Its almost romantic promise of bypassing telecommunications carriers for voice call--a promise that briefly led an international carrier consortium to lobby for banning the technology because it was seen as such a threat--appealed to the bargain hunter in all of us.

These days, it's those same carriers that are laughing. Having progressed their efforts to build scalable global IP networks, telecommunications providers are gearing up to capitalise on what is widely expected to become a major revenue earner as corporations progressively migrate aging switched voice systems to IP.

The carriers' newfound market strength comes after years of collaboration with Nortel, Lucent, Alcatel, NEC, and the other conventional leaders in PABX design and implementation.

Working in close collaboration with carriers, these top-tier equipment providers have successfully defended years of experience against the ambitions of smaller data upstarts who initially believed voice could be treated just like any other data. Cisco Systems, the only exception, has invested heavily and successfully to gain the skills its larger peers have in-house.

The result of all this work is that VoIP has, after a few frenzied years of planning, become a viable strategy for restructuring corporate telecommunications infrastructures.

With careful planning and enough money, it is now entirely possible for companies to reap considerable benefits by consolidating telephony and data networks onto a single IP core. So why aren't more companies taking the plunge?

Corporate decision makers have found many excuses. Some say its hidden expenses mean it's not yet cost effective. Others cite inadequate infrastructure, lack of standards, or concerns over the technical complexity and audio quality of a VoIP solution.

Still others would prefer to ride their aging PABXes into the ground than tinker with the phones that are their company's lifeline. And, over the past year, fiscal conservatism has simply soured decision makers on investing in radical change such as the type that VoIP brings.

Finding the right time

AGC's early optimism, like that of many others now scaling back their ambitions, was based on analysts' heady projections for VoIP's potential growth.

Several years ago, Dataquest predicted the global market for VoIP services would grow from just $US255 million in 1998 to be worth over $US21 billion by next year.

Recognising that VoIP had only really entered most companies' radar screens in early 2001, however, IDC last year issued more modest projections forecasting an Asia-Pacific market for VoIP services of just US$6.9 billion by 2005, up from US$213 million in 2000. "The promise is very enticing, but there is still a lot of apprehension about quality of service [QoS] issues," says Temple.

"All we've got at the moment is no different than analogue switched PSTN services; it's just different switches. The big deal is that you can manage it [better]. But there are a lot of legacy environments still in place, and we're not about to go out and develop new product lines in areas where we're uncertain of the market space. We're going to be fairly conservative and consolidate the product lines."

This apprehension, compounded by newfound corporate purchasing conservatism--which may ease if global economies pick up later this year--means that carriers may be the biggest beneficiaries of VoIP in the short term because they lure early adopters with promises of cost savings and easier management.

NEC and Optus, for example, are this year expanding their long-running partnership to offer VoIP as one of many services delivered via an "IP dialtone" to the customer's desks.

David Hanes, director of NEC Australia's Business Solutions division, believes telecommunications providers will play a key role in expanding usage of VoIP, particularly since companies like NEC can now upgrade PABXes and existing handsets to support the technology without having to replace existing gear. This approach, he argues, will increase customer confidence in VoIP.

"It's certainly cost effective from a customer point of view," says Hanes, who estimates simply shifting to VoIP can reduce companies' telecommunications costs by 20 percent.

"We can put existing handsets on the LAN, and users wouldn't know the difference. There's no additional training required, no change in functionality, and the user doesn't have to do anything special."

VoIP isn't free, however. Corporate Australia has spent heavily on upgrading network switches in the past several years, and with adequately functioning phone systems it's likely that most will avoid doing it again until those switches--or their long-suffering PABXes--are up for a refresh.

That was the driver for a recent VoIP upgrade at Melbourne's State Library of Victoria, which last year installed Cisco Systems VoIP--capable switches to replace its 14-year-old NEC PABX, which was so old it didn't even offer voicemail.

As well as gaining access to modern features, the library's VoIP investment has given its 330-odd employees the ability to automatically pull up customer details while talking to them on the phone.

The PABX is administered through a simple Web interface and can, in many respects, be treated just like any other Windows NT server. Handsets can be moved to new locations without having to reconfigure the PABX. Call forwarding, hunt groups, and grouping of multiple reception areas have all helped emulate the functionality of conventional PABXes.

"It no longer takes days of waiting for the service provider to get anything done," reports Ian Patterson, manager of the library's Technology Services division.

On top of those benefits, Patterson adds, is the knowledge that the library will save the more than AU$100,000 annually it was previously paying for PABX rental.

With the new IP PABX due to be paid off in two years, ongoing capital costs will be almost completely eliminated. Like many other organisations, the State Library of Victoria replaced its old handsets with new devices that work like phones but act like IP nodes.

While such handsets are certainly usable and well-proven, they are no longer necessary; IP PABX vendors can now upgrade existing handsets by adding a simple black box between the handset and data plug. This reduces the capital cost of a VoIP upgrade and may go some ways towards increasing customer concern over throwing out hundreds of perfectly good handsets.

Because VoIP adoption will be closely tied to the end of existing PABXes' lifecycles, analysts are forecasting steady but moderate growth for the IP telephony hardware market. IDC anticipates regional demand in China, Korea and Australia will propel the Asia-Pacific IP telephony hardware market to US$4 billion by 2005-up from around US$600 million in 2000.

Justifying VoIP

"VoIP is not a good technology to use purely for cost savings," he explains. "You make so many compromises in terms of voice quality, since systems that demonstrate very well often end up not delivering the same voice quality under a live load."

If the experience of early adopters has taught us anything, it's that VoIP needs to be carefully assessed in the context of individual companies' business requirements.

While it sounds great to save money on voice calls, it's important to think far bigger than that when building a business case.

Approach it the right way, and VoIP can not only reduce outgoing costs; it can actually increase revenues by improving internal efficiency.

One of the technology's most promising capabilities is its links to computer-telephony integration (CTI) in call centre and other phone-intensive environments.

This means that customer data and phone calls can be tied together as bonded data streams, allowing customer details to follow them through a support centre. Since customers hate having to repeat information over and over again, this feature alone can make VoIP worth the investment.

It can also be tied in with Web sites, with emerging technology eventually letting Web site visitors talk to customer support representatives through their PCs.

Such capabilities are rapidly becoming reality with the growth in support for SIP (Session Initiation Protocol), an IETF telephony signalling protocol based on HTML and MIME.

Designed to allow easier initiation of calls between Internet-connected nodes, SIP is a far more efficient alternative to videoconferencing-derived H.323, which is used for most of today's VoIP systems.

VoIP is also winning converts as a replacement for Voice over Frame Relay (VoFR), the widely used method for linking offices using wide area network links.

VoFR may work fine for point-to-point connectivity, but voice-capable FRADs (Frame Relay Access Devices) have fallen far behind more conventional WAN switches in terms of their ability to manage and direct those calls.

That's driving many customers to leave their Frame Relay links for data and explore IP-based voice solutions.

"The FRAD solution was only giving us a bridged network; it wasn't capable of a true routed network," says Steve Tucker, group IT manager with Adelaide-based airplane fleet manager National Jet Systems, which recently adopted a NEC VoIP solution in a push to improve the flexibility of communications between its eight offices. "We sought to combine those into one, and to add the ability to monitor the quality of service."

Taking VoIP to the world

Recognising that many companies still love circuit-switched voice, Melbourne telephony vendor Tennyson Technologies has taken the middle road by building its SOX small-business PABX around a design that combines support for up to 64 conventional voice lines with ancillary IP-based data functions like fax, unified messaging and voice over IP. Instead of being a replacement for switched circuits, SOX supports up to 16 simultaneous VoIP sessions as a complement to those circuits.

Remote users can take their normal extension with them on the road using PC-based soft phones that emulate a conventional phone but transmit the voice data as IP packets.

Current dial-up modems deliver enough bandwidth to adequately carry a single conversation, and IP-enabled PABXes can automatically forward incoming calls to a VoIP user's computer (as long as they're logged in at the time).

As emerging mobile networks become more practical, constant wireless connectivity will allow workers to have access to their office extensions wherever they happen to be.

This will help the humble notebook PC or PDA assume many of the characteristics of conventional mobile phones. It will also reduce costs by eliminating the need to give travelling employees two separate communications devices.

"For SMEs with up to 50 or 60 extensions, we can provide all the benefits of convergence and CTI without having to put in expensive switching, LAN infrastructure, and so on," says Tennyson director of marketing and support David Turton, who says SOX weighs in around 30 percent cheaper than comparable solutions tacking together several products to match its feature set.

"We're really trying to add a lot of value to existing engineering and solutions that are out in the fields," he explains. "SMEs have a very interesting predicament because technology can really differentiate them from the big boys.

But they're typically not tech savvy, and companies they have to deal with are also sometimes not able to represent these leading technologies effectively. We've focused on delivering tangible benefits through effective CTI, rather than whiz-bang technology behind the scenes."

VoIP also offers major benefits in improving communications with workers at small, remote branch offices with just a few phones. Using VoIP, expensive and unpredictable land lines can be routed back to a larger site by augmenting the data line into that office.

Since more than a few calls at once would be unusual, quality of service concerns can be addressed somewhat more easily than when trying to support a massive number of users.

The technology is equally advantageous for telecommuters, who might live in a different area code or want their office extension to follow them to their home.

For such users, VoIP can be paired with live intranet access over a conventional cable or ADSL broadband link. This approach can reduce costs but, even more beneficially, will help telecommuters seamlessly communicate as if they were at the office.

Everybody's an expert

Unless you've got extensive inhouse expertise in the area--unlikely in all but the largest companies--you're going to be relying heavily on the good advice of your integrator and vendor's implementation team.

Unfortunately, that's not always a safe bet. One by-product of the early hype over IP voice has been an explosion in the number of companies purporting to offer VoIP expertise.

Recognising the technology's natural appeal to customers, those companies have jumped on the bandwagon assuming their data skills are adequate.

"VoIP certainly seems to be becoming a mature opportunity in the Australian market," says Gary Spooner, managing director of Centile Australia/New Zealand, which opened up shop here late last year to spruik its VoIP software to local interests.

Centile's Hosted iPBX solution is aimed at service providers who would like to offer virtual PABXes to their customers, but can also be run inhouse within businesses eager to get into VoIP.

It requires Sun Microsystems Solaris-based Netra servers and Cisco Systems network switches to run, so the company is counting on its customers' already having the necessary infrastructure in place. In a cluster of five Netra t1s, Centile claims the system supports up to 100 virtual PABXes and 10,000 extensions.

Sun servers aren't cheap however, and it will take a good business case for all but the largest companies to justify such an expenditure. And that's only the beginning: without adequate bandwidth planning and commissioning, quality of service issues can easily persist despite having a technically correct software implementation.

Major systems integrators probably have access to the right kinds of people to avoid such errors, but customers need to retain a healthy scepticism to make sure that smaller companies aren't just talking the talk. It's all too common for suppliers to underestimate the complexity of VoIP implementations and assume that the technology will take care of itself.

For a data expert to assume that VoIP is just another form of data is a woefully common but potentially damaging mistake, since telephony issues such as signalling and feature management don't go away just because you're using VoIP.

"Data people tend to see VoIP as just 64Kbps data, but in particular voice signalling is not well understood," says Panaseer's Hampel. "This is reflected in naïve implementations that don't actually deliver results. Sometimes companies get into a situation where they've just thrown that VoIP data in with their general data, and neglected issues about how to focus dedicated capacity on that delivery."

Hampel estimates that effectively deploying VoIP as a replacement for conventional trunk lines requires a significant investment in bandwidth-four times the actual requirement, in his estimation-to ensure there's enough available bandwidth to support real-world traffic volumes.

"Often there are substantial hidden costs in terms of data upgrades that people don't fully take into account," he says. "Our company is doing a fair amount of business developing and implementing voice systems for people who have previously invested in the equipment to do data and VoIP believing they'd be able to do it all. They now realise they're not going to be able to get the result they expected."

Although he recommends VoIP in niche applications like call centres, commissioning so much excess capacity can make the network necessary to support VoIP prohibitively expensive.

For companies that can't justify the cost of VoIP's other benefits, Hampel says, a better solution may be conventional time division multiplexing (TDM) solutions using 8Kbps voice channels over less expensive leased lines.

Poorly architected VoIP implementations can also introduce problems should features not work like they did on the old networks. Incorrect implementation of VoIP call handling procedures, for example, may mean a call cannot be transferred when it's delivered to a handset.

One early VoIP adopter found that while call forwarding worked fine, calls would spin into an endless loop if the number to which the call was sent had also been set up to forward.

Users, of course, hate this--and they're the ones you want to inconvenience as little as possible. Without proper guidance, your VoIP project could easily become the bane of the company.

Make sure your VoIP implementation discussions include an assessment of the pedigree of potential service providers, who should be able to competently address issues including integration with existing systems; quality of service parameters; future scalability; power, server and network redundancy; VoIP administration and management strategies; and security procedures and software.

Slowly, softly

"Experience in voice is key to a successful implementation," Vaughan says. "Customers recognise convergence is inevitable and are implementing VoIP gradually in preparation for the future. This gives them time to identify hardware and software upgrades required, strategies for training staff, ironing out problems and aiding in acceptance of the new network."

You could do worse than to enlist some automated help. NetIQ, for one, offers a VoIP Manager Suite for assessing the performance of installed VoIP solutions.

The company also recently released Chariot VoIP Assessor, a suite of VoIP readiness assessment tools that guides would-be adopters through the process of evaluating their current network's ability to support the demands of VoIP. This includes stress testing under simulated loads, a critical element of testing that must be run extensively before implementation.

Such testing will rapidly reveal any technological deficiencies that must be addressed before expanding uptake. "There are still hundreds of thousands of man-years of development in switching equipment that have not yet been ported to VoIP," says Greg Bezuidenhout, general manager of sales with Siemens Australia.

"Integration of IP into existing and new platforms is a significant issue, and until such time as we have the same confidence in our data environment, people will still hesitate. But once the user understands the benefit and the reasons for doing it in the first place, there will be an increase in takeup."

By choosing the right approach, VoIP is attainable and poised to deliver very real benefits to most companies. IP functionality is rapidly being added across PABX makers' product lines, and feature sets are expanding all the time.

As PABXes continue to expire, it's well worth a look into this steadily growing technology to see what a migration would entail and what benefits it can provide.

Just remember: always think beyond the call. With customers becoming increasingly comfortable with the concept of a data-only world, it may not be long before VoIP finally fulfils the grandiose expectations its advocates once held.

10 steps to improve your voice

• Believe the hype: Voice over IP has been the Next Big Thing for so long now that it's become a reflex for many people to say they're waiting until it's mature. It is mature. For correctly executed implementations, current VoIP technology can offer tremendous benefits for companies upgrading for the right reasons.

• Don't focus on cost savings: While configuring VoIP to carry calls between sites and onto the public phone network can cut your phone bills considerably, the solutions aren't free. Your upgrade cost may offset much of your short-term savings on phone calls; however, VoIP still offers considerable benefits by improving integration between voice and data, consolidating separate voice and data networks, and reducing management cost and complexity. Reduced call costs are icing on the cake.

• Check your network: Being able to secure network quality of service (QoS) remains a priority for successful VoIP deployment. You'll also need ample bandwidth to carry unpredictable volumes of voice traffic. If your network still has 10Mbps Ethernet in it, it's probably time to upgrade your cabling and network switches to something faster. This can add considerably to the cost of the project, but can provide all-around speed and quality improvements that more than justify the cost.

• Partner well: Successfully implementing VoIP requires considerable skill in both circuit-switched telephony and packet-based data worlds. Don't expect your data people to understand telephony right away; if you do, odds are that they'll miss something. Instead, pick a consulting and implementation partner with several successful projects under its belt and a clear methodology for repeating that success on your site.

• Switch over slowly: If you're like most businesses, voice calls are your lifeline. You may be tempted to jump into VoIP with both feet, but a better approach is to run an initial pilot test with just a few extensions, then gradually expand the system's reach. That gives you time to find and iron out any wrinkles with issues such as features or redundancy, whilst retaining the old PABX for security.

• Integrate creatively: Convergence of voice and data opens up myriad possibilities to reshape your company's operations. If you think beyond simple phone calls, you'll find some of these possibilities offer considerable potential. For example, VoIP allows customer data and calls to follow each other around a call centre, enables unified messaging mailboxes and can be tightly integrated with enterprise directory services. Identifying and leveraging such benefits is critical to making the most of VoIP.

• Think openly: VoIP technology has progressed to the point where there are a number of competitive vendors. Although it's traditionally been a good idea to stick with one supplier for all parts of a VoIP solution, the increasing use of standards between companies should open up more options for handsets and switches, while pushing prices down considerably in the future.

• Facilitate remote extensions: While your office workers can be insulated from the switch to VoIP by preserving their current handsets, travelling workers should make the most of the technology. VoIP soft phones running on conventional laptops can replace costly mobile phones, allowing remote workers to make and receive calls as if they were sitting at their own extension.

• Consider service providers: Carriers of all sizes and shapes are gearing up to offer managed VoIP services intended to make your communications easier and cheaper. Some of them even work. Just be sure to find out how the carrier guarantees QoS; too many providers say they're VoIP capable but really mean they'll carry your voice traffic just like any other data.

• Consider other options: Although it's great on gimmick value, VoIP may not always be the absolute best solution. If it's cost savings you're after, working with a skilled telecommunications purchaser may provide a much better communications setup, based on conventional leased lines, without the hassles of implementing VoIP.

  Case study: National Jet Systems

  
  With branch offices in eight Australian cities, Adelaide-based aviation contract company National Jet Systems (NJS) relies heavily on its Frame Relay wide area network to provide workers around the country with seamless access to maintenance, spare parts ordering, and other administrative applications.

  Some time ago, NJS began using the Frame Relay to carry phone calls between sites. But as the company's voice call volumes increased, it became clear that its Marconi Frame Relay Access Devices (FRADs) were losing their ability to keep up.

  That meant many callers were finding it hard to get an outside line when making calls between offices.

  NJS began looking into alternatives, and after working with PABX supplier NEC decided the best upgrade was to shift its voice traffic onto IP using VoIP technology.

  -Because of the nature of our business, we need to have a fairly diverse operation around Australia," says Steve Tucker, group IT manager at NJS.

  -The justification for the WAN comes from [branch] offices because we have a high amount of voice and data activities. However, the bridged Frame Relay network wasn't capable of a true routed network that would give us toll bypass capabilities."

  After months of planning, NJS's new environment went live in one busy night last June 13. At its core was an upgraded NEC PABX, which combined NJS' previous system with a NEON (NEC Enterprise Open Network) add-on card that gave the PABX VoIP support and IP trunking capabilities.

  Although NJS was able to retain its existing phone handsets, engineers had to spend a considerable amount of time installing DHCP and DNS on servers, and changing network-related settings on its 380 client PCs. Since NJS hadn't used a routed network in the past, these upgrades were necessary to enable full least-cost routing and internal direction of VoIP traffic.

  Through a single-supplier agreement with NEC, that company manages all of NJS' voice service, giving the company one point of contact compared with the three it had in the past. NEC, for its part, manages equipment issues as well as liaising with bandwidth supplier Optus. If NJS wants to add more phone extensions, it can simply install a new multi-port PABX card and plugs in from 8 to 32 new phones.

  Relying on NEC to keep the solution running has helped NJS reap the benefits of VoIP without having to have expensive Cisco skills in house.

  Within a few months of installing the VoIP solution, Tucker says its cost benefits were quickly becoming clear. Phone billsââ,¬"particularly for STD callsââ,¬"dropped by 27 percent initially, and nearly a year later NJS' phone bills are continuing to drop.

  Because it's free of the limited bandwidth of Frame Relay, VoIP has also improved voice performance by ensuring that employees get a dial tone far more often than before.

  This improved performance comes from the design of the new solution, in which voice traffic is switched off the carrier network onto the local network, then routed onto the network unchanged; by contrast, the previous solution was limited by the FRADs' ability to analyse and move the data.

  -It's quite easy to see optimised results," says Tucker. -The previous equipment was nearing its capacity, but expansion is not an issue anymore: users are also confident because when they want to call another base, there are always circuits available."

  
  

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