Voice over IP--what's it all about?

Less than 10 years from now you won't be able to buy a traditional PBX phone system that does not support VoIP. That's what telephony experts are now predicting, due to the introduction of a new and exciting technology called Voice Over Internet Protocol (VoIP). This is a new concept to most organizations--including private clubs--and brings with it a host of questions and concerns about how VoIP can be used effectively in small businesses. To address these issues, we have consulted with two senior-level telephony experts offering extensive experience in telecommunications and VoIP technology (their credits are listed at the conclusion of this article). Their input forms the technical foundation for this article. So, let's get started with the basics: What is VoIP and how is it used?

VoIP--An Overview

The stated purpose of VoIP is "to leverage the organization's investment in data communications." Data communications? Isn't VoIP about voice communications? Yes--and no. Here's the concept. Most businesses use telephones and computers. Historically, these technologies use separate cables, hardware, and vendors. As a result, businesses have voice lines, which purely handle voice communications, along with a separate data infrastructure. The overriding idea behind VoIP is to integrate voice to an existing data infrastructure, creating an integrated voice/data connection.

It all starts inside the physical buildings by eliminating duplicate wiring for phones and computers. Today, phones can use at a minimum Category 3 (four-pair) wiring from each phone back to the PBX. Computers use Category 5, 5e, or 6 wire from each computer/device back to the net work server (directly or through switches/hubs). These cables represent separate voice and data cable infrastructure dedicated to each function.

From a cabling standpoint, the thought behind VoW is to use a single set of four-pair wires for both voice and data. The phone would simply become a network device that plugs into the computer network. IP phones include a jack to plug in a desktop or laptop computer. Both the phone and the computer share one wire simultaneously. That can reduce wiring costs in a new or refurbished structure. But there's more to it than that.

The value of voice and data integration continues into the Wide Area Network (WAN) connections. This is where the biggest bang for the buck is found. If the business is supporting two or more physical locations that are connected for voice and data transmissions, VoIP can allow voice and data to be integrated, reducing the number of lines needed to connect each site. This is especially important if those connections are over a long distance, requiring the leasing of high-speed service from the phone company. Since VoIP allows voice traffic to be delivered over the same link, the consolidation of voice and data transmissions can save a significant amount on monthly charges.

How Does VoIP Work?

Standard voice transmissions take 64Kbps of bandwidth--for each voice conversation. With VoIP, workable bandwidth can be compressed down to as little as 30Kbps, allowing many more conversations to be transmitted on the same circuit. For example, traditional T-1 service for voice (leased from the local phone company or other service provider) handles a maximum of 24 simultaneous voice conversations. Using VoIP, that same T-1 circuit can handle approximately 50 simultaneous conversations. More importantly for many organizations, voice traffic compressed to workable levels can be added to existing data lines to reduce the overall cost of leased line services.

Compression of voice telephone calls must be done carefully. Each compression

has the potential to impact the call quality. While some vendors suggest that compression can be done to 11Kbps, we have found that in the real world, the call quality at a level below 30Kbps is unacceptable to most business clients.

What About Using the Internet?

That's a tantalizing thought. What if we could use DSL and the Internet to handle our data and voice at a fraction of the cost of connectivity through dedicated leased telephone company lines? Unfortunately, that's not practical--yet. While VoIP can be conducted over the public Internet, it is not recommended by our experts. Simply stated, using the Internet, VoIP doesn't provide a "commercial grade" level of service. Here's why.

Quality and consistency of the connections can't be guaranteed using the Internet like it can be with dedicated leased service from the phone company. When you buy leased services, the phone company dedicates circuits to your business, and provides a "quality of service guarantee" that specifies the amount of bandwidth you will always have available, and the speed at which your transmissions will travel. The Internet, on the other hand, cannot guarantee a certain path from point A to point B. As a result, you can't anticipate the number of "hops" that will be used to handle your transmissions. The more hops, the slower (and lower quality) the service. Internet speed will need to increase significantly in order for the quality to reach acceptable levels. In the next five years, our experts tell us, the Internet backbone may be sufficiently upgraded and reconfigured to support the required speed for viable VoIP solutions.

What's Needed to Handle VoIP?

First of all, your club's local area network (LAN) must be running 100Mbps switched service. That means you must be using network switches in place of hubs. If more than one switch is used in a single location (building), they should be connected together through a 100Mbps or a Gigabit backplane (1,000Mbps), which provides very fast communications between the switches within the building.

Second, you will need VoIP routers. Older routers may not be capable of handling VoIP correctly. In the past two years router manufacturers have implemented specific options within their router software to better guarantee the quality of service for VoIP connections. If your club's routers are more than two years old, they will probably have to be upgraded or replaced. Even if you have purchased routers recently, you may need to add memory or software to handle the voice traffic.

Another required piece of hardware is the VoIP server that functions like your current PBX. Clubs will need to use a dedicated Windows network server to run the VoIP operations. Of course, your network security must also be up to par. Successful hackers would be able to intercept voice communications if lax security made your network vulnerable. Our experts recommend that you follow the security "best practices" recommended by Microsoft and the associated vendors. Their rule of thumb is: protect your VoIP system as you would the club's computer data.

Finally, you will need to maintain some traditional telephones and lines in each location, connected directly to the phone company itself--not to the VoIP server--to provide voice service in case of an extended loss of electrical power or other emergencies (such as 911 services to the local police and fire departments). Remember that VoIP is computer-based, and needs electrical power to operate (unlike traditional phones which can be powered off the telephone lines themselves). Battery backup systems for computers typically only last 10-30 minutes. So, if you experience an extended electrical outage, you will lose access to the VoIP server and phones.

What About the VoIP Phones Themselves?

Keep in mind that "IP phones" are actually small computers and provide similar features to traditional phones. IP phones typically sport an oversized display (like a small computer screen) that provides an amazing array of information and features. For instance, IP-based voicemail can display the name of the caller (for calls from the outside you need caller ID), the number that called, how long the message is--and if a document has been attached. That's right, a caller can attach a document (Word, Excel, etc.) or fax to a voicemail message, which you can then bring up on your computer. Or the reverse--you can attach a voicemail message to an e-mail, and the person receiving it can play the voice piece with MP3, Real Audio, or Windows Media. You can even click on a phone number in MS Outlook (on your computer) and automatically dial the phone. The idea is to combine the features of your computer and phone to increase productivity.

Implementation Guidelines 

VoIP is much more complex to install, debug, test, and tune than a traditional PBX system. To start, you must be able to control the infrastructure of the club's WAN if you are using VoIP to connect distant buildings. Your telecom carrier needs to be aware that you will be using VoIP so that they can minimize the number of routers they position between your club's router at point A and your other router at point B. Notify the provider right away of your intentions so they can configure for the least number of "hops."

VoIP is also much more time-consuming to implement than a traditional phone system, due to the number of technical people who must be involved and the level of complexity of the system itself. That's because IP routers must be configured very precisely to ensure that the quality of service (QoS) is the same as with a traditional PBX solution. Every remote location is "tuned" and "tweaked" differently and requires the attention of experienced networking and VoIP professionals. This is not a job for your local data or phone people to tackle. You need professionals with a strong track record for installing VoIP.

You should also note that most VoIP system providers do not include user training as a part of their standard package. Often these providers make the assumption that users will "catch on as they go," which can make the transition from a traditional PBX to VoIP more difficult than it needs to be. Our experts recommend that you make sure user (as well as administrator) training is included with any VoIP implementation.

On-Going Maintenance and Support

Once implemented by a qualified vendor, VoIP is similar to a traditional PBX for the end user to maintain. That makes VoIP practical for clubs with limited on-site technology expertise. The customer is able, and required, to do much more in the daily "care and feeding" of a VoIP solution. However, VoIP administrative tools are easier to use than those provided with a typical traditional PBX system. VoIP tools are Windows-based and much more intuitive for the "novice" administrator. While the PBX providers have similar Windows-based tools for management, these tools are often options and have additional cost.

For example, movement of phones is easier with VoIP. The user simply unplugs the phone, carries it to the desired location, and plugs it back into an active network jack. The phone initializes itself and the user's "profile" is moved to the new location. In addition, potentially complicated features such as automated attendant are a breeze to set up and maintain.

Cost Savings

The major cost savings (and greatest value) are achieved through the elimination of separate voice service between two club locations, which is leased from the phone company. In many cases there is no need to increase the bandwidth of the data connection to accommodate voice. In other cases, an incremental increase in bandwidth is needed.

You may also be able to reduce costs with "long distance aggregating." For example, if your club has two locations with two separate phone systems using separate long distance service, you may be a candidate for aggregating. By using VoIP, all long distance calls are sent from a single location. That could qualify the club for better long distance discounts.

Finally, we discussed earlier the potential savings on inside cabling. You can save by running one set of cables for both data and voice, especially if you are building a new clubhouse, or making significant renovations to an existing facility.

What about cost increases with VoIP? Well, the IP phones will cost you more, though manufacturers do make low-cost IP phones available. But upon comparison, similarly equipped VoIP phones compared to traditional telephones are more expensive. Count on IP phones costing about $200 more than what you would pay for a traditional multi-button speaker phone.

Bottom line--the upfront cost for a new VoIP implementation is more than a comparable PBX implementation. But with VoIP, a big savings can come over time, as redundant leased telecommunications service is eliminated. Add that to the value of productivity gains associated with some VoIP deployments, and you have a winning formula for many organizations.

Who Are the Major Commercial VoIP Players?

Lots of companies are getting into the VoIP business. It's important for you to make sure any provider considered by your club has deep experience with this specific technology and has a strong track record for successful VoIP installations. Our experts offered the following manufacturers as the top players in the industry:

* 3Com

* Avaya (formerly Lucent)

* Cisco

* Mitel

* NEC 

* Nortel

* Shoretel

* Siemens

VoIP--Should You Do It Now or Later?

For most clubs with no leased data service between locations, there's no urgent need to consider VoIP. For a club with multiple locations utilizing voice and data on separate leased circuits, VoIP is worth looking at now. Keep in mind that this is not a question of if, but of when. Our experts predict that 10 years from now, all voice will be handled by VoIP in some way. So it's probably a good idea to at least include VoIP in the mix as you continually evaluate your club's telephony and data communications needs.

We are grateful for the technical assistance provided for this article by our two VoIP experts. Primary input was provided by Tom Weiman, telecommunications practice leader at Technical Designs, Inc., an RSM McGladrey, Inc. alliance partner for telecommunications consulting. Additional input was provided by Jeff Hall, CISSP, GSEC. Jeff is a director with RSM McGladrey, Inc.'s Integrated Technology Solutions Group, and has 25 years of experience in voice and data networking. Both Tom and Jeff are currently working with several of RSM McGladrey's private club clients on VoIP projects.