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Internet calling: is voice over internet protocol ready for prime time?

LES KEITH SAYS IT'S NOT unusual for him to hear from companies that want Voice Over Internet Protocol technology without a clear vision of how it will benefit their company

"VoIP is in every business magazine you read," says Keith, sales and marketing manager with Dugdale Communications, a hardware and service provider of VoIP in Indianapolis. "If an executive takes a flight from New York to Los Angeles and reads about it, he's likely to come back to the office and tell his IT people the company needs it."

Getting the facts

Like any new technology buzzword, VoIP presents a challenge for businesses trying to sort out the facts. VoIP is simply a way of bundling voice data into digital packets using a method first designed to transport data over the public Internet.

What this means for businesses is that voice messages can now travel along the same network paths as data. Those network paths may or may not include the public Internet.

Businesses are motivated by savings, says Scott Wilson, president of Ultimate Medium, a VoIP service provider based in Carmel. He says for businesses the cost savings come from converging voice and data on a single network, rather than having to maintain separate networks for each.

But don't expect calls to come free, warns Wilson. He says for businesses that require consistent and high-quality voice delivery, Internet dialing just doesn't cut it.

Instead, companies deploying VoIP need network paths that are more controllable and give priority to voice traffic. This often takes the form of private broadband, cable and DSL lines, which are costly. Nonetheless, clients are saving in the neighborhood of 30 percent on their telecommunications, says Wilson and other business VoIP providers.

New efficiencies. "After they see it can save them money, the next thing they come to understand are the enhancements VoIP offers that can make their business more efficient," says Wilson.

Those enhancements include new ways of managing voice data that emerge when voice is put on a data network. For example, workers with VoIP can manage their voice messages the same way they do their email, with point-and-click ease. Want to make a phone call? Click on the telephone number. Want to set up a spur-of-the moment conference call? Click and drag numbers to that tool. The same goes for forwarding all your phone calls to a single number, muting calls and viewing phone logs.

In addition, VoIP is the starting point for unified messaging, which lets people read their voice messages or listen to their email.

Currently, companies adopting VoIP are those for which savings and added efficiency outweigh implementation cost. Often these are high telecom users--for example, companies with call centers.

Indianapolis-based The Finish Line Inc., a national athletic specialty retailer, converted its call center to VoIP in July What motivated the company to switch was an urgent need to keep up with growth, says Robert Gray, director of telecommunications for the company.

"Old key telephone system functionality was not adequately handling the growing needs of our business and personnel," says Gray, adding that stations were added to accommodate the company's corporate office employees in October. Since implementing Vole the call center has improved its reporting capabilities and cut COSTS.

"We have been very pleased with our VoIP telephony solution. It has afforded us the opportunity to take advantage of full integrated voice messaging to the desktop and conference calling capabilities for our district managers and regional vice presidents who are remote users," says Gray.

Finish Line worked with Interactive Intelligence Inc. in Indianapolis to get its VoIP system in place. Peggy Gritt, senior director of global marketing solutions, says her company deals with clients like Finish Line throughout the world.

In addition to call centers, companies with a lot of employees who work from home, remote locations or are on the move benefit, too, says Gritt. VoIP gives remote workers direct access to all voice and data just as if they were at headquarters. This also serves to broaden the pool of qualified labor for companies.

"It's not going to matter where someone is sitting on a network," says Gritt. "You'll be able to move that phone call to them."

Determining the costs.

Once companies have a handle on how VoIP can help them, the next step is to figure out costs. Some of the biggest implementation costs for VoIP stem from businesses needing to get their networks up to par for carrying voice. This starts with a network assessment, says Keith, and most experienced service providers should be able to help their clients with this.

Using special equipment, VoIP service providers can "camp" on the network to look at traffic. For example, if you have a T1 connection between points A and B and 80 percent of the time all bandwidth is in use, you can't assume you can put voice on it, too.

Based on the network assessment, Keith's company then spends a lot of time on network and hardware design or redesign to make sure clients get the most out of the VoIP solution they implement. Network assessments are generally recommended for VoIP deployments and can range from $1,500 to $3,000 per site.

Another cost is IP-enabled phone systems. Up until this year, most new phone systems shipped to business users had mainly analog or digital endpoints. But 2004 marked the first year that business phone systems more often than not were equipped with ports for IP-enabled phones.

Dugdale is a value-added reseller of Avaya IP communications systems and other "best of class" peripheral products. Other leading IP hardware manufacturers include Nortel and Cisco.

IP business phones cost from $300 to $500 each, so there can be a significant up-front cost for companies looking to make the switch. Other costs are associated with purchasing routers that can handle switching VoIP traffic to various networks. These can run about $2,000.

Despite the costs, VoIP can help put small companies on a level playing field with their larger competitors, says Prakash Nagpal, director of management for voice at Covad, a national provider of VoIP services based in San Jose, Calif. Covad began offering business class VoIP services in Indianapolis in October.

Until recently, companies wanting higher-level interoffice voice communication functions, like transferring calls, interoffice calling and name displays, would need to invest in costly PBX (private branch exchange) systems.

"Companies are looking for more capabilities," says Nagpal. "While a larger company is more likely to invest in a PBX, that option is out of reach for a smaller company."

VoIP lets smaller companies afford the inter-office functions once out of reach, says Nagpal. For these companies, Covad has developed a product it calls vPBX that works as a full PBX alternative.

For clients already heavily invested in PBX products, Covad developed PBXi to work with their existing PBX equipment. This product uses VoIP technology only in external calling. For some companies, this is a good way to transition to VoIP Both products have a Web-based interface and are served by Covad's nationwide broadband network.

Lower cost to migrate to VoIP is also getting a boost from providers moving to an open standard, says Gritt. "There was no standard a year ago," says Gritt. "Looking way out into the future, everyone is going to have it."
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Title Annotation:Communications
Author:Lewers, Christine
Publication:Indiana Business Magazine
Geographic Code:1U3IN
Date:Dec 1, 2004
Words:1219
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